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I just bought a 2005 Volvo V70 2.5T with 70k miles and I'm not sure that really made sense.
The price was $8700 and with 11.5% interest over 4 years the total price is about $11k. Fine, but there's no warranty. So I added a Wells Fargo engine and powertrain 3yr/36k warranty for $2600 which comes out to $65/month (yes generally a bad idea but I can cancel it whenever I want).
So I've spent almost $14k for a 10 year old car with 70 miles. My payment is $290/month. In 5 years I'll probably have put another 70k on it and it will be worth $3000 maybe.
Wouldn't it have made more sense to buy a new VW Golf Sportwagen for $23k? I'd have a more reliable vehicle with a full warranty. If I got 3% interest over 5 years I'd be paying $436/month. The car would probably be worth $15k.
If you look at it as cost per year, I'm paying $11k to own a vehicle for 5 years, while if I bought new I'd be paying $8k. That's not even factoring the benefits of reliability, and the gas mileage (30mpg vs 17mpg).
Conventional wisdom says that buying new cars is a bad idea, and I think conventional wisdom is dumb (and so am I)
I dunno much about volvo models but isnt a V70 priced well above a Golf?
You would be lucky if you got 10K after 5 years in a Golf. I seriously doubt you would get that unless it had super low miles and was in perfect condition. You can buy 2010 - 2009 Jetta sportwagens all day for under 11K without even negotiating with the dealer.
I think you overpaid for the volvo a bit. Like $1500 too much. But maybe not, just guessing on what I saw with a quick search. Probably depends on your area, thats not one of the most common cars to find.
11.5% is criminal for a used car. My credit union will give 4%-6% all day on used cars right now.
I would not recommend a warranty on used car. But I can see how for some people its not a bad decision.
I think you got hosed on price and the interest, so its no wonder you are thinking that buying new is better. Especially when your comparing a 40K+ car to a 23K car.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by justanokie
Why would buying airline tickets on credit make sense?
1) Avoid "do-not-fly-list" (terrorists pay cash...)
2) Why pay today for something you won't use until next month?
3) EZ transactions
4) Add more reward mileage / insurance (covered via CC)
5) EZ refunds
6) EZ tracking of expenses (for those of us who get itemized statements based on spending categories)
7) Company travel reimbursement direct to CC company (~$30k / yr)
8) Company WILL not reimburse cash expenses in excess of $50.
just a few reasons why I buy air tickets on credit.
Less than $10,000 for a low mileage, moderate mileage, desirable car? I haven't seen that in years.
It would have to be something that was cheap to begin with. With the average transaction price hovering around $33K now (more in my market where one of the top sellers is the BMW 3-series), most people are realistically paying a lot more for used cars and not getting the same windfall as they used to. But they are also getting vehicles that last substantially longer.
That's the part that makes no sense. What were you thinking?
I paid cash for a 2006 Mazda 3 with 7,000 miles and a lingering new-car smell. It's now approaching 10 years old, has 114,000 miles on it, and (I'll probably regret saying this part) hasn't caused me much trouble. Barring any catastrophes, I'll keep it for another year or two.
OK, so you're wealthy... How is that relevant to normal people?
LOL. Yeah, the Mazda3 is widely regarded as a baller car.
Uh no. Having enough cash to buy a nearly new car most likely means you are wealthy. The typical middle class person doesn't have that kind of money sitting around.
Uh no. Having enough cash to buy a nearly new car most likely means you are wealthy. The typical middle class person doesn't have that kind of money sitting around.
I'll just say that holding this belief goes hand-in-hand with the fact that you're paying 11% for your car loan and leave it at that...
I dunno much about volvo models but isnt a V70 priced well above a Golf?
You would be lucky if you got 10K after 5 years in a Golf. I seriously doubt you would get that unless it had super low miles and was in perfect condition. You can buy 2010 - 2009 Jetta sportwagens all day for under 11K without even negotiating with the dealer.
I think you overpaid for the volvo a bit. Like $1500 too much. But maybe not, just guessing on what I saw with a quick search. Probably depends on your area, thats not one of the most common cars to find.
11.5% is criminal for a used car. My credit union will give 4%-6% all day on used cars right now.
I would not recommend a warranty on used car. But I can see how for some people its not a bad decision.
I think you got hosed on price and the interest, so its no wonder you are thinking that buying new is better. Especially when your comparing a 40K+ car to a 23K car.
Yes a V70 cost more than a Golf Sportwagen, but the vehicles are probably equivalent in performance, luxury, utility, etc-- Because of how good the new VWs are
The loan is from my bank so I'm not sure how I could do any better anywhere else...
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