It’s not that a fancy new car isn’t, you know, fancy and new. It’s what it can do to the budget of a resident with a low salary who likely carries a lot of medical school debt.
Cory Fawcett, MD, a retired general surgeon and author of The Doctors Guide to Eliminating Debt, learned that lesson as a second-year resident when his 14-year-old Oldsmobile started giving him more trouble than it was worth.
Blogging at personal finance website Physician on FIRE, Dr. Fawcett recalls the temptation to buy a new Mercedes: the luxurious test drive, the sense of confidence — even the pleasant sound of closing the door.
Then reality sank in: He and his wife had agreed to live on one of their salaries and save the other one. The new car would make that impossible. The monthly payments, over the life of the loan, would add massive interest to the cost of the vehicle.
The couple thought better of it and wound up buying a year-old Taurus at one-third the price.
With medical school graduates carrying an average of about $200,000 in educational debt today, Dr. Fawcett urges extreme caution with auto purchases.
“If you need to borrow the money to buy the car, you can’t afford that car,” he writes. “Buy the car of your income, not the car of your dreams.”