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12-25-2007, 07:15 PM | #1 |
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Taking all the fun out of buying a new car
My dad once said that much of the money he has saved during his lifetime came from never buying a new car and always buying used. I've never been inclined to follow his advice, so my last car was (gasp!) a lease on a 325i.
I was reminded of this when I read this post from someone who obviously shares the same viewpoint of my dad - "I only buy used and use the 4:30 rule. 4 years old, 30,000 miles max. Go on AutoTrader.com to find them.Alternatively, I needed a car for the kids. Nissan made a 240-sx convertible in the early 90's (Toyota made the Celica; both are good!). Went on AutoTrader.com and did a search of the US. Found a couple with 75,000 miles for around $5k. I've had one for 10 years & it’s been great, it now has 200k miles on it. With that mileage, they bottom out at around $2,500. That works out to about 2 cents a mile; new cars will cost around 25 cents a mile, 4 year old car is around 12 cents. A car is the #2 expense for most folks. The difference of 25 vs. 2 cents works out to $350/month. It’s equal to the after-tax debt service on a $100k mortgage (30 year, 6%). In other words, you can go with a new car or buy used & get a larger or better house by taking on an additional $100k mortgage. Wheels vs. house. I buy used and drive it until it's a donor. It’s a trade off and no one answer is right for everyone. When I see the Lexus commercials with the big bright bow, I see an economic noose." Doesn't that just suck all the fun out of thinking about getting (gasp!) a new car? |
12-25-2007, 10:06 PM | #4 |
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I agree, car payments as a lifestyle will weigh you down unless you really make a ton of money and have little other responsibilities.
Once in awhile they build a car that's really something else. That said, I don't have a problem buying something new where there's little question you'll keep it a long time. I think the 135i could be that once-in-a-decade car that guys will kick themselves later for not buying new. (Ten years ago it would have been a Supra twin turbo. 40 years ago, a 426 Hemi Cuda. Etc.) |
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12-25-2007, 11:03 PM | #5 |
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Definitely true about buying used with cash instead of financing. If you want to really feel the pain, extend the example to 45 years (A reasonable length of time to be gainfully employed in the US). And instead of putting the money into a house, put it into higher risk investments with returns that beat the stock market average of 8%
Put $350/month from age 20 to age 65 into a stock investment plan that beats the market by just 2% a year, and at 65 you will have an astounding $3,180,570 in your account. So just agressive investment of your money that you would have otherwise spent on a nice car, and you could make yourself into a multi-millionare by 65. Then again, the entire US economy could crash and burn at some point over those 45 years, leaving you pennyless AND without a 135i. The answer is that it is all about balance. The Zen of Money. |
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12-26-2007, 08:28 AM | #7 |
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My personal philosophy regarding money is: save some; invest some; and spend the rest on things that make life comfortable, because I can't take a cent of it with me when I depart this world.
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12-26-2007, 08:38 AM | #8 |
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12-26-2007, 10:32 AM | #10 |
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Agreed for the most part, but try to build a few million $$ nestegg to leave the kids when you go, eh?:biggrin:
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12-26-2007, 10:36 AM | #11 |
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My parents have the right idea, they want to be chopping up the last piece of furniture for firewood when they expire. ; -) But, based on what they've saved, they're going to be hanging around for a long time, which is OK with me!
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12-26-2007, 10:58 AM | #12 |
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My kid has a trust set aside for her. Plus, she is one of the beneficiaries of my life insurance policy. I also own my business, so my philosophy works for me.
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12-26-2007, 12:22 PM | #13 |
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This thread is depressing . Yes if you invest all your money when you are 20 then you'll most likely end up a millionaire by the age of 65 but then what can you do with all that money at that age?
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12-26-2007, 12:41 PM | #14 |
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No one needs a new car, but it's ok to want a new car!
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12-26-2007, 01:07 PM | #15 |
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If someone in Atlanta hadn't bought a NEW e28 535i in 1987 I couldn't have had the fun last year of driving down a back-country road, pushing through the gears with the sunroof open, or the autocrossing fun of running it tail-first through a set of cones laughing hysterically.
I have been buying and driving 15-20 year old BMWs and Saabs for long enough to have earned a NEW car where I get to pick out the color and options, break in the motor, and when the time has come sell it I will pass it to a young BMW enthusiast it nearly-new condition with a complete set of maintenance records and a copy of the original window sticker. I don't mind at this time, and as I am able, spending a little extra to keep this cycle alive for myself and hopefully some other folks as well. |
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12-26-2007, 02:07 PM | #16 |
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I think my problem with people who give unsolicited advice about how to save money is that their ego is invested in it. To them, their frugality makes them smarter than others. And they love to go on and on about how silly people can be with money, how much debt people have, and how simple it is to be frugal if people had even a little bit of discipline and common sense. We all know at least of one these people.
So it isn't that I disagree with them, but I disagree with them pushing their views on others. That quote I posted to start the thread was from another forum where someone was asking if a certain local dealership was good to work with. And some guy responded with that bit about "I never buy new, blah blah" when they weren't asking for advice about that at all. |
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12-26-2007, 03:26 PM | #17 | |
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Trust me, you'll want a nice ride as much in your 60's as when you were a teenager - and you'll have more time to enjoy it. :biggrin: |
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12-26-2007, 04:15 PM | #18 |
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12-28-2007, 08:27 AM | #19 | |
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12-28-2007, 11:29 AM | #20 |
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There are many ways to save money in life.
Don't travel Don't go to the movies Only eat Cup-a-Noodle Shop at Goodwill Live in a trailer Drive a Kia Don't go on dates Don't smoke Don't drink Don't have kids The question is one of what pleasures you. I like cars, gadgets, and travel, so that is where I spend my money. I don't care for fashion or going to the movies, so I save there. Perhaps your dad wasn't a car guy. My dad sure wasn't and he drove a 1972 Dodge Dart for some 20 years. All he cared about was that it got him around town. |
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12-28-2007, 12:05 PM | #21 | |
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12-28-2007, 12:11 PM | #22 |
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