Talk me out of buying a new car! (or In!)

You have a real nice truck now, and it sounds like all the "Bugs" are out of it. Plus, you have leather. If the GMC had leather, maybe, but I wouldn't. I have about 14 payments left on my avalanche and I can't wait to not have a payment! And my payment is less then 200 a month.
Pay off the one you have now early if you can. Drive the wheels off of it and save the $$$ for a harley, or any toy, or the savings account. That is my goal anyway. I'm getting a street glide sooner or later. My goal anyway
 
I won't even pile on.

A fool and his money shall soon part....
 
eaglefan said:
You have a real nice truck now, and it sounds like all the "Bugs" are out of it. Plus, you have leather. If the GMC had leather, maybe, but I wouldn't. I have about 14 payments left on my avalanche and I can't wait to not have a payment! And my payment is less then 200 a month.
Pay off the one you have now early if you can. Drive the wheels off of it and save the $$$ for a harley, or any toy, or the savings account. That is my goal anyway. I'm getting a street glide sooner or later. My goal anyway
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Sounds like my plan except I will be saving for a mobile detailing rig or at least a DP for one once I pay off my ride thats why I took the shortest term I could on my car and put down as much as I could, because there is always something on the horizon.
 
HD.Detailing said:
if one can't pay cash for a car, one can't afford the car.
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Good in theory (and great back in the day), but not in practice by today's standards. The relative purchase price of vehicles has skyrocketed. My father purchased his first car (a 1970 AMC Javelin) for $2k. The average American salary was a little less than $6,200 according to National Average Wage Index during that time. That makes a new Javelin (a popular sports car) purchase about 1/3 of the avg salary at that time.

Fast forward to today and the average midsize sedan (not sports car) transaction price is about $25k (http://www.foxbusiness.com/static/managed/img/fb2/markets/truecar_infographic_besttimetobuy.jpg); with the median household income--not even salary--at $53k (USA QuickFacts from the US Census Bureau). That makes getting a new midsize sedan about half of the household income. Considering the price of goods & services nowadays; including that of maintaining an average family of four, paying cash for a car is somewhat unrealistic unless you want to get one for $5k-$7k (which takes a lot of time & diligent savings in itself). Just my humble opinion :)

To the OP though...the wise financial decision is to keep your current truck. Besides, it looks great !
 
CDot said:
Good in theory (and great back in the day), but not in practice by today's standards. The relative purchase price of vehicles has skyrocketed. My father purchased his first car (a 1970 AMC Javelin) for $2k. The average American salary was a little less than $6,200 according to National Average Wage Index during that time. That makes a new Javelin (a popular sports car) purchase about 1/3 of the avg salary at that time.

Fast forward to today and the average midsize sedan (not sports car) transaction price is about $25k (http://www.foxbusiness.com/static/managed/img/fb2/markets/truecar_infographic_besttimetobuy.jpg); with the median household income--not even salary--at $53k (USA QuickFacts from the US Census Bureau). That makes getting a new midsize sedan about half of the household income. Considering the price of goods & services nowadays; including that of maintaining an average family of four, paying cash for a car is somewhat unrealistic unless you want to get one for $5k-$7k (which takes a lot of time & diligent savings in itself). Just my humble opinion :)

To the OP though...the wise financial decision is to keep your current truck. Besides, it looks great !
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that is the majority of thought in this country, but the majority is also broke.

I bought 1 of my cars used 3 years old.. only 5k miles. Now had I bought it new, I wouldn't have been able to get it at that point in time.
 
HD.Detailing said:
that is the majority of thought in this country, but the majority is also broke.

I bought 1 of my cars used 3 years old.. only 5k miles. Now had I bought it new, I wouldn't have been able to get it at that point in time.
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I do agree in part with you, I think that's why the financial health of the average consumer is so subpar--our way of thinking is messed up. Most people are 1 or 2 checks away from not being able to pay any bills. My main point is that costs of items have gone up so much, that paying cash for a car that's 3 yrs. old or less is nearly impossible.

Vehicles are an especially tempting purchase because it's such an emotional experience. I'd personally never buy a new car--I can't make it make sense from a financial perspective. I'd have to eat depreciation in the first year, risk being upside down if I didn't put a huge down payment in, pay yearly new car property taxes (in NC cars are "personal property" like land and are taxed every year), etc. No thanks!
 
There is no difference in saving up for a car or paying off its loan except saving up in cash is cheaper. I don't see the logic in saying it's not possible to pay for a car in cash.

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You have a new truck. It only has 15k. I wish mine did. Keep the current one. You will be happy in the long run.
 
Keep your current one, and fill the bed with Chipotle burritos from the money you save by not purchasing a new one. You can never have enough Chipotle burritos.
 
HD.Detailing said:
if one can't pay cash for a car, one can't afford the car.
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Not necessarily true, nor does it really make complete sense in all situations, either.

I have 2 loans @ .09% each. That is basically free money, and it would have been foolish on my part to pay cash for a vehicle when I can put that money into a relatively safe investment and earn at minimum a 2-3% return.
 
KneeDragr said:
There is no difference in saving up for a car or paying off its loan except saving up in cash is cheaper. I don't see the logic in saying it's not possible to pay for a car in cash.

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Really, I should have said that it applies to me specifically. Huge difference when it comes to "actual use" of money--present vs. future value. I personally cannot save $15k earmarked just for a car--I have 2 kids, a wife, 2 mortgages because my wife and I both had houses when we got married later in life (thanks to the stupid recession/terrible housing market we can't get rid of one), 3 student loans, emergency expenses that come up now and then, and the expense of maintaining/repairing my now 14-yrs-old-by-build-date Altima. The latter costs me an average of $2-3k/year, which is still less than paying a $250/month car payment + a down payment amortized over 4-5 years of that payment. Just my personal life variables; others may be able to save for a car easy-peazy!

The cash savings vs. loan point does make sense if the interest rate on the car loan is especially high.

.brian. said:
Not necessarily true, nor does it really make complete sense in all situations, either.

I have 2 loans @ .09% each. That is basically free money, and it would have been foolish on my part to pay cash for a vehicle when I can put that money into a relatively safe investment and earn at minimum a 2-3% return.
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Good point :) That interest rate has to be pretty rare right?
 
.brian. said:
Not necessarily true, nor does it really make complete sense in all situations, either.

I have 2 loans @ .09% each. That is basically free money, and it would have been foolish on my part to pay cash for a vehicle when I can put that money into a relatively safe investment and earn at minimum a 2-3% return.
Click to expand...

Being ABLE to pay in cash is different from ACTUALLY paying in cash.

If you don't have the cash to be ABLE to pay for the car, don't (in the event its something other than a truly necessary purchase anyway).
 
natewood70 said:
Keep your current one, and fill the bed with Chipotle burritos from the money you save by not purchasing a new one. You can never have enough Chipotle burritos.
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haha.

... I love Chipotle burritos.
 
.brian. said:
Not necessarily true, nor does it really make complete sense in all situations, either.

I have 2 loans @ .09% each. That is basically free money, and it would have been foolish on my part to pay cash for a vehicle when I can put that money into a relatively safe investment and earn at minimum a 2-3% return.
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not foolish, but keep your loans... I prefer no debt.

MilesTeg said:
Being ABLE to pay in cash is different from ACTUALLY paying in cash.

If you don't have the cash to be ABLE to pay for the car, don't (in the event its something other than a truly necessary purchase anyway).
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:iagree:
 
CDot said:
Really, I should have said that it applies to me specifically. Huge difference when it comes to "actual use" of money--present vs. future value. I personally cannot save $15k earmarked just for a car--I have 2 kids, a wife, 2 mortgages because my wife and I both had houses when we got married later in life (thanks to the stupid recession/terrible housing market we can't get rid of one), 3 student loans, emergency expenses that come up now and then, and the expense of maintaining/repairing my now 14-yrs-old-by-build-date Altima. The latter costs me an average of $2-3k/year, which is still less than paying a $250/month car payment + a down payment amortized over 4-5 years of that payment. Just my personal life variables; others may be able to save for a car easy-peazy!
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What's the difference between paying 250$ a month for 4-5 years for your loan and saving 250$ a month for your next car? I don't see how that money would vanish if it wasn't going towards a loan.

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KneeDragr said:
What's the difference between paying 250$ a month for 4-5 years for your loan and saving 250$ a month for your next car? I don't see how that money would vanish if it wasn't going towards a loan.

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Really, it's the "life" part of the equation that can't be predicted. Saving $250/month nets me $3k/yr so it would take 5 years to save for a car. A lot can happen in 5 years--and a lot has happened for me in the past 12 months. If I had just forked over a lump $15k last year, I would have been ill-prepared for the birth of my son this year at the same time my former tenants moved out of my townhome the month before; we were (and are still) paying two mortgages flat out. My townhome mortgage is over $1,100/month (pre-recession purchase I can't refi b/c the value drop) with HOA fees, which means I've bled out more than a year's worth of car savings in the past 3 months. That extra liquid cash now has helped us pay both mortgages--that would have dissolved last year had I purchased a new-to-me car with cash. Besides, my credit is pretty good--so I could get a car loan for no more than 2-2.5% max on a used car.

The value of liquid cash savings come in handy a lot more than people give it credit. But like I mentioned earlier--the concept of paying cash for a car is not a possibility for me specifically. I would advise others to go ahead and pay cash if they have enough liquid assets to cover day-to-day expenses, emergency expenses , & one-off arge purchases (like say, a new full set of tires for an SUV).
 
CDot said:
Really, it's the "life" part of the equation that can't be predicted. Saving $250/month nets me $3k/yr so it would take 5 years to save for a car. A lot can happen in 5 years--and a lot has happened for me in the past 12 months. If I had just forked over a lump $15k last year, I would have been ill-prepared for the birth of my son this year at the same time my former tenants moved out of my townhome the month before; we were (and are still) paying two mortgages flat out. My townhome mortgage is over $1,100/month (pre-recession purchase I can't refi b/c the value drop) with HOA fees, which means I've bled out more than a year's worth of car savings in the past 3 months. That extra liquid cash now has helped us pay both mortgages--that would have dissolved last year had I purchased a new-to-me car with cash. Besides, my credit is pretty good--so I could get a car loan for no more than 2-2.5% max on a used car.

The value of liquid cash savings come in handy a lot more than people give it credit. But like I mentioned earlier--the concept of paying cash for a car is not a possibility for me specifically. I would advise others to go ahead and pay cash if they have enough liquid assets to cover day-to-day expenses, emergency expenses , & one-off arge purchases (like say, a new full set of tires for an SUV).
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Buying more than one can afford causes financial, personal, and marriage strain.



Sent from my Alien ship
 
.brian. said:
Not necessarily true, nor does it really make complete sense in all situations, either.

I have 2 loans @ .09% each. That is basically free money, and it would have been foolish on my part to pay cash for a vehicle when I can put that money into a relatively safe investment and earn at minimum a 2-3% return.
Click to expand...

Exactly, it would be totally foolish to pay cash for a vehicle when you get that kind of interest rate.

Not to mention that if the automobile industry relied on everyone being able to pay cash for a car their would be no auto industry.
 
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