The Millionaire Next Door

Toyota: 1st in Quality and #1 Among Millionaires

I have always been fascinated with the studies conducted by Consumer Reports that contrast the price of various brands with their quality and endurance.   Often it seems that those brands of products which are in the higher priced categories are not found to be of the highest quality.  Of course, there are many definitions and components to quality measures. 

When judging the quality of different makes of cars, I use one of the same criterion used by Consumer Reports.  The magazine calls it reliability; I call it endurance.  To me the cars with the highest quality are the ones that last the longest.  And the ones that last the longest and have the fewest required repairs are not always the ones produced by so-called prestige manufacturers. 

One graph in the April, 2011 Consumer Reports, “Reliability by Manufacturer,”  for my money is worth more than the subscription price.  Enlightened readers could avoid making a costly mistake in selecting their next car by digesting this information.   The graph charts the problems/100 vehicles (makes of cars) over a 10 year period.  While most makes cluster fairly well during the first and second year of ownership, there appears to be a wide and increasing variation up through the 10th year. 

In Stop Acting Rich, I mentioned that Toyota was the number one make of motor vehicle most recently acquired by millionaires.  More than one in ten drive Toyotas; among millionaire engineers it’s one in four! And, reading from the Consumer Reports‘ graph, Toyota was the number one manufacturer in terms of the fewest problems per vehicle after 5 years.    In contrast, a ten year old vehicle that was manufactured by BMW or Mercedes Benz is nearly twice as likely to have problems than one manufactured by Toyota. 

9 thoughts on “Toyota: 1st in Quality and #1 Among Millionaires”

  1. So I have 4 brothers.. In total I can recall they they have purchased at least 24 cars among them. Now at 41, I find myself only having owned only 2 vehicles. A 1992 Toyota Camry that I bought 1 week before I started my first job out of college ($384.19 per month). And a 1998 Lexus Sedan (in 2002) from a man’s driveway during the .com Bust. He had 4 in his driveway and the wife just bought a new one. He was asking $28,000 and I told him all I could do was $20,000 and before I made it down his driveway to leave he said “OK, let’s do it”. I’m not thinking he was the Balance Sheet Affluent type 😉

    As I’ve always said, “I just need to get from point A to point B, -consistently.” Toyota/Lexus has always done it for me..

  2. We just purchased another used Mazada after driving a used 1994 Mazada for 7 yrs. It wouldn’t pass inspection because the body was rusted but the car still ran great. We purchased it for $1500 with 60,000 miles on it and drove it to 240,000 with virtual no problems except routine maintenance.

    The great thing is that for 7 years, we had no car payment and the insurance was super cheap. This allowed us to concentrate on building our business and plow our money back into my business without worrying about making a car payment every month.

    It was the best decision that I ever made and a worthwhile sacrifice because now, I have a successful business and could afford something nice, but my wife and I decided to buy a used car again because we enjoy the freedom, security, and low risk of owning a used car.

  3. The first car that I owned was a 28 year old chevy nova as a junior in college. It had a problem with the alternator but was a solid vehicle. In my second year of graduate studies I bought a used ford tempo with 50k miles. The tempo was repaired a total of 13 times before It was traded with only 100,000 miles. From that time I have focused on toyota. I most recently bought a used sequoia on the internet . I obtained a great bargain on a great vehicle that I expect to last forever. I will add that the internet is a great resource for car shopping in general. I live in a small town and the local dealerships do not offer competitive prices. Even private sales are priced higher than in larger cities. I have a good friend who
    owns an auto repair shop who prefers toyota above other cars. I would add that the toyota avalon and the toyota sequoia are the finest vehicles in their respective classes on the road.

  4. I’ve owned Toyotas and Hondas and I think Hondas are a little bit better…but both reliable, inexpensive, and good to get from point A to point B.

  5. I’ll preface this by saying that I’m an avid reader and I agree with the spend-less-than-you make philosophy that this blog promotes and that most Americans just don’t get. However, come ooooon. There has to be a limit to how much personality and style you will sacrifice in order to build wealth.

    If your life is so humdrum that your main automotive concern is “getting from point A to point B”, I feel sorry for you. The WHOLE POINT of sacrificing to win, the whole point of getting out of debt and stacking money away, is so you and yours can enjoy life… or at least burn a little rubber to and from that desk job.

    Get out of debt, yes. Invest wisely, yes. Sacrifice to win, yes. Read books, work hard, live below means, yes.

    But give up on life and drive an appliance? No.

    I’m not leasing a new BMW, but I’m certainly not putting around in a Camry either. I’d rather drive a $2k beat up Mercedes and wrench on it twice a week, while I save up for an 80s Porsche. Or insert name of childhood dream car here — most of which can now be had for half the price of a Camry. And the maintenance? Well I guess that’s just the cost of having a little bit of taste. I work hard so I can afford the maintenance without sacrificing my savings.

    I applaud you all for being frugal, as I consider myself very frugal too. But don’t forget what it’s like to be a kid, to want something cool, to have some style, enjoy the ride.

    What if James Dean would have driven a Toyota?

    Different strokes I guess.

  6. Interesting article. I am a millionaire and my only car is a Toyota economy car. It’s nine years old and I paid if off in three years, and yes, very reliable. It’s a Matrix and very practical. I have big goals in mind which would have to involve me doubling or tripling my net worth. Getting rid of this car would be silly. Yes I drool at the BMW M5, Lexus ISF, Jaguar XF, even the less expensive top of the line Mustang GT 5.0s. But my dreams are inexpensive.

  7. I sort of agree with Michael. At some point when your investment average annual gains (provided you rebalance regularly) return far more than your living expenses AND the price of your brand new shiny dream car, are you really going to want to continue living as though you are middle class? Are you ever going to enjoy the results of your wise investing or business practices? Particularly in my case when I have no dependents. Yes I drive a Toyota. I think it is important to indulge. My own rule of thumb is to indulge on 1% of my net worth per year. It’s conservative for many, particularly if your investment portfolio gains eight percent per year. Suppose I have a net worth of $3,000,000? I would then indulge on $30,000 per year or indulge on $90,000 after a three year period. That is the price of a high performance German automobile. At this point I’m a millionaire but still far from that $3,000,000 figure, which incidentally is the figure I use in today’s dollars for being able to afford to retire on the central California coast. I got to this $1.4 million in ten years from $250,000. I think I can get to the $3,000,000 figure in another ten years but might not be able to catch the elusive brass ring if monetary inflation continues.

  8. Great points made by Michael. However, not all folks value having a car for enjoyment purposes. Perhaps they’d truly rather spend their money on the vacation home they want to drive to in their boring Toyota. Just as you and I may find it ridiculous for people to spend hundreds of thousands on jewelry, there are folks who find it foolish for us to spend money on sports cars for our enjoyment. Everybody has something they lust after, so let’s not ridicule anybody for having different tastes than our own.

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