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Old 12-04-2014, 01:22 PM
 
Location: North Beach, MD on the Chesapeake
32,138 posts, read 39,225,649 times
Reputation: 40594

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A note about those of you who don't want to "take a hit on the depreciation" if you buy a new car. That's only relevant if you are that guy who trades every couple to four years. If you're now the typical new car buyer you keep the car long enough (average age of cars on the road now is north of 11 years old) the depreciation doesn't matter.

Right now out front are the following vehicles bought new: 2002 Taurus wagon, 2003 F 150, 2010 Forester, 2014 F 150. Add in my kids and you have not one but two 1995 Taurus wagons and a 2014 Fit. Tell me again how depreciation has hit me buying those new vehicles.
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Old 12-04-2014, 01:30 PM
 
4,429 posts, read 3,113,150 times
Reputation: 5262
Quote:
Originally Posted by North Beach Person View Post
A note about those of you who don't want to "take a hit on the depreciation" if you buy a new car. That's only relevant if you are that guy who trades every couple to four years. If you're now the typical new car buyer you keep the car long enough (average age of cars on the road now is north of 11 years old) the depreciation doesn't matter.

Right now out front are the following vehicles bought new: 2002 Taurus wagon, 2003 F 150, 2010 Forester, 2014 F 150. Add in my kids and you have not one but two 1995 Taurus wagons and a 2014 Fit. Tell me again how depreciation has hit me buying those new vehicles.
+1. You only take a "hit" if you sell it. Keep it for 10-20 years and don't have to worry about it.
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Old 12-04-2014, 02:01 PM
 
Location: Western Nebraskansas
2,707 posts, read 5,174,828 times
Reputation: 2392
holy crap, people…

Quote:
Originally Posted by itsMeFred View Post
But the average income in the US is currently less than $50K…
For that $40K car.

New cars almost never make financial sense. If you have that much disposable income to blow, go for it. Be happy. Everyone likes new toys.


But the vast majority of us are trying to either squeeze as much out of our limited income as possible, or have the money but don't see the logic in tying up that much in a depreciable asset. (There's a reason Warren Buffet drives used cars)

For either of these scenarios, a 3-5 year old car in the $8-12K range will be a much smarter purchase. And, they're still new enough to have all the whistles and bells, be solid and reliable and need very little maintenance. Even if you finance it, do the math and compare the higher interest on, say, $9K to a phenomenal 0% on $20K.
You're still miles ahead with used. And, 3 years down the road, you'll have your used car paid off. It'll actually be an asset (though depreciating) at that point, rather than a debt that's ALSO depreciating.

Note: NO ONE HAS SAID YOU CAN'T BUY WHATEVER YOU WANT TO DRIVE.
However, the original question was about being able to afford automobiles.
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Old 12-04-2014, 02:02 PM
 
Location: Pikesville, MD
5,229 posts, read 11,495,564 times
Reputation: 4846
Quote:
Originally Posted by itsMeFred View Post

What a very odd statement.
Why would you make the assumption that I would pay someone else to do this because I'm incapable?
(In case you haven't guessed yet, your assumption is WAY off the mark. lol)
I'd make that assumption because most people here don't have all the equipment I do to do real restorations, from the welding and plasma cutting equipment for rust and panel repairs, to painting equipment, to the engine hoists and stands. Especially people who tend to see cars as depreciating assets that get you from point A to point B.

If you have that equipment and skill set, then I apologize.
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Old 12-04-2014, 02:06 PM
 
3,280 posts, read 3,550,141 times
Reputation: 3971
Quote:
Originally Posted by itsMeFred View Post
But the average income in the US is currently less than $50K
For that $40K car.

New cars almost never make financial sense. If you have that much disposable income to blow, go for it. Be happy. Everyone likes new toys.


But the vast majority of us are trying to either squeeze as much out of our limited income as possible, or have the money but don't see the logic in typing up that much in a depreciable asset. (There's a reason Warren Buffet drives used cars)

For either of these scenarios, a 3-5 year old car in the $8-12K range will be a much smarter purchase. And, they're still new enough to have all the whistles and bells, be solid and reliable and need very little maintenance. Even if you finance it, do the math and compare the higher interest on, say, $9K to a phenomenal 0% on $20K.
You're still miles ahead with used. And, 3 years down the road, you'll have your used car paid off. It'll actually be an asset (though depreciating) at that point, rather than a debt that's ALSO depreciating.
If you (like me) keep vehicles 10/20 years then a new car does make sense. If I was trading in my car at 50k miles (3-ish years) I would probably drive around like a bat out of hell. Buying new, I know how the car is maintained/driven as opposed to a used car. I can take care so that 15 years down the road, my car will still be in great condition.
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Old 12-04-2014, 02:07 PM
 
Location: Western Nebraskansas
2,707 posts, read 5,174,828 times
Reputation: 2392
Most people who are restoring a well-loved old car don't have this equipment, either. Cutting torch, wire feed welder, a homemade paint room, buckets of Bondo, and eBay searches for particular parts…
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Old 12-04-2014, 02:19 PM
 
Location: Minneapolis
405 posts, read 408,695 times
Reputation: 648
Quote:
Originally Posted by sdlife619 View Post
It's beyond me, I even see people with nice new luxury cars in section 8 housing, now that's fishy. .
That's SoCal in general. Living in Glendale you'd think a BMW, Lexus, or Audi must be a free gift once you become a resident. Finally I realized that/accepted that people in SoCal are willing to pay out the nose for a new car even if they're broke. Never seen anything like it anywhere else in the country on such a huge scale.
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Old 12-04-2014, 02:24 PM
 
33,156 posts, read 39,125,262 times
Reputation: 28518
Quote:
Originally Posted by Merc63 View Post
Whether you're saving up money every month to buy a car later, or putting the same money per month into a car payment to buy a car now, your budget doesn't care. I've done both, many times. I've decided that I like having the cash in savings and not tie up the savings into a car. Debt is not a bad thing if you are capable of managing it effectively. Which is the key, have a budget and stick to it.

As for buying by monthly payments instead of overall price, if you have a monthly budget the overall price does determine how much you're going to spend per month, so you still shop by overall price. For example, if my monthly budget is telling me I can spend $300/month on a car, I'll be looking at cars in the $15-18k range for purchase and $20-30k for leasing if there are incentives on the lease.
I dont save money for cars, when the time comes i need another car it gets paid for out of available sources..
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Old 12-04-2014, 02:26 PM
 
Location: Minneapolis
405 posts, read 408,695 times
Reputation: 648
Quote:
Originally Posted by Annuvin View Post
Posts like this are hilarious.

Would you mind listing some of these 10 year old cars that are "known to be reliable" and aren't going to start having a lot of parts wearing out out until the +15 year mark?

A car is a machine, and machines by their very nature are going to wear out parts. The older a machine gets and the more it is used, the more likely and more often it is going to require said repairs. A 10-15 year old car under normal use is going to require a lot of repairs as parts wear out. You may *think* you are saving $$$ on that $2000 10 year old beater, but when you are paying for constant repairs and sitting on the side of the road with the hazards on, you aren't going to be saving much.

I always buy new. But then again, I've never been one to have any interest in paying for someone else's problems.
They're not hilarious, you just need to put down the kool aid. Once you factor in the cost of a new car/payments that 10 yr.old car will save you money over new. And let's not play dumb about what cars the poster was referring to: a 10yr. old Toyota or Honda will likely keep on ticking for another 10 years. Car reliability has improved greatly over the past 20 yrs.

Got a 2000 Camry myself. Last 'major' repair was replacing the radiator 2yrs ago, myself, for $40 or whatever. Hell even my tape deck still works. Now that's progress.
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Old 12-04-2014, 02:37 PM
 
Location: Minneapolis
405 posts, read 408,695 times
Reputation: 648
Quote:
Originally Posted by Merc63 View Post
If YOU don't want to buy a new car, that's fine. but using Warren Buffet as the example of why we shouldn't is BS.
You're getting way too worked up. You're coming at this from the perspective of an enthusiast and obviously no one else in the thread is.
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