Drive Free, Retire Rich

[Red Squirrel]

Fairly common sense.

In fact the way I always looked at it is, a car I really want now, will be equivalent to a used car I say "meh" to by the time it's paid off. May as well just go with a used car and save my money for other stuff. If it gets me to work, it gets the job done. If it can do more, then bonus. I've been wanting a truck so I can get lumber and stuff at home depot for home projects but I can't afford it so sticking with my rust bucket until I can afford another decent used car, I might get lucky and find a used truck that's in decent shape.

 

[AstroManLuca]

Then she doesn't buy the car on an interest free loan. The old saying goes, "You can lead a horse to water, but you can't make it drink," applies here. If she deserves a better car, she deserves the financial ramifications that come her way.

While buying outright is (usually) financially sound, sometimes life doesn't work that way. Sometimes the interest rates (or lack there of) are too good, or other factors come into play.

I purchased a 2008 Civic Hybrid fully loaded for about $25k. I received $550 tax credit for buying a hybrid. Through the 62k miles I have on it, it's saved me about $2k worth of gas costs, and KBB has it at ~$16k in value to a private party. I've probably saved about $2k (on the conservative side) in repairs. So the rough costs of my car for the past 5 years has been about $4.5k.

In a pure financial sense, it probably wasn't optimal. However, I don't spend a lot of money on stuff, and I like having a nicer car. I don't need a $40k+ car (too cheap for that), but I like not being embarassed by my car if I have to give someone a ride.

You're too cheap for a $40k car? Wow, what a penny-pincher you are.

But I'm sure it was worth it if it means you can impress your friends or if it makes you feel better about yourself.

 

[BurnItDwn]

Meh,

I bought a car for 16k with about 6k out of pocket (down payment + all the various taxes) ... I pay 4.5% interest, and just went with a 5 year payment (interest rate was so low it didn't matter between 3 or 5 years...)

Anyhow, my car payment is not much more than my electric bill.

 

[GotIssues]

You're too cheap for a $40k car? Wow, what a penny-pincher you are.

$25k gets you most of the nice things. Jumping from $25k to $40k+ doesn't net a whole lot of what I value. However, there is a big difference between a $10k car and a $25k car.

But I'm sure it was worth it if it means you can impress your friends or if it makes you feel better about yourself.

Or I could just be a complete asshat like you. I'm sure that will impress people, or at least give me fewer friends that I apparently "need" to impress. I said I don't like being embarassed by my car, I didn't say I used it to impress people. But why bother reading what is there, when you could just make some shit up and be an asshole, right? Go fuck yourself.

 

[Blackjack200]

$25k gets you most of the nice things. Jumping from $25k to $40k+ doesn't net a whole lot of what I value. However, there is a big difference between a $10k car and a $25k car.

It's all a matter of perspective. I actually think that $40k is a better price point than $25k. At $25k it seems to me that you're mostly looking at hot hatches and generic sedans. In my mind I might as well drive an old corolla or something. On the other had, at the $40k price point, you can get something that really moves when you push the gas pedal has some style. But I can't justify spending that much on a car, so I'm left with the old Corolla. Everyone will feel differently about this.

In response to your earlier post about being embarassed by your car, I won't deny that when people have asked me for a ride in my car, I've felt a bit sheepish when pointing them to which car was mine. They know that I have a good job and I can't help but wonder if they just assume that I have child support payments or am snowed under a ton of debt or something. But I can't control what they think, and even if it were true it wouldn't be any of their business anyway. I like to travel, I like to sail, I like to ski, I like to play sports, and I like to visit with friends. I could do all those things with a big car payment, but I can do them much more without one.

All that said, I must admit that within the last year or so I've been deeply by the market for used Porsche Caymans. A 2006 model with reasonable milage can be had for $30k or so. But when I do the math, the payment, insurance, gas costs, etc. it would just cut too deeply into the things I want to do with my free time.

So, sorry for the long-winded post, but I just wanted to point out that sometimes having a low-cost car can actually help your social life and hobbies.

 

[Elbryn]

So, sorry for the long-winded post, but I just wanted to point out that sometimes having a low-cost car can actually help your social life and hobbies.

i'd make the point that having resources available gives you the option to do what you want. if you've got the means to get an expensive car, by all means do so. it's your value system, not mine.

much different story though if you're spending beyond your means to get the car. in that case, you're just driving yourself further behind the debt hill and reducing future options.

 

[Blackjack200]

i'd make the point that having resources available gives you the option to do what you want. if you've got the means to get an expensive car, by all means do so. it's your value system, not mine.

much different story though if you're spending beyond your means to get the car. in that case, you're just driving yourself further behind the debt hill and reducing future options.

Totally agree. Some people can afford a nice car and still persue all their other interests, and some people will just put a higher priority on having a nice car. I have no problem with any of that. I do hope that, to your point, that they are not overextending themselves.

 

[GotIssues]

It's all a matter of perspective. I actually think that $40k is a better price point than $25k. At $25k it seems to me that you're mostly looking at hot hatches and generic sedans. In my mind I might as well drive an old corolla or something. On the other had, at the $40k price point, you can get something that really moves when you push the gas pedal has some style. But I can't justify spending that much on a car, so I'm left with the old Corolla. Everyone will feel differently about this.

I definitely agree that the $40k cars have things that the $25k cars don't, particularly when it comes to HP, but I did say "what I value" and I'm not the type of person that cares if my car goes from 0-60 in 12s or 4s.

I understand WHY people like their $40k cars, I just don't get anything out of it that I enjoy, thus I don't think I could ever bring myself to purchase a car that expensive, regardless of how much money I have.

In response to your earlier post about being embarassed by your car, I won't deny that when people have asked me for a ride in my car, I've felt a bit sheepish when pointing them to which car was mine. They know that I have a good job and I can't help but wonder if they just assume that I have child support payments or am snowed under a ton of debt or something. But I can't control what they think, and even if it were true it wouldn't be any of their business anyway. I like to travel, I like to sail, I like to ski, I like to play sports, and I like to visit with friends. I could do all those things with a big car payment, but I can do them much more without one.

You are chosing to do different things with your money. I see no problem with that. Gotta do what makes you happy.

My wife and I do pretty well, and we could afford $40k cars if we chose to. We just chose to do other things with our money. Same situation as you, just different numbers.

All that said, I must admit that within the last year or so I've been deeply by the market for used Porsche Caymans. A 2006 model with reasonable milage can be had for $30k or so. But when I do the math, the payment, insurance, gas costs, etc. it would just cut too deeply into the things I want to do with my free time.

So, sorry for the long-winded post, but I just wanted to point out that sometimes having a low-cost car can actually help your social life and hobbies.

It certainly can, if that's what your financial situation dictates. However, the savings between a $10k car and a $25k car would have zero impact on what my wife and I spend on entertainment and our social lives. We are already running a heavy financial surplus, adding a little more to it won't give us different/more options. Going to $40k cars each might have an impact, though.

The short of it is that we can afford and draw more than enough happiness by having new, worry-free cars in a modest range. We can spend more on our cars, it just doesn't provide enough value to us to make sense. Each person will be different given different financial situations and different feelings on their cars. Some people don't care about their cars and drive beaters, but love something else and spend their money that way.

 

[marvdmartian]

Psh. Takes a lot for granted. Show me how to get 12% back on my money, that's more what I'm interested in. I paid both my cars off in 2 months after buying them.

Have a talk with Bernie Madoff......I hear he has a helluva great plan!

 

[Dr. Zaus]

The point is that even at 0% interest you are making a payment instead of saving the money.

 

[ShawnD1]

Good stuff, but I thought everything he said was common sense? :hmm:

EDIT: Shouldn't have assumed that people have common or financial sense, never mind.

We don't buy new cars to save money. We buy new cars because we like new cars. Similarly, I sometimes buy a super fast computer because I like having a super fast computer. Sure I could just float on a netbook for 3 years then switch out, but I don't want to.

I don't like how he assumes you'll get 12% return on your stocks every year. Good luck with that. Even 10% is extremely optimistic.

You're too cheap for a $40k car? Wow, what a penny-pincher you are.

I love ATOT so much.

 

[rcpratt]

The point is that even at 0% interest you are making a payment instead of saving the money.

At 0% you could have invested the principal you didn't spend up front and probably could have made more than 0% (in before "my returns the last 10 years are -83%").

 

[Engineer]

At 0% you could have invested the principal you didn't spend up front and probably could have made more than 0% (in before "my returns the last 10 years are -83%").

I think that DixieCrat's idea is to not buy a new car at all, 0% or not and just keep what you got.

I still say that I encourage EVERYONE out there to go and buy a new car, even if they cannot afford it. Great (short term) for the economy and also equally great in lower the prices of used cars as they flood the market! :sneaky:

 

[AstroManLuca]

You're too cheap for a $40k car? Wow, what a penny-pincher you are.

I love ATOT so much.

Oh god, I have become that which I despise! D:

 

[DrPizza]

Seems a number on here drive shitty cars not because they like it, but because OMG I have SO much money saved up!! Fuck that, live a little and drive something enjoyable for once. Most of us spend enough time in our vehicles to at least spend a little extra to get something you don't hate every time you look at it.

Agreed. And, some people really enjoy their cars. Myself, considering "do I want to spend this extra money 'living a little' by sitting in a nice shiny new car? Or would I rather "live a little' by spending that extra cash on other things - dinners, movies, toys (bikes, boats, etc.), trips," my choice is the latter - some people choose the former.

 

[OverVolt]

Agreed. And, some people really enjoy their cars. Myself, considering "do I want to spend this extra money 'living a little' by sitting in a nice shiny new car? Or would I rather "live a little' by spending that extra cash on other things - dinners, movies, toys (bikes, boats, etc.), trips," my choice is the latter - some people choose the former.

It's a good choice. Always remember that things you buy deteriorate and nothing trumps the day you bought it. Meanwhile memories of cool things you did tend to just get better as time goes by. In general people who 'do stuff' instead of 'buy things' are happier. Yay.

 

[polarmystery]

I think that DixieCrat's idea is to not buy a new car at all, 0% or not and just keep what you got.

I still say that I encourage EVERYONE out there to go and buy a new car, even if they cannot afford it. Great (short term) for the economy and also equally great in lower the prices of used cars as they flood the market! :sneaky:

 

[JTsyo]

Let me clear it up for you. The shady eyes at the end means he's not. In fact he might be looking into getting a used car and want the prices lower.

I tried to convince my wife that if we saved for another 6 years we could buy a house outright instead of paying it over 30 years. But we were expecting a kid and she didn't want to deal with the kid in an apartment. But now with the interest rate at below 4%, it's not a big deal.

 

[GotIssues]

It's a good choice. Always remember that things you buy deteriorate and nothing trumps the day you bought it. Meanwhile memories of cool things you did tend to just get better as time goes by. In general people who 'do stuff' instead of 'buy things' are happier. Yay.

They aren't mutually exclusive, you can, in fact, have a decent car AND 'do stuff.' My wife and I have been to Europe, the Carribbean, China, and we were planning on Australia/New Zealand in May (a couple of large, unexpected expenses, combined with how much Australia costs has us not sure if that's where we want to go at this time).

What some people are failing to realize is that just because you purchase a $25k car doesn't mean that 1) that's the most you can afford 2) reasons for purchasing new isn't pretty solid.

My wife and I work with clients, and often have to take them out to lunch or somewhere else. You don't take clients out in a beater, period. We also visit family quite a bit, and they live 5 hours (her family) and 10 hours (my family) away. Anyone that's been stranded in the middle of nowhere by a car knows that it's not something you want to do.

We plan on driving our cars until the cost and hassle of upkeep become annoying enough (probably 120k-150k miles) to warrant looking into a new(er) car. But with Used prices at ridiculous levels, and given our financial situation currently, a new car was, and still is, the better choice given the prices and what we want out of the car.

 

[AstroManLuca]

They aren't mutually exclusive, you can, in fact, have a decent car AND 'do stuff.' My wife and I have been to Europe, the Carribbean, China, and we were planning on Australia/New Zealand in May (a couple of large, unexpected expenses, combined with how much Australia costs has us not sure if that's where we want to go at this time).

What some people are failing to realize is that just because you purchase a $25k car doesn't mean that 1) that's the most you can afford 2) reasons for purchasing new isn't pretty solid.

My wife and I work with clients, and often have to take them out to lunch or somewhere else. You don't take clients out in a beater, period. We also visit family quite a bit, and they live 5 hours (her family) and 10 hours (my family) away. Anyone that's been stranded in the middle of nowhere by a car knows that it's not something you want to do.

We plan on driving our cars until the cost and hassle of upkeep become annoying enough (probably 120k-150k miles) to warrant looking into a new(er) car. But with Used prices at ridiculous levels, and given our financial situation currently, a new car was, and still is, the better choice given the prices and what we want out of the car.

Well, it makes sense for you for two reasons:

1. You obviously make a lot more money than most people do. Most people can't afford to take vacations all over the world OR buy a $25,000 car, let alone both.
2. You have a profession where driving a beater would be detrimental to your work. So it makes perfect sense to spend a little extra to not have a rustbucket. In a way, this offsets the cost of the car since having a nicer car lands you more work.

In the end, the financial impact of buying a $25,000 car on your family is probably about the same as the financial impact of an average working-class American buying a $10,000 or less car. It's all a matter of perspective.

And obviously I spoke too soon in my earlier post. You are clearly in a position to buy a $25,000 car. It's just that everyone has a different cutoff point between "cheap," "nice," and "too expensive." I just think yours is probably substantially higher than it is for many people.

 

[GotIssues]

Well, it makes sense for you for two reasons:

1. You obviously make a lot more money than most people do. Most people can't afford to take vacations all over the world OR buy a $25,000 car, let alone both.
2. You have a profession where driving a beater would be detrimental to your work. So it makes perfect sense to spend a little extra to not have a rustbucket. In a way, this offsets the cost of the car since having a nicer car lands you more work.

In the end, the financial impact of buying a $25,000 car on your family is probably about the same as the financial impact of an average working-class American buying a $10,000 or less car. It's all a matter of perspective.

Exactly, which is why applying the same rules across the board for everyone generally makes people look silly. Situations vary across people for many reasons, some being legitimate, some being absurd.

The wife and I can afford to travel because we, quite literally, don't like stuff. Neither of us are materialistic-natured (the cars are more for work and peace of mind), so we just don't care to buy things. The few things we do buy (house and car as examples) are of the nicer sort, but not extravagant.

If someone robbed our house, they'd leave with about a grand worth of stuff, plus about a grand in furniture. I sometimes joke that if someone broke into our house, they'd feel sorry for us and leave a donation to help us through these rough times.

And obviously I spoke too soon in my earlier post. You are clearly in a position to buy a $25,000 car. It's just that everyone has a different cutoff point between "cheap," "nice," and "too expensive." I just think yours is probably substantially higher than it is for many people.

You can get a nice $10k car. My entire life up until 3.5 years ago, I drove cars that were sub $5k. We just value a lot of the things enough on a $25k car, and the way the used car market is right now, it made sense for us to purchase new. We were actually looking for slightly used (20k-40k miles) when we first went looking, but everywhere wanted absurd prices for them. It's just how it works sometimes.

 

[magomago]

meh some of it is BS. I've been looking at trucks and I'm not finding 70% depreciation after 4 years.

 

[magomago]

You can get a nice $10k car. My entire life up until 3.5 years ago, I drove cars that were sub $5k. We just value a lot of the things enough on a $25k car, and the way the used car market is right now, it made sense for us to purchase new. We were actually looking for slightly used (20k-40k miles) when we first went looking, but everywhere wanted absurd prices for them. It's just how it works sometimes.

Yup I'm amazed how even at dealerships preowned certified are just as expensive as new cars. I was looking at a tacoma and told the guy "Wow, for an extra 1K, I could get a similarly equipped new truck! There isn't a feature on this that the others lack!" and he looks at me, smiles, and says illogically "But this one has already depreciated, its preowned certified"

 

[Blackjack200]

Yeah, the used car market is absolutely retarded right now. I guess it's a combination of cash-for-clunkers and the shitty economy. Even cars that used to depreciate like rocks - Saabs and Volvos and Fords etc. are holding their value or appreciating.

 

[bignateyk]

Yup I'm amazed how even at dealerships preowned certified are just as expensive as new cars. I was looking at a tacoma and told the guy "Wow, for an extra 1K, I could get a similarly equipped new truck! There isn't a feature on this that the others lack!" and he looks at me, smiles, and says illogically "But this one has already depreciated, its preowned certified"

That's why you don't buy used cars from a dealer