A Car Is the Path to Financial Ruin
Hell on wheels
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Earlier this year, hedge fund billionaire Ken Griffin bought the most expensive home in America: a $238-million Manhattan penthouse on Central Park South. That could have been me. In fact, the only reason I’m not bathing in caviar as I dictate this to my manservant is one seemingly small but ultimately ruinous financial decision I made decades ago.
I got a car.
Well, okay I made some other bad money moves, too. I failed to buy Amazon stock in 1997, I neglected to sell Bitcoin in December 2017, and, perhaps worst of all, I went to college and majored in English. Still, the car thing didn’t help.
Ironically, the reason I got the car in the first place (I certainly didn’t need one living in New York City) was because of bikes. I wanted to be able to do stuff like drive to out-of-town races or go mountain biking without having to make lots of arrangements beforehand. At first it seemed like a good decision. Not only could I just throw the bike up on the roof after work and drive 150 miles to do cyclocross for the weekend, but I could also do whimsical stuff like pick up furniture from Ikea or go to dinner on City Island just because.
Unfortunately, seduced by the illusion of convenience, I failed to appreciate how much money the car was costing me. In addition to all the usual car-related expenses you have anywhere else in the world (fuel, insurance premiums, dashboard bobbleheads), there were plenty of surprise ones, too. Not only do the potholes of New York City eat roughly a tire a week, but it turns out that dinner on City Island is actually pretty expensive. However, when you’re young and not responsible for anybody except yourself, it’s easy to write these sorts of things off as the cost of doing business as a 20-something in a dynamic metropolis, and in that sense, pouring 13 gallons of gasoline into a car you don’t need is no different than quaffing those overpriced cocktails you could have made yourself.
Of course, economy isn’t the point of cocktails. You’re also paying for the company, and the ambience, and ideally the serendipitous liaisons. In fact, going to bars and going to races are awfully similar in that both cost money, both involve throwing yourself into a pit full of relative strangers, and both leave you feeling like you got hit by a truck. Yet they also help relieve stress and tedium, so in that sense it’s both unfair and unreasonable to subject either of them to a cost-benefit analysis—and my car did carry me to some memorable riding experiences, I’ll certainly give it that.
But there’s another important similarity between cocktails and cars: they’re okay in moderation, but you can’t let them rule your life. And that’s exactly what the car wants to do. Like booze, cars lead to extremely poor decision-making. This is especially true when it comes to perhaps the most important economic decision you’ll ever make, which is choosing a place to live.
“You don’t need all this parking hassle,” the car says to the city dweller. “Let’s move farther out.”
“But what about getting to work?” you reply. “I need to be close to transit.”
“Transit schmansit! What do you need trains and buses for? You got me!”
At first blush, the car makes a compelling case. The further away from transit and bike infrastructure you move, the cheaper real estate gets. Sure, you’ve got the added expense of the car, which you’re now totally dependent on in order to get anywhere, but there’s lots of easy credit available for that. Plus, when you need a new one there are all sorts of leasing and financing arrangements available, including subprime loans that prey upon the poor.
Cars aren’t a mode of transport: they’re 'Black Mirror’-esque mind-fuckers that are trying to lead you out into the wilderness so they can kill you.
Banks and landlords may require all sorts of references and deposits and income requirements, but there’s always someone out there willing to put you in a nicer car. So it’s easy to move away from transit and tell yourself you’re making up for the inconvenience and isolation by getting a new car with a bigger engine or a more luxurious interior. But the reality is that every car on the road is basically a miniature Venezuelan economy on wheels, rapidly depreciating with no end in sight, and as soon as you’re dependent on one to get anywhere, you’ll be indentured to it for the rest of your life.
Planners and policy makers have been going with this program for generations now, and the result of it all has been transit deserts, income inequality, and sprawl. Cars aren’t a mode of transport: they’re Black Mirror-esque mind-fuckers that are trying to lead you out into the wilderness so they can kill you.
As for me, I must be the motorist equivalent of a social drinker; I never let my car lead me too far astray. (Also, having lived through terror attacks and blackouts, I don’t think I’d ever live anyplace in New York where I couldn’t walk or ride a bicycle to or from Manhattan.) I’m also very happy where I am now. Even so, if I’d never gotten that car in the first place—or if convenient alternatives like car share had existed at the time—I’d probably have made much better real estate decisions along the way. Maybe my neighborhood would have gotten hot and a landlord would have bought me out of my lease for big money. Maybe I’d have used that windfall to buy a place. Then maybe I’d have flipped that place for a big profit, and from there it’s just a few more savvy moves before you’re sitting pretty up in that penthouse.
Or, more likely, I’d have spent all my money on bicycle stuff—though more money for bikes is arguably an even better reason never to own or lease a car.