Ok, my bad.
IMO it still a needless expense (my vehicle costs are gas, insurance, and routine maintenance), but to each their own.
My boat is waaayyy more than 6K a year to operate (and I own it)
I know someone that is looking to trade in his car that is only a year or two old... he is delusional to think that he'll get 80%-90% of the origional price back on the sale of his current car... everyone around him thinks it's a dumb idea but he's pretty much sold himself on it...
There are a select few vehicles that this works with, and they are generally named "Honda" or "Toyota".
Without figuring in depreciation or inflation, the average car payment is worth over $6 million over the working life of your typical American. If you think flushing $6 million down the toilet is a "great idea" then trading every couple years will probably work for you.
Me, I drive $2000 - $4000 cars and maintain the crap out of them. Most people would be surprised at how nice of a car you can get in that price range, if you know where to look and how to inspect them.
To say that Honda and Toyota are the few that hold value is completely wrong. The model matters more. It's all about supply and demand. Typically a Corvette will top the list of best resale value.
I have the bad habit of getting a different (mostly new) car every few years. Here is how it worked for me.
06 VW GTI (for sale at Hummels)---25K sticker/Paid 23K OTD/17K Trade-Lost 6K
04 Honda Element----22K sticker/Paid 21K OTD/18K trade-Lost 3K
03 Nissan 350Z----31K sticker/Paid 29K OTD/22K trade-Lost 9K
00 Honda Civic SI---17K sitcker/Paid 17.5K OTD/trade for 17.5K--Lost nothing
So overall it's a dumb move. I've done a lot better on buying a couple year old vehicles like a Lexus ES300, Acura Intergra, etc. Also keep in mind that in some of these cases they escalated the trade value and didn't come down as much on the new car. I've considered leases but each time I've put pen-to-paper it didn't make sense for me.
Financially I know it's stupid but it's my one vice and I take care of everything else. I received a few big bonuses in my mortgage days so most of these I didn't even have loans on and they all were paid off before I traded/sold them.
I have owned only four cars in my life...my first was in 1972 and my last was bought in 1999. I bought the last three new and I like to do that so I can make sure they are maintained properly throughout the life of the vehicle. I've had each of them a minimum of 12 years with the exception of my first which was used to begin with. They all looked new when I traded them also. I drive a Mustang and I plan on a new one in 2010!!:smile:
My philosophy on cars is buy a brand new one and make absolutely sure it's fluids are changed regularly and all the other parts are kept properly maintained and it will be a good investment.
I have two vehicle that are less than two years old, and I did not buy either of them new. My grand prix we bought after one year, and it was half the price of a brand new one with 4 years of warranty left. My Chevy Silverado we just bought before new years, and was not even a year old yet, but we found a great deal and it was about $9,000 cheaper than the same truck that hadn't been driven 18,000 miles worth. I think an almost new vehicle is the way to go because you don't get that initial depreciation hit, and most of the warrenty is still there.
That being said my grandmother buys a new car every two years like clockwork, but shes got the money, and likes the reliability of a new car.
I would also suggest if you can pull it off to try to sell your car privately. Even if you can only get what the dealer was going to give you, most dealers will knock a good $2000 dollars of the asking price if you tell them you don't have a trade in.