Twenty-Something reality check: Nobody cares what you drive
When I was 16 I drove my parents' used '85 Subaru station wagon (a.k.a. The Silver Bullet). I was just thrilled to be behind the wheel of something with four moving tires. I could pack at least five friends in it legally and a few more if we avoided driving by the Dairy Queen in our small Texas Town. That was where you cops drank coffee.
The Bullet was great on gas mileage and 100% paid off. In fact my parents never took a loan out on a car. They bought used vehicles in good condition with whatever they had in their bank account. Now, we didn't live under a rock, our family had two credit cards, but they either always had low or no balances on them. This lack of debt wasn't because they had a lot of money to pay off cards off each month; it was because they never spent a lot on things that they "wanted." They only made purchases they needed.
I wish I had paid more attention to the way they handled money. For me it was about getting out of that small town as fast as I could and trying to live a lifestyle I had always wanted to live; a lifestyle un-deprived. When you come from nothing, the first major purchase in your twenties is that brand new car that you can barely afford. For me it was a convertible sport scar. I loved that car but it nearly broke me at payments of $425 per month. Broke or not, I felt like quite the hot pocket in that car. I thought what I drove really made a difference in other people's eyes.
After a year of sporting around, I moved to a city where it snows twice a year and decided what I really needed was a brand new SUV. So I traded in my sports car along with my $1,000 tax refund as a down payment. After all was said and done, I left the parking lot with a zero interest loan on a brand new Durango with heated leather seats. I convinced myself that the payment of $550 for 5 years was more than worth it. That day my banking account had maybe $200 in it and my savings account had $50. Once again I was more concerned with what other people thought than what was actually the best financial decision for me.
Here is a hard lesson that took me almost 10 years to learn, and I hope some other fool in his or her twenties reads this. No one gives a damn about what kind of car you drive, and if they do they probably don't give a damn about you. Buying a brand new car is never something you "need" to do. It's something you want to do and the car dealers have no problem financing more than you can realistically afford.
I have had the Durango (my Hoopty) paid off for two years now. Does it get good gas mileage? No. Is it too big for what I need in my life right now? Yes. Is it the coolest new ride in town? Most definitely not. But you know what is cool? Having an extra $550 to add to my savings account each month.
So the next time you get that new car itch, wash your old car. It helps, trust me. If your Hoopty is falling apart, consider buying a used car. If you can, use the money you have in the bank to finance all or most of the purchase price. Also don't forget to do some research, cars are lasting a lot longer than they used to.