Interesting perspective on how most folks spend an inordinate amount of money on personal transportation.
Interesting perspective on how most folks spend an inordinate amount of money on personal transportation.
Huh. And here I was, irritated that I just spent more on tires than I paid for the entire car...
Safety, comfort, and gadgetry are expensive!
MrJoshua wrote: Safety, comfort, and gadgetry are expensive!
That's true, you should see how cheap my cars are. 
After going through Dave Ramsey's Financial Peace University, I have started thinking a lot more budget minded about automobiles. Plus what people don't realize is that the average NEW car looses 70% of its value in the first 4 years. And imagine...after that some people have another 2 years to have to pay for it.
I was having this same conversation with a guy that works for me the other day. It kills me these people that only make between 30k and 50k a year and they will spend more than that on a brand new car and trade it back in a few years later for next to nothing. If you think about it they are spending a third of their income a year on transportation and that doesn't even include gas and maintenance.
Thus why I buy used and keep em for close to 10 years. I'm 24 and just now thinking about buying another truck since the first one I bought when I was 15.
However, this goes for daily drivers. Toys don't tend to stay around for that long, and I did make the mistake of buying my motorcycle new. I'll never do that again, though.
I haven't had a car payment in 10 years. So I guess the answer is no in that regard.
I spend about a car payment a month dragging the Abomination and Mazda to autocrosses with the Wife and Kids. In that regard the answer is yes.
I've know several people that have $500+ per month car payments because they're terrified of spending a few hundred dollars a year maintaining an older vehicle.
2 of my 3 running vehicles have loans. One is about $3k from being paid off and I still owe a bunch on my '06 GTI. However, I bought that car when I was doing outside sales and had a vehicle allowance, I've already made a promise to myself not to buy any more cars I can't just write a check for.
skruffy wrote: I've know several people that have $500+ per month car payments because they're terrified of spending a few hundred dollars a year maintaining an older vehicle.
Those people make owning at 10+ year old luxury/sport car for a tenth of it's original price possible. ;)
Personally, I look at it like a nice dinner or vacation. Not too much ROI on those, but they, like my cars, are the reason I earn more than minimum wage to begin with.
I have never had a car payment. I have been working on the Supra for over 6 months, and I have spent less than 2000, including car purchase.
I've never bought a new car, and never will. I enjoy letting some other fool suffer the 70% or greater depreciation while I wait for the long term durability to prove itself. Then add in the 100,000+ miles for even greater savings. Yes, I do this with daily drivers including the wife's car. I buy lower than average price in case they get totaled, stick some money away for repairs and only purchase cars that have stellar reliability. If they do have known problems, I stash that money away in a rainy day fund for the inevitable if the car is otherwise so good I'm willing to deal with an issue or two. When they get tired and start costing me money regularly, they get sold off and replaced (around 200,000 miles I start looking). I will confess to getting loans even for these since some of the money is tied up in the car waiting to be sold, but we generally pay them off in about 2 yrs and are never "upside down" on the loan.
Yes, most people out there are spending $400-$500 per month on the payment alone, not to mention the much higher insurance for a new vehicle. Easy credit has brainwashed the bulk of society into being stupid.
jlm_photo wrote: After going through Dave Ramsey's Financial Peace University, I have started thinking a lot more budget minded about automobiles. Plus what people don't realize is that the average NEW car looses 70% of its value in the first 4 years. And imagine...after that some people have another 2 years to have to pay for it.
We went through FPU too (after learning about Dave from a GRMer here!) and, of course, his car talk caught my attention. This probably is commonsense to us, but it continues to be eye opening to folks that I share it with.
Made my last car payment (on an IOU, not a loan) in February 1976. I've had 2 new cars in the ensuing years and paid for both outright, otherwise everything has been used and paid for with cash. The other thing I'd like to know is where Ramsey gets mutual funds with an average, annuak rate of return of 12% !! My retirement would look a lot better if I could get that .
not me. our last car loan was taken out in 2002 (on our '03 Ody) and paid off in 2005. still got the Ody, now with 170k on the odo. in 2003 i paid cash for the '96 Probe GT and it was my daily until a few weeks ago, when i paid cash for my new daily '03 Mazda6. bought PGT with 142k on the odo and it's now at 224k and change. the 6 has 128k on it, and i fully expect it to go another 100k.
wife and i did FPU about 18 months ago and we have stuck to our budget since the 4th week of the class. will continue to sock away about $500 per month for car replacement, and when the answer to fix versus replace comes up replace, we'll have the cash to do so, by buying used yet again.
I don't think I'll ever buy a new car unless I have so much money that I don't even have to look at what it costs. My current plan is to trade up to a better class of used sports car that's near the bottom of its depreciation curve every several years. Right now I'm thinking about selling my Miata (still worth about what I paid) and moving up to an S2000. Then in 4-5 years, I'll probably sell the s2000 for almost what I paid and move up to an Elise.
Toyman01 wrote: I haven't had a car payment in 10 years. So I guess the answer is no in that regard.
+1
Just bought my recent beater (131k mile 00 Civic DX Sedan) for $3600 cash. Nice car for the money.
My wife will most likely get a new Fit in the next few months. She is worthy of a new car--especially after her 99 CR-V has gone 210k miles. That said, even though we theoretically could afford WAY more than a Fit, this is what will make the most sense.
We live in a society where people see every reality show celebutard tooling around in a new Benz and they think that they "deserve" one. Keeping up w/ the Joneses is bankrupting people.
All I really have to add to this is you can get Duramax's with under 200,00kms (thats ~120,000miles to you yanks) for below $20K. That, is RETARDEDLY amazing. I'm having a tough time justifying buying a Subaru when I could get a 3/4 ton 4x4 dmax that gets 20+USMPG for about the same price.
I plan to keep my car well past 200k, barring BIG repairs.
Well, I'm currently considering to buy a car on credit for a couple of simple reasons:
OTOH I intensely dislike buying deprecating assets on credit (which is what buying a car usually is) and if I have to make car payments I'd prefer to make them on something that'll appreciate. But that's usually a vehicle that I won't be able to drive in winter.
dyintorace wrote: We went through FPU too (after learning about Dave from a GRMer here!) and, of course, his car talk caught my attention. This probably is commonsense to us, but it continues to be eye opening to folks that I share it with. Dave Ramsey on how to drive a car for free
While I agree with some of the points he makes, the snowball effect that he's talking about at the end is a bit off IMHO as he's making assumptions about a year-on-year return that are somewhat unrealistic.
He's expecting a return of 12% on a mutual fund when most pension funds are assuming 8% and have been noticing that an average return of 8% pa is already highly unrealistic...
I do like his approach of the 'continuous upgrade' that you can get if you put the car money aside each month instead of having a large chunk of it going towards interest.
skruffy wrote: I've know several people that have $500+ per month car payments because they're terrified of spending a few hundred dollars a year maintaining an older vehicle.
I think those people are funny. I've always respected my dad's policy of don't replace it until it refuses to be fixed. Thats probobly why one of my 2 cars is older than I, and why he only replaced his last service truck because it only had 7 working cylinders left on a good day, but at least the suspension noises were covered up by the screaming gearbox. How he managed to sell that thing for $3000 I'll never know...
I read an article in Top Gear a while back where May compared getting new cars to getting new clothes when the old ones (which are perfectly fine) go out of style. I think he mentioned the common arguement that old cars become too expensive to maintain, but he replied that most cars can be practically rebuilt for under $10k, so that argument is all crap.
On the other hand, brand new cars are a LOT safer than 20 year old cars, but just don't hit anything and you'll be fine 
Out of 5-vehicles, we have one payment & that's the '09 Fit. It's our work/commuter car and I receive mileage reimbursement from my work.
I don't like the idea of a car payment, but we drive upwards of 200mi/day. I started a spreadsheet a couple years ago calculating TCO on the vehicles we owned, as well as several new & late-model used cars. We reached a point about a year ago where it made sense to buy this - we save more than enough on fuel each month to cover the payment, we put a large down payment on it, which coupled with the good resale value means we're not upside down, even after 15-months & 46kmi.
We'll also drive it till it rusts apart.
dyintorace wrote:jlm_photo wrote: After going through Dave Ramsey's Financial Peace University, I have started thinking a lot more budget minded about automobiles. Plus what people don't realize is that the average NEW car looses 70% of its value in the first 4 years. And imagine...after that some people have another 2 years to have to pay for it.We went through FPU too (after learning about Dave from a GRMer here!) and, of course, his car talk caught my attention. This probably is commonsense to us, but it continues to be eye opening to folks that I share it with. Dave Ramsey on how to drive a car for free
ahh mr dave ramsey...
The "I'm going to teach you how to save money through common sense, rational thinking, and stuff your dad should have taught you.. Ohhh and I'll charge you for it.." guy.
ignorant wrote: ahh mr dave ramsey... The "I'm going to teach you how to save money through common sense, rational thinking, and stuff your dad should have taught you.. Ohhh and I'll charge you for it.." guy.
His advice has been free for the taking for several years both on radio and Fox Business channel's nightly show. His normal book is frequently on sale for around $10. Knowledge is power, and if knowledge can also make you money good for him in realizing it.
His endorsement of Zander Insurance I wasn't convinced was as great as he made it to be...until I got quotes from them. Holy crap, they kick my local agent's butts. We're doing the paperwork now for new life insurance.
I've learned a great deal from Dave without spending a single dime with him.
We bought out 2008 Astra during Cash for Clunkers. We got $3500 for our Camaro (the Astra gets an EPA estimated 27MPG, not 28MPG, which would have been the minimum for the $4500 rebate), and because the car had been sitting FOREVER on the car lot, we got another $2000 GM cash back plus $2500 from the dealer. Now we're talking a $22,000 car for $13,000.
We took out a loan for the car. We financed about $15,000 by the time taxes were included.
Total cost for the loan is just a tad over $19,000.
The Camaro had a slipping transmission, a knocking motor, a completely worn out suspension, rust, a beat to crap interior, and the AC had stopped working AGAIN. By the time I had the transmission rebuilt (I got a couple of quotes, the cheapest one was $1500 with me pulling and installing the transmission), the motor replaced (why rebuild a bad 305 when a good running 350 is $500?), fixed the suspension, and fixed the AC, we would have needed to put upwards of $5000 into the car to get it reliable again.
We plan on driving the Astra into the ground. There's no reason at all to get less than 200,000 miles out of the car, which at our current rate, puts us at around 9 years. We have a 72 month term, so that gives us 3 years to save for a down payment. That's not considering any effects of the debt snowball we're implementing right now.
Buying a new car isn't always a bad thing. It's trading it in after a year or two that bites you in the ass.
My mom has a 2007 Honda Odyssey. $700+ a month payments on it, with a 7 year term. They traded in a 2000 Mazda 626 with a bad transmission on a 2005 Honda Accord in 2005. They still owed about $7000 more than the Mazda was worth when they traded it in (refinanced it, rolled some other debt in there as well somehow I think). When the Accord was just about ready to come out of its 3/36, they decided they needed a van. They impulse purchased the Oddy. Got an EX-L, which meant that it was a $32,000-ish van. They were still about $7,000 upside down on the Accord. Now she wants a new van. Some people never learn.
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