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Old 03-05-2015, 12:14 PM
 
5,621 posts, read 8,560,724 times
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Quote:
Originally Posted by ncole1 View Post
Ok, use something reasonable then. A typical new car price of $25k, which after 10 years is worth $7k. It's $18k in depreciation in 10 years, or $150/month, plus any interest the buyer may have paid.
Is there some point or question here?
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Old 03-05-2015, 12:36 PM
 
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Quote:
Originally Posted by Malloric View Post
See, that's the problem. You think you NEED a BMW. I drive about 30,000 miles a year, which is way more than the average person needs to drive. Lots of people drive only a few thousand miles a year, which is more realistic. My car payment and insurance run about $450/mo, gas is another $200. Certainly that's more than $200/mo, but I'm also driving a brand-new car, have full coverage with high policy limits, and drive a lot. Repairs and maintenance certainly do cost something, but it's very little. The car is maybe eight months old at this point. I've thus far paid nothing for anything. Free maintenance for the first 25k.
Where I live 1k a month is what it costs for a used car.
Cost includes maintenance, gas, tolls, parking, insurance, registration, the cost of a replacement vehicle (cars don't run forever), and taxes.

edit to add:

budget= $400/mo for gas. That's a little less than 2 tanks per week (my job requires me to drive a lot, I'd say I'll put 30-40k miles on it per year)

registration= $30/mo

maintenance/repairs= $200/mo (my car is 15 years old)

insurance= $200/mo (doesn't even include collision and my driving record is spotless for the last 4 years)

tolls and parking (unavoidable where I live)= $40/mo

replacement vehicle for when this car dies= $100/mo

Doesn't even include a car payment or collision insurance.
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Old 03-05-2015, 12:53 PM
 
12,709 posts, read 9,989,624 times
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Quote:
Originally Posted by Themanwithnoname View Post
Is there some point or question here?
Yes, the point is that this is the capital cost of the car, not the monthly payment.
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Old 03-09-2015, 05:38 PM
 
Location: Vallejo
14,074 posts, read 16,105,531 times
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Quote:
Originally Posted by dysgenic View Post
Where I live 1k a month is what it costs for a used car.
Cost includes maintenance, gas, tolls, parking, insurance, registration, the cost of a replacement vehicle (cars don't run forever), and taxes.

edit to add:

budget= $400/mo for gas. That's a little less than 2 tanks per week (my job requires me to drive a lot, I'd say I'll put 30-40k miles on it per year)

registration= $30/mo

maintenance/repairs= $200/mo (my car is 15 years old)

insurance= $200/mo (doesn't even include collision and my driving record is spotless for the last 4 years)

tolls and parking (unavoidable where I live)= $40/mo

replacement vehicle for when this car dies= $100/mo

Doesn't even include a car payment or collision insurance.
I did 24,000 miles last year for business use. Assuming your 40k and $4/gallon gas, it would cost me about $270/month for gas. But then I bought a fuel efficient car. Parking usually runs around $200/month, tolls around $100. I'm reimbursed for those though. Ouch. I spend about $1,000 less per year on insurance, have full coverage with normal $500 deductibles, 500/1000k policy limits.

The gas savings and not constantly dumping money into an old car pays more car payment and then some.
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Old 03-10-2015, 08:33 AM
 
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Quote:
Originally Posted by Malloric View Post
I did 24,000 miles last year for business use. Assuming your 40k and $4/gallon gas, it would cost me about $270/month for gas. But then I bought a fuel efficient car. Parking usually runs around $200/month, tolls around $100. I'm reimbursed for those though. Ouch. I spend about $1,000 less per year on insurance, have full coverage with normal $500 deductibles, 500/1000k policy limits.

The gas savings and not constantly dumping money into an old car pays more car payment and then some.
It's not the car payment that matters, it's the depreciation (and interest if you pay it). I don't get why this is so tough to understand. Money is fungible and you'll have to sell the car eventually, right? So you cannot rationally ignore positive or negative equity you accrue in the car.
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Old 03-10-2015, 12:02 PM
 
Location: Vallejo
14,074 posts, read 16,105,531 times
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Quote:
Originally Posted by ncole1 View Post
It's not the car payment that matters, it's the depreciation (and interest if you pay it). I don't get why this is so tough to understand. Money is fungible and you'll have to sell the car eventually, right? So you cannot rationally ignore positive or negative equity you accrue in the car.
It's not hard for anyone to understand. Nobody really operates on a depreciation basis. It's how I do my taxes for business equipment but it's really only relevant for taxes. My business decisions are made based on cash flow, not the tax implications of how long a particular piece of equipment will depreciate for.

Regardless, with conventional financing over the relevant timeframe, depreciation is always less than the payments. It's not really how people operate. Mine will be worth less than average due to the miles I drive, but typically they only depreciate by 50% over five years whereas the payments/down obviously cover 100%.
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Old 03-10-2015, 01:25 PM
 
12,709 posts, read 9,989,624 times
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Quote:
Originally Posted by Malloric View Post
It's not hard for anyone to understand. Nobody really operates on a depreciation basis. It's how I do my taxes for business equipment but it's really only relevant for taxes. My business decisions are made based on cash flow, not the tax implications of how long a particular piece of equipment will depreciate for.

Regardless, with conventional financing over the relevant timeframe, depreciation is always less than the payments. It's not really how people operate. Mine will be worth less than average due to the miles I drive, but typically they only depreciate by 50% over five years whereas the payments/down obviously cover 100%.
If this were true then no one would be upside down on their car...

People may not be operating on a depreciation basis, but because money is fungible, it is irrational to value $1 in marginal car equity at $0.00. People do it, but it's still irrational.
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Old 03-10-2015, 06:01 PM
 
26,027 posts, read 33,040,777 times
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A living wage to me is one that allows a person to afford rent and utilities (with roomate/s or a working spouse), pay for transportation (used car or rideshare or public transport) and afford food and clothing. No manicures and pedicures. No hair salon color visits. Utilities would not include cable tv or a high priced smartphone/data plane either. I have none of those things, and I earn far more than a "living wage".
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Old 03-11-2015, 07:21 PM
 
12,709 posts, read 9,989,624 times
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Quote:
Originally Posted by ChessieMom View Post
A living wage to me is one that allows a person to afford rent and utilities (with roomate/s or a working spouse), pay for transportation (used car or rideshare or public transport) and afford food and clothing. No manicures and pedicures. No hair salon color visits. Utilities would not include cable tv or a high priced smartphone/data plane either. I have none of those things, and I earn far more than a "living wage".
No kids, right?
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Old 03-12-2015, 05:50 AM
 
Location: USA
6,226 posts, read 5,369,286 times
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I believe the markets should dictate wages based on supply on demand. If you're skill set is only worth minimum wage, then you must improve your skill set or work another job. Employers don't recruit people just for the sake of giving them a job. They have a function that must be carried out and need someone with the skills to do it.
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