Why Billionaires Drive Cheap Cars — and You Should, Too
We often associate billionaires with the most expensive versions of common things, like $3 million dollar luxury cars. But not all billionaires spend their income in such a way. The most pragmatic ones actually opt for cheaper cars, for instance. Michael Bloomberg has a net worth of over $52 billion, yet he drives a Chevrolet Suburban, which costs $39,200. Jeff Bezos’ net worth is over $154 billion. He drives a $16,995 Honda Accord. The same dynamic of the car price being a tiny fraction of their net worth applies to others like Mark Zuckerberg, Jim Walton and Larry Page. Zuckerberg referred to his Acura TSX as “safe, comfortable and not ostentatious.”
Check Out: 5 Cars You’d Regret Buying If You Live Only on Social Security
Read Next: 6 Genius Things All Wealthy People Do With Their Money
It seems counterintuitive, yet it’s a completely sound choice. The decision doesn’t serve them alone — it should help motivate non-billionaires to select cheap cars, too. Should you choose to follow in their footsteps, you’ll find yourself benefiting from the following savings, in addition to the lesser expense of the car itself.
1. Insurance Costs Less
The average insurance cost for a car differs depending on what state you reside in, as the accident/claim frequency, cost of parts, road conditions and how often cars get stolen are all contributing factors. On average, insurance for luxury cars is 18% higher than for regular cars. This figure is based on the consideration of several types of car insurance, including liability, comprehensive, collision and personal injury protection (PIP).
2. Less Expensive Maintenance and Repairs
The maintenance of luxury cars is similar to that of regular cars in that both require brake, transmission, suspension, and other repairs. Where they do differ is that luxury cars require unique, often rarer parts and an expert mechanic to handle the more complex and difficult fixes–meaning they can charge more.
Heavy Depreciation
Learn More: 5 Best American Cars for Retirees on a Budget
Because luxury cars carry higher maintenance costs, they’re less likely to be purchased by buyers looking for a used car. Not only that, luxury cars tend to be about public image, resulting in rich buyers purchasing newer models at an accelerated rate. This also contributes to the faster rate of devaluation. Thus, by purchasing a regular car you can avoid the substantial loss in resale value.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: Why Billionaires Drive Cheap Cars — and You Should, Too
