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$13,000 - $5,000 = $8,000 or $8,000/5 = $1,600 per year
All repairs have been covered by the warranty. Most consumables should be in good condition after only 5 years.
After 5 years, you add $8,000 and get the next brand new one. You can easily pay $8,000 cash, there is no need to finance.
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Is anything wrong with my calculations?
Lowest TCO for a new car is a somewhat useless exercise. If a car buyer is truly driven by frugality, they will buy late model used, not new. And then the smart frugal buyer looks for the best value, which would be the highest quality vehicles among those with the highest first year depreciation, excluding those with above average maintenance costs.
Does it mean that this smart frugal buyer will buy a 25k-mile Camry LE for $20,000 when a new one costs $24,000?
It doesn't make sense as a new vehicle with a warranty is a new vehicle.
$13,000 - $5,000 = $8,000 or $8,000/5 = $1,600 per year
All repairs have been covered by the warranty. Most consumables should be in good condition after only 5 years.
After 5 years, you add $8,000 and get the next brand new one. You can easily pay $8,000 cash, there is no need to finance.
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Is anything wrong with my calculations?
yes. 13000/4=$3250 a year. $270/month plus the cost of gas, insurance, etc.
$13,000 - $5,000 = $8,000 or $8,000/5 = $1,600 per year
All repairs have been covered by the warranty. Most consumables should be in good condition after only 5 years.
After 5 years, you add $8,000 and get the next brand new one. You can easily pay $8,000 cash, there is no need to finance.
---
Is anything wrong with my calculations?
actually the top trade in value for a base mirage 2015 with average miles 15k per year, 75k is $2400 per kbb. and that $13k does not include dealer fees or tax.. in florida, you would add a 899. dealer fee and tax.. so you are at 14,700ish. so that mirage is actually costing you a good penny.. lets assume that the mirage was 11k in 2015.. 11k-2400=8600 its costing you over 5 years..about 140 a month before tax to drive junk.
Then you use the car for 1 more year for free and sell it for $7,000.
You pay only $6,000 for the next car.
Correct?
a couple of problems with your premise. first, you're assuming that a 5-6 year old mitsubishi mirage with 60+k miles on it will sell for $7000. secondly, you've selected the cheapest model from each manufacturer. you could utilize your same tactic and it would work with the cheapest offerings from every car company. you can buy a civic for $19k, and sell it years later for $13k and your operating costs are similar. now, I just loaded up a mitsubishi outlander on their website, and the MSRP before taxes and fees is $42k. do you think you'd be able to sell that vehicle in 5 years for $37k? that's the point. if you take an extremely cheap vehicle, the operating costs will be low. but as a brand, fiat and mitsubishi are trash.
a couple of problems with your premise. first, you're assuming that a 5-6 year old mitsubishi mirage with 60+k miles on it will sell for $7000. secondly, you've selected the cheapest model from each manufacturer. you could utilize your same tactic and it would work with the cheapest offerings from every car company. you can buy a civic for $19k, and sell it years later for $13k and your operating costs are similar. now, I just loaded up a mitsubishi outlander on their website, and the MSRP before taxes and fees is $42k. do you think you'd be able to sell that vehicle in 5 years for $37k? that's the point. if you take an extremely cheap vehicle, the operating costs will be low. but as a brand, fiat and mitsubishi are trash.
agree.. however my wife drives a 2014 fiat 500... paid $9,999 for it new plus tax.. yes it was an advertising gimmick and they tried to tell us they sold it.. but we were there the night before and knew that the car was hidden in the back lot.... still could get $6500-$7500... well it actually only has 6,800 miles on it... I don't drive it.. its white with pink striping....
agree.. however my wife drives a 2014 fiat 500... paid $9,999 for it new plus tax.. yes it was an advertising gimmick and they tried to tell us they sold it.. but we were there the night before and knew that the car was hidden in the back lot.... still could get $6500-$7500... well it actually only has 6,800 miles on it... I don't drive it.. its white with pink striping....
the lower initial cost, the lower 5 year ownership costs. I bought a 2007 toyota RAV4 for $7500. I bet I could sell it for $5000 in 5 years. the depreciation curve has flattened on that vehicle. what hurts mitsubishi and fiat are their pricier vehicles. as a brand, they don't hold value. all of these "studies" and new car lists are just a joke. I mean, this is a 5 year ownership forecast on 2020 vehicles. there's simply no logic to that.
I'd buy almost any used car before I bought a Mirage.
Quote:
the depreciation curve has flattened on that vehicle.
I bought a 2005 Jagwagon in 2010 and traded it in two years later for nearly what I paid for it.
But that was an unusual situation, to put it mildly. I've had a few of those...
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