quote:

Originally posted by sigcrazy7:
However, a huge percent of our population enjoys new vehicles with no future planning for their retirement, rationalizing that they need it now.

I agree with Aeteocles, cars are consumable asset. Buying a $60K sedan (with rare exception) is rarely an investment.

I'd guess a good portion of today's new car purchasers don't have emergency funds or adequate retirement savings. But at least they will have had a nice, depreciating asset!

quote:

Originally posted by LBTRS:

Living beyond his means is exactly why your brother in law went with 84 months. I don't know why his reason for living beyond his means is any more justified than someone else living beyond their means?

I thought about that when I posted it, and technically you're right.

The rationale is that he needed a car, the Yaris is pretty much at the low end of the scale price-wise for compact cars and will last him long past the last payment. He lives with us and has no other expenses beyond the car and insurance.

I realize I'm picking nits here, but I'm sure you'd agree that a base Yaris is a little different scenario than a loaded F350 Super Duty Platinum Edition.

The other alternative would be used and my experience with used vehicles has left a REALLY bad impression. Every one I've ever bought has made it crystal clear just WHY the previous owner traded it in. I guess I just suck at evaluating used vehicles as I know several people that buy nothing but used vehicles. Financially, it makes perfect sense. My history with them has made it a no-go.

So you sell a few more eggs, go ahead , you deserve it

I've learned that it's an unwinnable game. You either trade in every 3-4 years while you still have good value or you make the payments to yourself after it's paid off to add cash to you trade when it's time. Whether you pay yourself or pay the finance company you make a payment every month forever.Even if you buy used and pay cash you first had to save up the money to pay cash.

quote:

Originally posted by Russ59:

quote:

Originally posted by sigcrazy7:
However, a huge percent of our population enjoys new vehicles with no future planning for their retirement, rationalizing that they need it now.

I agree with Aeteocles, cars are consumable asset. Buying a $60K sedan (with rare exception) is rarely an investment.

I'd guess a good portion of today's new car purchasers don't have emergency funds or adequate retirement savings. But at least they will have had a nice, depreciating asset!

I know one rare exception, I never believed it until I saw the paperwork from one of his purchases. A friend of mine builds houses and gets a new truck every year (sometimes sooner). He averages paying around $200 a month for it. He only buys GM, charges all his supplies on their card and uses the points toward the vehicle (at least he used too, I assume GM still has their credit card). He never chooses the truck, he asks them what they need to get rid of and takes that model. He takes advantage of the rebates and trades in before it loses too much value. He uses the same dealer and sales guy. He never pays for tires or maintenance since he never has the truck for more than a year. Of course when he started this buying new all the time he paid cash for the first truck.

quote:

Originally posted by mark60:
I've learned that it's an unwinnable game. You either trade in every 3-4 years while you still have good value or you make the payments to yourself after it's paid off to add cash to you trade when it's time. Whether you pay yourself or pay the finance company you make a payment every month forever.Even if you buy used and pay cash you first had to save up the money to pay cash.

No, there is a way to game it.

Save cash while driving a beater that has only low depreciation left. Like, a 8-10 year old Civic. Sell the beater for what you paid for it after driving a year or two in order to stay in a car that is relatively reliable and not terribly old. Continue to pay yourself the monthly payment that you would have made on a new car.

With the money invested and compound interest, you'll reach a point where the you'll generate enough income from the investment to make the monthly payment on a cheap lease. Continue contributing into the account, and eventually the cheap lease becomes a modest lease and then a nice lease.

Keep at it, and you'll hit the point where the account generates enough interest to allow you to make payments on a car, driving it until it is reasonably depreciated, and then rolling the trade in value.

But in the end, it's just a car. You decide whether spending the monthly on being in a new car is worth having some other shiny toy each month.

Honestly, I haven't really found anything that serves as an "investment" other than actual investments, high end handbags, and Rolexes.

quote:

Originally posted by PHPaul:

quote:

Originally posted by DaBigBR:
$30,000 at 0% interest is $500 per month for 60 months.
$30,000 at 2.2% interest is $528 per month for 60 months.

The cost of financing at that rate totals $1,708 over 5 years.

I guess I don't know that I understand the exasperation. If you want to pay $30,000 over five years with interest, the payments are going to be over $500 a month since the principal alone is $500 a month.

I guess it's because $30,000 doesn't sound like a lot of money given today's prices until you sit down and figure out how you're going to pay it.

As you noted, even 0% comes out to more money than I'm willing to pony up every month. The 2.2% rate is very reasonable.

I just got the wife a Toyota RAV-4 a month ago.
1st of the month, new deals come out from Toyota. I got 0% for 60mo.
See about some of the rebates that have, haggle the price.
Only other way to lower it is how much $ are you putting down.

I have to say, our 3 “cars” are paid for... 2012 F-150, 2018 Audi A3, 1997 Jeep TJ.

I can’t imagine having another car payment. If these 3 don’t get us to the end, we’ll be paying cash for whatever replaces them... like we paid cash for these, all bought used.

quote:

Because cars last so long now, it's actually quite reasonable to own a car for 10 years or more.

The 2012 is coming up on 100k, the 1997 is over 205k... both are doing fine.

I don’t beat cars up like I did when I was younger, I really don’t see any reason the can’t last forever.

quote:

Originally posted by PHPaul:
I realize I'm picking nits here, but I'm sure you'd agree that a base Yaris is a little different scenario than a loaded F350 Super Duty Platinum Edition.

Completely depends on each of their income (and expenses). Assuming I'm living beyond my means, a loaded F350 Super Duty Platinum Edition at 84 months may be less beyond my means if I make $250k per year than your brother in law making $25k per year and financing a Yaris for 84 months.

I understand the point your making though.