Anyone get a new car every year or two?

**HOTDON** · 03-13-2008, 07:16 AM

Originally Posted by peteypie

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.

Did the same with my Grand Prix last summer. $30,000 MSRP, bought for $16,000. Two years old, 23,000 miles, warranty still in place. On top of that I have an older Grand Prix that I've owned for 8 years that has 168,000 miles, so I have hopes that I'll be able to hang onto the newer one as long as I'd like. I've always been a Pontiac fan, but there is NO WAY I'd buy a brand new one. Some one else can take that hit.

**dmclone** · 03-13-2008, 07:23 AM

The general rule of thumb is if you're going to buy something new and you want to retain resale value than buy a Honda/Toyota. If you're buying something a year or two old, buy a GM, Ford, Chrysler, or Hyundai.

No slams against any of these cars. Hyundai has improved a ton and is now in the top 10 in reliability. Unfortunately, one you have a bad reputation it's hard to change this around. GM and Ford are facing the same problems. They are both making some good cars now but it's going to take a while to improve that image.

BTW-I'd love to pickup a 5-10 year old Corvette.

**dmclone** · 03-13-2008, 07:26 AM

Originally Posted by peteypie

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.

This is true to a point but you'll also want to consider the tax ramifications. If you're trading a 16K car on a 25K car you'll pay $450 in taxes. if you buy the 25K car outright the taxes will be $1,250. Your right though, most of the time it's better to sell outright.

**CycloneErik** · 03-13-2008, 07:29 AM

Originally Posted by herbicide

Me three. People don't always relate that no payment increase does not mean it is cost free, both in the literal sense and in the long term. All that depreciation adds up in the end.

If depreciation would represent an increasingly negative #, would it be subtracting in the end?

I just got home. Maybe I'm not ready for intelligent posting yet

**Cydkar** · 03-13-2008, 07:37 AM

A new car is one of the single worst investments you can make. I have a company car but if I ever have to buy again it won't be new.

My buddy asked me if he should buy a new vehicle because his wife liked the 0% financing. I asked him what percentage he thought the $10,000 dollars he loses when he drives it off the lot equates to. :) It was a $40,000 vehicle.

People live in a "how much per month" world. That isn't the true cost of purchasing.

Leasing isn't much better but if you insist on a new car every 2-3 years that may be the way to go. I still believe it's a collosal waste of money to drive a new vehicle. It's an ego thing.

**Wx4Cy** · 03-13-2008, 08:02 AM

Seems pretty simple to me. If you want a new car, get one. If you want one, you'll make it work and you won't care about the depreciation arguments, etc. If you are concerned about depreciation and still want a new car, lease it.

This is just like politics...what do you believe and what do you care about? There are two opposing views here and that's all your going to get in response when you ask the question.

We drove the same two cars for 6-8 years. They were junk, too small for our kids, etc. but we made it work. We HATED it but we couldn't afford to do anything about it. Now we can, so we did.

My advice, don't ask others. Do you what YOU want to do.

**dmclone** · 03-13-2008, 08:07 AM

I don't know that it's always an ego thing. Some people like to drive new cars. It's not an investment but it's just like everything else.

Some people like go to 801 Grand Steak/Chop rather than McDonalds.

Some people are fine with wearing used clothes while others have to wear all new.

Some people are fine with a 19 TV while others have a 50 HD TV

Some people buy a $5,000 treadmill while they could run for free outside

Some people buy spend $2,000/year going to ISU football games when they could go to drake football games for $100/year

**jumbopackage** · 03-13-2008, 08:10 AM

Originally Posted by dmclone

I don't know that it's always an ego thing. Some people like to drive new cars. It's not an investment but it's just like everything else.

Some people like go to 801 Grand Steak/Chop rather than McDonalds.

Some people are fine with wearing used clothes while others have to wear all new.

Some people are fine with a 19 TV while others have a 50 HD TV

Some people buy a $5,000 treadmill while they could run for free outside

Some people buy spend $2,000/year going to ISU football games when they could go to drake football games for $100/year

Yes, but there's an appreciable difference between all of those things (save for maybe the clothes).

There ISN'T one between a modern car with 10k miles on it and one with 0, save that one will likely cost you thousands of dollars more.

**dmclone** · 03-13-2008, 08:14 AM

Originally Posted by jumbopackage

Yes, but there's an appreciable difference between all of those things (save for maybe the clothes).

There ISN'T one between a modern car with 10k miles on it and one with 0, save that one will likely cost you thousands of dollars more.

I could say this with about every product. It almost always makes more sense financially to buy a used item over a new one. Of course you don't want to buy used food

.

**Phaedrus** · 03-13-2008, 08:25 AM

Originally Posted by jumbopackage

Yes, but there's an appreciable difference between all of those things (save for maybe the clothes).

There ISN'T one between a modern car with 10k miles on it and one with 0, save that one will likely cost you thousands of dollars more.

Good post.

My wife and I have pretty sophisticated tastes, but we love being financially solvent, more.

So instead of going to 801 Grand, (except once, just as a curiousity) I study how to prepare the steak dinner, myself.

And my wife is a pilot and loves to fly, so I got an A&P license to make flying affordable for both of us.

Again, it's still a matter of taste, but there is almost always a less expensive option that still retains the "essence" of what the consumer wants.

BTW, I really admire the folks with the guts and moxie to make it to the place in their lives where they can really, really afford that new car every couple years, regular visits to gourmet restaurants, and private aircraft. I am personally not in that category, but I admire those who are.

While some are actually properly capitalized to carry that out, a bunch of the folks who buy new cars, eat at gourmet restaurants and own and fly airplanes really can't afford it and are a paycheck away from disaster. One of our airplane friends asked us what brand of "hull insurance" we had on our airplane. He just couldn't believe that we had liability only, as we owned our plane, outright. The concept of not owing money on an airplane was completely foreign to him, and if the bank lends you money on it, hull insurance is mandatory.

**dmclone** · 03-13-2008, 08:30 AM

The good thing is that I'm now in rehabilitation. I'm driving a 5 year old Accord with nearly 50K miles. In my 20 years of driving I've probably had 12 cars and this is the first one that I've ever had to buy brakes for and within 10K miles I'll also have to buy tires. It's kind of nice being able to park wherever I want without worrying about people door dinging me.

**ColoradoClone** · 03-13-2008, 08:35 AM

Originally Posted by jumbopackage

The most cost effective way to own a vehicle is to buy used and run it into the ground.

It's insane to take depreciation hit after depreciation hit on new car after new car. You're basically throwing money down the drain.

While it's true that you're going to take a depreciation hit, I look at it differently. A car is a terrible investement. Terrible. You'll never get your money back unless you're talking about a collectable you can't even drive. Therefor, I look at paying for a car as more of a service. I can choose to pay a lot and enjoy the service, or I can choose to pay a little and get by just fine. Some people enjoy driving newer cars and so it's worth it to them to pay a little more for the service. Why pay less and hate it? Some people don't care about the vehicle as long as it gets them from point A to point B. Good for them, they can go with the cheaper service and still be happy.

**wesley_w** · 03-13-2008, 08:36 AM

Originally Posted by Cydkar

A new car is one of the single worst investments you can make.

I disagree with that. Like I posted earlier, I keep my car for a long time and take care of it right from the start. I could not care less what it's resale value is either. I will agree that to make it cost effective you have to keep the car as long as you can. In my case they've all been with me at least 12 years.
I haven't figured out the total because I can't remember what I paid for each of my cars but I bet my total amount spent on car payments through my lifetime is quite small.

**cycloneworld** · 03-13-2008, 08:54 AM

Originally Posted by jumbopackage

Yes, but there's an appreciable difference between all of those things (save for maybe the clothes).

There ISN'T one between a modern car with 10k miles on it and one with 0, save that one will likely cost you thousands of dollars more.

Then why doesn't everyone buy Hy-Vee or Wal-Mart brand groceries? They are basically the same product but one cost more than the other. It's all about personal taste.

**jtaconutz** · 03-13-2008, 08:56 AM

Here is what you do:

Buy a car that is 2 years old and plan on driving it until the wheels fall off. If you were making payments on it, make sure to continue to make payments to yourself after the loan expires.

When the wheels finally fall off you will have enough money to pay cash for the next 2 year old vehicle.

Then repeat.

This way the MAN isn't making any $$$$ off of you and you become your own MAN.