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[prytania3]

Doesn't it also depend on how long you intend to have the car, even if you're paying cash and don't need to think interest?  For example, paying $15,000 for a new car you expect to keep 12 years is a better idea than paying $12,000 for a car you expect to last 8 years, unless you think you're approaching the end of your driving life.

Thank you. So true. So true.

[clean]

$1200 a year in repairs...  $6000 a year in car payments?  ...  Even new cars break down and take just as long to repair.  They may break down less often, but the time lost is not shorter or less inconvenient. 

Then there are the extra costs of taxes (based on value in many states) and insurance (required if you have a loan, also based on value).  And there is the loss in value that you are eating.  There is also the psychic cost of the first dent/scratch.  Can you park anywhere in the grocery lot?  Sure are a lot of buggies out there!!!

The argument that fleets change out after so many miles is misleading. They are dealing with the law of large numbers. You are dealing with only one.  You know the one they know only the 'average'.  If your car is giving you a lot of problems, then dump it (it's costing more then $1200 a year), but dont use that as an excuse to have to buy a new car and FINANCE it!   You can and should Pay Cash. 

Look over the High Mileage Cars section.  There are a lot of cars that make it a long time. (insert personal story... 1995 Toyota Avalon 267000+ miles, still going strong).

IF you can not pay cash, you can not afford it.  Zero interest, low interest, great gas mileage, new car (cancer causing) smell, 'reliability', .... are rationalizations.  Pay cash and keep it a long time.  I dont care if you buy new or used, but if you dont have the green, then you cant afford the machine.  So Says Clean.

Even in one year, the difference between keeping that old car running (1200) and that new car payment, sure adds up!  If you saved 3600+ in after tax cash flow this year, would you HAVE to teach summer school?  If you could keep it going for 5 years (and a lot of us have), could you pay CASH for a new or new to you car?

just sayin... There are a lot of alternatives to financing a car (and insurance, and taxes, and the loss in value...)

[prytania3]

Clean, I've never paid cash for a car, but dammit, I'm going to have a car.

Also, new cars have 3 year warranties and ten years on the powertrain.

Sure, there are some cars out there that keep going at 250K miles. I don't want to be driving one with that kind of mileage.

Now I bought my Tacoma new and I've put in about 2K for maintenance stuff. I've had the truck 8 years and it has 93K miles on it. That means between the car payments and the maintance, the truck has cost $283/month, and that price will go down every year I keep it. Now it's Prylet's and he probably will put another 100K miles on it. Say that takes him 6 years (the truck has new brakes, clutch, and all new belts). Say he puts another 2K in it, then the cost is 173/month or 2076 per year.

Now, yes, that's more than $1200 per year, but should Prylet choose to keep the truck for 250K miles--it will be very close to $1200  + you don't have to buy as many new cars as you do used cars. In a stretch of 10 years, I had 2 used cars. In a stretch of 8 years, I had one new truck that is then sold to Prylet. So in 24 years, I would have bought 3 new cars or almost 5 used cars.

[clean]

24 years.... That is almost my entire adult driving life.  Since I graduated from my MA program and got my first 'real' job, I have owned 4 cars.  Often 2 at a time as one is for play (a 4x4 something, and even those are kept a long time and paid for with cash).

I tell my classes that buying good used cars for cash have been the best financial decisions I ve ever made.  They have allowed me to pay off my house.  Cars are the second largest tangible purchase, and have relatively short loan periods.

8 years and 93K miles is not a lot of miles, though, so it could go a long time, but in the Arctic where you live pry, I believe that the car companies donate salt to the cities to spur sales... Does Ziebart still exist?

I was not criticizing your decision to buy a new car.  Your decision was tempered by your motherly instincts regarding your youngin.  Besides, I believe that you would have paid cash if your IRS problems had not drained you and you had the money.  SO in a sense you are 'starting fresh' yourself.

Or am I completely wrong, and you are advocating always buying on credit?

[oldadjunct]

If my daughter, the economist, were sitting beside me she would supply the technical term for the value of enjoying a brand new [anything].

Remember, back in the day, when most cars had out lived their useful value after 2-3 years, depreciation was a foregone conclusion.  Not so anymore. Yes, there was a time not so long ago when 50-75k miles was pretty much the end of a car.  That is no longer true.

Couple that with the intrinsic value of sitting in "newness" then I think a pure mathematical evaluation of buying new on credit is less clear than many assert it to be.

This from someone who did pay cash for a "gently used" pre-owned car for the first time in recent history.

Enjoy the newness, Pry.  I hear that Hyundai's have advanced dramatically in the last few years.

[prytania3]

If my daughter, the economist, were sitting beside me she would supply the technical term for the value of enjoying a brand new [anything].

Remember, back in the day, when most cars had out lived their useful value after 2-3 years, depreciation was a foregone conclusion.  Not so anymore. Yes, there was a time not so long ago when 50-75k miles was pretty much the end of a car.  That is no longer true.

Couple that with the intrinsic value of sitting in "newness" then I think a pure mathematical evaluation of buying new on credit is less clear than many assert it to be.

This from someone who did pay cash for a "gently used" pre-owned car for the first time in recent history.

Enjoy the newness, Pry.  I hear that Hyundai's have advanced dramatically in the last few years.

I test drove a Hyundai about 13 years ago, and it was like driving a can, but my car is very nice with lots of features.

And Clean, I *never* have much cash. At least not that I can get my hands on.

[pedanterast]

Doesn't it also depend on how long you intend to have the car, even if you're paying cash and don't need to think interest?  For example, paying $15,000 for a new car you expect to keep 12 years is a better idea than paying $12,000 for a car you expect to last 8 years, unless you think you're approaching the end of your driving life.

No.  It depends on what you get for the car when you sell it, and on the opportunity cost of the $3,000 difference.  You think the first on costs $1,250 a year and the second one costs $1,500 but that assumes you sell it for zero. It also assumes you would have earned zero on the $3,000.  And, of course, it assumes equal gas mileage, equal insurance, equal repairs, equal cost of registration, and so forth.

[prytania3]

Doesn't it also depend on how long you intend to have the car, even if you're paying cash and don't need to think interest?  For example, paying $15,000 for a new car you expect to keep 12 years is a better idea than paying $12,000 for a car you expect to last 8 years, unless you think you're approaching the end of your driving life.

No.  It depends on what you get for the car when you sell it, and on the opportunity cost of the $3,000 difference.  You think the first on costs $1,250 a year and the second one costs $1,500 but that assumes you sell it for zero. It also assumes you would have earned zero on the $3,000.  And, of course, it assumes equal gas mileage, equal insurance, equal repairs, equal cost of registration, and so forth.

But used cars depreciate, too. A lot.

[cgfunmathguy]

Doesn't it also depend on how long you intend to have the car, even if you're paying cash and don't need to think interest?  For example, paying $15,000 for a new car you expect to keep 12 years is a better idea than paying $12,000 for a car you expect to last 8 years, unless you think you're approaching the end of your driving life.

No.  It depends on what you get for the car when you sell it, and on the opportunity cost of the $3,000 difference.  You think the first on costs $1,250 a year and the second one costs $1,500 but that assumes you sell it for zero. It also assumes you would have earned zero on the $3,000.  And, of course, it assumes equal gas mileage, equal insurance, equal repairs, equal cost of registration, and so forth.

But used cars depreciate, too. A lot.

Not nearly as much as new cars do. In most circumstances, new cars lose 40% of their value (as brand-new cars) in about three years. In the next three years, they lose a lot less than that. If you can find them, check the Kelly blue-book value for a current six-year-old car (with average miles) during each of the last six years. You'll be amazed.

[clean]

But used cars depreciate, too. A lot.
 
 
 

Not nearly as much as new cars do.

50% of $30,000 is a lot more than 50% of $12000.
And that used car will take longer to lose the next 50% than that new car (unless driven by teenagers or someone who texts while driving!)

[prytania3]

That POS VW that I used as a trade-in depreciated 90%.

[prytania3]

You guys can run the numbers on used cars all you want, but I can't hear you because I time travel back to when I've been stuck on the side of the highway.

I've *never* had a used car that was anything but trouble.

So a good used is $1200/year.

Never breaking down is priceless.

[cgfunmathguy]

You guys can run the numbers on used cars all you want, but I can't hear you because I time travel back to when I've been stuck on the side of the highway.

I've *never* had a used car that was anything but trouble.

So a good used is $1200/year.

Never breaking down is priceless.

And I've never had a used car that gave me trouble, while seeing plenty of "new" POS anythings that were trouble from the word "go".

[humpty_dumpty]

Oh, nevermind.

Came back to reality the other day after finishing and submitting the new research project, and can't even remember why I thought it was so important to post this. Sorry.

Now do you know the joke about a small town priest (no matter which confession)? Once a woman comes in the temple, and complains that her husband, always good and faithful, suddenly left her for a younger woman. "It's not fair of him to do this to me, after 25 years together, is it?" she says, and the priest says:

"You're right".

A few hours later, the woman's husband comes in and says: "You know, I spent 25 years with her, did everything for her, never done wrong, but now she's provided for, the kids have grown up and have their own families, I feel I deserved to live for myself a little bit, am I right?"

And the priest says: "You're right".

Then, the priest comes home to dinner, and tells the story to his wife, and the wife says: "Now, the woman told you one thing, and the man told you a completly different thing, and you told them both they were right. Aren't you, as a priest, supposed to resolve their argument, to make a ruling in favor of one that has more moral right behind his or her complaint?"

And the priest says: "You're also right".