car poor

[snafu]

fe2o3ez, don't worry about what your neighbors think, those Lexus' BMWs and other high end vehicles are likely leased or encumbered with large loans. On our street those costs are more often than not paid by the employer/business. People who rate others by their 'drive' are pretty shallow, leave them to worry about 'keeping up with the Jones.' It's all about marketing to the most insecure.

[disneysteve]

The goal is that by getting it new, I wouldnt need a replacement until after my son gets his license and we give it to him. He is 6 now

Funny that you say that. My daughter was 2 when I bought my car in 1998. She is now 16, got her permit on Saturday and drove my car for the very first time today.

[rj.phila]

on the other side of the coin, i bought a 2007 bmw z4 last year(outright fyi), after being a "practical car guy" my whole life. it has proven to be one of the best decisions i've ever made with money. SO much fun to drive. the benefit of a fun driver for a car person is also a thing to factor-you can't take it with you and all that.

[MonkeyMama]

On the "buying new so it lasts longer" comments, we bought both our cars at 1-year-old. The oldest car I have had was 20 years. I think our cars will last plenty long. BUT, we would have had to pay almost twice as much to go brand new (to drive a car for one more year???)

On the reliability comments - 20-year-old car was perfectly reliable. We get a safety inspection (brakes/fluids, etc.) before any extraordinary long drives. Whether car is brand new or 20 years old, is a prudent thing to do. I've never rented a vehicle for a long trip. I have personally done TONS of driving in my older cars. I've personally ever only called AAA for a dead battery or flat tire. Those things can happen to a brand new car too.

[greenskeeper]

on the other side of the coin, i bought a 2007 bmw z4 last year(outright fyi), after being a "practical car guy" my whole life. it has proven to be one of the best decisions i've ever made with money. SO much fun to drive. the benefit of a fun driver for a car person is also a thing to factor-you can't take it with you and all that.

Everyone who knows me will be able to tell when my mortgage is paid off, because I will get a "nice" new-to-me car, paid in cash to celebrate.

[greenskeeper]

On the "buying new so it lasts longer" comments, we bought both our cars at 1-year-old. The oldest car I have had was 20 years. I think our cars will last plenty long. BUT, we would have had to pay almost twice as much to go brand new (to drive a car for one more year???)

On the reliability comments - 20-year-old car was perfectly reliable. We get a safety inspection (brakes/fluids, etc.) before any extraordinary long drives. Whether car is brand new or 20 years old, is a prudent thing to do. I've never rented a vehicle for a long trip. I have personally done TONS of driving in my older cars. I've personally ever only called AAA for a dead battery or flat tire. Those things can happen to a brand new car too.

I would be confident buying a car up to 20 years old with under 200k miles on it that it will last. AS LONG AS THE MAINTENANCE HAS BEEN DONE TO IT AND DOCUMENTED. With the advances in automobile technology and oil technology any make/model should last to 200k without a problem if it has been maintained.

Of course the "wildcard" is that anything man-made will break eventually, and that goes for "off-the-show-room-floor" cars as well as "experienced" ones.

[paul_btam]

Enjoy the drive along the way

I just bought a brand new car. We arrived at the decision by considering how rapidly modern vehicles are changing and also based on current and future fit for our family. However, before this purchase I never thought I would purchase brand new again. But when the shoe fits....

I also really enjoy driving, so I like my cars to drive a certain way. To each his own I guess. I think everyone has things they like to spend on, and things they like to save on. Vehicles certainly are bad investments, but no matter how much you like to save on them, there is someone who likes to spend on them.

Saving for retirement is a major part of my life, but I know if I don't do things that I enjoy then I will miss out. I would rather regret doing/purchasing something than to regret not having done it. The key is to pay yourself first, that way everything else is spendable should the need/desire arise.

[photo]

People who rate others by their 'drive' are pretty shallow

I hope people do judge me by what I drive -- especially would-be thieves.

[disneysteve]

I hope people do judge me by what I drive -- especially would-be thieves.

Don't feel so safe. Some of the most commonly stolen cars are older models that are needed for parts. New cars aren't targeted as much. The 91 Camry, 94 Accord, 95 Civic and 97 Ford F-150 made the top 10 stolen cars list last year.

[cypher1]

Don't feel so safe. Some of the most commonly stolen cars are older models that are needed for parts. New cars aren't targeted as much. The 91 Camry, 94 Accord, 95 Civic and 97 Ford F-150 made the top 10 stolen cars list last year.

At the same time, that list is referencing cars 15-20 years old. You'd be surprised how easy and fast it can be to steal one of those cars. NOT that I have. Both my Civic (97) and CRV (00) keys are interchangeable to drive each other. My friends shop at one point had 4 different 94-98 Camrys, 3 out of 4 started with those different keys. Compare that list with later technology, and you have laser cut\transponder keys, Onstar service, and other car alarms. Newer cars can still be at risk, but much more difficult.

[dawnwes]

If the car is still reliable, it isn't a problem.

We take our 2004 on vacation now but our 2002 would do the job just fine, it is just quite small for our family of 5.

We also have 1996 that there is no way we would drive out of town.

Dawn

I have a paid for 2000 Nissan Pathfinder and a 2010 Honda Accord. The Honda was the first car that I've ever bought new. It'll probably be the last new car I buy.

Question for the forum here. To the people who have older model/high mileage cars: What do you do for family vacations? I take my family on a couple vacations a year and the thought of getting broke down in rural South Carolina on our way to MB frightens me.

Thanks.

[glycemic]

Nice - we bought a new diesel Chevy Silverado in 06' (ouch, really expensive) but have 135k on it and its barely broke in. Heavy duty (3500) trucks used are usually contractor vehicles and beat up, so buying used on them often makes no sense at all given how they hold value.

Awesome though on not burning cash on such a depreciating asset. And diesel's -- awesome. I wish more American manufacturers of cars (not trucks) came in diesel too.

You're right though - you get judged by what you drive. Oh well - who cares. Keep your cash!

[YLTL_Dan]

Dave's Ramsey rule is that the value of your total 'toys' - cars, boats, RVs, etc - should be less than 50% of your gross income.

I took that a little more detailed to create the "Rule of 20%" when buying a car... that you shouldn't spend more than 20% of your salary on a new car purchase. One year out of college, I spent $28k on a new car when I made $45k/year... I get physically ill when I think about that today!

Cheat sheet on how much car you can afford:

$20,000 salary = $4,000 car
$40,000 salary = $8,000 car
$80,000 salary = $16,000 car
$140,000 salary = $28,000 car
$200,000 salary = $40,000 car

The only note is you should divide this value by two if you have two cars.

[bjl584]

Dave's Ramsey rule is that the value of your total 'toys' - cars, boats, RVs, etc - should be less than 50% of your gross income.

I took that a little more detailed to create the "Rule of 20%" when buying a car... that you shouldn't spend more than 20% of your salary on a new car purchase. One year out of college, I spent $28k on a new car when I made $45k/year... I get physically ill when I think about that today!

Cheat sheet on how much car you can afford:

$20,000 salary = $4,000 car
$40,000 salary = $8,000 car
$80,000 salary = $16,000 car
$140,000 salary = $28,000 car
$200,000 salary = $40,000 car

The only note is you should divide this value by two if you have two cars.

Is Dave talking about purchase price of your toys or is he talking about straight up value of the things that you own shouldn't exceed 50% of your income? Is it is the later, how does he account for depreciation? And, what happens when you retire and your income drops? Does he advocating selling these items?

[disneysteve]

Is Dave talking about purchase price of your toys or is he talking about straight up value of the things that you own shouldn't exceed 50% of your income?

I believe he is referring to value but he really uses that as interchangeable with cost. If your income drops, however, you certainly might need to sell something. He often advises that. We here often advise it, too. If the stuff is bought with debt and you can no longer support the payments, you need to sell things. If, however, the items are fully paid for, it won't matter though selling something might help raise funds to improve your situation.