I Drive a Mondeo
My brother and I have shared a 2012 ford Mondeo (diesel) for the last 4-years. The car in the picture on the right is not the Mondeo, it is our friend Jared, who put this car on Carsales.com with the tag line – “Only used for school pickups”.
Everyone has their own advice on cars. Never buy new. Only drive Toyota. Make sure its Diesel. And Jared’s advice, “Never follow your mates into a river crossing” and “Every accident gives someone some pleasure”.
Even my twin brother, who has no interest in cars is liberal with his motoring advice. “Drive the cheapest car your ego can afford” he tells his mates. I think he stole the line of the Barfoot Investor. He’s a Millennial and although it doesn’t sit well with 80’s stockbrokers like Henry and Marcus, Millennials like us are never going to spend a lot on cars. You may think we have big egos, wanting to be the CEO on day one, but we don’t.
In our world, we split the bill on a date, and no-one shouts the bar, having a car as a status symbol is so uncool, so 1980’s. For Millennials like us spending money (let alone borrowing money) to buy anything to impress the other Millennials is a bit pathetic. Marcus will tell you, its taken him three years to get me to shave, wear a suit and put on a tie. We’re new school, not old school. We are more interested in depth of relationship than image, despite what you might think. We know that buying cars isn’t always the most financially astute decision.
The Mondeo has cost us practically nothing to service/run and sharing it with Liam means half-price fuel, half-price insurance, half price servicing and half-price rego. Not so stupid after all. (That’s Chika in the driver’s seat)
But things change. Ego levels evolve and last month Liam had an epiphany. “I’m going to buy a 4WD” he declared.
Oh. The downside to this revelation is that I must buy him out of his share of the Mondeo and my fuel costs, insurance, rego and servicing costs, suddenly double.
His ‘Dream’ car, which will almost certainly be a lemon on a budget of $10k, is going to cost me a small fortune for no discernible improvement in my driving experience. Not happy Liam! And it has got me thinking that finally, after a good innings, and in line with the development of my ego, whether I too shouldn’t finally graduate to a new vehicle.
I broached the subject on the desk and was bombarded with advice. But amongst the ribaldry and ignorance (get a Porsche) was a salient point from Marcus.
He tells the story that when he was 25, in 1986, his Dad worked for Mercedes Benz and was allowed to buy a one-year-old fleet car each year at a wholesale price. That meant he could buy a one-year-old company car every year 50% below the book price. In 1986 his Dad offered him the chance to buy a white 190D (Diesel) Mercedes, half price, which was $5000 at the time. A utopian situation for most 25-year olds.
Being the shrewd businessman he is, Marcus drove it for a year then off-loaded it for a 100% profit. Big win.
34-years down the track he tells us he regrets it and that he wonders whether that 190D would still be going and, if it was, how much better off he’d be if he had just kept driving it. The price of vanity isn’t always something you can calculate but one thing is for sure, the opportunity cost (money lost) from buying/leasing twenty or so new cars since then, especially the string of flash new company cars he leased and took the depreciation on in the 80’s and 90’s, would amount to millions of dollars in today’s money. Another casualty of being on the wrong side of the compounding miracle.
To add insult to injury, and this is where I hope to avoid his mistake, searching on carsales.com this week, the same car he bought half-price off his father, is still ticking along with half a million km on the dial.
Those early diesel (tractor) engines were clearly indestructible. It may cost $2400 now but it actually represents a few million dollars of compounding vanity.
And, if he’d driven around in that for the last 30-years, he says there is a good chance that Emma (his wife) would never have paid him any attention (it turns out cars do actually help you pick-up). She allegedly adopted his brand new Black BMW Coupe as soon as they started going out in London. If he’d had the 190D there is a chance he would still be single and would have avoided the compounding cost of four kids. Pretty confident there was a few million to be saved there.
The moral of the story is obvious. Don’t sell the Mondeo, and if Liam and I can just leave our egos at the door, we, and all of us, should, if there is nothing functionally wrong with it, keep driving our crappy old cars until they die.
So I’m going to spend a few thousand dollars buying out my brother’s share of our car. I wonder if he will give me a good deal?
That’s my plan. Fingers crossed it can go for another eight years. I’m in no hurry to emulate Marcus’ mistakes and waste hundreds of thousands, if not millions of dollars on vanity. Best I try to earn a return on the money I earn than lose half of it the moment I turn the key of an ego-based upgrade of the Mondeo.
If UBS is correct, by 2035, we will all be riding around in ‘robotaxies’ anyway and owning your own dirty petrol car will be as unfashionable as smoking. The Mondeo just has to make it until then. And aren’t electric cars going to obliterate the second-hand value of any petrol or diesel car in the next decade (year) anyway? It just doesn’t make sense. I’m a Millennial, a Mondeo will do and failing that, its probably just as cheap for a City dweller like me to Uber, taxi, tram or train. Spending money on cars for urban-dwelling Millennials is sunk money. I’ll wait for the next generation of transport to emerge.