Buying My First Car in 2013
In January 2013 TheFrugalDoctor bought their very ever first car for $23,800. I paid cash for it. I delayed the buying of the car by a whole year. During internship I used to be get around by public transport or get lifts from my colleagues. When the internship rotations were over, I had to travel to the next country town. I used buses, trains, or taxis. I carried all my possessions in an extra large suitcase. Fortunately once at the next hospital intern accommodation was not too far from the hospital.
Delaying Gratification and Choosing the Perfect Ride
I knew not to buy a car new. However, having delayed gratification, I figured I could get exactly what I wanted. At that time, I liked that the new Corolla had reverse cameras, touch screen, Bluetooth and was more fuel efficient. I had said to myself I was not going to buy another car until I had ran it down. I bought a brand new black Toyota Corolla, hatchback, sports transmission, with tinted windows. Was $23,800 a frugal purchase? I haggled my way at the car dealer shop. At the end of the negations, the car dealer asked if I worked in sales. He also thought I should consider a job in sales. The invoice contained the following:
| Sale price of motor vehicle | $ 22 990 |
| Administration fee | $0 |
| Floor mats (front & back) | $0 |
| Window Film coat | $200 |
| Vehicle colour ink | $425 |
| Dealer charges | $1995 |
| Dealer discount | – $3239.82 |
| Price before registration | $ 22 370.18 |
| Stamp Duty | $ 672 |
| Registration fee | $ 757.82 |
| Total cost | $23 800 |
What If I Had Invested Instead?
TheFrugalDoctor had a smile on their face when they saw the dealer discount. I do not like paying full price. The $23,800 spent in 2013 is equivalent to $30,912 in 2023. This is according to the official inflation numbers from the Reserve Bank of Australia. It is 2025 and I still own that same Toyota Corolla. At the last insurance renewal in 2024 it is insured for an agreed value of $16,000. 2013 was also the year I started investing in the stock market. Unfortunately I did not know about ETFs or index funds. I was investing in individual companies on the Australian Stock Exchange at that time. If instead I had taken the $23,800 and invested in Exchange Traded Funds (ETFs) or Index Funds it would be worth the following assuming dividends are re-invested :
* iShares S&P 500 ETF (IVV) = $159,900
* Vanguard US Total Market Shares Index ETF (VTS) = $153,800
* Vanguard International Shares Index Fund = $80,900
* Vanguard Australian Shares Index ETF (VAS) = $39,800
The Real Trade-Off: Convenience vs Opportunity Cost
Fortunately buying the car new did not set me back financially. I was also able to focus on my other goals of investing, saving for a house deposit and travel. I knew the car was a depreciating liability, it was a necessary evil. Twelve years later, I have stayed true to my word. I still own that same car. It has traveled 134,000 km. There is no plan to update it anytime soon. If I had invested the $23,800 in IVV, I would have an extra $159,900 in my share portfolio. I could have bought a second hand car for less. Who knows if I had done so I would have probably needed to upgrade the car by now. At the end of the day it is all what ifs. There will always be trade-offs and opportunity costs.
A Moment to Check Your Own Trade-Offs
At some point, we all face a version of this same decision. Spend now for comfort and convenience, or redirect those dollars toward a future that buys back our time. A car is just an example. The real lesson is in noticing the silent price tag attached to every choice. Before you commit to your next purchase, pause and consider. What freedom could those dollars create if they were invested instead? What stress could they remove? What options could they open? The opportunity cost is always there, whether we acknowledge it or not.