# monthly car payments



## Happyfamily (Apr 15, 2014)

My degree is in engineering so I like to work things out to the decimal, but I'm new to finance matters other than being a super saver on principle. We don't believe in car payments, which isn't anything we thought up ourselves. Most money advisors are going to say buy the car you can afford and get by with that. That's what we do, without really calculating what it saves us. But I did it this morning and I am amazed. I bought my Subaru for $1300 three years ago, and have had some minor repairs on it. On the order of a hundred bucks, certainly not much more. 

My insurance is $13 a month. I just pay the whole amount for six months at a time, but that's the monthly equivalent. It goes slow up steep hills, has rust, dingies, you know - a clunker.

So I looked up the average price of a new car and it was around $31K. The average interest rate is 4.88%. I got a finance calculator that says the monthly payment on that for five years is going to be $588. The average insurance payment per month in the USA is $150, a whole lotta that for collision. That amounts to a monthly payment of $738 just for car and insurance. As compared with $13 for me. So the difference is $725 per month.

I can hardly believe my eyes, but that's what the math says if you are buying the average new car at average interest rates and paying average insurance. Over top of what I am paying. That's about our monthly food budget for a family of four. 

Sometimes people tell us they don't want to have repair bills. They want a warranty. But when you are saving $725 a month you can afford an awful lot on repairs and in fact you can buy a car like mine every two months if you wanted to. No need to fix them. Astonishing, really. 

Of course, if you can AFFORD to, then go lay down cash for your $4.5 million Lamborghini Veneno Roadster. Google says that was the most expensive car last year.


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## EleGirl (Dec 3, 2011)

What it boils down to is that everyone makes their own choices on how to spend their money.

Keep in mind that buying a junker ever two months takes time. And there is no guarantee that the junker will even make it to your house. Most people do not have the knowledge needed to pick a good junker.

While $725 a month can cover a lot of repairs... what do does this person do to get to work while their junker is in the shop getting repaired? So much for having a car if it's always in the shop.


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## Homemaker_Numero_Uno (Jan 18, 2011)

Happyfamily said:


> My degree is in engineering so I like to work things out to the decimal, but I'm new to finance matters other than being a super saver on principle. We don't believe in car payments, which isn't anything we thought up ourselves. Most money advisors are going to say buy the car you can afford and get by with that. That's what we do, without really calculating what it saves us. But I did it this morning and I am amazed. I bought my Subaru for $1300 three years ago, and have had some minor repairs on it. On the order of a hundred bucks, certainly not much more.
> 
> My insurance is $13 a month. I just pay the whole amount for six months at a time, but that's the monthly equivalent. It goes slow up steep hills, has rust, dingies, you know - a clunker.
> 
> ...


This should appeal to your engineer self:
http://twentyfiveandjobless.files.wordpress.com/2010/11/pat_on_the_back_1.jpg

Remember, if nobody bought new cars, the market motivation for improvements in technology wouldn't be there. We'd all be inhaling leaded gas fumes and flying through glass windshields after being in crashes unrestrained by seat belts.

I'm reviewing and editing a research manuscript right now on why for innovation to occur, engineers need a translator and boundary-bridger/facilitator to get their new ideas recognized. It's because they don't understand if even comprehend the role of the marketplace in how new technology is adapted and demanded. 

Sorry, I couldn't resist. No harm intended. Your strategy works for you, and maybe some others. But it can't work for everyone if there are to be quality used cars on the market.
Be grateful there are people who do bear the cost of new technology. You benefit from their purchases.

On the other hand, you're paying way too much for food. You must eat meat and dairy. $25 per week per person is sufficient. With wiggle room, you should be able to have a nice diet for $500 for the 4 of you. To be super efficient and not to require your food to be inefficient, in terms of packaging, handling and transport, you should be growing your own, and worm composting. 

Please also remember the human health cost of working in scrap yards for the people who separate good used parts from junkers to sell on the market for repairs, and the people who make the repairs. They are exposed increasingly to all sorts of harmful chemicals. There is a cost, it's just not being carried by you. Some types of components are now banned, or at least properly labeled, or sold in contained units.


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## tacoma (May 1, 2011)

I'm pretty much in agreement with the OP as long as you can be certain you're not buying a lemon.

I tend to go middle of the road on this one though.

My last truck purchase was 4 years old when I bought it so it was about half the price it was when new 12K.

I did finance it but made certain I was in a loan that allowed early payments towards principal (these are hard to find nowdays)

Paid it off in two years (The earliest I could without penalty) and it's very nice having a paid off, clean, like new vehicle now.


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## chillymorn (Aug 11, 2010)

I buy cheap cars with low miles. last car was a 96 with 60k for 2000$
one before was a 94 with 20k for 2400$. and the one before that was 89K for 500$.

all three are still on the road. haven't had a car payment in over 20yrs. I do 95% of all repairs and maintenance.

less than 1000$ in repairs the last 4yrs. on all three. yes I do spend some time on repairs. and I start shopping for another one before I need one. and when the cream puff comes along I buy it.I don't care what color,make,size of engine. all I care about is condition and miles.

I realise its not for everybody but I have saved a pile of money the last 20 yrs without a car payment.

I also buy AAA plus for 125$ a year if it breaks down I have it towed home where I can repair it.

588+ 150=738x12x20...........you do the math.


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## Happyfamily (Apr 15, 2014)

Homemaker_Numero_Uno said:


> Remember, if nobody bought new cars,


:scratchhead:

How do you get from buying cars we can afford to buying no new cars, especially when I emphatically stated to buy the $4.5 million car if you can? I'm not a luddite. I'm an engineer on leave for homeschooling duties. Salary = $0.


Yes, *chillimorn* that's my kind of math while I am homeschooling the kids. I'm so surprised by how big the numbers are in savings. 

Insofar as what to do with a car that breaks down - that's a lot different depending on people's individual circumstances. Worst case scenario is renting a car while yours is being fixed. $30 a day? $50? With $725 a month to work with you can afford to rent a Corvette.


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## Happyfamily (Apr 15, 2014)

Homemaker_Numero_Uno said:


> On the other hand, you're paying way too much for food. You must eat meat and dairy. $25 per week per person is sufficient With wiggle room, you should be able to have a nice diet for $500 for the 4 of you.


Oh, like I said I am new to financial matters. I've been keeping a spreadsheet, and anything we buy at the grocery stores I have called "food". But it includes all kinds of things like paper towels, laundry detergent, light bulbs, my husband's motor oil, tools, bug dope - all kinds of stuff we don't eat. 

So my mis-use of terms there. It's a lot more than food budget, sure.


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## tacoma (May 1, 2011)

chillymorn said:


> I also buy AAA plus for 125$ a year if it breaks down I have it towed home where I can repair it.


This is arguably the best investment I've ever made for my family.

Seriously, it has saved all of our butts at one point or another.


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## Homemaker_Numero_Uno (Jan 18, 2011)

Happyfamily said:


> :scratchhead:
> 
> How do you get from buying cars we can afford to buying no new cars, especially when I emphatically stated to buy the $4.5 million car if you can? I'm not a luddite. I'm an engineer on leave for homeschooling duties. Salary = $0.
> 
> ...


I did say I was half-joking. I understand you are now without an income and suddenly immersed in all manner of home economics. Including "saving money." I forgot that engineers aren't good with picking up on subtle humor.

It's just that most people won't do a cost-benefit for something they can't afford, vs. something they can afford. They just do the cost-benefit within the options that they can manage and that are realistic for them to begin with. It's great to see how much money you're saving with option A vs. option B, but if you can't afford option B in the first place, there's no money to be saved at all. It just means you don't have to come up with extra money for option B, if you chose it, which in your case means not having to return to work. (Which might be an option for you if you really needed that car whereas for some people the constraint curve is not so easily shifted out.) It doesn't mean you now have the money you saved from option B to invest, because you never had the money in the first place. 

Savings in this case is just a sleight of hand, producing an image of money that never existed.


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## Sbrown (Jul 29, 2012)

I agree whole heartedly that car payments are a horrible way to spend ones money. And with the Internet and youtube buying a "lemon" now days is a mistake only a fool would make. Before buying any car I can find the most common problems and their fixes in just a few moments. And if the car does break down the repair can most likely be found online.
_Posted via Mobile Device_


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## chillymorn (Aug 11, 2010)

Homemaker_Numero_Uno said:


> I did say I was half-joking. I understand you are now without an income and suddenly immersed in all manner of home economics. Including "saving money." I forgot that engineers aren't good with picking up on subtle humor.
> 
> It's just that most people won't do a cost-benefit for something they can't afford, vs. something they can afford. They just do the cost-benefit within the options that they can manage and that are realistic for them to begin with. It's great to see how much money you're saving with option A vs. option B, but if you can't afford option B in the first place, there's no money to be saved at all. It just means you don't have to come up with extra money for option B, if you chose it, which in your case means not having to return to work. (Which might be an option for you if you really needed that car whereas for some people the constraint curve is not so easily shifted out.) It doesn't mean you now have the money you saved from option B to invest, because you never had the money in the first place.
> 
> Savings in this case is just a sleight of hand, producing an image of money that never existed.


so whats your point? :scratchhead:

if you did without to have more then you did have the money. maybe it didn't going into a saving plan or under the bed. but you could afford other more important things or necessities that other wise you would have to do with out. if you really want to trip out your mind imagine if you invested this in a moderate stock fund and gained say 5-8% compounded of 20 years you would be very rich.


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## Dredd (Apr 16, 2014)

As far a getting "good" junker, forge a cordial relationship with a local mechanic. When your test driving the thing, swing it by there and have him look at it. 

I know, I went to Oxford.

But yeah, I drive a 20 year old Honda Civic. Insurance is cheap, and it gets good gas mileage.


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## Happyfamily (Apr 15, 2014)

Homemaker_Numero_Uno said:


> Savings in this case is just a sleight of hand, producing an image of money that never existed.


I don't understand what this means really. No worries. We have three different tax sheltered savings plans. It infuriates my husband that the law is so complicated. He's maxed out on his SEP plan for his business, then he's maxed out on a personal IRA, then there is a college fund for the kids. He does the taxes and I don't know any of the details beyond that. I can see how much is in the accounts. It's just one place, three accounts. He has a pension he is already receiving plus one more account we can't get to for a few more years.

We're very modest income, but we're saving and a big car payment along with insurance would really cut into savings. $725 a month is $8700 a year. Let's say you can get 2% on your money, that's reasonable. Ours is in stocks and doing way better, but let's be conservative. That's $45K in five years. Almost $100K in ten years. That's a lot of security to me.


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## Happyfamily (Apr 15, 2014)

Sbrown said:


> I agree whole heartedly that car payments are a horrible way to spend ones money. And with the Internet and youtube buying a "lemon" now days is a mistake only a fool would make. Before buying any car I can find the most common problems and their fixes in just a few moments. And if the car does break down the repair can most likely be found online.
> _Posted via Mobile Device_


Oh hey, thanks for responding to that question. Agree totally. It is amazing how specific the youtube videos are, and my husband watches them. 


I am very jealous of *Dredd* and his Civic. Mr Smarty Pants might be getting 50 mpg. Google shows a pretty wide range from 30 to 50 depending on his model. People here drive a lot of Subarus because they are sure-footed in the winter and go 100's of thousands of miles in tough conditions. 

My husband thought he was in charge of things and bought a five speed manual. So it is sitting in the front yard. That one was $1400. So the full story is that he was right about the Subarus but I am not driving a stick shift. He figured if he bought it then I would have to drive it. He can sell his little stick shift car anytime he wants. Nothing wrong with it. :lol:


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## 4understanding (Oct 23, 2011)

If you can rent a new a new corvette for $725 per month please let me know where...that is a bargin. I paid $500 for 5 days on vacation recently for a vette convertable.....
_Posted via Mobile Device_


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## Happyfamily (Apr 15, 2014)

4understanding said:


> If you can rent a new a new corvette for $725 per month please let me know where...that is a bargin. I paid $500 for 5 days on vacation recently for a vette convertable.....
> _Posted via Mobile Device_


No, no - you weren't following the question. 

What do you do when your car is _in the shop_. For what, a couple of days at most? Fine, call it three for worst case scenario. 

If I just did my reservation right with Hertz I got a corvette convertible in LA for $87 a day. I thought it would be more. I believe a hundred bucks a day depending on where, sure. 

When you are banking $725 a month you can afford a lot of rental car time if you had to. I've never had to do it. The issue of mechanical problems is silly when you look at the numbers. I think people just want to drive nicer cars than they can afford to buy outright and are willing to pay compound interest to do it, that's all.

That's what *EleGirl* said. Everyone can do what they want.


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## turnera (Jan 22, 2010)

Happyfamily said:


> Insofar as what to do with a car that breaks down - that's a lot different depending on people's individual circumstances. Worst case scenario is renting a car while yours is being fixed.


NO, worst case scenario is our DD23 stalling her used car on the side of the road while driving back to university in a backwoods town with one stoplight and Jethro pulling over to "help" her.


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## chillymorn (Aug 11, 2010)

turnera said:


> NO, worst case scenario is our DD23 stalling her used car on the side of the road while driving back to university in a backwoods town with one stoplight and Jethro pulling over to "help" her.


just because its a used car does not mean it will break down. If your car is inspected by a mechanic once a year and resonable prevenitive maitance is done the the chances of Jethro comming across your dd23 broken down is greatly reduced. not to mention cell phones and being able to call for help is at an all time high. You could also teach that driving trough shady areas to be frowned on. 

I will admitt that because I drive older vehicles I tend to drive them with more care. although I am amazed at the number of people who have problems with their newer or even brand vehicles. Just because you drive a newer vehicle don't equate to being more reliable all the time. 


on the same note I try to teach my children that common sence goes along way. make sure you park near a light if at all possible. Do you really need to drive through the bad section of town late at night, be aware of your souroundings and whats happening as best you can, dress and act apropiate and watch your reputation espicialy on line stuff. (posting drunken pics on facebook so future employers can see would be a bad thing)


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## tennisstar (Dec 19, 2011)

I agree with turners. I'm not going to chance breaking down some late night on a dark road. 

I drive newer cars, and I pay for it. I don't live in a city with a lot of public transportation so reliable transportation is a must. My employer would not tolerate me having a car that broke down because I'm expected in meetings etc at specific times. Also, I sometimes have customers etc in my car, and a beater just doesn't cut it.
_Posted via Mobile Device_


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## turnera (Jan 22, 2010)

chillymorn said:


> on the same note I try to teach my children that common sence goes along way. make sure you park near a light if at all possible. Do you really need to drive through the bad section of town late at night, be aware of your souroundings and whats happening as best you can, dress and act apropiate and watch your reputation espicialy on line stuff. (posting drunken pics on facebook so future employers can see would be a bad thing)


The drive to her university includes ONE road only, that drives directly _through _half a dozen such towns. Sorry, but this is one instance where I'm going to trust a new car over an old one.


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## Happyfamily (Apr 15, 2014)

turnera said:


> NO, worst case scenario is our DD23 stalling her used car on the side of the road while driving back to university in a backwoods town with one stoplight and Jethro pulling over to "help" her.


I guess DD means dear daughter? Towing is a normal insurance option, and you should have that whether new car or not, should this be your concern. It's 24/7 for ours. I'll be there for my kids with one cell phone call, in my used car. 

Your concerns are valid, I mean feelings are facts regardless of the physics involved. Being broken down on the side of the road is something I dread too, sure. That's why you buy cars that get 300,000 miles, no problem. You service them and when something starts clanking, you check into it instead of driving until the wheels fall off. :lol:

Anyone driving an older car has to concede that they are more likely to have mechanical problems in, say, one year than a car off the showroom floor. It's a question of what you pay to get that, and whether it is worth it to _borrow at compound interest for it_. 

I'm 25. If I retire at 60, and if I can pull off 5% on my money, this is a _million dollars_. When I am an old lady I want people that are my age now scurrying around to get me a straw for my ice tea.


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## turnera (Jan 22, 2010)

Happyfamily said:


> I guess DD means dear daughter? Towing is a normal insurance option, and you should have that whether new car or not, should this be your concern. It's 24/7 for ours. I'll be there for my kids with one cell phone call, in my used car.


I would too, except that it is HOURS AWAY. She could be DEAD or RAPED by then.


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## chillymorn (Aug 11, 2010)

I'm not trying to convince anybody that my way is the right way. But I am convinced that my way is the right way for me!

Its helpfull to discuss things like this with others because sometimes my way is not the right way for me. lol!

there might be somone out there reading this and saying holy cow. I really can't afford 1/2 my take home pay on a car. And causes them to reveualuate their position on it. and theres always middle ground to consider. Lots of my friend buy late model used cars thats 1 or 2 years old and put as much down on it as possible and then try their darndest to pay it off as quick as possible.

to everybody that makes enough money to pay a new car payment I say good for you. But I honestly don't think thats the case. most live paycheck to paycheck and are one emergency away for having serious finiancial trouble.


But I do realise that everybody can and should make their own decissions reguarding the money they earn! by the way the dows up 87.28.


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## turnera (Jan 22, 2010)

I'm fine with that. Just, as you said, not trying to convince everyone that there is only one way to handle things.


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## Homemaker_Numero_Uno (Jan 18, 2011)

I've homeschooled kids, kept working, earn $60-$100/hour from home with little to no overhead (if you're not working your social security benefits will stop in 5 years, including disability benefits) and my car is paid for and sits in the driveway most of the time. 

I'd rather have a horse, they're more useful! Less maintenance and if you have two of them, you can even make more of them for free. You can ride them drunk and drive them into the woods and nothing bad happens. You can even sleep or text or whatever while driving one. If someone undesirable comes around and tries to make trouble, a horse can defend you pretty well with a well placed kick or evasive maneuvers. A car just takes off with whomever has the key, your own car can even run you over. They have no freakin loyalty.

;-)


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## Sbrown (Jul 29, 2012)

Most people love their debt. They'll dream up highly unlikely scenarios to keep it. Like being forced to drive through a town full of raping murdering men. Smh.
_Posted via Mobile Device_


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## Sbrown (Jul 29, 2012)

Homemaker_Numero_Uno said:


> I've homeschooled kids, kept working, earn $60-$100/hour from home with little to no overhead (if you're not working your social security benefits will stop in 5 years, including disability benefits) and my car is paid for and sits in the driveway most of the time.
> 
> I'd rather have a horse, they're more useful! Less maintenance and if you have two of them, you can even make more of them for free. You can ride them drunk and drive them into the woods and nothing bad happens. You can even sleep or text or whatever while driving one. If someone undesirable comes around and tries to make trouble, a horse can defend you pretty well with a well placed kick or evasive maneuvers. A car just takes off with whomever has the key, your own car can even run you over. They have no freakin loyalty.
> 
> ;-)


Lol horses are free upkeep? Hardly...They need fuel no matter if you "drive" them or not.
_Posted via Mobile Device_


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## turnera (Jan 22, 2010)

Sbrown said:


> Most people love their debt. They'll dream up highly unlikely scenarios to keep it. Like being forced to drive through a town full of raping murdering men. Smh.
> _Posted via Mobile Device_


It only takes ONE.

And btw, she paid for her own car.

Actually, when she was still in high school, we were fixing up my H's 1974 Nova SS for her to drive. Which was fine because she would be in town where I or the police or the two truck driver could reach her within 15 minutes, as opposed to 3 hours.


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## tennisstar (Dec 19, 2011)

Sbrown, some of us live in places with little public transportation and must go back and forth to work. Some of us can't afford to lose our jobs due to broken down cars. 

My car is paid for, btw. 

Chilly, I work in an office where luxury cars are the norm because people are highly paid. I don't drive a luxury car, though. Just to say there are plenty of places where people earn high salaries though.
_Posted via Mobile Device_


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## chillymorn (Aug 11, 2010)

tennisstar said:


> Sbrown, some of us live in places with little public transportation and must go back and forth to work. Some of us can't afford to lose our jobs due to broken down cars.
> 
> My car is paid for, btw.
> 
> ...


I hear ya.

my comments were really for people who are lower middle class salary wise. I have a fair number of friends who make jokes regarding my older paid for vehicles. and it always amazes me that they really could afford a much nicer lifestyle if they didn;t run out and finance a new car every 2 years.

but like I said its up to each and every person to decide how to spend their hard earned money.

the real key is to try not to pay interest! both you and tunera have indicate that your vehicles were paid for so this really doesn't apply to either one of you. if your driving newer paid for cars that awesome. It show that you are basically doing the same but because of your higher income you can afford a newer ride.:smthumbup:


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## Hope1964 (Sep 26, 2011)

$13 a month for insurance?!?! Holy crap that's cheap.

I like driving around in my big SUV that guzzles my free gas and lets me see over all the puny cars far too much to ever take public transit.


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## chillymorn (Aug 11, 2010)

Hope1964 said:


> $13 a month for insurance?!?! Holy crap that's cheap.
> 
> I like driving around in my big SUV that guzzles my free gas and lets me see over all the puny cars far too much to ever take public transit.


tree hugger!!!!!!

how do you get free gas?


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## Aspydad (Oct 17, 2013)

It all depends on how many miles you drive, where you have to drive, how flexible you are to more frequent failure of components or having your car out of service to be fixed, how comfortable you want to be while driving etc.

For me, I like a car that is comfortable as I put around 15K miles a year on my car and live in an area that gets quite hot in the summers. My time is too valuable to be spending it coordinating unexpected repairs. In some places where I drive if the car were to break down, it would be dangerous. So, I do not drive Junkers. Now, I do drive a reliable car that will go 100-150K Miles before I have to buy a new one - at 15K miles per year that's about 10 years. I have always purchased new cars and I take care of them and I will say I have never broken down unexpectedly. Now, I have had a battery die before - so now I get a new battery every two years no matter what. I believe in having good tires at all times - so - if the tire is rated for 60K - I put new ones on at 35 K. I always have good breaks and change all fluids according to the requirements. Replace spark plugs and wires every 5 years no matter what.

I can well afford to pay cash for my cars. I actually own four cars - I bought them all new - oldest one is 2005. Each of my daughters has a car and my wife has one. I actually drove my daughter’s cars for the first year and then gave them their car. I would just let my car sit for that year and just drive it once and a while – so I really did not buy them a new car – I gave them are car that I used. My wife’s car is 9 years old and has 148K miles on it - it is a Toyota and just keeps on going - I keep it just like new. I am really struggling with trading it in according to plan at 150K miles but I am going to do it in the next few months. To me – once a vehicle gets to be around 10 years old you can have some component failures that are just not expected – and I will not take that chance. My hope is that my daughters will take the car that I gave them and drive them for 10 years or $150K miles just like I do so as to minimize their cost of transportation. To me – people who buy a new car every 2 to 3 years and only put around 60K miles total are completely wasting money.

Very tempting to get a very fancy car for $50-70K and so far I have never done that – I can afford it but I just think I would rather limit the amount of depreciation that is incurred when you buy such an expensive car when it is really not needed. Also, the money required to maintain high end vehicles tends to be more expensive as well.

I have financed each automobile - I just cannot bring myself to cash in my investments - that average over 8 % return for the last 10 years when I can borrow money for very low interest. My youngest daughter’s car that I am just handing over to her is financed at .9 %. Why would anyone in their right mind cash out investments when the cost of money is so cheap? By making car payments for all of my vehicles, I am way ahead of the game. I am actually considering leasing my next vehicle as it bothers me having any cash sitting in cars – I probably have around 20K sitting in all the cars that I own and that really is costing me money.


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## chillymorn (Aug 11, 2010)

Aspydad said:


> It all depends on how many miles you drive, where you have to drive, how flexible you are to more frequent failure of components or having your car out of service to be fixed, how comfortable you want to be while driving etc.
> 
> For me, I like a car that is comfortable as I put around 15K miles a year on my car and live in an area that gets quite hot in the summers. My time is too valuable to be spending it coordinating unexpected repairs. In some places where I drive if the car were to break down, it would be dangerous. So, I do not drive Junkers. Now, I do drive a reliable car that will go 100-150K Miles before I have to buy a new one - at 15K miles per year that's about 10 years. I have always purchased new cars and I take care of them and I will say I have never broken down unexpectedly. Now, I have had a battery die before - so now I get a new battery every two years no matter what. I believe in having good tires at all times - so - if the tire is rated for 60K - I put new ones on at 35 K. I always have good breaks and change all fluids according to the requirements. Replace spark plugs and wires every 5 years no matter what.
> 
> ...


this is whats called a humble brag!

I've read your always better off buying rather than leasing.Do your homework first before you lease. lots of hidden cost in leasing a car.


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## Happyfamily (Apr 15, 2014)

Aspydad said:


> I have financed each automobile - I just cannot bring myself to cash in my investments - that average over 8 % return for the last 10 years when I can borrow money for very low interest.


Oooh! I know! I just learned this so bear with me. A new car is going to depreciate 20% the moment you drive it off the lot, but let's say one year. Let's work with round numbers too, so say a $30,000 car at 1% interest. 

$30,000 - .2*$30,000 = $24,000. Interest = $300.

So you pay $300 in interest for the privilege of losing $6,000 on your asset. That's why investment advisors tell us cars are not "investments". Special cases, sure - like vintage or movie-star owned pieces. But not regular drive-around cars.

My Dad didn't raise a fool either. If you can make car payments, then you can put money in the bank instead. Don't tell me it is coming out of your savings. It is coming out of your income stream. 

So again, no problem - if the joy is worth the cost then good for everyone. But it is not an investment strategy, that's for sure.


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## turnera (Jan 22, 2010)

I have one Beemer (95) with 350,000 miles on it. I have another beemer (2005) with 250,000 miles on it. DD23's 2005 diesel VW has 80,000 miles on it. I've never regretted buying new as each one enjoyed at least 3, if not 5, years of free service, and not one has ever died on the road.


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## Theseus (Feb 22, 2013)

Happyfamily said:


> So I looked up the average price of a new car and it was around $31K. The average interest rate is 4.88%. I got a finance calculator that says the monthly payment on that for five years is going to be $588.


Where do you get the average interest rate at 4.88%? I bought my Mini Cooper new 3 years ago, and my interest rate is only 0.9%. If you look around, and wait until the rates are low, then it's not hard to find a good deal. In fact, I was going to pay the whole amount, but the interest rate was so much better than my home mortgage, that it made sense to instead use that money to pay down the house and finance the car instead. 

A new or newish car was the only option for me. I'm in the military, and can't be broken down when people are expecting me. And the Mini is the most reliable car I've ever had. 

If you want a good deal, here is the way to go. Buy a used car that's just 1 or 2 years old, so it's still under warranty, but at the same time significantly marked down from it's new price.

These days I would be leery of buying a new car for this reason - ten years or so down the road when everyone wants electric cars, will you be able to sell it? If anyone buys a new car now, I recommend that it's something economical, hybrid, or electric.


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## Happyfamily (Apr 15, 2014)

Theseus said:


> Where do you get the average interest rate at 4.88%?


The miracle of google. That was for all of 2013. This year it is a little lower, like 4.2%. 

Current Auto Loan Interest Rates | Bankrate.com




> If you want a good deal, here is the way to go. Buy a used car that's just 1 or 2 years old, so it's still under warranty, but at the same time significantly marked down from it's new price.


This is headed on the right road. Cars depreciate geometrically. Let's roll with the 20% annual depreciation and see what the result is on a twenty year schedule. Below is the percent of original value remaining in the car. Roughly, what you can sell it for. 

0.80
0.64
0.51
0.41
0.33
0.26
0.21
0.17
0.13
0.11
0.09
0.07
0.05
0.04
0.04
0.03
0.02
0.02
0.01
0.01

So in the first few years you lose half your asset. In the last three years you only lose 1% of the original value of the asset.


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## Theseus (Feb 22, 2013)

Happyfamily said:


> This is headed on the right road. Cars depreciate geometrically. Let's roll with the 20% annual depreciation and see what the result is on a twenty year schedule.


It's true that vehicles depreciate quickly at first, but I think you are taking that 20% depreciation a little too literally. 

According to your scale, then a ten-year old car is only worth about 11% of it's original value? That's too low. Right now, you can't buy 2004 cars that cheaply, unless they are in really bad condition.


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## Happyfamily (Apr 15, 2014)

Theseus said:


> It's true that vehicles depreciate quickly at first, but I think you are taking that 20% depreciation a little too literally.
> 
> According to your scale, then a ten-year old car is only worth about 11% of it's original value? That's too low. Right now, you can't buy 2004 cars that cheaply, unless they are in really bad condition.


Oh, no worries. If you want a third-order equation with tighter fight on decay rate I can do that for you. 

It's an illustration based on google research. The fact is you lose tremendous amounts of value on new cars in the early years. Twenty years later, another year doesn't matter much.


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## Happyfamily (Apr 15, 2014)

Hope1964 said:


> $13 a month for insurance?!?! Holy crap that's cheap.


Thanks for noticing. Less than 10% of the average. 




> I like driving around in my big SUV that guzzles my free gas and lets me see over all the puny cars far too much to ever take public transit.


I assume you are kidding about the free gas, and thank you for the point. Average SUV mileage is 21 according to here:

Best Gas Mileage by Vehicle Class - Cars.com

We're roughly 50% better on mileage, yet we too sacrificed even higher mileage to get a sturdier vehicle with 4wd. You can get twice the mileage easy if you drive one made out of salmon tins. 

Larger vehicles are safer, but there is diminishing returns. A little larger than sub-compact helps a lot, and beyond that stepping up to an army tank doesn't help much more. In terms of crash test data I looked at anyways. Each class has quite a bit of variance too, so bigger isn't necessarily a higher test crash rating. You have to look at the individual model.


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## Hicks (Jan 14, 2011)

You don't lose more money on a new car vs a used car and new cars don't depreciate more.

A 30,000 used car depreciates the same way a 30,000 new car depreciates... Different vehicles depreciate more than others. Hondas and Toyotas hold their value really well. 

It's nearly impossible to find a $1300 car these days. The used car market is "hot" right now.

When you buy an expensive car, you pay more sales tax and your depreciation is higher. When you buy a cheap car, your depreciation is lower but your repairs are higher. Depreciation is relatively predictable and repairs are not. An expensive repair such as a transmission can be more than depreciation.

Used cars can actually appreciate as well... For example, you could probably get more than $1300 for the subaru today.


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## turnera (Jan 22, 2010)

I bought the first year of the Honda Prelude for $6000 way back when. Drove it for 6 years and it got totaled. We had replacement insurance; they offered us $1000, my H refused it. Offered us $2000, he refused it. Offered us $3000, he said he couldn't get a replacement for that. Finally they said fine, just go find one and we'll pay you what they're selling it for (nobody was selling the car cos it was that good). He found one in another city - one! - and it was selling for $6000. So we got $6000 from the insurance company. And bought a BMW with it. 

Now, once we ever get that 74 Nova back together, it will be worth a LOT more than H paid for it brand new.


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## Aspydad (Oct 17, 2013)

chillymorn said:


> this is whats called a humble brag!
> 
> I've read your always better off buying rather than leasing.Do your homework first before you lease. lots of hidden cost in leasing a car.


If one assumes that the only source for leasing a car in through a dealership you are correct. But, this is a false premise as there are other companies that have very flexible lease offerings where you con design the lease to fit your needs. The main thing that holds me back on leasing is that at the end of the lease term if you want to do the buyout, the banks will charge higher interest for a used car. The advantage of leasing however is that you have greater cash flow throughout the term of the lease and you end up with no money in the vehicle at the end of the lease – as long as the agreement is drawn up correctly. Certainly, one must consider what the cost of money charge the leaser includes and what the buyout value is – that’s all part of the analysis. 
So, I will have to disagree that it is always lower cost to buy versus lease. The company I work for has a fleet of over 500 vehicles and they are all leased – we do not want to have any cash tied up in vehicles as we can make much higher return on cash that is being used to generate profits.


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## jb02157 (Apr 16, 2014)

tacoma said:


> I'm pretty much in agreement with the OP as long as you can be certain you're not buying a lemon.
> 
> I tend to go middle of the road on this one though.
> 
> ...


I Think is a great analysis. I usually go middle of the road an buy a car two to three years old and pay half or less of the new car price. I also pay it off in two years which means I have the same thing you would have if you bought it new with a five year loan. I want something relatively new that won't give me problems, but I don't want to pay the new car price. This is a nice alternative.


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## Aspydad (Oct 17, 2013)

Happyfamily said:


> Oooh! I know! I just learned this so bear with me. A new car is going to depreciate 20% the moment you drive it off the lot, but let's say one year. Let's work with round numbers too, so say a $30,000 car at 1% interest.
> 
> $30,000 - .2*$30,000 = $24,000. Interest = $300.
> 
> ...


Owning a vehicle that takes you from point A to B is certainly not considered and investment – ever.
I think there are allot of folks out there who get in trouble with vehicle ownership simply because they do not realize that each mile you drive in a car – you pay money no matter what. It is an absolute ridiculous concept that if you pay cash for a vehicle then you do not have any cash outflow when you drive the vehicle – you have fuel, maintenance, lost opportunity to make profit on the cash you have in the car, depreciation, insurance, value of your time if the car breaks down, etc. – the engine blows – and you start over – another $1500 to buy another clunker that you better have in the bank. Bottom line – if you drive say 15K miles per year - even if you own a clunker – you have cost. I think a $1500 – no, I know a $1500 car will cost you a minimum of $1000 per year in maintenance over 45K miles to operate – that’s if you are lucky big time – could run you twice that – heck it can be $2k just for a transmission - $1K for an air-conditioning unit, struts - $600, radiator (rebuilt) $600 – plus your driving in a vehicle where the interior is falling apart – especially if you live in the south – springs in the seats are worn out and uncomfortable etc. What about being stranded on an interstate because your alternator failed? What is the cost of that? 

If you drive 1K miles per year and stay within 10 miles of your home, then even I would consider the Junker for that – but, how many people have that luxury these days?


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## turnera (Jan 22, 2010)

Not to mention that most cars built in the last 10-15 years have to be fixed at a real mechanic's because there's very little we can do on them ourselves any more.


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## chillymorn (Aug 11, 2010)

turnera said:


> Not to mention that most cars built in the last 10-15 years have to be fixed at a real mechanic's because there's very little we can do on them ourselves any more.


I disagree. thats just what they want you to think so they can gouge you.


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## turnera (Jan 22, 2010)

Bullshyte. We have TRIED to do several jobs on our own and the items are now buried under other parts of the engine that have to be removed by a lift. Don't have one of those lying around.


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## chillymorn (Aug 11, 2010)

turnera said:


> Bullshyte. We have TRIED to do several jobs on our own and the items are now buried under other parts of the engine that have to be removed by a lift. Don't have one of those lying around.


we will have to agree to disagree.

I use two floor jacks and jack stands.

but you can believe what you want.


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## turnera (Jan 22, 2010)

Thank you. I do!


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## ScarletBegonias (Jun 26, 2012)

I spend something like 43-44 hours a month on the road. I will not tolerate spending that much of my life driving in an old clunker. I count my blessings that I can afford to drive a car I love.It really turns the miserable experience of commuting into something more positive and peaceful. 
As it stands,my car gets about 30 miles to the gallon and other than my bad luck w/getting flat tires it has cost very little money to maintain. I bought it brand new and threw extra money at it every month til it was paid off. 

Once it gets old and starts costing more money to repair than it's worth,I'll have to see where I am financially before deciding to buy new or used. I really don't care what other people think about my decision or about my car. I'm the one paying for it and I live below my means with most other things in life.


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## Happyfamily (Apr 15, 2014)

ScarletBegonias said:


> I spend something like 43-44 hours a month on the road. I will not tolerate spending that much of my life driving in an old clunker. I count my blessings that I can afford to drive a car I love.It really turns the miserable experience of commuting into something more positive and peaceful.


Sure. The only thing financial advisors point out is _don't borrow money to do it. _

Unfortunately people keep trying to turn it away from primarily a discussion about debt. 



> As it stands,my car gets about 30 miles to the gallon and other than my bad luck w/getting flat tires it has cost very little money to maintain. I bought it brand new and threw extra money at it every month til it was paid off.


In three years we have replaced two fuel filters, and they were one right after the other. They were full of water and my husband has reasoned that the kids put water in the tank. That's a maintenance bill of $2 a month, apart from what everyone does anyway like changing oil and replacing oil filters. 

Not one person has actually submitted any kind of evidence showing how awful the repair costs are for an older car. So what this tells me is that people haven't actually put pen to paper and made calculations. Throwing out random numbers about how much various parts cost is silly. You need to produce hard data from studies as I have done with quoting average US car prices, interest rates, insurance costs, or whatever. I don't just make stuff up to support my argument. This is something I learned by studying. 


*Aspydad* 



> another $1500 to buy another clunker that you better have in the bank.


That's the whole point.  Doing this is what puts money in the bank. At $725 a month, it takes two months. We have a spare car in the front yard too. So with this perfectly good spare car, people are saying we're in real trouble because we won't have transportation. :scratchhead:






> I think a $1500 – no, I know a $1500 car will cost you a minimum of $1000 per year in maintenance over 45K miles to operate – that’s if you are lucky big time – could run you twice that – heck it can be $2k just for a transmission - $1K for an air-conditioning unit, struts - $600, radiator (rebuilt) $600 – plus your driving in a vehicle where the interior is falling apart – especially if you live in the south – springs in the seats are worn out and uncomfortable etc.


Really? So am I imagining that my car has cost a grand total of two fuel filters in three years from the children putting water in the tank? That's why you read consumer report pubs on cars. You buy the ones that have good reports, not the lemons. 




> What about being stranded on an interstate because your alternator failed? What is the cost of that?


Despite being a small woman I did come equipped with a brain. I have free towing on my insurance and I have a cell phone. It has never happened, for one thing because when the alternator starts squeaking you tighten the belt. We've done a LOT of nine hundred mile trips with this car because it is our highest mileage vehicle. 

We've racked up more than $30K in the bank at our actual return on investment, just from the savings over one car payment in three years. We're in blue chip growth stocks and the market is through the roof. 

That's what's so bizzare about your comments. What we're doing is showing why investment advisors say not to borrow money on cars. So that you can have money in the bank. 

And we're being told just the opposite by people who are not investment savvy.


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## ScarletBegonias (Jun 26, 2012)

Aspydad said:


> Owning a vehicle that takes you from point A to B is certainly not considered and investment – ever.


 I can fully agree with for sure. I figured this would go without saying.I've never met anyone who was thick enough to think a car is an investment.


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## Homemaker_Numero_Uno (Jan 18, 2011)

Sbrown said:


> Lol horses are free upkeep? Hardly...They need fuel no matter if you "drive" them or not.
> _Posted via Mobile Device_


Try to explain that to the half of the Mongolian population that doesn't live in Ulaanbaatar. Or a Native American who lives on a rez and can't afford the gas for his or her truck.

Or someone in Chile who can get through on a road to the city that's landslided and the trucks and buses can't get through for days, maybe weeks.

Horses will win hands down, unless you have the prissy kind that you use to jump over white painted fences or to run around in circles with tiny little men on them. 

Even in Ulaanbaatar, you can ride your horse right through the center of the city. Nobody blinks.

When it's bitter cold and your car runs out of gas, you'll freeze to death. With a horse, if you're willing to sacrifice him or her, you can survive for quite a while longer than snuggling in your heap of coldhearted metal.


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## Aspydad (Oct 17, 2013)

Happyfamily said:


> Sure. The only thing financial advisors point out is _don't borrow money to do it. _
> 
> Unfortunately people keep trying to turn it away from primarily a discussion about debt.
> 
> ...


If you bought a car for $1500 and drive it for 45000 miles with just changing the oil - then what you should have done is turned around and sold it for $10000 right away because that is what it was worth.

A car like that has new tires ($500-$700) has new brakes ($300-$600) the front end is tight ($500) air-conditioning has been charged ($200) new battery ($125) all new fluids ($400) new belts ($400) plus the value of the car (500 which is what a junk yard would pay for parts) if you add this up - your story holds no water - now one in their right mind would sell you a car like this for $1500.

I hate to tell you but financial advisers are 10% about giving you sound financial advice and 90% about selling you investment products that pay them money.

And buy the way a $720 car payment is what it takes to borrow $40K with a five year term. Not sure where you get this number?


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## Hicks (Jan 14, 2011)

There is no sure thing with cars.

You could buy car a for $8,000 that is worth $7,000 in one year an in that year nothing went wrong with it.

You could buy car b for $1,500 and need a new transmission for $2,000 an it's worth $1300 after one year.

Thus, car A was a better deal. But the exact opposite could have happened too.

You could do all the studies you want, but at the end of the day the 10 cars you buy in your life will not be the statistical average of the population of the study.

What's good about economic engines (no pun intended), is they take care of the studies for you. A car depreciates because it loses life and requires more repairs as time and particularly miles goes on.

Probably the best thing you can do to keep your car costs to your best advantage is buy cars that are undervalued. One really good way to get those is to buy a car that a friend or person you know is about to trade in.


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## bbdad (Feb 11, 2013)

After we got everything on track, we save the monthly equivalent of a car payment for each car. That way, when it is time to replace a vehicle, we just take the money from our "car payments" and buy a 1-2 yr old car. We didn't start out with nice cars this way, but over time, you can really purchase a pretty nice vehicle for cash. It is about choosing to delay your instant satisfaction to meet more long term goals. The insurance is still gonna get you, but you would have that anyway.


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## Happyfamily (Apr 15, 2014)

Aspydad said:


> And buy the way a $720 car payment is what it takes to borrow $40K with a five year term. Not sure where you get this number?


See how you are not paying attention? Car insurance. 



> If you bought a car for $1500 and drive it for 45000 miles with just changing the oil - then what you should have done is turned around and sold it for $10000 right away because that is what it was worth.


Huh? Car prices are determined by supply and demand. 



> A car like that has new tires ($500-$700) has new brakes ($300-$600) the front end is tight ($500) air-conditioning has been charged ($200) new battery ($125) all new fluids ($400) new belts ($400) plus the value of the car (500 which is what a junk yard would pay for parts) if you add this up - your story holds no water - now one in their right mind would sell you a car like this for $1500.


No, we got two full sets of winter/summer tires with both vehicles, 16 tires total. Hubby has a pick-up truck full of other tires that will fit this car. At least. 

Batteries, same thing. We still have a spare, and he has batteries laying around, up to and including Caterpillar heavy equipment batteries. 

Brake pads? Goodness, $30 bucks. Air con? First thing he does is dismantle them. He removes the whole thing on account of weight and friction drag on the motor. He's relentless about mileage. 

This really is a separate topic - how to be smart about maintaining and repairing cars. I totally agree with (was it you?) the poster that said mechanic work is difficult. Well, you don't see me doing it. That is what a husband is for. 





> I hate to tell you but financial advisers are 10% about giving you sound financial advice and 90% about selling you investment products that pay them money.


I am watching my retirement accounts growing, and because of that it has given me much greater confidence that others too can be piling up money in the bank even if they don't earn a lot. 

I eagerly agree that there are financial con-artists out there - I mean criminal even like with Ponzi schemes - but that's true of anything. This is my money. I can check on it electronically 24/7/365. The IRS has all this information on the accounts, this is a legitimate big-name investment company... my money is secure. Fees are just about nil.


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## Aspydad (Oct 17, 2013)

bbdad said:


> After we got everything on track, we save the monthly equivalent of a car payment for each car. That way, when it is time to replace a vehicle, we just take the money from our "car payments" and buy a 1-2 yr old car. We didn't start out with nice cars this way, but over time, you can really purchase a pretty nice vehicle for cash. It is about choosing to delay your instant satisfaction to meet more long term goals. The insurance is still gonna get you, but you would have that anyway.


Exactly - you always have a car payment if you are putting miles on a vehicle because it is wearing out every mile you drive. You can either borrow the money and keep your cash to invest or you can use your cash to pay for the car - but, you have to put money in each month or year so you can either repair or buy another one when time. When comparing the two alternatives (pay cash or finance) you compare the expected return on investment for the cash versus the interest you pay. You are very disciplined but I believe that most people are not like you and that they are better-off financing and making the payments – this forces them to pay each month and adjust their standard of living to accommodate a fixed car payment. Someone who pays cash for a vehicle and then assumes that they can adjust their standard of living to “no” car payment will be in big trouble quick if the car becomes in operable due to some component failure and there is no room in their budget for a car payment - this is especially true when purchasing a used vehicle.


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## Hicks (Jan 14, 2011)

Happyfamily;8514153
Air con? First thing he does is dismantle them. He removes the whole thing on account of weight and friction drag on the motor. He's relentless about mileage.
.[/QUOTE said:


> That decreases the value of the car by a huge amount (I would value this over $1,000) since an AC repair on a car is quite high.


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## Homemaker_Numero_Uno (Jan 18, 2011)

Aspydad said:


> Owning a vehicle that takes you from point A to B is certainly not considered and investment – ever.
> I think there are allot of folks out there who get in trouble with vehicle ownership simply because they do not realize that each mile you drive in a car – you pay money no matter what. It is an absolute ridiculous concept that if you pay cash for a vehicle then you do not have any cash outflow when you drive the vehicle – you have fuel, maintenance, lost opportunity to make profit on the cash you have in the car, depreciation, insurance, value of your time if the car breaks down, etc. – the engine blows – and you start over – another $1500 to buy another clunker that you better have in the bank. Bottom line – if you drive say 15K miles per year - even if you own a clunker – you have cost. I think a $1500 – no, I know a $1500 car will cost you a minimum of $1000 per year in maintenance over 45K miles to operate – that’s if you are lucky big time – could run you twice that – heck it can be $2k just for a transmission - $1K for an air-conditioning unit, struts - $600, radiator (rebuilt) $600 – plus your driving in a vehicle where the interior is falling apart – especially if you live in the south – springs in the seats are worn out and uncomfortable etc. What about being stranded on an interstate because your alternator failed? What is the cost of that?
> 
> If you drive 1K miles per year and stay within 10 miles of your home, then even I would consider the Junker for that – but, how many people have that luxury these days?


I agree, this is why it's great to have income from your own business, or do some volunteer driving. You can deduct mileage or be paid mileage, and do your own errands and bulk groceries (coop) en route. But it's still good to try to do as little driving as possible.

That said, don't skimp on insurance. My car had a hit and run in my own driveway, car unoccupied, red, in a snowstorm during the day, guy drove in and hit it, then drove off. Had I not figured out who it was and had the police confront him with the evidence (and other witnesses, including his own employee who lives next door to me) would have cost my $500 out of pocket, and I WASN'T EVEN DRIVING! (I lowered my deductible, had no idea...) Plus the time it took for the police reports, dealing with insurance, getting it to the body shop, getting it back, etc. What a hassle. If it was a horse, I could have shot it and ate for the year.


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## tennisstar (Dec 19, 2011)

Happy, older cars work for you. Great! But some of us don't have time for all the repairs, extra tires, etc.

And I don't want to spend all my driving time in an old car. I don't drive a luxury car, but I'm going to drive a decent, newer car. I always look for low interest rate, like 3% or below. 

Some of us want newer things. It doesn't make us bad or wrong.
_Posted via Mobile Device_


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## Happyfamily (Apr 15, 2014)

Hicks said:


> That decreases the value of the car by a huge amount (I would value this over $1,000) since an AC repair on a car is quite high.


Kelley Blue book shows a difference in price of $70 for our car and zip code. What's so crazy about that is my husband sold two parts off it. The compressor and some kind of radiator. He got something like $300. He uses craigslist and ebay for that kind of thing. I use it for clothes, shoes, kids' stuff... 

That's why he doesn't sell the car in the front yard. He says it is worth a fortune in parts.


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## chillymorn (Aug 11, 2010)

no doubt everybody decides what to do with there money. I am more like Happyfamily in regards to vehicles.

one thing that kinda irks me is when people don't live with in their means and as a result the rest of society has to foot the bill when they file for bankruptcy or default on their mortgage.

sometimes I wonder if I'm an a$$ for trying to be responsible with my spending when I look around and see others who have made poor financial choices and then got bailed out!


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## tacoma (May 1, 2011)

Happyfamily said:


> Air con? First thing he does is dismantle them. He removes the whole thing on account of weight and friction drag on the motor. He's relentless about mileage.
> .


You guys obviously don't live in Florida.


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## Horizon (Apr 4, 2013)

My car was costing nearly a $1000 a month in finance ($50k car). Sold it last month an bought a beaut 10 yr old Aussie muscle car in good nick for less than $5k. No brainer. Comprehensive Insurance with the extras (windows, replacement vehicle, on road service / towing) is $79 a month.


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## tennisstar (Dec 19, 2011)

Chilly, I'm in agreement about people living beyond their means. But just because someone drives a new or newer car, doesn't mean they are living beyond their means. I could drive a $40k car but choose not to. 

Happy, in your front yard? You're not painting a pretty picture. Many people live in subdivisions where not only is there not room for extra cars, but the subdivision wouldn't allow it. I shudder to think of a lot of old cars sitting in people's front yards.
_Posted via Mobile Device_


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## Happyfamily (Apr 15, 2014)

tennisstar said:


> Happy, older cars work for you. Great! But some of us don't have time for all the repairs, extra tires, etc.


I couldn't agree more.  Said so myself what, three times now?

But don't tell me that my bank account is imaginary or that I spend thousands on repairs. I should be allowed to respond to falsehoods like those, especially when so wildly inaccurate. 

*Homemaker_Numero_Uno* Right on. My husband has a business, and here are the numbers. Lets round to ten thousand mile increments for ease of calculation:

Federal Mileage deduction for 10,000 miles = $5,600.

Husband's gas and oil expense = .15 per mile. Actual depreciation on vehicle = .1 per mile. Total = .25 per mile. Profit on federal mileage deduction = $5600-$2500 = $3,100. 

That isn't money saved. That is money they are putting directly into our pockets by "poofing" an expense into existence that isn't there for us. 

Same thing with per diem. You can take three hundred dollars a day in per diem, but sleep in your cab over camper and cook ramen on the propane stove. $2 in actual expenses, but $300 in daily lawful nontaxable per diem. My husband laughs hysterically about that. "Honey, they're paying us to go camping". The main trip he does is 900 miles, so that's $279 in mileage profit and $298 in per diem, a total of $577 on top of what he earns in the business itself - on a one day overnight business trip. 

*tennisstar* - we have 40 acres. My husband would probably not be welcome in your neighborhood.  He's got bulldozers, dump trucks, excavators, tractors, ATV's, boats - you name it.


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## tennisstar (Dec 19, 2011)

Sorry I offended you happy.
_Posted via Mobile Device_


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## ScarletBegonias (Jun 26, 2012)

chillymorn said:


> no doubt everybody decides what to do with there money. I am more like Happyfamily in regards to vehicles.
> 
> one thing that kinda irks me is when people don't live with in their means and as a result the rest of society has to foot the bill when they file for bankruptcy or default on their mortgage.
> 
> sometimes I wonder if I'm an a$$ for trying to be responsible with my spending when I look around and see others who have made poor financial choices and then got bailed out!


:iagree: It was so obnoxious buying a home w/DH bc the real estate folks and the lender just kept telling us "oh you can afford $x amount for a home you don't need to settle for THAT house!(referring to the one we fell in love with that happened to be waaaaay cheaper than the other homes we were seeing)" 
It was like really?? Way to give solid advice there

You're definitely not an ass for trying to be responsible w/your spending. I wish more people would stop maxing out their credit and start making better choices. I'm kinda tired of bailing people out LOL


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## wanttofix (Jun 4, 2013)

Happyfamily said:


> Most money advisors are going to say buy the car you can afford and get by with that.


Exactly! That's why I can't wait to pay off our car. I wish more people were like you.


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## turnera (Jan 22, 2010)

tacoma said:


> You guys obviously don't live in Florida.


Or Texas! It's already in the 90s here.


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## Hicks (Jan 14, 2011)

I think you lose alot more than $70 when you take out the AC of a car. You can test this out buy buying a car, removing the AC and selling it. If you are right, you have identified repeatable business that you can make $230 per car on....


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## Happyfamily (Apr 15, 2014)

Hicks said:


> I think you lose alot more than $70 when you take out the AC of a car.


I thought guys knew about cars, especially something so basic as Kelley Blue Book or NADA! Are you kidding? This is exactly what they do (track sales prices by zip code according to various options):



> You can test this out buy buying a car, removing the AC and selling it. If you are right, you have identified repeatable business that you can make $230 per car on....


That's what a junkyard does. They make a LOT more than that off a car they get for free. It is a $22 billion dollar industry. I don't appreciate being called a liar. We already sold those parts, and saying we have to do it again to "prove" we did it the first time is just calling me a liar. 

Air con does not have much value in the north. Heaters don't have much value in the south. So put your thinking cap on now and tell me where air con parts are being delivered and where heater parts are being delivered.


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## Homemaker_Numero_Uno (Jan 18, 2011)

chillymorn said:


> no doubt everybody decides what to do with there money. I am more like Happyfamily in regards to vehicles.
> 
> one thing that kinda irks me is when people don't live with in their means and as a result the rest of society has to foot the bill when they file for bankruptcy or default on their mortgage.
> 
> sometimes I wonder if I'm an a$$ for trying to be responsible with my spending when I look around and see others who have made poor financial choices and then got bailed out!


Sounds like you're clairvoyant and can tell by looking at someone whether they've had a brain injury, left an abused marriage, got shafted by a landlord, or had a kid with a disability. Better hope you don't end up with a sudden disability, have a kid or a spouse who needs care, or some kind of thing happen with your house that's not covered by insurance. Besides rice and beans, there's also humble pie, not so bad tasting, when push comes to shove.


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## ScarletBegonias (Jun 26, 2012)

Homemaker_Numero_Uno said:


> Sounds like you're clairvoyant and can tell by looking at someone whether they've had a brain injury, left an abused marriage, got shafted by a landlord, or had a kid with a disability. Better hope you don't end up with a sudden disability, have a kid or a spouse who needs care, or some kind of thing happen with your house that's not covered by insurance. Besides rice and beans, there's also humble pie, not so bad tasting, when push comes to shove.


True. It's better to save judgments for the people I know are just being stupid with their funds. Like my coworkers. Complain about being broke yet they go out for lunch daily,make multiple trips to Starbucks every week,leave early for no reason when they're out of vaca time,etc.


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## Hicks (Jan 14, 2011)

Happyfamily said:


> I thought guys knew about cars, especially something so basic as Kelley Blue Book or NADA! Are you kidding? This is exactly what they do (track sales prices by zip code according to various options):
> 
> 
> 
> ...


I wasn't calling you a liar. I have no doubt you can sell parts on Craigs...Where I live, you would lose alot more than $70 on a car if the AC was removed. I do buy and sell cars and check KBB frequently... I would move the car from good to fair with a removed AC and calculate $1000 minimum for that repair.

But if the climate is different where you live, and you belive the KBB to be accurate, then you could and should flip cars while removing Air condtioners... This is a legitimate opportunity. If you did that 10x per year, you could make $3,000... Plus if you find cars undervalued you could make alot more.


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## Happyfamily (Apr 15, 2014)

Hicks said:


> I wasn't calling you a liar. I have no doubt you can sell parts on Craigs...Where I live, you would lose alot more than $70 on a car if the AC was removed. I do buy and sell cars and check KBB frequently... I would move the car from good to fair with a removed AC and calculate $1000 minimum for that repair.


So? You have been insisting it was bad for my husband to remove the air con parts, and you are wrong. He made money by doing it and our mileage is higher.

I can see where this game is going so before anyone tries to jump in with the lame "rolling car windows down also detracts from mileage" canard - we don't roll the windows down, especially not at 20 below zero. Or even 70 degrees. 




> But if the climate is different where you live, and you belive the KBB to be accurate, then you could and should flip cars while removing Air condtioners... This is a legitimate opportunity. If you did that 10x per year, you could make $3,000... Plus if you find cars undervalued you could make alot more.


 It already is a legitimate business. If I make my own coffee does that mean I have to run a Starbucks joint too? Or prove to you they exist because you don't believe there are parts recycling businesses? 

My husband built this house. He does all the plumbing, electrical, carpentry, welding, heating & ventilation, roofing - you name it and he can do it. 

That doesn't mean he needs to prove all of those businesses are legitimate. Crazy.


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## hawkeye (Oct 6, 2012)

I don't understand the weird contrast that so many people make here that it's either new or nearly new OR it's a junker. What? There's a lot of middle ground there. I paid 8k for a good used car 2.5 years ago and have put all of $400 in it through 45,000 miles. It's not like every older used car explodes the second you drive off the lot, or leaves you stranded on the side of the road every day. 

Frankly, keep up routine maintenance, warm your car up if you live in a cold climate, and don't beat the hell out of them and most cars will treat you just fine.


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## chillymorn (Aug 11, 2010)

Homemaker_Numero_Uno said:


> Sounds like you're clairvoyant and can tell by looking at someone whether they've had a brain injury, left an abused marriage, got shafted by a landlord, or had a kid with a disability. Better hope you don't end up with a sudden disability, have a kid or a spouse who needs care, or some kind of thing happen with your house that's not covered by insurance. Besides rice and beans, there's also humble pie, not so bad tasting, when push comes to shove.


it doesn't take a crystal ball to know that a large amount of people were way over extended with debt. That the lending instutions were lending money to risky or peolpe who couldn't afford to pay it back and then selling the debt to second lending institutions so to mimimize their risk or writing it off as losses. Like ScarletBegonias said. when I was buying my house they were willing to give way more than I could reallly pay back and still have enough left over to pay utilities and eat. I endend up taking half of what they said I could afford.

as far as emergencies I don't put them in the same catagory. and I feel they are the minority with this situation.


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## Homemaker_Numero_Uno (Jan 18, 2011)

ScarletBegonias said:


> True. It's better to save judgments for the people I know are just being stupid with their funds. Like my coworkers. Complain about being broke yet they go out for lunch daily,make multiple trips to Starbucks every week,leave early for no reason when they're out of vaca time,etc.


I've actually done the math on a calculator for a woman who ate out every day and smoked. She was :-o

A year of brain damage showed me how "average" people do math. In that they don't. They are hungry, they eat. 

Not everyone does numbers, and some cannot equate them to the money and situation. There is a disconnect. Habits are deeply engrained. 

Plus, we always assume that people live in a place with a kitchen, and that they can cook, or that they know how easy it is to cook, and that they understand that advertising is often false and profit-motivated. 

What looks like stupid may be just an entirely different paradigm than where we are. 

I've lived with a lot of different people, as a kid, in the military, as an overseas intern with a host family, worked in an office that dealt with homeless people in metro DC (please don't make assumptions that they're scruffy and live under a bridge, it's not like that at all, usually) and some people really do need to just buy their food. It really stinks, but that's the way it is.

Same thing with cars, people need to get to work, they don't have good credit, or even any credit, there is no public transport, they are told they need to get a job because their benefits are ending or whatever, and a car is necessary. Of course they are preyed upon by salesmen who pretend to be looking out for them, and car breaks down...leading to payday loans...

Heard a woman today in social services, she had no car, it broke down, was paid for, she had to give it to her brother. She left her home up north because no public transport there (though cost of living much much cheaper) to move to capital city of our state because they have soup kitchen/food pantry and women's homeless housing...and public transportation. 

We think that everyone can use our fair system to have an equal chance. The system is not fair, the resources for public transportation are not equal, jobs are not well dispersed, and the education is certainly not equal either. There are food deserts in which people are stuck due to their housing situation. To tell people not to have kids, is ridiculous, kids are not just for the people who are (temporarily, perhaps, at a point in time) able to afford them. 

I've been to other countries where there are buses even in remote areas, people can get to work, people can buy food, they have decent housing, and medical care.

America loves inequality. We need to feel like by having health care, food and housing, plus a way to get to grocery and work, that we are somehow superior to those who don't. We are fed lies about these people, so that we will despise them and not see the truth: profits go to companies who bolster the politicians, not to the general public. By looking down on others you are encouraging inequality that doesn't need to exist, I'm not talking about handouts, I'm talking about basic public services.

Refer to the UN Declaration of Human Rights.
Look at Nordic Countries, heck look at Canada, Australia, they may not be perfect but at least they try. 
American, go ahead and hate the poor "it's their fault" we are told. I call BS!


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## Happyfamily (Apr 15, 2014)

Hicks said:


> I wasn't calling you a liar. I have no doubt you can sell parts on Craigs...Where I live, you would lose alot more than $70 on a car if the AC was removed. I do buy and sell cars and check KBB frequently... I would move the car from good to fair with a removed AC and calculate $1000 minimum for that repair.


Silly man. If you knew how to use Kelley Blue Book or NADA then you wouldn't have told me to do exactly what they do for free, and that millions of people rely on for accurate information. Like banks for example, that loan money on cars. 

I just looked up the difference in prices for with/without air con in Dallas Texas, 1994 Subaru Legacy, and the answer is $1224 vs. $1089, or $135. You are wrong by a factor of 7, even where air con is highly prized, for an older car like mine.

I get this all the time. Men think that just because I am a woman I don't know anything about cars.


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## turnera (Jan 22, 2010)

And you're rude. So what?


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## tennisstar (Dec 19, 2011)

Who in Texas would drive a car without ac? It was 91 here earlier in the week. I highly doubt tons of people here are removing their acs.
_Posted via Mobile Device_


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## Homemaker_Numero_Uno (Jan 18, 2011)

chillymorn said:


> it doesn't take a crystal ball to know that a large amount of people were way over extended with debt. That the lending instutions were lending money to risky or peolpe who couldn't afford to pay it back and then selling the debt to second lending institutions so to mimimize their risk or writing it off as losses. Like ScarletBegonias said. when I was buying my house they were willing to give way more than I could reallly pay back and still have enough left over to pay utilities and eat. I endend up taking half of what they said I could afford.
> 
> as far as emergencies I don't put them in the same catagory. and I feel they are the minority with this situation.


Why did you buy a house during that market?
I sold both of mine


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## chillymorn (Aug 11, 2010)

Homemaker_Numero_Uno said:


> Why did you buy a house during that market?
> I sold both of mine


because I was starting a family!

I think you just like to argue. and I am please with what I bought.I was illustrating a counter point to you comment.:scratchhead:


glad your doing well financially. But wonder about your comments about the people with no kitchen and having to move so they can get assistance.


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