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I am working now and perhaps within 5 years of retirement. The cars we have are paid for, are in good shape but are 8-10 years old. Should we buy one last new car before retirement and drive it into the sunset while we are still working or simply budget $300 a month and lease indefinitely? Bottom line, do people afford to buy new cars on retirement income?
My mother-in-law in retirement just leased a new Camry every 24 months. That way she was always driving a new car, it was always under warranty, she never had to deal with shady mechanics or have any repairs done. I thought it was a waste of money but to her it was just another monthly bill like the utility bill.
A car like that is fairly cheap to lease because it holds its value well.
As for me, I prefer to drive my cars into the ground. My previous new car lasted 18 years.
My MIL bought my DH's company fleet vehicle last year to replace her old car. She wanted to buy used but was worried about being ripped off. She was visiting when DH was doing paperwork to turn in his old car before he got his new one. She ended up buying it through fleet; it was five years old with 65,000 miles in perfect shape, the tires had been replaced 6 months earlier. She knew the car's history and that it had been maintained regularly as fleet requires. DH put her in touch with fleet and she dealt with them directly. She got the car for $6,000 less than book value.
The Subaru DH is driving now will be ready to turn in by the time he retires in four years and our plan is to buy it from fleet then.
Our days of buying new cars are gone; we blew enough money over the years buying my new cars that depreciated thousands just driving them off the lot. It was fun at the time but such a waste.
I bought a 5 year old car that had under 65,000 miles on it. Paid cash & yes, the salesman was shocked & tried to talk me into financing, but I didn't do that.
I've had it a little over a year and am perfectly happy with it.
I seem to recall my dad bought a new car about a year before they retired. When they sold their house at a huge profit to downsize in retirement, he paid off the car loan with some of the profits on the sale. They are now mortgage-free AND car-loan free.
Lots of people seem to think that buying a new car at the outset of retirement will "be their last". If you're retired for 20 years, it may not be!
I'd buy cars in the same manner as before retirement - several years old but in good shape and from a reliable source - then I'd plan to keep it for 10-15 years. And I'll also plan on possibly needing another car before I'm done!
We have 2 cars. One has over 300,000 miles, the other over 400,000 miles. My husband was a mechanic. Both cars are in great shape, and when and if we need another car someday, we'll just pick up one for 3 or 4 grand from one of our used car friends like we did 12 years ago. We have never had car payments and just the thought of one makes me sick. We live near a bus stop that takes us anywhere I Pueblo, so I was thinking maybe we should make one of our cars a neighborhood shared vehicle car with everyone sharing gas, repairs, and insurance.
Insurance may be very tricky in this case - insurance rates are based on the experience of a primary driver and a shared vehicle (outside of a household) technically won't be covered. Perhaps on some type of commercial policy which would likely have it's own issues. Otherwise it gets kind of shady and that's not good if there's ever a claim.
Ditto. We buy a new car when our current one is off warranty and needs its first major repair. Which is usually when the car is 5-10 years old. Which is pretty much what we did before we retired. Robyn
Although our cars are 11 and 6 years old, they have low mileage, 59 k and 29k . I don't expect to have to trade them soon. If we do, we will have saved and pay cash. Happiness is NO car loans AND NO mortgage.
I am working now and perhaps within 5 years of retirement. The cars we have are paid for, are in good shape but are 8-10 years old. Should we buy one last new car before retirement and drive it into the sunset while we are still working or simply budget $300 a month and lease indefinitely? Bottom line, do people afford to buy new cars on retirement income?
Retired eight years and have bought two new cars. It isn't a function of work status but of financial profile. The better the profile the better the interest rate and it could be low enough to beat paying cash if you are so disposed. If possible when and if financing avoid dealers if you can.
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