Why are you attacking me? It's not needed. On the safety links: I'd proably get a Chrysler minivan...possibly a Honda. Those ratings can also be mileading. When a large SUV hits a minivan or smaller wagon (instead of a wall like the test uses) there are very different results.
Explorers:
Explorers are very decent cars. My in-laws have a 1999 (perhaps 2000) and are very happy with it...but they say the V6 needs more power.
Envoy: The interior is nicer than than other GM cars. My wife and I were quite surprised witht his vehicle.
Pathfinder: Too small for me, is what I meant.
tmp: We don't NEED an SUV, but it would be nice. I have thought about a wagon...but there hust isn't a lot out there now. I don't like Subarus or VW's. The VW's are nice, but I know several people with major maintenence problems.
Leasing: Matsu, I disagree. I have leased two previous vehicles. It is a very nice option for people that understand it (not that you don't). When calculating payments, one cannot simply look at the fact that he "will have nothing left at the end of the lease". It isn't that simple. With a new vehicle, one is paying depreciation as well. It is part of the cost. Since most people ar going to finance for 5 years, they'll be paying that same large payment when the car is out of warranty as well.
With a lease, all you pay is the depreciation and an interest rate. If you can stay within the mileage, it can be a good deal (though not as good anymore, with leasing compaines going out of business). With a lease, one has a fixed cost. The best leases are for three years...because that's the usual warranty period. For people that are going to buy a new car every few years anyway, leasing is great. As I said, I can't this time...unless I go like 18-20K miles per year.
The other thing about buying used like this is just the peace of mind. I could in my car tonight and drive however far I want, and for whatever reason I want.
Actually, that's what I don't like about used cars. How do you know you didn't buy somebody else's problem, but didn't know about? With a new car, at least you have the warranty.
with the 0% finanacing mania of the past year, the market is actually pretty glutted with low mileage used cars. A lot of people got rid of cars that they would have kept years longer to take advantage of the low rates. I would seriously consider buying used if you are in the market for the type of car you are looking for.
You are right- recent VW's have had a bad rep for quality.
I guess I am an SUV hater.
Speaking of which, I saw the new Porsche Cayenne in Brentwood. It looks from the back like an Audi that needs about a month at the Golden Door. The front looks like a bloated catfish, IMHO.
I know you said you don't care for the subaru vehicles, but i can vouch for their reliabilty. I've had a Forester, Outback, and Legacy GT sedan, all 3 are very good cars.
I still have the Legacy GT, and it will be traded in down the road for another subaru. i guess it's a matter of whether you really need awd? I have a ford ranger too, and I'm kind of concerned about it's sloppy feeling transmission. They say it's fine each time i take it in, but it just doesn't feel right to me, and I've read the fords have transmission issues.
Actually, that's what I don't like about used cars. How do you know you didn't buy somebody else's problem, but didn't know about? With a new car, at least you have the warranty.
Well you buy with some mileage but not over say 100k miles. The second issues is in the price range I was talking about, you would be able to purchase several vehicles for the price of the one SUV or sedan.
Secondly, I am of the opinion that all cars come with bad design decisions. An advantage that you might take from a used car is that the original owner likely had to iron out or deal with these design decisions and they might be fixed for you. You have to keep your eye open eitherway. You could buy in the first year of a new model and have innumerable problems as well. I guess nothing beats knowing a bit about cars when you look and buy, new or used.
As for an example of design flaws, most cars today come with cheap radiators that are a combination of plastic and aluminum. I have had the radiators in my cars and witnessed them failing relatively quickly in my friends cars as well. (Living near and playing in the desert will do that) So I replace my radiators with real radiators that are not plastic. If someone bought my car, they would come out better off.
If you are talking about beaters that people drive and beat into the ground (GeoMetro's, Kia's things like that) then nothing will save those cars. He was discussing mid-size SUV's and I was discussing my SUV's.
Again my warranty doesn't cost $30k nor could any repair I could imagine.
I know you said you don't care for the subaru vehicles, but i can vouch for their reliabilty. I've had a Forester, Outback, and Legacy GT sedan, all 3 are very good cars.
I still have the Legacy GT, and it will be traded in down the road for another subaru. i guess it's a matter of whether you really need awd? I have a ford ranger too, and I'm kind of concerned about it's sloppy feeling transmission. They say it's fine each time i take it in, but it just doesn't feel right to me, and I've read the fords have transmission issues.
I can also vouch for Subaru. I had a Brat that I drove through the entire Pacific Northwest as well as all through the second half of college. It was a great little car/truck/whatever you consider a Brat to be.
My parents bought a used Subaru Legacy wagon about 9 years and that vehicle has been very reliable for them. They've put a 120k miles on it. It's just now starting to fall apart with some difficulties in starting in the MN winter and the AC unit has finally blown out. They probably need to replace it this summer.
A thing to note about the Ford Explorer is that 2002+ model years are much better than previous years. They have longer wheelbases, are wider, and have a whole lot of ride options. They (and Mercury Mountaineers) do have V8 engines, but they are also the same price as a Envoy XL.
$36k to play with? SDW, that's a whole lot of money, and why aren't you considering an Expedition or a Tahoe? A buddy of mine got a $36k Expedition and it's a beautiful vehicle. He has 3 kids and a 90 lb beast. But I don't think he wheels around his dog in the Expedition. So maybe you don't want to have an extry-lux interior if you're going to drive the dog around. And, get leather (if it's not standard in the 1st place) because dog hairs are tough to get out with fabric interiors.
I only buy used cars and run them into the ground. My past few:
$500 for an 86 Honda accord that finally died on me (I crashed it) after 180K miles
$4500 for an 89 VW Jetta GSi that let me run it up to about 150K miles and I traded THAT in for a...
$9000 94 VW Passat VR6. I had almost 200K miles on it (mostly travelling back and forth between upstate NY and southern CT every weekend for 6 months) and I traded that in for, last year, a...
$16,000 99 Honda Accord. I'm giving this car to my wife who is selling her Saturn, and I'll have to settle for a, that's right, another used car.
This time I'm looking for a hoopdy in the $2K-3K range for strictly commuting to work. It's be a while before I get a new car...
Oh well, I have had my eye on a late 80s Golf GTi...
SDW, the fact that you posted this proves that there is still hope to change your path. I think you want to. This thread was a cry for help.
Buy a used family car, not a new SUV.
You don't need an SUV. Yes, everyone else has one. But they're too expensive, they're obnoxiously big, they cost a lot to support (i.e., fuel), and I heard somewhere that terrorists get a cut every time you buy one. Like 10% I think.
You also don't need to buy new. trumptman and the others who made this point are 100% correct - a new car is just about the worst investment you can make. I think from previous discussions that you're well off but not filthy rich like Fellowship . I remember thinking that your family and mine are in the same ballpark financially, so I know where you're coming from. Do the smart thing for your family. Invest the money elsewhere. Do what trumptman suggested to me earlier this year and invest in real estate with the $20,000 you'll save when you buy a used car rather than a new SUV.
Not only should you not spend a lot on it, but you should not finance it. Never finance a depreciating asset like a car. Scale down your expectations, keep the clunker for a little while longer, and save for your next one.
You won't have a shiny new SUV like everyone else, but have the pride in knowing that you're not a lemming like everyone else, and that you're not dumb with your money like everyone else. Let the sheep think they're cool for buying new SUVs. Just smile to yourself knowing that you did the right thing for your family.
Thanks for the advice. One thing I disagree with: Financing. Here is why.
It is almost impossible to buy cash. That's a fact. Any decent used vehicle that is safe and will meet my needs will run at least 15K. No way I'm coming up with that while keeping savings for other things.
But lets say I spent $8000 on used car. Actually, the number doesn't even matter. Let's say I bought it and started saving for the next one. Now, a affordable car (cash) isn't going to last more than, say, 5 years in reality....perhaps less. So, let's assume I save $200 a month to buy another one later. That's $2400 a year. We'll subtract $800 per year in maintenence costs on that car since it would be much older. That's a net savings of $1600 a year. Multiply by 5 years until the next one, that's $8K for the new one down the road.
Here is the problem. Though it seems I wouldn't be making payments, I actually am. I am paying $200 a month. And guess what?...I am still driving a used car, probably 5 years old at that...and paying to do it. I'm just making payments to myself! You see, no matter what one does, there are still payments. The only question is are you going to pay to drive used and have questionable reliability, or pay (finance) to drive much newer and have a warranty.
Financing is not bad anymore when it comes to cars. Now, another thought about even buying a RECENT, financed used car.
Car: 2000 Dodge Caravan, 30K miles (basic options, no leather, etc)
Price with tax: 17,000
Warranty: Powertrain only
Financed amount: 15,000
Term: 48 months (not going 60 months on a used car!)
Rate: 5.9% (remember...it is used)
Payment: $352 a month.
Car: Honda Odessy, mostly loaded, new
Price with Tax: 30,000
Warranty: Full
Financed amount: 28000
Term: 60 months
Rate 0.9%
Payment: $477/mo
Now, obviously car #2 costs a lot more. The point? For $100 a month I can drive brand new, pretty loaded up vehicle with a full warranty and peace-of-mind as they say. Do I really want to pay $350 a month and not have a warranty....AND drive a 3 year old car? Not me. I'll pay the $100 a month.
The Explorer is nice, but we'd need a V8 because it's six isn't powerful enough.
How's your driving style that you need a V8? I have Landrover Freelander with a 4 cylinder 2.0l Diesel (112 hp). With that car, I pulled the car of a coworker (ca. 1.5 t) for over 100 miles over a hilly Autobahn at about 55 mph - and I never had to use full throttle.
The Insurance Institute for Highway Safety attempts to create a more real-world crash test by using not a wall, but a semi-crushable object at an offset to the vehicle's path. So only the front left part of the vehicle hits the object, and the object crushes and gives a little just like another car would. The government crash tests are almost a joke, run at 30 MPH head on into a brick wall. So although the IIHS crash tests aren't perfect, they're certainly more scientific than the government tests.
Thanks for the advice. One thing I disagree with: Financing. Here is why.
It is almost impossible to buy cash. That's a fact. Any decent used vehicle that is safe and will meet my needs will run at least 15K. No way I'm coming up with that while keeping savings for other things.
But lets say I spent $8000 on used car. Actually, the number doesn't even matter. Let's say I bought it and started saving for the next one. Now, a affordable car (cash) isn't going to last more than, say, 5 years in reality....perhaps less. So, let's assume I save $200 a month to buy another one later. That's $2400 a year. We'll subtract $800 per year in maintenence costs on that car since it would be much older. That's a net savings of $1600 a year. Multiply by 5 years until the next one, that's $8K for the new one down the road.
Here is the problem. Though it seems I wouldn't be making payments, I actually am. I am paying $200 a month. And guess what?...I am still driving a used car, probably 5 years old at that...and paying to do it. I'm just making payments to myself! You see, no matter what one does, there are still payments. The only question is are you going to pay to drive used and have questionable reliability, or pay (finance) to drive much newer and have a warranty.
Financing is not bad anymore when it comes to cars. Now, another thought about even buying a RECENT, financed used car.
Car: 2000 Dodge Caravan, 30K miles (basic options, no leather, etc)
Price with tax: 17,000
Warranty: Powertrain only
Financed amount: 15,000
Term: 48 months (not going 60 months on a used car!)
Rate: 5.9% (remember...it is used)
Payment: $352 a month.
Car: Honda Odessy, mostly loaded, new
Price with Tax: 30,000
Warranty: Full
Financed amount: 28000
Term: 60 months
Rate 0.9%
Payment: $477/mo
Now, obviously car #2 costs a lot more. The point? For $100 a month I can drive brand new, pretty loaded up vehicle with a full warranty and peace-of-mind as they say. Do I really want to pay $350 a month and not have a warranty....AND drive a 3 year old car? Not me. I'll pay the $100 a month.
Just food for thought.
Your abour halfway there with your thinking...perhaps we can get you the rest of the way there.
First your figures minimize a lot of things. You are still financing a used car or new car in your scenarios. The type of thing Brussell was mentioning and I mentioned is that you can get a used SUV or minivan with a little looking for likely under $5000 with under 100k miles.
Also you have to consider some other factors. In either scenario you must come up with $2000. (I am basing that on your financing figures) With my suggestion you only need come up with $3000 for the next 5-7 years. (15k miles a year typical driving)
However there are some serious factors you minimize. The car places ALWAYS get their money. The inexpensive financing has origination fees or often times you go in and they offer the that .09 for only 36 months and so you have to go with the 4-6% regular financing. Plus I don't know about your state but you also have to add sales tax in California. (private parties don't charge that)
Also I can't recall a single year in which I have spent $800 to repair my car!
Now I don't know your age, mine is 32 and if you grew up with the same experiences I did I can understand why you would think that about high mileage cars. The cars of the 70's were seriously working to get 100k miles. The 80's cars were terrible because they were basically 70's engines with all sorts of added on smog equipment. When this stuff would start to deteriorate it would get tremendously expensive.
However in the late 80's and beginning 90's America had finally gotten a clue and adopted Japanese style autodesign. The cars had redesigned engines, drivetrains etc. This improvement means that you will get 200k out of these cars and then the expensive repairs will finally start happening. The same mentality you use to take with a 100k mile car now applies to these 200k mile cars. Also certain things on cars fail because of miles driven, not because they are new or old. Most cars cough up an alternator periodically, say every 80-90k miles. Water pumps seem to go out about every 75-80k miles. These are $200-250 repairs if you know a good mechanic. Things like tires will wear out on a new or used car so the costs are just part of driving like gas.
So now the new math.
$2000 dollars down on both vehicles.
$3000 of costs spread over the remaining life of the car.(car cost)
$500 a year for oil changes, tire wear, small repairs
Say that you get 6 years out of the car and then it gets to 200k miles and finally has an expensive repair. That would be about 15-16k miles a year of driving.
That is $6000 worth of costs spread over 6 years. Less than $100 a month.
With your scenario 1 you have $16896 spent on purchasing the car (same $2000 down) and you still have the small repairs out of warranty (talking 6 years here) tire wear. Also you have more expensive insurance costs because you must carry not only full coverage but whatever amount of liability insurance the loan requires as well.
BTW, that was the less expensive scenario.
But think about that mentality, It's just a few hundred dollars. That few hundred dollars could pay off your home mortgage 15 years early and save you a hundred THOUSAND dollars. (Assuming say a 200k home) Those 15 extra years of mortgage payments instead of going to the bank can go to your retirement where if properly invested you can double your money every 7-8 years.
Then 100k becomes 400k over 15 years.....
Or that extra money gives you the room you need to be a little riskier in some investments and get a real return, it allows you to buy and rent 2-3 houses without worrying what would happen if someone skipped a month of rent and you had to evict them... it changes a lot of things.
Sorry to have this drone on so long, but this being thrifty is sort of a hobby of mine. The little things serious add up. My income as a teacher is not nearly as substancial as some here make. It is only $57k a year. However my wife doesn't have to work at all and our net-worth is well over a quarter million dollars while owning over 800k of real estate.
You have to have your dollars working for you, and not for someone else. It isn't what you make but what you keep.
Example:
If your house is worth $200k and appreciates 5% this year, it will be worth $210k next year.
My properties worth are $800k will be worth $840k next year.
My net worth will have gone up $30k more than yours. Meanwhile you might be working a little extra here or there, sending the spouse off to work so that you can both give the maximum to your 401k's and have something to retire on.... etc...in otherwords you will be working to make up that 30k gap instead of letting your money work
I know I am ranting, and generalizing, but those little things become big things over the long run. They can add up in your favor very quickly. That money could be what qualifies you for an investment property, it could be what starts a business, it can be a lot.
I think anyone that buys a car with 100K on it is a fool. Those cars are for high school students to wrap around trees. And lemee tell ya. You don't want the cell phone call from the wife when that 100K beauty dies on the side of the road.
i think people make way to big of a deal about the buying / leasing thing. Some hate leasing, citing how after the lease is over you end up with nothing but paid a bunch of money.
All leasing is is paying the depreciation on that car over 3 or 5 years or whatever. It isn't some god-awful horrible idea, it's just a different way of doing things (probably good for those who always like to drive a new car). So, when looking at a lease, first figure the depreciation of the car, then compare that number to the total paid in the lease.
I think anyone that buys a car with 100K on it is a fool. Those cars are for high school students to wrap around trees. And lemee tell ya. You don't want the cell phone call from the wife when that 100K beauty dies on the site of the road.
I don't know if your refering to my post but the miliage I listed was when i sold the car not the miliage that was on it when i bought it. All my used cars had between 20K-50K miles on them when first bought. But the kids I sold them to... that's another story.
One other thing cost-wise- depending upon what state you live in, your vehicle registration costs can be much higher for a new car. That 5-year old Camry can be hundreds less a year to register in California than the 2003 model. Insurance is a lot less as well.
I think anyone that buys a car with 100K on it is a fool. Those cars are for high school students to wrap around trees. And lemee tell ya. You don't want the cell phone call from the wife when that 100K beauty dies on the site of the road.
I could not have said it better. I have a good job. If anyone thinks I am going to spend $5000 on a car with friggin 100K on it....think again.
I do appreciate the advice. As far as financing goes, there are not orgination fees and such that I have ever seen. Any normal middle class person is NOT going to be able to buy a decent car for cash. Any decent used car that would meet my needs is going to be a minimum of 15K. Period.
trumptman: If you haven't spent $800 in repair on a $5000 car, then you outght to go out and play the lottery....right now. You are one lucky SOB!
EDIT: you also forget....as I mentioned before: After I go into my pocket for $5000 (money which I could be earning interest on instead of spending), I have to start saving hundreds a month for the next car. I have to add that to the repair costs. Even if we use a compromise figure...say $600 a year for repairs, we get this:
Initial payment: $5000
Monthly svaings: $150
Repair amoritization: $50
That's $200 a month, PLUS the 5K I have to come up with. So, in reality what is happening is that I am driving a car with, good God, 100,000 miles on it, is at least 5 years old, has no warranty and regardless of how well I take care of it, is a ticking time bomb. Not me, thanks. Either way, one is going to pay. The only question is how much, and how new is the car going to be.
Then I think...what? Thirty-six thousand dollars? Where do I get off spending that kind of money? Where are my priorities....but wait, we do need a safe, reliable family vehicle that will suit our needs. AHHH! A five year loan with zero percent financing and about 10% down...that's like $550 a month! As my father said awhile back "a decent car now costs upwards of $30K".
Look I'm not the one wondering how people can spend $36,000 on a car to hold a kid and a dog. As you said yourself where are the priorties? People don't have them. They lease. They don't save toward retirement. They spend the equity in their homes. There are all sorts of crazy things they do. They stuff their kids into daycare. They forgo their vacations. They get laid off and have it repossessed. They justify working on weekends and holidays
It honestly looks like you have your mind made up and are looking for a justification. I assure you I would trust my 1993 Cherokee to drive me just as far as your brand new Explorer in terms of safety and a major trip. I took my other Cherokee to New York, Pennsylvania and Washington D.C. when it had 168k miles on it. I put 8,000 more on it that summer. It did cough up an alternator along the way which was replaced during dinner at a local garage.
As for what I would tell her if the car failed, that is what I keep triple AAA for at a massive $50 per year. That is the same answer I would have to give her if she got a flat, dead battery or ran out of gas in her new car or used car.
Now you asked me to tell what I tell her when the car broke down and I did.
So now you tell me, what do people tell their spouses when they HAVE to have that $550 for the next 5 years. Would I rather answer to a car breaking down like once every 3 years or would I rather tr to deal with this...
Look I would love to take Sat off for the family, but I can't....or I know that working the holidays is inconvenient but at least we can get ahead with time and a half....or I know one of us should stay home with our sick child but ...the bills...
Comments
BR:
Why are you attacking me? It's not needed. On the safety links: I'd proably get a Chrysler minivan...possibly a Honda. Those ratings can also be mileading. When a large SUV hits a minivan or smaller wagon (instead of a wall like the test uses) there are very different results.
Explorers:
Explorers are very decent cars. My in-laws have a 1999 (perhaps 2000) and are very happy with it...but they say the V6 needs more power.
Envoy: The interior is nicer than than other GM cars. My wife and I were quite surprised witht his vehicle.
Pathfinder: Too small for me, is what I meant.
tmp: We don't NEED an SUV, but it would be nice. I have thought about a wagon...but there hust isn't a lot out there now. I don't like Subarus or VW's. The VW's are nice, but I know several people with major maintenence problems.
Leasing: Matsu, I disagree. I have leased two previous vehicles. It is a very nice option for people that understand it (not that you don't). When calculating payments, one cannot simply look at the fact that he "will have nothing left at the end of the lease". It isn't that simple. With a new vehicle, one is paying depreciation as well. It is part of the cost. Since most people ar going to finance for 5 years, they'll be paying that same large payment when the car is out of warranty as well.
With a lease, all you pay is the depreciation and an interest rate. If you can stay within the mileage, it can be a good deal (though not as good anymore, with leasing compaines going out of business). With a lease, one has a fixed cost. The best leases are for three years...because that's the usual warranty period. For people that are going to buy a new car every few years anyway, leasing is great. As I said, I can't this time...unless I go like 18-20K miles per year.
Originally posted by trumptman
The other thing about buying used like this is just the peace of mind. I could in my car tonight and drive however far I want, and for whatever reason I want.
Actually, that's what I don't like about used cars. How do you know you didn't buy somebody else's problem, but didn't know about? With a new car, at least you have the warranty.
You are right- recent VW's have had a bad rep for quality.
I guess I am an SUV hater.
Speaking of which, I saw the new Porsche Cayenne in Brentwood. It looks from the back like an Audi that needs about a month at the Golden Door. The front looks like a bloated catfish, IMHO.
I still have the Legacy GT, and it will be traded in down the road for another subaru. i guess it's a matter of whether you really need awd? I have a ford ranger too, and I'm kind of concerned about it's sloppy feeling transmission. They say it's fine each time i take it in, but it just doesn't feel right to me, and I've read the fords have transmission issues.
Originally posted by GardenOfEarthlyDelights
Actually, that's what I don't like about used cars. How do you know you didn't buy somebody else's problem, but didn't know about? With a new car, at least you have the warranty.
Well you buy with some mileage but not over say 100k miles. The second issues is in the price range I was talking about, you would be able to purchase several vehicles for the price of the one SUV or sedan.
Secondly, I am of the opinion that all cars come with bad design decisions. An advantage that you might take from a used car is that the original owner likely had to iron out or deal with these design decisions and they might be fixed for you. You have to keep your eye open eitherway. You could buy in the first year of a new model and have innumerable problems as well. I guess nothing beats knowing a bit about cars when you look and buy, new or used.
As for an example of design flaws, most cars today come with cheap radiators that are a combination of plastic and aluminum. I have had the radiators in my cars and witnessed them failing relatively quickly in my friends cars as well. (Living near and playing in the desert will do that) So I replace my radiators with real radiators that are not plastic. If someone bought my car, they would come out better off.
If you are talking about beaters that people drive and beat into the ground (GeoMetro's, Kia's things like that) then nothing will save those cars. He was discussing mid-size SUV's and I was discussing my SUV's.
Again my warranty doesn't cost $30k nor could any repair I could imagine.
Nick
Originally posted by SQUÅSH
I know you said you don't care for the subaru vehicles, but i can vouch for their reliabilty. I've had a Forester, Outback, and Legacy GT sedan, all 3 are very good cars.
I still have the Legacy GT, and it will be traded in down the road for another subaru. i guess it's a matter of whether you really need awd? I have a ford ranger too, and I'm kind of concerned about it's sloppy feeling transmission. They say it's fine each time i take it in, but it just doesn't feel right to me, and I've read the fords have transmission issues.
I can also vouch for Subaru. I had a Brat that I drove through the entire Pacific Northwest as well as all through the second half of college. It was a great little car/truck/whatever you consider a Brat to be.
Nick
A thing to note about the Ford Explorer is that 2002+ model years are much better than previous years. They have longer wheelbases, are wider, and have a whole lot of ride options. They (and Mercury Mountaineers) do have V8 engines, but they are also the same price as a Envoy XL.
$36k to play with? SDW, that's a whole lot of money, and why aren't you considering an Expedition or a Tahoe? A buddy of mine got a $36k Expedition and it's a beautiful vehicle. He has 3 kids and a 90 lb beast. But I don't think he wheels around his dog in the Expedition. So maybe you don't want to have an extry-lux interior if you're going to drive the dog around. And, get leather (if it's not standard in the 1st place) because dog hairs are tough to get out with fabric interiors.
$500 for an 86 Honda accord that finally died on me (I crashed it) after 180K miles
$4500 for an 89 VW Jetta GSi that let me run it up to about 150K miles and I traded THAT in for a...
$9000 94 VW Passat VR6. I had almost 200K miles on it (mostly travelling back and forth between upstate NY and southern CT every weekend for 6 months) and I traded that in for, last year, a...
$16,000 99 Honda Accord. I'm giving this car to my wife who is selling her Saturn, and I'll have to settle for a, that's right, another used car.
This time I'm looking for a hoopdy in the $2K-3K range for strictly commuting to work. It's be a while before I get a new car...
Oh well, I have had my eye on a late 80s Golf GTi...
Buy a used family car, not a new SUV.
You don't need an SUV. Yes, everyone else has one. But they're too expensive, they're obnoxiously big, they cost a lot to support (i.e., fuel), and I heard somewhere that terrorists get a cut every time you buy one. Like 10% I think.
You also don't need to buy new. trumptman and the others who made this point are 100% correct - a new car is just about the worst investment you can make. I think from previous discussions that you're well off but not filthy rich like Fellowship
Not only should you not spend a lot on it, but you should not finance it. Never finance a depreciating asset like a car. Scale down your expectations, keep the clunker for a little while longer, and save for your next one.
You won't have a shiny new SUV like everyone else, but have the pride in knowing that you're not a lemming like everyone else, and that you're not dumb with your money like everyone else. Let the sheep think they're cool for buying new SUVs. Just smile to yourself knowing that you did the right thing for your family.
[/peptalk]
Drool.
Thanks for the advice. One thing I disagree with: Financing. Here is why.
It is almost impossible to buy cash. That's a fact. Any decent used vehicle that is safe and will meet my needs will run at least 15K. No way I'm coming up with that while keeping savings for other things.
But lets say I spent $8000 on used car. Actually, the number doesn't even matter. Let's say I bought it and started saving for the next one. Now, a affordable car (cash) isn't going to last more than, say, 5 years in reality....perhaps less. So, let's assume I save $200 a month to buy another one later. That's $2400 a year. We'll subtract $800 per year in maintenence costs on that car since it would be much older. That's a net savings of $1600 a year. Multiply by 5 years until the next one, that's $8K for the new one down the road.
Here is the problem. Though it seems I wouldn't be making payments, I actually am. I am paying $200 a month. And guess what?...I am still driving a used car, probably 5 years old at that...and paying to do it. I'm just making payments to myself! You see, no matter what one does, there are still payments. The only question is are you going to pay to drive used and have questionable reliability, or pay (finance) to drive much newer and have a warranty.
Financing is not bad anymore when it comes to cars. Now, another thought about even buying a RECENT, financed used car.
Car: 2000 Dodge Caravan, 30K miles (basic options, no leather, etc)
Price with tax: 17,000
Warranty: Powertrain only
Financed amount: 15,000
Term: 48 months (not going 60 months on a used car!)
Rate: 5.9% (remember...it is used)
Payment: $352 a month.
Car: Honda Odessy, mostly loaded, new
Price with Tax: 30,000
Warranty: Full
Financed amount: 28000
Term: 60 months
Rate 0.9%
Payment: $477/mo
Now, obviously car #2 costs a lot more. The point? For $100 a month I can drive brand new, pretty loaded up vehicle with a full warranty and peace-of-mind as they say. Do I really want to pay $350 a month and not have a warranty....AND drive a 3 year old car? Not me. I'll pay the $100 a month.
Just food for thought.
Originally posted by SDW2001
The Explorer is nice, but we'd need a V8 because it's six isn't powerful enough.
How's your driving style that you need a V8? I have Landrover Freelander with a 4 cylinder 2.0l Diesel (112 hp). With that car, I pulled the car of a coworker (ca. 1.5 t) for over 100 miles over a hilly Autobahn at about 55 mph - and I never had to use full throttle.
Originally posted by SDW2001
Brussell:
Thanks for the advice. One thing I disagree with: Financing. Here is why.
It is almost impossible to buy cash. That's a fact. Any decent used vehicle that is safe and will meet my needs will run at least 15K. No way I'm coming up with that while keeping savings for other things.
But lets say I spent $8000 on used car. Actually, the number doesn't even matter. Let's say I bought it and started saving for the next one. Now, a affordable car (cash) isn't going to last more than, say, 5 years in reality....perhaps less. So, let's assume I save $200 a month to buy another one later. That's $2400 a year. We'll subtract $800 per year in maintenence costs on that car since it would be much older. That's a net savings of $1600 a year. Multiply by 5 years until the next one, that's $8K for the new one down the road.
Here is the problem. Though it seems I wouldn't be making payments, I actually am. I am paying $200 a month. And guess what?...I am still driving a used car, probably 5 years old at that...and paying to do it. I'm just making payments to myself! You see, no matter what one does, there are still payments. The only question is are you going to pay to drive used and have questionable reliability, or pay (finance) to drive much newer and have a warranty.
Financing is not bad anymore when it comes to cars. Now, another thought about even buying a RECENT, financed used car.
Car: 2000 Dodge Caravan, 30K miles (basic options, no leather, etc)
Price with tax: 17,000
Warranty: Powertrain only
Financed amount: 15,000
Term: 48 months (not going 60 months on a used car!)
Rate: 5.9% (remember...it is used)
Payment: $352 a month.
Car: Honda Odessy, mostly loaded, new
Price with Tax: 30,000
Warranty: Full
Financed amount: 28000
Term: 60 months
Rate 0.9%
Payment: $477/mo
Now, obviously car #2 costs a lot more. The point? For $100 a month I can drive brand new, pretty loaded up vehicle with a full warranty and peace-of-mind as they say. Do I really want to pay $350 a month and not have a warranty....AND drive a 3 year old car? Not me. I'll pay the $100 a month.
Just food for thought.
Your abour halfway there with your thinking...perhaps we can get you the rest of the way there.
First your figures minimize a lot of things. You are still financing a used car or new car in your scenarios. The type of thing Brussell was mentioning and I mentioned is that you can get a used SUV or minivan with a little looking for likely under $5000 with under 100k miles.
Also you have to consider some other factors. In either scenario you must come up with $2000. (I am basing that on your financing figures) With my suggestion you only need come up with $3000 for the next 5-7 years. (15k miles a year typical driving)
However there are some serious factors you minimize. The car places ALWAYS get their money. The inexpensive financing has origination fees or often times you go in and they offer the that .09 for only 36 months and so you have to go with the 4-6% regular financing. Plus I don't know about your state but you also have to add sales tax in California. (private parties don't charge that)
Also I can't recall a single year in which I have spent $800 to repair my car!
Now I don't know your age, mine is 32 and if you grew up with the same experiences I did I can understand why you would think that about high mileage cars. The cars of the 70's were seriously working to get 100k miles. The 80's cars were terrible because they were basically 70's engines with all sorts of added on smog equipment. When this stuff would start to deteriorate it would get tremendously expensive.
However in the late 80's and beginning 90's America had finally gotten a clue and adopted Japanese style autodesign. The cars had redesigned engines, drivetrains etc. This improvement means that you will get 200k out of these cars and then the expensive repairs will finally start happening. The same mentality you use to take with a 100k mile car now applies to these 200k mile cars. Also certain things on cars fail because of miles driven, not because they are new or old. Most cars cough up an alternator periodically, say every 80-90k miles. Water pumps seem to go out about every 75-80k miles. These are $200-250 repairs if you know a good mechanic. Things like tires will wear out on a new or used car so the costs are just part of driving like gas.
So now the new math.
$2000 dollars down on both vehicles.
$3000 of costs spread over the remaining life of the car.(car cost)
$500 a year for oil changes, tire wear, small repairs
Say that you get 6 years out of the car and then it gets to 200k miles and finally has an expensive repair. That would be about 15-16k miles a year of driving.
That is $6000 worth of costs spread over 6 years. Less than $100 a month.
With your scenario 1 you have $16896 spent on purchasing the car (same $2000 down) and you still have the small repairs out of warranty (talking 6 years here) tire wear. Also you have more expensive insurance costs because you must carry not only full coverage but whatever amount of liability insurance the loan requires as well.
BTW, that was the less expensive scenario.
But think about that mentality, It's just a few hundred dollars. That few hundred dollars could pay off your home mortgage 15 years early and save you a hundred THOUSAND dollars. (Assuming say a 200k home) Those 15 extra years of mortgage payments instead of going to the bank can go to your retirement where if properly invested you can double your money every 7-8 years.
Then 100k becomes 400k over 15 years.....
Or that extra money gives you the room you need to be a little riskier in some investments and get a real return, it allows you to buy and rent 2-3 houses without worrying what would happen if someone skipped a month of rent and you had to evict them... it changes a lot of things.
Sorry to have this drone on so long, but this being thrifty is sort of a hobby of mine. The little things serious add up. My income as a teacher is not nearly as substancial as some here make. It is only $57k a year. However my wife doesn't have to work at all and our net-worth is well over a quarter million dollars while owning over 800k of real estate.
You have to have your dollars working for you, and not for someone else. It isn't what you make but what you keep.
Example:
If your house is worth $200k and appreciates 5% this year, it will be worth $210k next year.
My properties worth are $800k will be worth $840k next year.
My net worth will have gone up $30k more than yours. Meanwhile you might be working a little extra here or there, sending the spouse off to work so that you can both give the maximum to your 401k's and have something to retire on.... etc...in otherwords you will be working to make up that 30k gap instead of letting your money work
I know I am ranting, and generalizing, but those little things become big things over the long run. They can add up in your favor very quickly. That money could be what qualifies you for an investment property, it could be what starts a business, it can be a lot.
Ranting mode off....
Nick
All leasing is is paying the depreciation on that car over 3 or 5 years or whatever. It isn't some god-awful horrible idea, it's just a different way of doing things (probably good for those who always like to drive a new car). So, when looking at a lease, first figure the depreciation of the car, then compare that number to the total paid in the lease.
Originally posted by Scott
I think anyone that buys a car with 100K on it is a fool. Those cars are for high school students to wrap around trees. And lemee tell ya. You don't want the cell phone call from the wife when that 100K beauty dies on the site of the road.
I don't know if your refering to my post but the miliage I listed was when i sold the car not the miliage that was on it when i bought it. All my used cars had between 20K-50K miles on them when first bought. But the kids I sold them to... that's another story.
Originally posted by Scott
I think anyone that buys a car with 100K on it is a fool. Those cars are for high school students to wrap around trees. And lemee tell ya. You don't want the cell phone call from the wife when that 100K beauty dies on the site of the road.
I could not have said it better. I have a good job. If anyone thinks I am going to spend $5000 on a car with friggin 100K on it....think again.
I do appreciate the advice. As far as financing goes, there are not orgination fees and such that I have ever seen. Any normal middle class person is NOT going to be able to buy a decent car for cash. Any decent used car that would meet my needs is going to be a minimum of 15K. Period.
trumptman: If you haven't spent $800 in repair on a $5000 car, then you outght to go out and play the lottery....right now. You are one lucky SOB!
EDIT: you also forget....as I mentioned before: After I go into my pocket for $5000 (money which I could be earning interest on instead of spending), I have to start saving hundreds a month for the next car. I have to add that to the repair costs. Even if we use a compromise figure...say $600 a year for repairs, we get this:
Initial payment: $5000
Monthly svaings: $150
Repair amoritization: $50
That's $200 a month, PLUS the 5K I have to come up with. So, in reality what is happening is that I am driving a car with, good God, 100,000 miles on it, is at least 5 years old, has no warranty and regardless of how well I take care of it, is a ticking time bomb. Not me, thanks. Either way, one is going to pay. The only question is how much, and how new is the car going to be.
Look I'm not the one wondering how people can spend $36,000 on a car to hold a kid and a dog. As you said yourself where are the priorties? People don't have them. They lease. They don't save toward retirement. They spend the equity in their homes. There are all sorts of crazy things they do. They stuff their kids into daycare. They forgo their vacations. They get laid off and have it repossessed. They justify working on weekends and holidays
It honestly looks like you have your mind made up and are looking for a justification. I assure you I would trust my 1993 Cherokee to drive me just as far as your brand new Explorer in terms of safety and a major trip. I took my other Cherokee to New York, Pennsylvania and Washington D.C. when it had 168k miles on it. I put 8,000 more on it that summer. It did cough up an alternator along the way which was replaced during dinner at a local garage.
As for what I would tell her if the car failed, that is what I keep triple AAA for at a massive $50 per year. That is the same answer I would have to give her if she got a flat, dead battery or ran out of gas in her new car or used car.
Now you asked me to tell what I tell her when the car broke down and I did.
So now you tell me, what do people tell their spouses when they HAVE to have that $550 for the next 5 years. Would I rather answer to a car breaking down like once every 3 years or would I rather tr to deal with this...
Look I would love to take Sat off for the family, but I can't....or I know that working the holidays is inconvenient but at least we can get ahead with time and a half....or I know one of us should stay home with our sick child but ...the bills...
I would rather deal with the car personally....
Nick