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I drive an 06 Kia sedona, 111300 miles on it. I bought it in 2010 at 4 years old and 50k on it. I traded in my OH s 94 Ford Taurus, and financed the rest for 5 years. I paid it off in 2 years, 3 mos.
In the last 3 years, it has cost me about $5k to replace/repair/rebuild all the rusted parts, but i am firmly in the salted roads snow belt.
Atthis point, that is more than its worth, but it IS paid for. And theres really nothing good to buy in this area gor $5k, so maybe it's money well spent.
In 2014 we paid cash for my OH s 2014 brand new car, the first brand new car my OH has EVER had, and my OH was 55 at the time. Its a Hyundai. Sister company to Kia. Its been ok, but we will probably never buy one of either company again. They are rather inexpensive vehicles comparatively, andit shows.
My father still drives his 94 dodge van.
Since we used the car fund to pay extra on the mortgage, we cannot yet replace my minivan
But i hope to in 5 years. Cash. As we just stopped paying extra onthe mortgage. We now own half the house in jusr 4 years, with only 10% down.
So it was a trade off.
Only the first two (pick up trucks) of my vehicles were brand new. After i saw what I paid, and lost on those trucks, i have bought used only, usually 3-4 years old.
Folks build a lot of silly and arbitrary rules around cars and other things, but I'm increasingly coming to believe the best solution is just to figure out your savings first and structure everything else around it. Too many people fool themselves into thinking if they follow "some" of the rules they're okay. So they buy a cheap car. Than a more expensive house. Or a cheap house, than fritter away money on other things.
Figure out savings first and the remaining money is fungible. Yes, its great to cut costs where you can and cars/housing are definitely a BIG area where people overspend. Buying a cheap car may be a prerequisite to saving for some people, but it doesn't accomplish a thing if people don't actually save the residual...and I genuinely do not believe most would. I don't think telling people to spend less on cars is going to have the intended effect...its just going to increase the amount of non-car-crap most people buy.
We are in our 30's, with net worth about $2m, and earn about 30k/month. We drive older cars. I would like a newer car and have been looking but the depreciation on luxury cars is obscene. Personally I love luxury. I do not like lower end economy cars. They just seem cheap to me. But take my example, looking at getting a Cadillac XTS, new roughly $50k-$60k, just 1-2 years old they are HALF that or less! With under 40k miles. I'm also looking at the Volvo XC90, new around the same cost, used the 2016s are down to $30k. Not quite as good a deal but still quite nice.
Why anyone in the bottom 90%-95% of income earners would buy a new luxury car is befuddling, despite income or net worth.
If you make $1m/yr, I guess, go for it, but you're still lighting money on fire.
Some people have to buy new cars, which can be financed easily, because they do not have the cash to buy a used one.
I knew a man whose car needed tires, but he couldn't afford them so he traded it in on a new car.
Folks build a lot of silly and arbitrary rules around cars and other things, but I'm increasingly coming to believe the best solution is just to figure out your savings first and structure everything else around it. Too many people fool themselves into thinking if they follow "some" of the rules they're okay. So they buy a cheap car. Than a more expensive house. Or a cheap house, than fritter away money on other things.
Figure out savings first and the remaining money is fungible.
Yes to this. The reason for encouraging people to spend less on cars and houses is that many people need to save a lot more than they currently are managing, and cutting the expenses on those two big-ticket items frees up a lot more money to save. But of course freeing up that money does them no financial good if they don't commit to actually saving it!
"Pay yourself first!" is the single most important rule of personal finance.
Hyperbole attracts attention. Thus the tone of the cited article. Eschewing new-cars won't magically take one to $1M net-worth. Neither is splurging on new-cars guaranteed to preclude such savings-goals. But there is a positive correlation.
Where these anti-car articles lose me, is their basic premise, that cars are mere transportation. They completely disregard the possibility that a car might be a sporting-tool, an object of personal fancy or enthusiasm, an instrument of pleasure. Operating a fast, agile machine can be a wondrous source of joy and satisfaction.
A quality sporting-car can quite often be a tolerably good investment - and more rarely, a fantastic one. 20 years ago, I treated Datsun Z-cars as semi-disposable parts cars. Big mistake! What was then a $900 heap, is today worth $5K+, even if the only non-rusted portions are the title and the seat-covers. Granted, this won't happen with a new car, or generally even one that's <10 years old. But those aren't the sort of cars that enthusiasts buy.
In sum, there's a drumbeat of negativity, that an automotive-enthusiast must be a spendthrift. Like most generalizations, this one is false (but not yet self-referential).
Where these anti-car articles lose me, is their basic premise, that cars are mere transportation.
At core, that is what they are.
Quote:
They completely disregard the possibility that a car might be a sporting-tool, an object of personal fancy or enthusiasm, an instrument of pleasure. Operating a fast, agile machine can be a wondrous source of joy and satisfaction.
And all that is gravy. It’d be very nice to own a vehicle you feel that way about, IF you can actually afford it. The problem is that too many people honestly can’t, but they want it badly enough that they trick themselves into believing that they can, to the detriment of their ability to save for the long-term.
To me, that’s the reason so many finance gurus spout the line “Pay for your cars with cash.” What truly matters of course is the total purchase price of the vehicle in relationship to your overall finances, not whether it is purchased used or new, bought with cash or financed. But financing, with its emphasis on that “low monthly payment” over the total cost or the overall loan length, makes it easier to overpay for a vehicle you’d like but really can’t quite afford. If you have to sit down and actually write a check for the vehicle, you’re much more aware of the total cost and how it’s affecting your bottom line.
There’s nothing wrong with being a car enthusiast (or a travel enthusiast, or an art collector, or a wine lover, or a lover of any other activity that is potentially extremely expensive) as long as you keep your passions in line with what you can actually afford. Unfortunately a lot of us aren’t very good at doing that.
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,351 posts, read 8,572,211 times
Reputation: 16698
Quote:
Originally Posted by ohio_peasant
Hyperbole attracts attention. Thus the tone of the cited article. Eschewing new-cars won't magically take one to $1M net-worth. Neither is splurging on new-cars guaranteed to preclude such savings-goals. But there is a positive correlation.
Where these anti-car articles lose me, is their basic premise, that cars are mere transportation. They completely disregard the possibility that a car might be a sporting-tool, an object of personal fancy or enthusiasm, an instrument of pleasure. Operating a fast, agile machine can be a wondrous source of joy and satisfaction.
A quality sporting-car can quite often be a tolerably good investment - and more rarely, a fantastic one. 20 years ago, I treated Datsun Z-cars as semi-disposable parts cars. Big mistake! What was then a $900 heap, is today worth $5K+, even if the only non-rusted portions are the title and the seat-covers. Granted, this won't happen with a new car, or generally even one that's <10 years old. But those aren't the sort of cars that enthusiasts buy.
In sum, there's a drumbeat of negativity, that an automotive-enthusiast must be a spendthrift. Like most generalizations, this one is false (but not yet self-referential).
I totally get this.
I’ve had several Porsche’s, a Ferrari, a viper, and a 240z which like you I miss.
I just saw one on auction hitting 38k
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,351 posts, read 8,572,211 times
Reputation: 16698
Quote:
Originally Posted by Aredhel
At core, that is what they are.
And all that is gravy. It’d be very nice to own a vehicle you feel that way about, IF you can actually afford it. The problem is that too many people honestly can’t, but they want it badly enough that they trick themselves into believing that they can, to the detriment of their ability to save for the long-term.
To me, that’s the reason so many finance gurus spout the line “Pay for your cars with cash.” What truly matters of course is the total purchase price of the vehicle in relationship to your overall finances, not whether it is purchased used or new, bought with cash or financed. But financing, with its emphasis on that “low monthly payment” over the total cost or the overall loan length, makes it easier to overpay for a vehicle you’d like but really can’t quite afford. If you have to sit down and actually write a check for the vehicle, you’re much more aware of the total cost and how it’s affecting your bottom line.
There’s nothing wrong with being a car enthusiast (or a travel enthusiast, or an art collector, or a wine lover, or a lover of any other activity that is potentially extremely expensive) as long as you keep your passions in line with what you can actually afford. Unfortunately a lot of us aren’t very good at doing that.
I get this. I know someone who didn’t have good stable income who went out and bought a new challenger.
They proceeded to rack up a ton of miles quickly on the car too. It made no sense to me. I made more money, but was holding back on getting another car and have had the goal of doing so for five years.
I finally bought a Lexus with cash, but wound up refinancing it and used the proceeds to buy a rental house. That way the loan was tax deductible plus I got some income to carry the loan payments and a depreciation expense.
I’m now shopping for a high end exotic and plan to refinance it too after paying cash for the same reason.
I can afford it, but still a bit nervous about spending that much.
I also think on smaller items like wine or travel you can kind of nickel and dime yourself.
I guess the reason I love it, is because that's why we do. OK, they're not really crappy, but we don't waste money on cars. Like the article says, it's basically taking $40,000 and setting it on fire.
I'm retired. Since 2010. And we get along just fine with our conservative spending habits and life style. I still drive the 90 GMC 4X4 pickup that I bought new in 1990. And The Woman still drives her '08 CRV that we bought used in 2010 when I retired.
The article has good advice. Get your house paid for, get all your 'stuff' paid for and you will be amazed how much of a load it can take off. We used 15 year mortgages on the house and the rental property. That meant we took no money out of the rentals for 15 years, but it also means they have been a constant source of income ever since they were paid off around 2000. It adds up quickly, every month.
It does result in significant wealth loss for sure. When I was poor, I didn't drive expensive cars though I lusted after them. Only after I was able to pay cash for the cars I liked did I start buying nicer cars...now in my 1st year of retirement, wife and I have 3 really nice cars (all paid for) and they are on our monthly wealth report which we depreciate the value monthly. I can see in retirement that I might need to go to a cheaper car next time (currently drive a Hellcat and BMW).
Some people have to buy new cars, which can be financed easily, because they do not have the cash to buy a used one.
I knew a man whose car needed tires, but he couldn't afford them so he traded it in on a new car.
There are used car loans. Penfed has them. New car loan has slightly better rates.
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