a real problem..car payments

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Comments

  • Dustin51
    Dustin51 Posts: 222
    mammasan wrote:
    Those things are great but will not bring you true happiness only temporay enjoyment.

    Happiness is Pearl Jam...
    Be excellent to each other
  • mammasan
    mammasan Posts: 5,656
    Dustin51 wrote:
    Happiness is Pearl Jam...


    Amen to that brother.
    "When one gets in bed with government, one must expect the diseases it spreads." - Ron Paul
  • inmytree
    inmytree Posts: 4,741
    I have to say, my reason for starting this thread was to discuss payments....

    if somebody pays cash for a new car and keeps it for 10 years, that's is a ok move...vs. those who pay 700 buck a month for a new car...

    I agree, the keeping up with the joneses mentality tends to cause poor choices...

    for me, I can't understand how someone will be willing to pay so much per month for a car...


    and leases, my goodness, renting a car for a couple of years, having to worry about mileage, and still having to pay for maintenance..yikes...!
  • Abuskedti
    Abuskedti Posts: 1,917
    LikeAnOcean wrote:
    How much sense does it make to buy something that only seconds later looses thousands in value? Tell me?

    You're better off buying a $500 beater and running it into the ground every few months.


    It depends upon the value you assign to reliability. The cost of a car that unexpectedly will not start is different for everyone. For me, that cost is great.

    If I buy used, I have to wonder how it was treated by the previous owner. If I buy new - I take good care of my cars because the transportation is very important to me.

    If I keep a new car 10 years, then sell it and replace it with a new car... The cost of maintenance, repair and replacement will be less.. and the reliability will be far better....
  • blackredyellow
    blackredyellow Posts: 5,889
    LikeAnOcean wrote:
    A new car is the worst financial move. Any expert would agree buying a two year old used car is the best bet. If you can afford it, great. I've bought a new car before. Probobly wasn't the smart move, but I also felt it was safer. But only safer for the first few years. The minute you drive off the new car lot, you loose atleast 2,000. Thats $2000 you could easily fix up any lemon used car with. Just for turning the keys and driving off the lot. Not worth 2 G's.

    Yes, the value of the car will go down, but that isn't the whole story.

    For the most part used cars (even a couple months old) don't come with the full warranty as a brand new car. To get the additional coverage, you will have to spend more. Also, if financing the interest rate probably won't be as good on a 2 month old car, as a brand new one.

    So the value of the car is definitely lower as soon as you drive it off the lot, but once you figure in financing and the warranty addition (or risk of not having as long of a warranty), the difference isn't that huge.
    My whole life
    was like a picture
    of a sunny day
    “We can complain because rose bushes have thorns, or rejoice because thorn bushes have roses.”
    ― Abraham Lincoln
  • mammasan
    mammasan Posts: 5,656
    inmytree wrote:
    and leases, my goodness, renting a car for a couple of years, having to worry about mileage, and still having to pay for maintenance..yikes...!

    Well I take public transportation to work so no worries about the mileage and most lease agreements yo get a lot of the maintenance for free. I have a Honda and my first two year's, out of a three year lease, maintenance is covered including tire replacement. I admit a lease is not for everyone, but if it a is a good fit then I would say go for the lease instead of buying.
    "When one gets in bed with government, one must expect the diseases it spreads." - Ron Paul
  • dunkman
    dunkman Posts: 19,646
    Abuskedti wrote:
    Well, if you intend to purchase a new car then sell it a few hours after you drive it - you would not do well..

    which is why I indicated that I would be keeping my new cars 10 years.

    you indicated that afterwards though... all i said was "cars lose thousands the minute you drive them off the forecourt!" which IS true :)

    i wouldnt keep a car 10 years myself but thats cos i get bored of the same old things.... every 4 or 5 for me is ok
    oh scary... 40000 morbidly obese christians wearing fanny packs invading europe is probably the least scariest thing since I watched an edited version of The Care Bears movie in an extremely brightly lit cinema.
  • Abuskedti
    Abuskedti Posts: 1,917
    inmytree wrote:
    I have to say, my reason for starting this thread was to discuss payments....

    if somebody pays cash for a new car and keeps it for 10 years, that's is a ok move...vs. those who pay 700 buck a month for a new car...

    I agree, the keeping up with the joneses mentality tends to cause poor choices...

    for me, I can't understand how someone will be willing to pay so much per month for a car...


    and leases, my goodness, renting a car for a couple of years, having to worry about mileage, and still having to pay for maintenance..yikes...!

    Around 1990, I paid cash for a new car..

    In 2004 I took out a 6 year loan.. the loan was better because the interest rate was so low - lower than the return I could expect from government securities

    again it depends

    edit: I did not keep the 1990 car for 14 years.. I bought another in 1998 and gave that to my son.. I felt much better about giving my son a car I purchaced and maintained myself than to have him driving a car purchaced from a stranger..

    another benefit
  • LikeAnOcean
    LikeAnOcean Posts: 7,718
    blackredyellow wrote:
    Yes, the value of the car will go down, but that isn't the whole story.

    For the most part used cars (even a couple months old) don't come with the full warranty as a brand new car. To get the additional coverage, you will have to spend more. Also, if financing the interest rate probably won't be as good on a 2 month old car, as a brand new one.

    So the value of the car is definitely lower as soon as you drive it off the lot, but once you figure in financing and the warranty addition (or risk of not having as long of a warranty), the difference isn't that huge.
    Thats understandable if you're keeping the car for many years, but alot of people buy a new car every year or two. If they can afford it and want it, great! They could be saving a few dollars though.
  • mammasan
    mammasan Posts: 5,656
    I don't see a problem with people wanting to buy a new car, or lease a new car, or buy a used car as long as you live within your means and not let vanity get the best of you.
    "When one gets in bed with government, one must expect the diseases it spreads." - Ron Paul
  • hippiemom
    hippiemom Posts: 3,326
    inmytree wrote:
    I agree, the keeping up with the joneses mentality tends to cause poor choices...
    Who are these Joneses anyway, and why does anyone care what they do? Honestly, I'm sitting here trying to think what any of my neighbors drive, and I can't. I know they have cars, and I know I see them every day, but who pays attention to such things?

    I start to notice other people's cars when I'm in the market for a new car and thinking about what I might like. The rest of the time, they're just vehicles buzzing by.

    Oh, and I notice when I see really silly looking 50ish men in bright red sports cars. That's just funny :D
    "Nothing in the world is more dangerous than sincere ignorance and conscientious stupidity." ~ MLK, 1963
  • Pacomc79
    Pacomc79 Posts: 9,404
    mammasan wrote:
    I don't see a problem with people wanting to buy a new car, or lease a new car, or buy a used car as long as you live within your means and not let vanity get the best of you.


    Insurance generally takes care of vanity, for me anyway :)

    It's how MUCH!!! oh poop.
    My Girlfriend said to me..."How many guitars do you need?" and I replied...."How many pairs of shoes do you need?" She got really quiet.
  • inmytree
    inmytree Posts: 4,741
    mammasan wrote:
    Well I take public transportation to work so no worries about the mileage and most lease agreements yo get a lot of the maintenance for free. I have a Honda and my first two year's, out of a three year lease, maintenance is covered including tire replacement. I admit a lease is not for everyone, but if it a is a good fit then I would say go for the lease instead of buying.

    sounds good, mama...

    everyone has different circumstances...and for you you're making the best choice for you...
  • dunkman
    dunkman Posts: 19,646
    hippiemom wrote:
    Who are these Joneses anyway, and why does anyone care what they do?


    :D

    Spike Jones drives a porsche, Norah Jones drives a VW beetle, Chuck Jones drove a cadillac and Grace Jones drives me fucking mental :)
    oh scary... 40000 morbidly obese christians wearing fanny packs invading europe is probably the least scariest thing since I watched an edited version of The Care Bears movie in an extremely brightly lit cinema.
  • gue_barium
    gue_barium Posts: 5,515
    Abuskedti wrote:
    Around 1990, I paid cash for a new car..

    In 2004 I took out a 6 year loan.. the loan was better because the interest rate was so low - lower than the return I could expect from government securities

    again it depends

    edit: I did not keep the 1990 car for 14 years.. I bought another in 1998 and gave that to my son.. I felt much better about giving my son a car I purchaced and maintained myself than to have him driving a car purchaced from a stranger..

    another benefit

    You gave your son a car? That doesn't sound like the educational thing to do. :)
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    except by express written permission of ©gue_barium, the author.
  • inmytree
    inmytree Posts: 4,741
    hippiemom wrote:
    Who are these Joneses anyway, and why does anyone care what they do? Honestly, I'm sitting here trying to think what any of my neighbors drive, and I can't. I know they have cars, and I know I see them every day, but who pays attention to such things?

    I start to notice other people's cars when I'm in the market for a new car and thinking about what I might like. The rest of the time, they're just vehicles buzzing by.

    Oh, and I notice when I see really silly looking 50ish men in bright red sports cars. That's just funny :D

    perhaps it's more of "I must have a something shiny and new because the man on the tv says so..."

    I had a conversation with a co-worker, her sister was buying a Hummer...and I asked "why?"...she just smiled and shrugged...and we went on to talk about her friend looking for a new car...because her friends car is "old" (a 1997 Camry)...I asked, "does it have any problems...?"

    she said, "no, it just looks old"....

    :rolleyes:
  • fanch75
    fanch75 Posts: 3,734
    know1 wrote:
    I agree. You should only buy used cars and you should only pay in cash.

    Whether you can afford it or not, the gigantic hit that you take in depreciation almost immediately just makes very poor financial sense to truly consider buying a new vehicle.

    (Just watch as I get bashed for these opinions.)

    You drop $25k or more in a brand new car (principal & interest) over five years, and at the end of that five years, it's worthless.

    If you put $25k somewhere else over a five year period....now you're talking!

    And people wonder why they never have any money.
    Do you remember Rock & Roll Radio?
  • fanch75
    fanch75 Posts: 3,734
    hippiemom wrote:
    Oh, and I notice when I see really silly looking 50ish men in bright red sports cars. That's just funny :D

    they're goign after that hot young piece of ass...and generally, hot young pieces of ass tend to care about such things sadly
    Do you remember Rock & Roll Radio?
  • CaterinaA
    CaterinaA Posts: 572
    Your discussion about new cars and used cars reminded me of this paper I read while at the University:

    "The Market for Lemons: Quality Uncertainty and the Market Mechanism", written by George Akerlof in 1970 (who along with Stligtz and Spence won the Economic Sciences Nobel Prize in 2001). It is totally brilliant and entertaining and very related to your discussion. It broadly states the following (I'll quote wikipedia 'cause it explains it in an easy way without the equations and the econometric models).

    Akerlof's paper uses the market for used cars as an example of the problem of quality uncertainty. There are good used cars and defective used cars ("lemons"). The buyer of a car does not know beforehand whether it is a good car or a lemon. So the buyer's best guess for a given car is that the car is of average quality; accordingly, he/she will be willing to pay for it only the price of a car of known average quality.

    This means that the owner of a good used car will be unable to get a high enough price to make selling that car worthwhile. Therefore, owners of good cars will not place their cars on the used car market. The withdrawal of good cars reduces the average quality of cars on the market, causing buyers to revise downward their expectations for any given car. This, in turn, motivates the owners of moderately good cars not to sell, and so on. The result is that a market in which there is asymmetrical information with respect to quality shows characteristics similar to those described by Gresham's Law: the bad drives out the good.
    Source: http://en.wikipedia.org/wiki/The_Market_for_Lemons

    Just thought I could add something to the discussion...carry on :)

    Peace from Argentina,
    Caterina
  • hippiemom
    hippiemom Posts: 3,326
    inmytree wrote:
    perhaps it's more of "I must have a something shiny and new because the man on the tv says so..."

    I had a conversation with a co-worker, her sister was buying a Hummer...and I asked "why?"...she just smiled and shrugged...and we went on to talk about her friend looking for a new car...because her friends car is "old" (a 1997 Camry)...I asked, "does it have any problems...?"

    she said, "no, it just looks old"....

    :rolleyes:
    Nothing wrong with that if you've got the resources (the friend, that is .... there is definitely something wrong with anyone who would buy a Hummer), but to go into debt for a car when you already have a perfectly good car doesn't make sense to me.

    Now after a few pages of me preaching against car loans, I will say that for my next car I may be willing to take on a small amount of debt if necessary to buy a hybrid. I'm probably a couple years away from a new car, so I might not have to, but I think I could justify that to myself if I were saving money on gas and being more environmentally responsible.
    "Nothing in the world is more dangerous than sincere ignorance and conscientious stupidity." ~ MLK, 1963

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