Why I Only Buy Toyotas

– By Chris Harris

I teach classes on personal finance and have a policy in my class that after the first time we talk about “cars,” we only refer to them as “depreciating assets” going forward.

By calling a car a “depreciating asset,” it helps to reframe it as a tool that you use – a tool that becomes worth less every time you use it. This mindsight can be helpful because transportation is typically the second largest expenditure in American budgets(1).

Because people tend to spend so much money on this particular depreciating asset, I decided to approach the car buying process as a financial decision. If I am going to spend a significant amount of money on a depreciating asset, what are the qualities or characteristics that matter the most to me?

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I want a depreciating asset that…

Will last a long time
Will not break often while I own it
Is inexpensive to fix if it does break
Will lose its value slowly

When I approached the idea of buying a car through this process, I came to the conclusion that the only car brand people should buy is a Toyota; it fared the best in decision-making for depreciating assets.

1. I want a depreciating asset that will last a long time.

Recent rankings for 2022 listed all auto manufacturers based on the percentage of registered vehicles with over 200,000 miles. The top brand was Toyota(2). This was evidence to me that this is the brand that builds a depreciating asset that can last a long time.

2. I want a depreciating asset that will not break often while I own it.

Consumer Reports ranks the most reliable car brands each year. In 2022, similar to most years, Toyota topped the list as the most reliable car brand(3).

3. I want a depreciating asset that is inexpensive to fix if it does break.

CarEdge produces an interesting listing of average maintenance costs over 10 years for each brand, as well as for each individual model(4). Toyota is at the top of the list for lowest maintenance costs, and specific Toyota models take the top 6 spots of least expensive maintenance costs.

Admittedly, this may be a combination of the cost to fix the vehicle and the fact they don’t break down as often. It is still interesting data related to the actual dollars paid if something breaks.

4. I want a depreciating asset that will lose its value slowly.

Kelley Blue Book maintains a list of car brands, as well as individual models, that hold their value the longest. The 2023 rankings show Toyota holds the top spot for maintaining value(5). This has been the case for 6 of the past 7 years.

I apply these principles of buying depreciating assets to all major purchases I may make (large appliances, lawnmowers, power tools, etc). However, cars hold a unique place because they make up such a large part of most people’s budget.

Unless we are willing to significantly reduce the amount we spend for transportation, we should consider choosing a depreciating asset that does well in all of these categories. As for me, I will continue to only buy Toyotas – unless Toyota gives me one for free.

1 https://www.cnbc.com/2022/04/09/thinking-about-buying-a-car-heres-what-experts-say-you-need-to-know.html#:~:text=People%20spend%20a%20lot%20of,education%2C%20and%20saving%20for%20retirement.

2 https://www.wane.com/news/top-picks/the-most-reliable-car-brands-for-2022/

3 https://www.consumerreports.org/car-reliability-owner-satisfaction/who-makes-the-most-reliable-cars-a7824554938/

4 https://caredge.com/ranks/maintenance

5 https://www.kbb.com/awards/best-resale-value-cars-trucks-suvs/#:~:text=Best%20Brand%3A%20Toyota