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You have quoted MSRP for the 2016 model. Who pays that any more?. I am more likely to not pay more than $25K for the 2016 car when the 2017 ones are coming out
The problem is that you are comparing 2 different time frames and extrapolating it for the $ 1000 spent. At 4 years the new car with 50K miles will need only $1000 or even less but the 8 year old car will have more problems ( especially if it had a bad driving history) and now needs $5000 in parts and maintenance. That will almost wipe out the initial savings. You can do that for every 5 years with the 4 year difference.
And then the 4 year earlier model will have less safety features.
If you account for the negotiability of the new car price, you should do the same for the used.
This...the old adage does not apply anymore..maybe on higher end American or German....but on Toyota, Honda, subaru etc this doesnt hold up- three year old models with 30K miles are not even 5K less, and at a higher rate. I'd rather pay the extra $$ upfront esp since I'll know the service history.
I agree with all this, too.
There is also an extremely high incidence of people with leased cars rolling back the odometer before turning the car back in to avoid all the mileage penalty. If the car hasn't been inspected or dealer serviced in the third year, there's no way of detecting a year's worth of driving being wiped off a 36 month/36,000 mile lease car. I certainly couldn't tell the difference between 35,999 miles and 50,000 miles if the car had fresh tires and brake pads. If somebody is facing a 15 cent per mile charge and they're over by 10,000+ miles, they'll happily feed a couple hundred bucks cash to the local shady used car lot to roll the odometer back. With digital odometers, most can be "corrected" via the ODB II port.
The low depreciation rate on some Japanese brands is changing some. We no longer have the inventory shortage that was caused by the crash in the new car market in 2010 at the height of the recession. Far more low end cars are being leased. There's a much bigger supply of 3 year old low mileage cars now than there was a few years ago. I've read that used prices are down about 10% for the low depreciation cars like Camry, Corolla, Accord, and Civic and are expected to drop more.
If you account for the negotiability of the new car price, you should do the same for the used.
Yes, but a dealer trying to clear last year's new model to clear the old inventory and meet his quota to get manufacturer's incentives is more likely to cut $5K off the marked price. Not a chance in hell that the used car seller will do the same amount. Unlikely to be more than $500 max.
3:32 "I don't borrow money and I don't teach people to borrow money"
5:00 "The company you work for, is there any chance they might give you a little advance on some of your pay?"
At the same time, I'm sure an employer wouldn't be charging interest AND if the person is working and expected to continue working for said employer, it's not like they can't get their money back from a future/next paycheck. A paycheck 'advance' is different than borrowing money from a bank.
But Ramsey is right -- he really doesn't 'teach' people about borrowing money because other than a 15 yr mortgage, he's against going into debt.
At the same time, I'm sure an employer wouldn't be charging interest AND if the person is working and expected to continue working for said employer, it's not like they can't get their money back from a future/next paycheck. A paycheck 'advance' is different than borrowing money from a bank.
But Ramsey is right -- he really doesn't 'teach' people about borrowing money because other than a 15 yr mortgage, he's against going into debt.
Well apparently we can add this to the ad-hoc list of Ramsey-approvable debt.
3:32 "I don't borrow money and I don't teach people to borrow money"
5:00 "The company you work for, is there any chance they might give you a little advance on some of your pay?"
Interestingly enough I've processed some advances for employees before. Usually for salaried or hourly folks it's really rare and involves an emergency, it's still rare for our sales folks but easier to get done the more their revenue generation is
That's hilarious! My employer is the LAST PLACE I would look to borrow money.
You do understand that an advance is not borrowing money, right? When you borrow, you have to pay back. You dont pay back an advance.
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