How much is too much to pay for a car?

[DebbieL]

A little off topic, but many on here will like this one if they haven't seen it already. It is a Saturday Night Live skit with Steve Martin called "Don't buy stuff you can't afford". If you google it, I'm sure you can watch it online. Funny stuff.

[irmanator]

I just got a new to me car. I thought about it a long time. I am in a rural area w/out bus service. so I need car to go to work. I got a 5 yo ford taurus. pmt is 128 mo. low miles. I have owned many 11 year old tauraus so i know they last. I could not find an old one and my saturn was dying. I am not crazy about the pmts but to me it is a "new car" and it is new enough that it has not been abused yet. I know that I can maintain this well adn it will last me at least 8 -9 years based on my previous exp.

[Broken Arrow]

A little off topic, but many on here will like this one if they haven't seen it already. It is a Saturday Night Live skit with Steve Martin called "Don't buy stuff you can't afford". If you google it, I'm sure you can watch it online. Funny stuff.

Hehe, yeah, I had a link up in the General Discussions forum not too long ago.

[InDebtInDC]

On the other extreme, you can do what I do.

Usually car manufacturers stop making parts for a specific model after 10 years. If there is no aftermarket company willing to make replacement parts, you will not be able to maintain your car.

I retro-fitted my car with a GM engine. The GM engine has been in production for over 50 years, and will probably be in production for another 50. This way I will never have to buy another car. Just replace the engine when it gets old and perform other routine maintenance.

This is a bit extreme for most people and the initial investment is quite hefty, but once you calculate it for the long term it's much cheaper than replacing a car every 8-10 years.

[thekid]

To me, the relevant consideration on car purchases is not sticker price but price per years of use.

Basically, this is (purchase price + maintenance costs - resale price) / years of ownership.

There are many situations where buying an unreliable make, older or fast depreciating car will cost you more than buying a newer model of a reliable make that holds its value.

Personally, at least in Canadian market where I live, this means reliable japanese cars are the best bet. The Hondas / Toyotas of this world.

A two year old civic which you purchase and keep for 8 years will most probably cost you less at the end of 8 years than buying and rebuying older cars in that period. It will also cost you less than than more expensive (when new) but less reliable makes that you may buy cheaper because they are a few years older at time of purchase.

As for financing, it depends on the rate. I had the money to pay my car cash but instead financed it over 3 years as the rate was 1.9%. I would have lost money by not financing it.