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... Thank You to MrRational and TuborgP (Post #47) for Y'all's understanding!
IF ... I were capable of doing my own mechanic-work on a vehicle, and
IF ... I had the tools and work-space to "do the needful" for an older car or truck ...
I wouldn't hesitate to make it happen. Yet, since I have neither, I'm at the mercy of auto mechanics who do that for a living. That tends to prescribe that we find us a reliable, long-lasting vehicle (first), and one that will be comfortable to drive on the road (second). "The Price we Pay" (third) will be predicated on how much we decide we want to spend to get the first two criteria solved.
Now ... the "fixed income" portion of this equation, upon which many of us rely, and upon which ultimately leads us to the cost of financing, is something we want to think about, long and hard. DW and I certainly are!
A possible suggestion for you consider if it works for you. Working within your fixed income identify a monthly car loan cost you can live with and consider it a permanent costs that increases as COLA's allow. When the car is paid for continue that same monthly amount in to a savings account. If you have a credit union you can use it for both purposes. As you save after paying the car off it gives you that money for a down payment resulting hopefully in lower future payments. However continue the same amount going out each month now to pay the loan off earlier etc etc. If it makes sense consider it but it gives you some control over future car costs.
Hmmmm, hmmm should I read in to this that you are able to comfortably buy new and buy what you want with little financial sweat?
No, it means I'm tired of people making declarative statements about a variety of subjects that aren't even related to questions posed by OPs. This thread is just the latest example. The OP asked if he should buy a vehicle now or after he retires and someone weighs in with his authoritative opinion that one should always buy a used car. The OP wasn't asking about new vs. old. Here are other examples:
Someone asks about the best way to negotiate a car lease, and the usual people weigh in with their views that leasing a car is stupid and no one should ever do it.
Someone asks about where to retire internationally and the usual suspects weigh in with their responses that they would never leave the good ole U.S.A. and people who do are unpatriotic or simply ignorant of the cost-of-living in small towns in the middle of the country.
Someone asks about retiring in Florida and the usual suspects weigh in with their opinions on why they would never do such a thing because of traffic, humidity, bugs, etc., etc., etc. Nobody asked you why you wouldn't live in Florida, and nobody GAF.
Someone asks about other people's experience with living in a 55+ active community, and the usual suspects weigh in with their opinion why they would never move to a 55+ community and then go on and expound upon all the reasons why they want to live in a regular all-age community. Again, no one GAF about the fact that you personally would never move to a 55+ community. If you don't have any experience with one and can't help the OP with their question, stay the hell out of the thread.
I could go on and on, but you get the picture.
ETA: I am using a generic "you" in my examples, and my responses in no way should be construed to mean that I was addressing Tuborg.
IF ... I were capable of doing my own mechanic-work on a vehicle, and
IF ... I had the tools and work-space to "do the needful" for an older car or truck ...
I know that some have brought up the issue of sticking with older and/or buying used
and even at the 'beater' level... I'll assume you are ignoring these posts.
Quote:
...tends to prescribe that we find us a reliable, long-lasting vehicle (first),
and one that will be comfortable to drive on the road (second).
Exactly. There are a lot of ways to skin that cat.
And for however long you might choose to keep it once your grand tour is complete.
Quote:
...predicated on how much we decide we want to spend to get the first two criteria
Sticking with the "brand new" options (vs even two year off lease)...there is a range:
from the $25,000 Hyundai Genesis through the $45,000 Cadillac CTS to the $85,000 BMW 7series
(I just picked these 3 randomly but still: LINK )
Quote:
Now ... the "fixed income" portion of this equation, upon which many of us rely...
This is where I throw the wrench into the works with what I consider a reasonable expectation that
as generally responsible adults that we will ALSO have cash set aside or allocated in some manner to replace
known depreciating assets like cars... such that the financing question can be approached as a real choice.
Quote:
...and upon which ultimately leads us to the cost of financing...
To the degree that we choose to --or are forced to-- if unable to buy the asset in question outright.
And my underlying point of warning in all this:
If we don't have the $25K needed to buy the perfectly adequate to purpose Hyundai...
and by that are being 'forced' to finance the objectively warranted new car purchase regardless...
then the upgrade to the higher cost Cadillac (or BMW) begins to look like a rational choice.
Last edited by MrRational; 04-12-2017 at 11:29 AM..
My plan that once I pay off the mortgage (hopefully about 3 years before retirement), I'll dump all that mortgage money into savings until I have the price I'm willing to pay for a car, and then go out and get a brand new car, negotiating and paying cash.
I've got a ways to go though - I'm getting a new (to me) car in 3-4 years when I gift my now-12-year-old car to my son once he gets his driver's license. I will drive the car I get then for about 16-17 years until I retire.
My plan that once I pay off the mortgage (hopefully about 3 years before retirement), I'll dump all that mortgage money into savings until I have the price I'm willing to pay for a car, and then go out and get a brand new car, negotiating and paying cash.
I've got a ways to go though - I'm getting a new (to me) car in 3-4 years when I gift my now-12-year-old car to my son once he gets his driver's license. I will drive the car I get then for about 16-17 years until I retire.
... Thanks for contributing, Girl ... We've Been There - Done That ... Our refi'd mortgage provides enough savings for us to mostly-afford a car payment.
As I think TuborgP stated, too: Use the extra money (savings) to build-up a fund to purchase the vehicle outright. And, we have been making deposits; there's just not enough in the pot to make an outright purchase ... yet.
I appreciate everyone's input into this thread. Some of y'all's advice won't "apply" to DW and me; some of it will. For that, I offer my "Thanks"!
... TC
And my underlying point of warning in all this:
If we don't have the $25K needed to buy the perfectly adequate to purpose Hyundai...
and by that are being 'forced' to finance the objectively warranted new car purchase regardless...
then the upgrade to the higher cost Cadillac (or BMW) begins to look like a rational choice.
I've been advised that this was still too open to interpretation.
To clarify... it may look rational to go with the higher priced choices ...but it isn't.
It's just extra debt beyond what is needed.
I buy a car when I need a new car. Right now, I expect that I will be buying my next car in 2021-22 when my car hits 200k miles. There is no incentive for me to buy a car anytime sooner.
I've been advised that this was still too open to interpretation.
To clarify... it may look rational to go with the higher priced choices ...but it isn't.
It's just extra debt beyond what is needed.
Is there a universal concept of what is needed in a car and beyond that is unneed? Or is it personal?
Others have mentioned the importance of your credit rating.
The other thing is will you have sufficient income to pay a car loan after retirement? This is something I remember from a "getting ready to retire" seminar from a number of years ago. As an example: If your only income is from social security and you plan to withdraw money as needed from IRAs, 401ks, other investments, you may not be showing enough income to get the loan. Don't know how much finance companies count the "money in the bank" when deciding if you can afford the loan.
Is there a universal concept of what is needed in a car (or a refrigerator or a fishing rod)...
I think there is. It's a moving target but it's out there for all of us.
But the question here is about how much of the ego stroke involved,
how much of the purchase beyond that need point, should be done with debt - by a retiree.
(Even low rate, low payment, long term debt)
I'm of the opinion that NONE of these purchases should be done by debt
even if that might be part of a coherent cash management plan...
but when the Q about debt is limited to those buyers who need
it as the only means of achieving the purchase (as has been implied in the thread)...
that debt should be a whole lot less than what their golf buddy might tell them to do.
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opinion that one should always buy a used car. The OP wasn't asking about new vs. old. Here are other examples:
