Should I buy a new car? (insurance, sell, engine, cost)

[Checkered24]

Originally Posted by Carson9

Haha, thank you. Actually, though I do want a new car at the end of the year, I wasn't really looking for justification. This would be my first new car purchase and wanted to hear from other folks on their experiences/thoughts on the matter.

IE keep it through 2016, trade in value won't be that different, etc....

I'm one that has more than an 8 month emergency fund, contribute to my Roth IRA and traditional IRA to the max, so tend to want to make sure it's not a colossal waste of money.

My thinking was that if I were to get let's say $9000 at the end of 2015 and $7000 at the end of 2016, it may make sense to trade it in sooner vs. later (I'm making these numbers up BTW). Just wasn't sure if my thinking is accurate.

I do like the 2008 Tucson, but it's starting to look pretty dated and assume will be even more so in a year or two and not sure how much that would negatively affect resale value.

Your making the numbers make sense for you. I do see where your coming at. How much are you looking to spend per month on a loan? Lets say $350. So if you wait an extra year, take the depreciation hit and trade in for $7,000, but save that $350 a month for the next year (total $4,200), you will have a total down payment of $11,200 instead of $9,000... which lets you afford $2,200 more in options and toys on the next car and keep payments the same $350.

So really, maybe it depends on what you want, how much you want to spend, whether you would save that money for an extra year if you could...

Any new car is a "waste" of money to some people, due to new car depreciation. That will ultimately cost you a lot more than the depreciation on your Tucson. However, if you wanted to research it more, go on autotrader/craigslist, and kbb/edmunds and run numbers for the trade in values and asking prices of your 2008 Tucson, and comparable 2007 Tucsons with your milage now plus what you will drive in a year. This is not perfect, but should give you a ballpark idea on how much the same model Tucson will depreciate in the next year.

[mic111]

Originally Posted by Carson9

So.... I've been itching to buy a new car at the end of 2015 though I realize it may not be the smartest financial decision....

What are your thoughts? Should I keep the car longer or bite the bullet and get a new one at the end of the year?

Since your asking... I think you should wait until you can pay cash for a new car. You want to get ahead right? You want to be a millionaire sooner rather than later right? Then your first car is for payments. After that save cash for the subsequent ones.

You can buy a used car with all the toys. Do you have enough cash for that? If your dying for a car with toys then check out what your cash + trade in value will get you. If you can't get what you want with what you have then I'd wait until you had the cash to do it.

A little financial discipline when your young pays off big time when your old.

Argument - want to get most for trade in value: The new car will depreciate alot more than what you have so the trade in sooner argument isn't a valid one. In terms of losing money the new car will lose alot more than your existing one over any period of time.

Argument - gas mileage: Gas is really low. You don't drive very much. Your gas cost is minimal in either case. Not a reason to take on the depreciation.

Argument - I want more toys: You can get all the toys you want after market. Back up camera something like $75 at Walmart. Costco has them also. Bluetooth hands free car kits are $75 at Best Buy. Do some searching on whether people really use their sunroof. I've tried them and after a few times I never open them again. I don't like the sun in my eyes. Also when shopping for a new car I ordered one to not get the sunroof. If your tall they take up room where your head would normally go. I value the extra head room and being able to prop my sunglasses on my head without hitting the roof.

Argument - I just want a new car: Ok, I get that. But do you know which one? Try shopping and test driving. Do the research. Nitpick every single car you look at. Check out the reliability. Check out the new technology, the recalls etc. Is the seat comfortable? Do you like the available colors of grey, dark grey, light grey, black or white? How are the crash reports? Where was it built? Etc. With a little luck you will find something wrong with them all. When your spending your hard earned cash you want it to be perfect.

[Chance and Change]

It appears you can afford what you want. That is actually one of the bigger factors in the over-all. What we need vs what we want is always something debatable in choices to purchase.

It seems by summary, you have prepared yourself to go for what you want, then it is more a matter of when you choose to execute your choice.

[kayanne]

Originally Posted by miu

IMO I am never impressed by a salesperson in a shiny new car. It would just mean to me that he's making too much in commissions, a spendthrift, and also not appreciating my hard earned dollars.

On the other hand, I would respect a salesperson drove a classy older vehicle (BMW/Lexus SUV) that was well detailed and maintained.

My thoughts exactly regarding sales people.

I can, however, somewhat understand OP, as I am feeling similarly. I love some of the features that newer cars have, compared to my 2011 Camry. I have a Garmin GPS mounted in the window, and a Sirius box mounted next to it, with cords streaming down and always in the way of my cup holders. It looks so antiquated, like having a clothesline or an outhouse! I love how new cars have those things built in.

But I guess my hub is more deserving of a new car than I am, so I'll patiently wait my turn. He is still driving a 2003 Camry, despite his senior position in a large oil company, and enough money to buy a new car several times a year if he wanted to. He is just very practical that way, feels no need to show off, and will drive every car he owns into the ground. I am mildly embarrassed by his car, but mostly I love him for being so down-to-earth and not the least bit shallow.

[Haakon]

You want a new car and you can afford a new car so why not go out and buy it? I wouldn't do it, there are other things I'd rather spend my money on, but it's not my money. Would it be a 'waste of money'? That depends on what you think a waste is, plenty of people spend tens of thousands on a boat or RV they only use a few times a year, that would seem to be a lot bigger waste than buying a new car that you want.

[mkarch]

If you can find a new car to trade in for that will depreciate less than a 7 year old car, you need to start a thread on it.

[HappyRider]

Originally Posted by kayanne

My thoughts exactly regarding sales people.

I can, however, somewhat understand OP, as I am feeling similarly. I love some of the features that newer cars have, compared to my 2011 Camry. I have a Garmin GPS mounted in the window, and a Sirius box mounted next to it, with cords streaming down and always in the way of my cup holders. It looks so antiquated, like having a clothesline or an outhouse! I love how new cars have those things built in.

If that’s all you are longing for do what I did. Its a lot cheaper than a new car.

[ShakenStirred]

Originally Posted by Carson9

So.... I've been itching to buy a new car at the end of 2015 though I realize it may not be the smartest financial decision.

I currently drive a 2008 Hyundai Tucson LTD, which currently has 24,000 miles. Will have about $28,500 when I'm ready to trade it in December. I'll have it paid off by this April (I bought it used about 3 years ago). I realize that only leaves me with a few months of no car payments.

But my thoughts are that the longer I wait to trade it in, the less I'll get for it. I'd rather trade it in sooner to try and get as much as I can. It's in great condition and hopefully the low miles will be attractive to either a dealer or buyer if I end up selling it myself.

Secondly, I do 95% city driving, so I'm average around 16 MPG. Which is fine as I really only need to fill up on average 1x a month, but would like to get better MPG regardless.

Lastly, and I realize this is the least important, I really just want a nice, new car with all the modern conveniences (bluetooth, rear view camera, panoramic sunroof, etc.) I'm also in sales and at times just feel I need/want to be driving a nicer car.

What are your thoughts? Should I keep the car longer or bite the bullet and get a new one at the end of the year? In addition to trade in value, I'd probably put down an additional $10k for the down payment and plan on getting a 5 yr loan with 0% interest (my FICO score is around 800).

Any thoughts or insight would be appreciated!

You left out a lot of details that would help provide a better answer. What is your current financial situation? Do you have 6 months emergency cash stockpiled? Do you have a sizable investment account generating dividends for you? How much other debt do you have?

It's hard to say without assessing the other aspects of your life.

So here's some general advice.....Never, ever buy brand new. You will be throwing $10-20,000 away just by the instantaneous depreciate of the vehicle when you drive it off the lot. If you wish to just throw away that much money, please Private message me your name and address and I'll be glad to dispose of the money for you.

Now think about this...not only are you throwing that money away in depreciation, if you are financing the car, you are paying interest on the money that you have just thrown away.

Just for simplicity sake, let's say you buy a car worth $40,000, and finance it at 3% (I really don't know the going rate for car loans these days since I pay cash for mine). Then, when you take the car home, it immediately depreciates $5000 and that car is now worth only $35,000. Not only have you in essence "thrown away" the $5000, you are continuing to throw away another $150 per year for however long the car is financed for by paying interest on that $5000 that you can never recoup.

Now in the event you are or have made a boatload of money, and have no debt, no kids, no mortgage or anything like that, then I would say go for it, and get the new car.

I never, ever owned a brand new car until I was about 35, which was a new Honda Odyssey Touring Edition that I bought for my wife (I still get used cars for myself). This was only because I had started my own business which took off, plus I had been very smart about my money all my life and started investing when I was just 17 years old, so we had the cash to pay for everything including our house and beach property. Trust me when I say that was a surreal feeling when it came about!

Credit is the modern form of slavery, and it entraps all races, but if you can break free from it, it is quite a liberating experience. There is a catch however.....2 houses and a beach property, 3 vehicles, all purchased with cash, no debt, profitable business, sizable investment account, and I cannot get a loan from any bank to save my life. Because I haven't bought anything on credit for so long, my credit score is under 500. Talk about a catch 22. My credit union offered me a $3000 one yr. loan at like 13% or something ridiculous just to "establish" my credit score. I asked the VP of the Credit Union, so essentially, what you're telling me, is that for $3000 plus interest, I can "buy" my credit score? He said "basically, yes."

I thought I could borrow the money for another car at a low interest rate, and hang on to the capital for the car and earn a higher return on that capital while I am paying the car off, hence making money off of the car loan itself, but our current system of credit is apparently not friendly to those who are responsible and pay everything off. He told me it's how the banks punish you for not letting them make money off of your money.

So basically, I am stuck being my own bank, which is not a bad place to be, but to get there, you have to be very smart with your money early on. A little here and there adds up to a lot over the long haul.

Best of luck to you.

SS

Edit: I forgot to mention, my current vehicle is a 2002 with 200,000 miles and still runs strong, if that means anything to you.

[te rose]

This is what I would do:

Sell the car myself, then by a newer car, but not brand new. Too much depreciation.

[AmFest]

My advice: buy what you want and can afford. Ignore any trolling or personal attack. Life is too short to waste on trolls and to not pursue what you want.