About · Press · Contact · Write For Us · Top Personal Finance Blogs
Featured In:

Pimpin’ Your Ride Is Not a Wise Financial Decision

By Erik Folgate

I’m sure that most of you have seen the show on MTV, “Pimp My Ride”. It’s a great show. Some of the stuff they do to those cars is sick. Some of my personal favorites were the waterfall/river running through the middle of the interior of the car, and another car where they turned the entire trunk into a sweet karaoke machine. Tricking out a car has become wildly popular over the past decade. Honda Civics with 22″ rims, and Eldorados with LCD monitors and playstations installed. Young people love to pour money into their cars, but is it worth it?

The answer is simple: NO! It’s never wise to pour a ton of money into something that will always go down in value, no matter what. The sad truth is that cars depreciate no matter how much junk you throw into them. It may help them to maintain their value for a little while or sell a little higher than the book value, but it’s not going to stop the car from constantly going down in value. The only time that a car will appreciate in value is a rare collector’s item like the Mustang Shelby GT in the movie ‘Gone in 60 Seconds’. So many young people take their paychecks, pay their bills, and put the left over money into their cars. This is fine if you have that kind of money to throw around for a hobby, but don’t think that you’re going to get rich off of putting a 20″ LCD in your car or a custom paint job. Even if you upgrade the mechanics of the car, it will help hold the value more, but you’re not going to get rich off of reselling the car.

I’m not trying to sound like a stick-in-the-mud about this, but I want to encourage you to invest more money into things that go UP in value. It’s great if fixing up cars is your hobby, but don’t let that hobby dominate your finances. If you want a hobby that is also a good investment, but a house and start fixing that up. Fixing up houses and reselling them WILL get you rich.

Erik Folgate
Erik and his wife, Lindzee, live in Orlando, Florida with a baby boy on the way. Erik works as an account manager for a marketing company, and considers counseling friends, family and the readers of Money Crashers his personal ministry to others. Erik became passionate about personal finance and helping others make wise financial decisions after racking up over $20k in credit card and student loan debt within the first two years of college.

Related Articles

Comments

  • http://www.derrich.com/ derrich

    I will agree wholeheartedly with this…based on experience. I had a sound system good enough to compete in an IASCA soundoff, and I accumulated enough debt to make medical students cry doing this very thing…and then some. Be patient. Your time to “pimp” anything (car, wardrobe, apartment, etc) will come. Get a job at Abercrombie or Banana if you want cheap clothes…or Best Buy if you want sweet deals on electronics. Employee discounts pwN (I think I just endorsed spending again, didn’t I?).

  • http://madsaver.com Mac

    Easier said than done for a lot of teenagers out there. They want to impress their friends and the ladies with a pimped up car. Thankfully, I was never really into cars, as long as I had one and it looked decent. I’ll be teaching my kid to put money in stocks so that he can tell his friends that he owns part of Apple or Google. That should get him a few dates! ;)

Links monetized by VigLink
Close