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Let me guess, you are not much of a DIY mechanic, are you?
My newest car is 20 years old, my usual daily is 30. I do my own work, and don't beat the cars up, so beyond registration and insurance, I drive for about 10 to 15 cents per mile, no depreciation, no interest.
You can't get near that with a new or late model car.
The risk, my foot. To paraphrase Patton: "Accept the challenges (of owning and DIYing on an older car) so that you can feel the exhilaration of victory!"
I'm all for DIY, but if my car breaks down, and I need it for work tomorrow, I'm probably screwed. "My car broke down so I couldn't come to work" is not an acceptable excuse past one's 20's. You and I both have other vehicles that will buy us some repair time. OP may not.
Leasing to me means three things:
I will always have a car payment
I will never have any useful equity in my vehicle
I will generally be driving a newer, nicer vehicle than what I would afford to buy. This also means my vehicle is less likely to require expensive maintenance or break down.
I've managed payments when the situation required it, but I much prefer not having one. I've never leased.
As for new vs old, it seems like a simple matter of math, plus peace of mind. For people that like cars, the fun of a new and different vehicle also factors in a bit. For me, my car is also entertainment. My truck, not so much.
"My car broke down so I couldn't come to work" is not an acceptable excuse past one's 20's.
It's called a sick day, so long as it's one day I don't think any employer is going to be too upset. Now you call out often with the same excuse, that be another story. If the repair time is going to be more than the day you called out on, your can rent a car for a week. Even new cars break down sometimes, buying new doesn't guarantee you'll never have car troubles.
Quote:
Originally Posted by vmaxnc
For me, my car is also entertainment.
I have a radio in my car for that. Would I like to have a new car? Absolutely, but not enough to want to have a car payment every month.
If you have an aging car (say over 10 to 15 years old) and the risk of high repair bills is increasing. At what piont would you trade it in, instead of continue keeping it?
The Point of Diminishing Returns for how long to keep any vehicle is when the body/frame start to fall apart since everything else is just replaceable parts.
> Based on what you all are saying, a typical Honda or Toyota (10 year old car) owner should keep owning the car for at least 10 more years.
There are two more factors. There is the risk of a sudden failure that keeps you from work or other essential things. And there is the improved safety features of newer cars. Only you know how important these things are to you.
I drive an old Ford 150 (2000) that hasn't cost me much of anything but tires. But, my mechanic says a Toyota is his favorite car to work on, because they're simple and easy, for what that's worth. The cost of repairs should be a consideration.
It's called a sick day, so long as it's one day I don't think any employer is going to be too upset. Now you call out often with the same excuse, that be another story. If the repair time is going to be more than the day you called out on, your can rent a car for a week. Even new cars break down sometimes, buying new doesn't guarantee you'll never have car troubles.
I have a radio in my car for that. Would I like to have a new car? Absolutely, but not enough to want to have a car payment every month.
Our view of what constitutes an acceptable reason to miss work obviously differs.
Quote:
Originally Posted by Grandpa Pipes
The Point of Diminishing Returns for how long to keep any vehicle is when the body/frame start to fall apart since everything else is just replaceable parts.
I think the point of diminishing returns is during the time all those parts are being replaced, not after the money has been spent.
Quote:
Originally Posted by claudhopper
I drive an old Ford 150 (2000) that hasn't cost me much of anything but tires. But, my mechanic says a Toyota is his favorite car to work on, because they're simple and easy, for what that's worth. The cost of repairs should be a consideration.
I wouldn't call 12 years old, but that's just my opinion.
Sounds simple enough, but isn't that what helped cause our current recession, too many people taking on HUGE amounts of debt thinking they can get a bigger return on there money by investing it instead of just paying off debt.
While yes you could possibly get a bigger return on your 20k if you invest it, you could also lose it all and be stuck with a 20k loan to pay all. I really don't consider any debt "good" debt.
You have to remember that before the decade of retardation where people chased hedge fund managers like rock stars some people were actually prudent with their investments. A <2% financing deal combined with a conservative investment still nets you a positive result.
I also disagree with a blanket statement that no debt is good debt. I would argue for many people a home loan within their means can certainly provide some prudent tax avoidance in the first 10-15 years or so the loan as well as shelter. Tax avoidance is prudent, tax evasion is illegal.
Again, there are no answers that are correct for everyone, every situation is different.
@ Vmax - of course, playing the old car game to win means you definitely have at least 2 old cars. I have 3 "daily" cars - the Scirocco (which is waiting in the garage for a coolant temp. switch that is being UPS'ed to me) the 87 Camry (which has a growling front wheel bearing - perfectly usable, parts are on hand to fix, just have not got 'round to it) and the 92 Subaru (driving it today). It also means you are OK with driving a car that you know has a minor problem, the root of this last is having the judgment and experience to know what has to be fixed RIGHT NOW, and what can wait.
I have been driving old cars, including an MG-B, 40 miles one way to the same job for 21 years. I have missed, I think, part of 2 days of work due to car trouble. The boss is OK with that.
A car whether new or used should never cost more than 3% of your after tax income. That includes includes interest payments, taxes, registration feet etc. If you have 2 cars then 1.5% each.
A car whether new or used should never cost more than 3% of your after tax income. That includes includes interest payments, taxes, registration feet etc. If you have 2 cars then 1.5% each.
3%? of my income? How do you afford that? I need to make 10k/month and only have $300 to spend monthly?
Or, of course, if there are other financial gains (or, rather, break evens) that make buying (or leasing) smarter than hanging onto an already depreciated used car, for tax purposes, and the like. Money flows in other directions than just a monthly auto payment.
I disagree. Writing off the expense of a new vehicle, whether interest expense, lease payment expense, or depreciation expense, doesn't gain you anything in tax savings, it only offsets the cost slightly.
Using a lease as an example, assume a $300/month payment and a 25% tax bracket; you would save $900 on your tax bill, but it would cost $3600 to do so. Compare that to a fully-depreciated vehicle still in good operating condition that might cost $1000/year (or $750 net taxes) in additional repair and maintenance over the new vehicle.
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