Cars versus homes

[nick__45]

I can see why alot of people think inspection is a waste of money. It's mostly an emmisions check, the rest is just a cursory look. It's just a snapshot in time anyways - so your car is in good order for 1 day a year - supposedly.

In general I'm kind of militant on the whole idea that driving should be alot more expensive and then people would care about their cars and how they drive. I think there should be severe fines for cars with rust holes, ineffective breaks, broken/inoperatve lights and mirrors, etc. How about a $1000 fine for a burned out headlight? I'm sick of people running around with their high beams on because a light is out. How about running down the interstate 70 mph+ on one of those "donut" spares?

I'd like to see some automatic way of ticketing drivers yakking on their cell phones. Why is there so much to talk about these days? Back in my day, we used to listen to the radio!

I'd love to see registrations at $1500 a year, inspections at $500 and gas at $10 a gallon.
Sounds crazy, right?

You must drive a newer car with less than 10 years/150k miles. Additionally, you must like throwing away money and be told what to do if you think registration should be $1500, $500 for inspection, and gas should run at $10 a gallon. I'll tell you what, you send me $10 per gallon you normally use each money and I'll send you a gas card that would cover you gas bill. I'll even round the number up so you get free sodas and chips.

I do the work on my vehicles most of the time and certain things I'll have shops do (I won't do brakes and only trust a few people to do it for me) and my vehicles are in pretty good shapes. However, a dishonest shop, especially in this economy has a way of failing a good and safe vehicle. Ball joints, steering and brakes are quite common. All only check on wheel but would tell you that you need all new brakes.

[nick__45]

I'm amazed at how people say they can afford to make payments and pay interest, while they cannot save to pay cash and earn interest.

Americans have a very self center and selfish way of living and marketers have figured out a way of making sure we would never have generational wealth. That is why we have nursing home to help us spend every penny we have and leave our children penniless and house-less. The TV tells us that being old is not cool and hanging out with grandparents are waste of time and nursing home TV tells the elders that kids and grand-kids are ungrateful and residents should think about themselves and enjoying the golden years, active and alone in bed. Why do people with more than 3 generations here still making mortgage payment is beyond me. My children won't have mortgage. Car payments will be the norm but it will be a one-time thing for each vehicle purchased, preferably private sale and slightly used and to be kept for as long as possible.

[nick__45]

In PA, inspection was done by independent mechanics of your choice.

Here in NJ, there are state inspection centers or you can choose to have it privately inspected but the state centers are included in your registration so I'm not sure why anyone would go private. It usually took me no more than 15-20 minutes for inspection. Even better, the state recently eliminated most of the inspection requirements. I think now it is pretty much just an emissions inspection and you don't have to do it as often as you used to.

I am all for emission and certain inspection such as brakes and tires. However, when it is done privately as it is done in Virginia, it is a scam. My 4x4 needed tires but no shops told me to get new tires. They wanted to work on my ball joints, exhaust leak (fixing instead of replacing the whole thing because it cost much less to replace the entire exhaust than to find the leak(s) to patch), and headlight assembly. Of course, each shop tell me a completely different thing. M 4x4 is fine, it is not a beauty queen but it is safe and reliable. The most important safety factor is the driver, not the automobile.

We don't have bumper height here but some shops want to charge for headlight alignment. It is a simple thing to do with a screw driver but they want to charge an hour of labor to do that. The worst shop would try to make you replace the whole entire light housing assembly if you had a minor fender bender. To me it is a scam when a person has a authority to fail your vehicle and knowing you'll be subjected to ticket a moment you leave the shop. If it was important, every state would require it.

[LivingAlmostLarge]

I posted the link to show that society is pushing people to get new cars every 3 years!

Second, if people are trading in a $25k car every 3-5 years over a 50 year period that is 10 cars per person. Mind you people keep going up, up, up.

And $25k is easily a brand new Honda Accord/Toyota Camry. These are not the luxury cars, but average vehicles. We start looking at SUVs, Minivans, etc? If people really were sticking with the same car then maybe it'd be a different argument, but it seems like most people get new cars all the time.

The average vehicle is easily $25k if not higher for average american family and they are supposed to make $50k/year! So 50% of their income is for a car.

Nope $800/month for one car is a $20k car with 3 years of payments. Try driving a $30k car or $40k car and you are easily over $1k/month. How do you think people are driving those lexus, volvo, mercedes, BMWs, large suvs?

There is no way people are only paying $500/month x 12 = $6k x 3 = 18k?

[humandraydel]

Nope $800/month for one car is a $20k car with 3 years of payments. Try driving a $30k car or $40k car and you are easily over $1k/month. How do you think people are driving those lexus, volvo, mercedes, BMWs, large suvs?

There is no way people are only paying $500/month x 12 = $6k x 3 = 18k?

People often finance for 5-6 years...then roll the balance into a new loan after 3-4 years

[disneysteve]

People often finance for 5-6 years...then roll the balance into a new loan after 3-4 years

Exactly. Most people are not taking 3-year loans. Most are financing for at least 5 years and often 6 or 7. That's the only possible way they could "afford" the ridiculous purchases they are making.

[nick__45]

I posted the link to show that society is pushing people to get new cars every 3 years!

Second, if people are trading in a $25k car every 3-5 years over a 50 year period that is 10 cars per person. Mind you people keep going up, up, up.

And $25k is easily a brand new Honda Accord/Toyota Camry. These are not the luxury cars, but average vehicles. We start looking at SUVs, Minivans, etc? If people really were sticking with the same car then maybe it'd be a different argument, but it seems like most people get new cars all the time.

The average vehicle is easily $25k if not higher for average american family and they are supposed to make $50k/year! So 50% of their income is for a car.

Nope $800/month for one car is a $20k car with 3 years of payments. Try driving a $30k car or $40k car and you are easily over $1k/month. How do you think people are driving those lexus, volvo, mercedes, BMWs, large suvs?

There is no way people are only paying $500/month x 12 = $6k x 3 = 18k?

I am trying to get a nice vehicle to drive to work as well as a weekend warrior and keep it under $5 and no more than $10k complete. I am looking at things from the 70s and 80s to avoid the draconian inspection as well as property taxes. There is no reason to pay property tax on multiple vehicles because I use the road the same amount regardless if I have 2 cars or 5 cars. Well, my wife think we're better off with a new car, even if it is some crappy car like Kia or Dodge instead of a nice vehicle that has been properly cared for and updated. In other words, she rather have a new piece of crap that would not be new in a year or two and instantly be outdated because the design is an after-thought fad. Additionally, she thinks new cars don't require maintenance, at least not personal attentions I give to the vehicles I own, and that they are reserved for the professionals at dealership. And she doesn't work while going to school. That is what's wrong with America. People want new cars even when they clearly have no understanding of what it takes to own a car. They get a new car and let the dealership ripped them off. Then they trade it in for something else new in 3 years because the salesmen tell them to. It is a throw-away mentality thanks to TV.

This morning coming into work, I saw a F350 Crew Cab that looks like it's a 78-79. I didn't know or think they made F350 Crew Cab back then. That thing was running perfectly fine. I could use a paint job but everything looks good. It probably cost the fellow next to nothing beside gas and oil change. No property tax, no licensing fee, no registration fee, no high insurance, and very little theft worry. And it is safe.

[LivingAlmostLarge]

Another thread had a $30k car loan at $700/month. Not sure how long the loan, but I don't think that's an outrageous or unexpected car loan. I think the poster makes $5200/month. So 14% of income on a car and we're telling people to stick to 30% for a home? Seems crazy.

[jpg7n16]

Another thread had a $30k car loan at $700/month. Not sure how long the loan, but I don't think that's an outrageous or unexpected car loan. I think the poster makes $5200/month. So 14% of income on a car and we're telling people to stick to 30% for a home? Seems crazy.

It seems crazy because you're comparing different timeframes, and good interest rates vs terrible ones.

The car loan you mention (if for 5 years) - is 60 payments of $700/month = 14.13% interest and 60 payments.

If that car loan were stretched to 30 years (360 pmts), the payment falls to $358.44... essentially 7% of income. [adjusts the timeframe to a comparable one]

If you change the interest rate to 5% (like a reasonable home deal), the payment falls to $566.14 which is 11%. [adjusts the interest rate to a comparable one]

If both changes are made, the payment falls to $161.05 which is 3% [adjusts both timeframe and interest rate]


You are trying to compare a bad car purchase, where someone bought too much car, at too high of an interest rate, and tell us why our guideline for a reasonable home at a reasonable interest rate is out of line.

Apples to beef.

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If you'd like to make a valid comparison with respect to the housing guideline, it should go like this:

Your poster above has 13.5% going to cars - which exceeds the monthly guideline by 3.5% (guideline for car payments is less than 10%); or 1.35x the guideline.

By rectifying his car mistake, he could save at least $180/month, for 5 years.

If the same poster were to overspend by a similar degree on his home (guideline for housing is less than 28%, 1.35x guideline = 37.8%), he would be spending $1,965.60/month on housing, when the guideline recommends $1,456.

By rectifying his housing mistake, he could save at least $509.60/month, for 30 years.


Therefore, it is clear that making a similar mistake on housing is much more costly than the same mistake made on cars.


Both errors should be corrected, but the housing one is much more costly.

[LivingAlmostLarge]

Very cool calcuation. Thanks.

[Frugal]

I don't know if car payments drive all debt, but I personally would never take out a car loan. I and my spouse both paid cash for our cars. Granted, one was brand new at the time, and I bought mine old a year or so back. It helps a lot to not have other debt on top of a mortgage!

[kalimaniac]

never buy new...

Nowadays there is no point in buying new cars. You can get a basically new car for half the price by getting something two or three years old.

[carolan]

Your house AND your car, the two biggest purchases of your life, should fit into your budget. I drove my last car for 14 years and this one costs me $300.00 per month and I have a business so I can write off some of the loan. The reason so many people are in trouble financially is because they are trying to keep up with others. Who cares what other people do! Do what's right for you and your budget.

[pat_chung]

I would not advise someone buy a more expensive car than what they would be comfortable paying for in cash.

Loan:
I've used car loans, but only because the interest rate the manufacturer was offering was low for the 2 cars I've bought (3%, 0.9%)

New vs Used:
There is not a straightforward answer. If you have alot of time, and can wait for a great deal to come by, then buy used and wait for the deal.
I've owned japanese cars (honda/toyota), and used prices on these cars don't seem to be good deals relative to new prices -- so I've bought new. If I could save 40% on a 3 year old japanese car, I would; but you really can't (if you compare used negotiated price to new negotiated price; not to new msrp)

[Bud1225]

yes, you are right brother thanks for sharing this beautiful forum about the living almost and income here on this thread.Because now these days every thing is increasing rapidly we don't know what will be happened to us in future.