Do Younger Service Member Drive Nicer Cars?

I was at an event recently, and someone was talking about one particular car that is on our base.  The car in question is exactly the stereo-type of what a young, single service member would buy, especially if they’d had a long deployment and built up some significant savings.  (I bet some sort of image has come to mind – what is it?)

During this conversation, someone stated that they had read a study of car values to rank, and that the average value of cars goes down as service members gain rank.  I admit it sounds like an unlikely study, and I can’t find it anywhere, but it also sounds like it might be true.  But what do I know?

Mustang ShelbySome completely unscientific sleuthing does seem to show some trends.  On any military base, you will see some expensive cars.  With an E-4 making less tan $30,000 a year, I’m surprised to see $40,000 Dodge Challengers and Ford pick-ups trucks in barracks parking.  But I do, every place I visit.

Of course, there are also many average cars, too.  And driving through housing, I’ve seen everything from beat-up old Honda Civics to high-end BMWs.  What I don’t see is a noticeable increase in the quality and value of cars as you move into housing for more senior service members.  This is interesting to me, because it seems logical that people would be willing to spend more money on their transportation as their income increases.

On one hand, I feel like this shouldn’t be an issue or a question.  Everyone certainly has the right to own whatever car they want, as long as they can pay for it.  On the other hand, financial mismanagement is a serious operational issue for the military.  When service members buy cars that they can’t truly “afford,” they create problems for themselves and their commands.

So, I’m curious.  Have you ever seen this purported study about cars and rank?  Or have you seen any similar research?  What have you seen in your community?  And, if you feel like sharing, what are your personal views on cars?

I’ll start:  I see a car as a useful tool to get me and my family from point A to point B.  I like something that is safe, comfortable, starts every morning, and hopefully doesn’t use a lot of gas. I don’t want to spend a lot of money on my cars, and I don’t want to have a car payment! I drive an older Prius in need of body work.  My husband drives a Jaguar older than some of the people with whom he works.  And we have a Honda Pilot for any time that our whole family goes somewhere together.  (Yes, we’re one of those families who has more cars than drivers.  I’ve done the math, it works for us, but only because our cars were so cheap.)

About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.
  • 4M

    When my wife first came on AD we bought a brand new compact car for her. Three year loan at 0.9% was nearly $500 a month. Back then it was worth 14,000 on KBB, now it’s worth $11,000. Car didn’t change, we just held into it.

    And that’s why I could see the study as valid, you buy your cars early in your career, as time goes by rank increases and deperication sets in pushing the cars value down.

    I do think there’s some truth in our young enlisted getting nice cars, but that’s ok. It’s often the only thing they have that’s theirs. They live in the barracks, or on a ship, they can’t have much stuff, and so a nice car makes sense from a Maslow viewpoint.

    Financially it’s a disaster waiting to happen, they often don’t have the credit history to get a prime rate, they pay more for insurance, and often buy too much car.

    My neighbor makes all his airmen come to him before buying a car. He’ll go with them when checking out a used car mechanically, and will also go with them when hashing out the deal. I’ve even seen him help his former airmen fix their cars.

    I never asked what he did if they didn’t comply, but I’m sure they did even without the threat of a stick because he was just that kind of a leader.

    • Top

      True NCO, Looking after his Troops. As a 1st Sgt my troops used to come to me to sign their paper work to buy an expensive what not from some rip off store off Post., 9 out of 10 times I would talk them out of it or just refuse to put my name on it. I would instead Guide them to the PX for a Better Price and higher Quality. How ever some time they would take it to the Rip Off Joint and they would let them have it anyway. Most of you Know what Happen Next.

  • 4M

    Just wanted to add that when I was a young sailor I drove an all to expensive Jeep Wrangler. The car plus gas and insurance are up more than half my pay, but it was my entertainment on weekends, and impressed the ladies (an important thing in a young servicemembers life).

    I actually slept in that jeep for a few months when I first got to my first sea duty assignment (no E4 and below could afford to live out in town in San Diego, and living on the ship was awful so I crashed in my car (should have bought something bigger)).

    I recovered from that financial mistake and left the service with ~$50k that I saved to help with the transition, but didn’t tap because the Post 9/11 GI Bill was more than I needed to pay the bills for my wife and I.

    So I’m not worried about the young guy who buys a nice car, I’m worried about the single income family that keeps trading cars in and can’t live on the GI Bill should they not be allowed to stay in.

  • Chucky

    I’m assuming your a spouse or a civilian. In either case, I don’t think it’s really your concern what younger servicemembers drive. Younger servicemembers don’t generally have a wife or a football team’s worth of children to feed. Many have not racked up any significant amount of debt. There are little to no bills to pay, other than maybe a phone and internet bill. That $30,000 dollars a year is roughly net income considering the E-4 doesn’t pay rent (if that soldier receives BAH, that estimate is significantly higher).

    I’ve been enlisted for 11 years and I’ve had several nice cars during my tenure. As a previous poster stated, we, as single enlisted Soldiers, rarely have much that is “ours”. We live in government quarters with government furniture, room inspections, visiting hours, sentry duty (i.e. CQ), and I could keep going. The point is, I don’t see the issue with having a nice vehicle, as long as financial stability is maintained. For example, I’ve still managed to build up an ample amount of savings. I have a 750 FICO credit score and got a 2.23% interest rate on my most recent vehicle. And surprise… it’s a BMW.

    Older/senior Soldiers often have many financial issues as well. Student loans, credit cards, multiple real-estate obligations (many officers/senior Soldiers seem to believe they are realtors or wall street investors) money tied up in stocks, etc. They put their money in different areas, but many of the financial situations are the same.
    Point is, you should worry about your own paycheck and less about ours.

    • 4M

      Chucky,

      Kate is a military finance writer, getting military members to give pause and think about their finances is her job, and one that comes at no cost to the military.

      This page is a great resource, and it never hurts to dwell on the whys, not everyone has a DivO that takes such an involved position into their divisions finances. I know my division financial councilor was broke, clueless, and just a rubber stamp for BAH, and so were many of my coworkers, despite getting some narly bonuses. Maybe related, maybe not, but factual, and sometimes frank, writing on military finance is something we need in the military.

      Respectfully,
      4M

  • USMarine64

    My first car was a 1955 Chevy as a Marine E-2. I paid $150 for it in 1965 and had to leave it on the lot until it was fully paid for. Took me 4 months to do it! Insurance – what was that?

    These days between the high enlistment bonus and the re-enlistment bonus, the junior troops have/had money that those of us who started off a very long time ago didn’t have. Even with that, the cost of a new car is absolutely nuts these days. If they can afford it, great for those who make the purchase. Wonder how many sit in the parking lot until pay day so they can buy that 1/2 tank of gas.

  • Ed C

    Simple…younger drivers lease expensive cars and older ones will buy and keep theirs, longer….

  • Hal A

    You hit the proverbial nail on the head when you said “my family.” It costs as much if not more to maintain kids, and multiple cars (insurance, repairs). In my 20 plus years on active duty I saw more financial hardships from married older couples with a family, than young single Marines living in the barracks. Even if they live paycheck to paycheck, they have something tangible to call their own. Long deployments give them something to look forward to upon return; unlike married couples. Even in the military there is jealousy over material goods, hopefully leaders know that there is a benefit to younger enlisted having something; albeit a car to take care of.

  • jastdi2

    This is not even a question. Of course they do. When I was a brand-new second lieutenant, I drove an Austin Healey 3000. When I was a brigadier general, I drove a Citroen 2CV.

  • joeaverager

    For me it’s whatever floats their boat. I’m a car guy – I love anything with an engine – new and old. The more weird the ride, the more interesting it is to me. Over the years I’ve watched peered buy cars with credit card interest rates, and pay top dollar for cars that were on their last legs. One fellow left his convertible parked at the pier where our ship had been tied up. He left it with the top down and a nylon car cover over it. Far from waterproof. We were gone for six weeks or more as I recall. He complained that at the last second he could not get the power top to go up. Many convertibles have bypasses for the power top mechanism allowing the top to be raised manually. The whole car was on it’s last legs before we left so it wasn’t much of a loss to anyone but him. That car was one of those credit card interest rate type loans on a worn out car. Saw another convertible at my overseas assignment whose owner had a nice enough car but left it parked outside with the top down for over a year. Nope – he wouldn’t sell it. It was special to him. Why not put the top up and avoid the rust? Live and let live.

    For some of these guys – these cars were liberty time trophies. They spent alot of cash on them. I’ve spent some cash on my rides too – not that the results were visible. Some were very ordinary cars but mechanically were A+. Not race cars – just in good knack.

    I came into the service years ago with a good $1500 Mustang but sold it before I moved overseas. Then started a long line of cheap economy cars – aircooled Beetles, Rabbit convertible, $150 CR-X. Still have my oldest aircooled Beetle all these years later.

    I just didn’t want to invest alot of money into a car when I could more or less drive for free by buying older cars, fixing them up and reselling them after a few months of driving them. What I did want and never bought was a good travel car so when I drove long distances to visit friends and family I was comfortable.

    Now years later (civilian) I still drive older cars. Our one new car we still drive 17 years later b/c it is still presentable, reliable and suits our needs. Our eldest child will likely drive it some soon. It brought him home from the hospital… Our other car is is an older Chevy sedan that was cheap. I still love old cars but as a married father of two – I have many, many other places I’d rather put my money than into a depreciating asset – my mortgage is where I want to put my money to get it paid off. ;)

    In the next year or two though we will buy a new(er) car for our out of town trips. We’ll pay cash even if it is new. We’ll keep one of the well aged cars for commuter duty (wife and I carpool 100% of the time to keep costs down) and the teen might get the older Chevy sedan. The new car will be parked inside.

  • Catiebat

    Well, it is just a general misconception that younger service men drive nicer cars. Service men need not necessarily be inclined towards materialistic fantasies and a “nice car” would definitely fall in this category. My uncle is an ex-serviceman who drives a Honda Civic, which in itself is a nice car. His juniors do not have the luxury of affording such a car. He says that nice car need not necessarily be the cost of the car, but a nice car is one which is serviced properly like he does from Service Plus in Etobicoke. Hence, this popular notion is actually a misconception.

  • My first car was ford fiesta, I had bought it in early 2004 and after that i have used many cars but in last I am using the mercedes benz A class. It is little bit expensive and good one and I am happy with this one

  • Who else wants the insider secrets to finding great cars and trucks for up to 90% off the Kelly blue book value? Every month, 1000s of cars become government property through seized and foreclosure laws. Since there are so many cars in these government auctions, and the enormous costs for storage, these cars must be sold fast and cheap!

  • Service men need not necessarily be inclined towards materialistic fantasies and a “nice car” would definitely fall in this category.

    Read more: https://paycheck-chronicles.military.com/2015/06/0
    The Paycheck Chronicles