Purchasing a dream car is probably the most common big financial mistake in a nurse’s career. In 2006, I was given a gently used Nissan Altima. This was the first car I owned. It was a good car but by no means a dream car. Most of us have an ideal car we would like to drive around although a great car my Altima was not it. I was proud of having my own car and took care to maintain it regularly. I even installed an aftermarket radio and speakers to improve my ride. Nevertheless, I also couldn’t wait until the day that I finally chose and bought a car that I really wanted.
Winter in Boston is brutal. While on a travel nurse assignment, my Altima did not appreciate the New England winter. It seemed to take forever for my car to heat up. My battery and starter were constantly sluggish or dead. I even ran an extension cord from the apartment to my car to keep the battery from going dead in the cold winter night. I also had a water pump failure that resulted in a hefty bill from a local garage. My engine would start overheating and then drop for no apparent reason.
When I finally finished my contract in Boston, I drove back home with only about 2 weeks before heading off to another travel nurse contract in Austin. I was determined in those 2 weeks to trade in my Altima and buy another car. This was the chance I had been waiting for! I was hacking the nurse payscale, so I was making good money. Now I could finally buy my dream car. For me, this was a small pick-up truck, the Toyota Tacoma.
When I was in Boston, I started planning on buying another car. I spent lots of time researching different vehicles from Mazda to Subaru to the Toyota Tacoma. I also shopped around and got pre-approved for a new car loan. I did what most people do and figured out how much I’d be willing to pay each month, which was $408 per month.
I took out a $23,000 car loan for 60 months with 2.5% interest. I had about $12,000 in the bank, so I felt like I could afford to get my dream car, a brand new 2014 Toyota Tacoma 4×4, for about $33,000. Never mind that the gas mileage was 18 mpg or that I really didn’t need a truck most of the time. I reasoned this was the perfect time in my life to buy the car I always wanted to buy. I also needed some extra space for my travel nurse adventures. So I drove off the lot that day with a brand new blue Toyota Tacoma leaving my old white Altima behind while now owing $23k.
A Huge Financial Mistake
Many people would probably say that the cars they buy are a huge financial mistake when they reflect back on it. When I look back, purchasing a brand new vehicle with a massive car loan was a huge mistake. I should’ve never borrowed money for a car or at least not borrowed so much money. Thankfully I didn’t end up in a financial bind like many do when taking out car debt, but I wasted so much money purchasing a new car that could’ve gone towards building wealth or paying off student loans.
I also should’ve bought a car that was more practical for my situation. I don’t live in a rural area or snowy area where I need a 4×4. I don’t need a truck because I don’t haul stuff around. I mostly drive to the hospital and around town. I have only camped in the back a couple of weeks when I camped along the West Coast for another travel nurse assignment.
What I do need in a vehicle is good gas mileage, safety, and ability to park in tight spots. We bought a Toyota Yaris for $10k cash in 2016 for this reason, and it’s been a great financial decision. We have since paid off the truck and still continue to use it as a second car but only for short trips.
My Ideal Situation
My ideal situation would be to sell the truck and purchase an e-bike for commuting to work and other places. Unfortunately the e-bike situation is not realistic right now. My previous per diem job was 18+ miles away across an urban jungle without any great bike paths. As a nurse practitioner, I now live closer to my job but I practice at 2 different sites which requires using a car. Maybe someday I’ll get to commute to work on a bike and save not only money but also the environment. Learn from my big financial mistake and avoid car debt and build wealth and find worth in what really matters.