New Car Opinions

[Nikko75]

When I was young it stuck to me that when an individual purchases a car they do it with the intelligent and informed purpose of getting their hard earned money's worth and keeping it for a long time. When I buy something I do it with the intention of using it until it no longer works.

In the past 6 or so years more people are buying new cars and when it turns 3 years old they are saying "its so old, we need a new one".

My car is 10 years old, I bought it 2 years ago and has 154,000km now. Never needed engine service. Been written off twice; rolled, T-boned by idiots, backed into and repaired. Sometimes I'm told to just buy a new one, but what makes more sense; spending $30,000 on a new car or fixing the old one for $3000? I'll use it until it dies. Are there others who gets their money's worth?

 

[ByteWrangler]

Actually, I think people are keeping cars longer than they did when I started driving in 1968. Through much of that decade my parents would keep a car for two years and trade when the 50,000 mile warranty expired; they used them to pull horse trailers, though, and they were pretty much used up by then! Do the math and figure how many miles they would drive a year, in a big American car with a big American V8, often towing a trailer with two horses. And how many gallons of $0.299 gas they must have gone through. Yikes!

Lots of other people would replace a car every other year, it seemed. Then, almost all cars had odometers that would go up to 99999.9 miles, and a car "rolling over to zero" was a notable event. Now it doesn't seem unusual to see a car, still in pretty nice condition, still owned by the original buyer, with well over 100,000 miles on the clock.

Me? It's unusual for me to keep a car less than 10 years and well into the 100's. We never trade in - there is little left to trade when the time comes. The "new" car in our current fleet is a 2003 Civic (with only about 40,000 miles - wife uses it to commute about 1.5 mi to work and run errands around town; not a great car for long trips). My 2000 Camry is still going strong at 120,000, and the odometer on the 1986 Saab 900T stuck at just under 210,000 miles 5 years ago (I'm guessing it's actually 220-225 k now). The Camry replaced an '84 Accord (170,000 mi) that still ran well but someone T-boned in 2000. The Saab was my dad's; three kids learned how to drive in it, but it doesn't get used all that much (2nd gear is shot, makes it a nuisance to drive in town) now that they've moved away; the hatchback is useful when we need to carry something bulky, though. The turbocharger still works well, though, if I can get better than 91-Octane gas!

We did have a 1967 Plymouth Valiant I used in High School that went almost 225,000 miles (not easy miles, either, between my brother and me, then relegated to farm work!) before finally crumbling into a pile of rust years later. The Chrysler 225 CI slant six and 3-speed Torqueflite automatic transmission of the day were nearly bombproof.

Thanks for the memories!

 

[Eric H]

I also tend to keep a vehicle a long, long time.
My 87 Toyota truck that I bought used in 1994 is just shy of 340,000 miles (second engine) and runs fine.
There's pretty much nothing that could go wrong with that I can't fix myself for $300 or less.

Still, I wouldn't mind getting something newer, more comfortable, safer, more fuel efficient...

 

[Andyman]

American consumers en masse are pathetic sheep being lead to the point of financial ruin by our consumption driven economy. If you NEED a 5 year loan or some sort of wacky financing to BUY a new car, guess what, YOU CAN"T AFFORD IT!! :yes: Too many people with $40,000 (or less) jobs driving $30,000 cars is one of the symptoms of the financial disaster we are currently living in. And anyone who rolls a car note into a mortgage refi is really asking for it. Sure, it's all about cash flow, but taking a 5 year note at 10% to a 30 year note at 6% is just financially idiotic. Once again, if you can't make the payments, you can't afford the car.

I bought one new vehicle in my life, a 1987 Ford Ranger STX and drove it for 11 years and 187,000 miles before I burned a bearing because it overheated due to a thermostat issue. Took out a 5 year loan and made extra payments and paid it off in about 3 years. My current vehicles are a 1993 Explorer with 146,000 miles, a 1997 Taurus with 176,000 miles and the wife's 2002 Taurus with 65,000 miles bought used w/ 42K on it for $7600 cash. They'll all leave here on the end of a tow truck too if I have my way. But I'm unusual as cars have always meant little to me and only serve as transportation. Start, stop, good radio, and good heater are my major points aside from longevity and reliability.

 

[meggy]

I've done 3 year leases for the last 10 years. Minimum down, higher monthly, but so what. I've got better places to put cash than a 20% down on a loan for a depreciating asset. You just gotta do the math on the make/model/bluebook history, and toal cost of money (of course).

 

[Andyman]

I've done 3 year leases for the last 10 years. Minimum down, higher monthly, but so what. I've got better places to put cash than a 20% down on a loan for a depreciating asset. You just gotta do the math on the make/model/bluebook history, and toal cost of money (of course).

I've never bought into this.
You've had car payments for 10 years and nothing to show for it, not even an depreciated asset. If you would have done that due diligence and bought something like a 1997 Honda Accord, you probably would have had it paid off by 2002, had no payments for the last 5 years, and smaller insurance premiums. Plus you'd be driving a paid off vehicle that gets repsectable gas mileage and that will quite possibly last several more years, especially in the dry Southwest where rust doesn't eat a car alive. You almost certainly would have incurred maintenance costs, but I won't believe that they would be as much as your payment streams; my 1997 Taurus certainly hasn't required anywhere near that.

No, I believe that leases are a result of our economy going in the crapper as ways had to be determined to keep the consumer machine rolling, so smaller payments had to be developed. Ditto 50 year and interest only mortgages. If we hadn't lost our well paying middle class job base, you wouldn't be seeing this sort of thing.

 

[pahtcenter77]

There hasn't been a single part put in a car for the last 50 years that was put there to save you money.

Leases also fall into that category. They aren't there for your benefit.

 

[OvenMaster]

When I was young it stuck to me that when an individual purchases a car they do it with the intelligent and informed purpose of getting their hard earned money's worth and keeping it for a long time. When I buy something I do it with the intention of using it until it no longer works.

In the past 6 or so years more people are buying new cars and when it turns 3 years old they are saying "its so old, we need a new one".

My car is 10 years old, I bought it 2 years ago and has 154,000km now. Never needed engine service. Been written off twice; rolled, T-boned by idiots, backed into and repaired. Sometimes I'm told to just buy a new one, but what makes more sense; spending $30,000 on a new car or fixing the old one for $3000? I'll use it until it dies. Are there others who gets their money's worth?

You bet. Cars, appliances, household stuff... we keep it, we fix it to keep it going; when we buy something, the next owner is a scrap yard or city dump. We've got furniture that was my great-grandparents'; we've kept cars for over 20 years, my present VCR is 11 years old... it's the way my parents and I were brought up: get all you can out of what you worked hard for.
Tom

 

[ByteWrangler]

I've got better places to put cash than a 20% down on a loan for a depreciating asset. You just gotta do the math on the make/model/bluebook history, and toal cost of money (of course).

I've never understood how leasing can be competitive at all - after all, someone has to eat the depreciation, and the lessee is paying someone else to do so in his place - and pay the lessor's costs, overhead, risk, and provide some profit in the process.

But the numbers must work in some cases. I suppose it's because a business can write down the depreciation, which is significant (to say the least) in the first three years, whereas you and I can't; this shifts some of the depreciation to the government.

I still like my formula, but realize it's not for everyone. Buy new, pay cash, maintain it well and drive it until it drops. Repeat every decade or two.

 

[Andyman]

I've never understood how leasing can be competitive at all

It's all about making the payments affordable; to folks who really can't afford them in the first place.

I still like my formula, but realize it's not for everyone. Buy new, pay cash, maintain it well and drive it until it drops. Repeat every decade or two.

Absolutely!!
Unfortunately today's society is all based upon instant gratification of wants, not true needs. Folks with expensive houses with no furniture; new cars, nice clothes, big TVs, and no savings.

Guys like us are ants in a world of grasshoppers

 

[meggy]

yikes -

OK, like this:

The last Jeep Grand Cheorkee I leased was $400 mo x 36m = $14.400 3 yr cost.

To buy it (a $28,000 car) I would've had to put down 20% = $5600.

That $5600 would cost me at least 10% year x 3 years because I would have had to take it out of where it was earning money. So that's costs me $1680. Now I'm up to $7280 cost.

A new car loan for $22,400 at 7% x 36 mo = $691 monthly payments. $691 x 36 = 24,876.00 cash over 3 years. Bluebook was $14,000 I'd get back. Net cost just in payments $10,876.00

I would've cost me $10,876 to drive, plus my $5600 down, plus the $1680 I didn't earn by tieing up $5600 for three years that's $18,276.00 total cost.

I leased it and paid $400 x $36 = 14,400, plus my $1000 down, plus the cost of my $1000 not working at 10% for three years = $300.

Lease: $14,400 + $1000 + $300 = $15,700 cost to drive.

Purchase: $24,876 payments (- $14,000 blue book) + $1800 = $18,276 cost to drive.

Other bonus - lease maintenance covered everything. If I own it I'm gonna have higher repair expenses. Plus, the fact I can expense the lease in my biz. But that doesn't change the cost of money.

ByteWrangler - that's exactly what we did this year for one of the cars. Paid cash. Saves the cost of the loan. Which is the same as investing the money at the loan rate but in effect, it's a guaranteed %. Net of what you can resell it for. Two things we gamble on there. The car maintains it's high resale value, and we don't crash it.

 

[skippy_ps]

While I do pretty much all of my maintenance stuff myself, I really don't want to spend the weekends working on a car to make it go again. And, it just ain't no fun anymore crawling around underneath one so I don't keep them beyond 100k. Both the vehicles I drive have less than 40k right now. :thmbsp:

I just want to get in it and go without wondering if the water pump is going to crap out and leave me stranded somewhere.

Murray

 

[colortrakker]

Other bonus - lease maintenance covered everything. If I own it I'm gonna have higher repair expenses.

That right there is THE reason to lease: the car is always under warranty, so all you pay for is oil changes, wiper blades and other expendables. Repeat every 3 years, give or take, depending on the length of term and warranty.

That may also be the reason people who finance trade in so often: "Out of warranty, out of my life." They don't want to spend $4,000 on a new transmission at 70K. Not even god knows how much labor would be on top of that.

And it's a good possiblity that a lot of people who'd like to lease can't, simply because they drive too much. 12,000 miles a year doesn't go as far as it used to, and that's the amount most leases are still written for. Annual mileage is negotiable, but additional miles can make the lease payment a lot higher than before, so potential lessees end up financing instead because it's cheaper for them each month based on the amount of driving they do.

 

[jerrymrc]

My newest one is a 98 dodge diesel that is paid for. I bought it 3 years ago and it has 170000 on it.

The wife's Astro (96) was bought in 98 and has 165000 on it.

The dodge has only been one alternator outside of maintenance. The van has had one transmission (under warranty) one rear end because of the kids and two front ends. $165 and a couple hours of my time.

I have two collector cars than can be used in a pinch. My last new car was in 92 and I will never do that again.

I would rather do a little research and buy something that is 2-4 years old that I can pay cash for or have a payment under $200.

One more thing to consider is the cost of insurance and tags. Here in Colorado a new $30000 car will be on the order of $400 for the first year for a plate. as the car ages it gets cheaper. My 86 2+2 grand Prix is $30 a year.

Just some thoughts.

 

[Andyman]

OK, like this:

The last Jeep Grand Cheorkee I leased was $400 mo x 36m = $14.400 3 yr cost.

To buy it (a $28,000 car) I would've had to put down 20% = $5600.

That $5600 would cost me at least 10% year x 3 years because I would have had to take it out of where it was earning money. So that's costs me $1680. Now I'm up to $7280 cost.

A new car loan for $22,400 at 7% x 36 mo = $691 monthly payments. $691 x 36 = 24,876.00 cash over 3 years. Bluebook was $14,000 I'd get back. Net cost just in payments $10,876.00

I would've cost me $10,876 to drive, plus my $5600 down, plus the $1800 I didn't earn by tieing up $5600 for three years that's $18,276.00 total cost.

I leased it and paid $400 x $36 = 14,400, plus my $1000 down, plus the cost of my $1000 not working at 10% for three years = $300.

Lease: $14,400 + $1000 + $300 = $15,700 cost to drive.

Purchase: $24,876 payments (- $14,000 blue book) + $1800 = $18,276 cost to drive.

Other bonus - lease maintenance covered everything. If I own it I'm gonna have higher repair expenses. Plus, the fact I can expense the lease in my biz. But that doesn't change the cost of money.

ByteWrangler - that's exactly what we did this year for one of the cars. Paid cash. Saves the cost of the loan. Which is the same as investing the money at the loan rate but in effect, it's a guaranteed %. Net of what you can resell it for. Two things we gamble on there. The car maintains it's high resale value, and we don't crash it.

The problem with this is that you apparently WANT a newer car. and are willing to pay for it. Fine if you really can afford it, which means $400/month plus top dollar insurance for coverage on a new vehicle.

My point was that you could have spent the $24,876 for the car and have been done with it for the next seven years instead of opting for a continued payment stream of $400 x 7 years x 12 mos/year or $33,6000; assuming you keep a similar payment. I don't include your $1800 opportunity cost (which was initially $1680 in the third paragraph??) because I'm not adding MY opportunity cost which should be the same 10% applied to your future stream of payments for the next 7 years (ignoring any sort of compounding for matters of simplicity, but the FV of a stream of $400 payments for 7 years would be MUCH more than the simple sum of the payments). You can't just apply it when it benefits you; it has to be applied uniformly to ALL streams, and that includes the $400/month payments you're making for cars that could have been put wherever you pulled the $5600 from.

So based upon my math, you've been through 3 leases and into a fourth, and are sitting on a 1 year old car with 2 years left on a lease and a $400 monthly plus top dollar insurance looking you square in the eye. Me, I have a 10 year old Cherokee that's been paid in full for seven years with minimal insurance that is probably rusting and probably needs and has had some maintenance, but I have (or had ) access to over $33,000 to pay for it. I like my chances that the $33,000 will cover my maintenance costs.

Basically, it all boils down to what's important to you; in this case it's a newer car. Me, I've got better things to spend money on than a car, so I'll drive the older car and stick your payment in my IRA or other investment.

 

[meggy]

The problem with this is that you apparently WANT a newer car. and are willing to pay for it. Fine if you really can afford it, which means $400/month plus top dollar insurance for coverage on a new vehicle.

My point was that you could have spent the $24,876 for the car and have been done with it for the next seven years instead of opting for a continued payment stream of $400 x 7 years x 12 mos/year or $33,6000; assuming you keep a similar payment. I don't include your $1800 opportunity cost (which was initially $1680 in the third paragraph??) because I'm not adding MY opportunity cost which should be the same 10% applied to your future stream of payments for the next 7 years (ignoring any sort of compounding for matters of simplicity, but the FV of a stream of $400 payments for 7 years would be MUCH more than the simple sum of the payments). You can't just apply it when it benefits you; it has to be applied uniformly to ALL streams, and that includes the $400/month payments you're making for cars that could have been put wherever you pulled the $5600 from.

So based upon my math, you've been through 3 leases and into a fourth, and are sitting on a 1 year old car with 2 years left on a lease and a $400 monthly plus top dollar insurance looking you square in the eye. Me, I have a 10 year old Cherokee that's been paid in full for seven years with minimal insurance that is probably rusting and probably needs and has had some maintenance, but I have (or had ) access to over $33,000 to pay for it. I like my chances that the $33,000 will cover my maintenance costs.

Basically, it all boils down to what's important to you; in this case it's a newer car. Me, I've got better things to spend money on than a car, so I'll drive the older car and stick your payment in my IRA or other investment.

Fixed the "1800", thanks. The $5600 is the downpayment cash out of pocket. I undesrstand what you're saying and yes you're right it boils down to what you can afford and what is of value to you. I was basically showing the math of the cost of money for a three year period of loan vs lease in my particular situation.

Like I said, we also did what you suggest. Paid cash for a different car. Still, I think the trick is to turn it over before the resale value starts to drop too sharp due to age.

In the big picture I think there's a long term monthly cost average of owning/operating a car. Some cars you'll have (like your 7 yr old Cherokee), that you get lucky with low maintenance costs. Maybe the next one becomes a money pit. Kind of all averages out.

 

[arrow 68]

My Mother just bought a new Honda CRV. My Father and I were there helping out. My parents are divorced. Anyway my Father was quite shrewd about mentioning that Honda's financing was fine, but the Federal Credit Union's interest is not "Front Loaded" like Honda's financing. This went back and forth, until the Honda agent dropped the financing down to 1.9%. My Mother also put a third down. She drove her last CRV 9 Years. It was a dumb accident on my part that caused this. I really would like to be in a position to only drive occasionally. I HATE DRIVING!!!

 

[240sx4u]

I am not sure I will ever buy a new car. The last few cars I have purchased have been used. I AM a car guy by nature. I like to work on them, so maintaining is no big deal as long as they don't become a total hassle (then they leave). That combined with the idea that nothing on the market really makes me green with envy. I drive a big HP 95' 240sx that I wouldn't trade for anything (within reason). Never carried a loan on this car, its dead reliable, and a freaking blast to drive. I have been driving it for 4 years now, and still smile every time I slide into the drivers seat. The chassis rolled over 170k miles. Nothing left on it is that old now though.

Evan

 

[6thumbs]

Whats a new car ?,,,I drive a 21 year old Town car with over 200k on it and its allmost paid for,,,Damn that dealer Financing

 

[cfranz]

I purchased a Hyundai Sanada. 10 years/100,000 miles drive train and 6 years on everything else. First new car I purchased (I'm 50).

I got it because they were willing to give me 5 years @ 0%. I never turn down free money.

The only reason I needed it was that some &^%*% rear ended my 99 Grand Am. 110,000 miles, absolutely nothing wrong with it. No rust and even the interior is in great shape. Still, I got $6K insurance which I used as a down payment.