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View Poll Results: What is your usual vehicle buying habit?
PAY CASH for a NEW vehicle and drive it into the ground (not worried about resale of trade in value). 156 45.75%
FINANCE a NEW vehicle and drive it into the ground (not worried about resale of trade in value). 32 9.38%
PAY CASH for a NEW vehicle, but TRADE every few years while it still has value. 32 9.38%
FINANCE a NEW vehicle, but trade every few years while it still has value. 4 1.17%
PAY CASH for only USED vehicles because I want someone else to take the big depreciation. 101 29.62%
FINANCE only USED vehicles because I want someone else to take the big depreciation. 11 3.23%
I LEASE vehicles (either personal or through a business). 5 1.47%
I only purchase my cars at the Pebble Beach Concours d'Elegance, and my CPA worries about the details. 0 0%
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Old 01-16-2021, 07:58 PM   #21
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None of the above but one comes close. I finance a new vehicle every few years but only if interest is below 1%. I finance for 48 to 60 months (4 to 5 years) I make sure the car is paid off at the end of 4 years. During the 5th year, I will attempt to trade in. If the dealer makes me a fair offer on trade-in, fine. If not, then I'll sell on my own via craigslist or other local listing.
By doing this, I stay with a modern car with payments well below $300 a month. In my current case, I bought a 2020 Subaru Ascent in November of 2019. My trade in was a 2015 Subaru Forester. Payments on the new car is $265 a month after trade-in and will be paid off in 4 years, 48 months, from the time I bought it. This includes the extended 'Gold Plus' bumper to bumper warranty. No smog checks, no wrenching, free loaners, free tow, $500 a night if break-down happens more than 50 miles from home, etc. I budgeted for this amount when I retired, not wanting to work on the family car if I didn't have to.

My other main vehicle is a 2006 Dodge Ram 4x4 Diesel I use to haul my camper around as well as tow my boat. It has 77,000 miles on it, barely broke in for a diesel. Around 5,000 miles a year is all I drive it. I bought new and financed for 5 years. I'll keep this truck until I die or it somehow gets destroyed and I need to replace. I paid $32,000 out the door. Same truck today is in the neighborhood of $75,000. At that price, this truck will always be repairable unless it's been in a serious wreck that I probably wouldn't survive anyways.
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Old 01-16-2021, 07:58 PM   #22
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Originally Posted by pb4uski View Post
We usually keep our cars for 5-10 years and less than 100k miles... though today's cars are so good I'm thinking of increasing my mileage limit.
+1

The problem is, we tend to put less than 7,000 miles per year on each car, so I am good with upgrading every 8-10 years, even if there is only 60-70,000 miles on the car.

That reminds me, my car is now 9 years old, with about 65,000 miles. Must be time to upgrade.
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Old 01-16-2021, 08:10 PM   #23
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Originally Posted by bobandsherry View Post
IMHO I disagree. Hardly complicated, it's very simple as it's simply negotiating payment. It's hardly opaque, very clear as to what it will cost. And my experience with now on my 5th lease, it's cheaper than buying.

Like anything, those educated can do well.
I'm with Old Shooter. I have a few friends in that lease and it's just perpetual car payments... but the are always driving a new car.

We just finished paying off our 5 year old car that has 75k miles and is in great shape... I picked up a friend at the airport and he is a car guy and asked me when we got our new car (it's 5 years old). So my monthly car payment is currently $0 and I expect it will be for 2-3 years at least.

I've looked at leases over the years but have never found one that was financially compelling.
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Old 01-16-2021, 08:51 PM   #24
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Originally Posted by pb4uski View Post
I'm with Old Shooter. I have a few friends in that lease and it's just perpetual car payments... but the are always driving a new car.

We just finished paying off our 5 year old car that has 75k miles and is in great shape... I picked up a friend at the airport and he is a car guy and asked me when we got our new car (it's 5 years old). So my monthly car payment is currently $0 and I expect it will be for 2-3 years at least.

I've looked at leases over the years but have never found one that was financially compelling.
I don't look at it as continued payments. Those who pay cash just prepay their payments. Lol. I look at total cost per year. Then compare with how much I'd spend over a 10 year period depending on maintenance, repairs, etc. For me, I enjoy a newer car every 3 years for either new safety or tech, plus maybe just get tired of looking at same car for too long. Just the way I roll.

As I said, I consider the cost over 10 years, that seems to be what the "frugal" find their sweet spot to buy and hold. I use my own estimates as every time I ask those who claim to be frugal how much they spend over 10 years, including the cost of vehicle less the value after 10 years, plus any repairs and maintenance they've put into the car, I never get anyone to share that. So I estimate the expense for new tires, batteries, oil changes, wiper blades as well as something going wrong within a 10 year period like an alternator.

For me, my cost over past 5 years has been just under $20k. For 7 years my cost will be about $27k. Cars I drive are between $40-50k. My current car had $46k MSRP, my lease payment is $300/mo. That's no money down which is only way anyone should lease a car. I don't pay for maintenance as dealer covers the scheduled maintenance. I'm always under warranty, so any repairs are covered. I also get a free loaner when car is due for maintenance or warranty work, they bring the car to me. I don't drive massive miles, 12k/yr is sufficient for my driving needs, more so for past year due to Covid. So my out of pocket costs truly is just my payment, I'm ok with $3,600/yr (18 more months). Plus a new car with new tech and safety.

If you don't mind sharing, what's your all in cost for 5 year period for owning your car; loan payments, maintenance and repairs, less what you reasonably think your equity is today? How much you expect you'll spend on repairs and maintenance for the next 2 years when you enjoy the freedom of no payments?
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Old 01-16-2021, 09:01 PM   #25
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In the past, mostly #2. We kept vehicles between 9 to 13+ years. DW's previous commute vehicle, which only has ~62,000 miles, was purchased new May 2007, so approaching 14 years ago. The Nissan 3.5L engine in her Infiniti is nearly bulletproof. Quite possibly the best engine we've ever owned. It serves as our second/backup vehicle.

Our current main vehicle and the one I mostly drive was paid for with cash, so option #1 there. It was purchased new July 2015, so 5 1/2 years ago. It replaced a vehicle owned for 13 1/2 years. Only 31,000 miles on it, so it should last a while.

My only complaint is it's a FWD vehicle. Was fine back in the California. Would prefer to have AWD for the colder/icy roads in the winter, flooding from rains, and clay/debris on the roads from the constant surrounding construction here in Texas.

Any further purchases going forward will be cash (#1).
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Old 01-16-2021, 09:19 PM   #26
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#1
We maintain our vehicles and drive them for a long time.
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Old 01-16-2021, 09:45 PM   #27
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We have mostly purchased new vehicles. If I can get 0% financing, I'll take it. Otherwise, we pay cash.

We always drive them into the ground. My record is 303,000 miles in 11.5 years on a 2008 Honda Civic Hybrid. I do almost all of my own maintenance and repair work.

Given that our current stable is so new, with miniscule mileage, and the fact that we don't drive much anymore (the young wife has driven her new 2019 Mini Cooper only 1200 miles in the 19 months she has owned it) we may never buy another car.
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Old 01-16-2021, 10:03 PM   #28
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I like to buy new vehicles, and either pay cash or finance for a better deal and pay it off soon.
I intended to keep my last car to drive at least ten years, but traded it in to get the latest safety features. As I age, those safety features have become more important to me since itís harder for me to twist my neck and back to see. I also like the automatic collision avoidance feature and accident reporting.
Iíve just ordered a new car with all the safety bells and whistles, so hopefully this one will last a good long time.
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Old 01-16-2021, 10:21 PM   #29
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So many good comments. With we had like buttons.
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Old 01-16-2021, 10:24 PM   #30
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I picked "PAY CASH for only USED vehicles" because that's what I've always thought was the smartest thing for a frugal person to do. Other than that, it's a mixed bag:
  • Made payments on one new car.
  • Made payments on one used car.
  • Paid cash for one new car.
  • Paid cash for two used cars.

I also keep vehicles for a long time, but haven't driven one into the ground. The last new car I bought for cash was a 2002 Subaru, which I'm finally selling because I just bought something a little larger, a 2017 Honda CR-V, for cash. I expect to get top dollar for the Subie since it's very low miles (56k), one owner, and I've taken care of it.
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Old 01-16-2021, 10:51 PM   #31
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I wish I could have chosen more than one option. I typically buy used for the depreciation reason given (also I'm enough of a frugalist/deal-hunter that I like to look for extra-cheap private party sales with a little bit of damage that I can later repair).

That said I do occasionally buy new (at least I've done so once and may again some day) - always for cash.
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Old 01-16-2021, 11:36 PM   #32
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Quote:
Originally Posted by bobandsherry View Post
.....

For me, my cost over past 5 years has been just under $20k. For 7 years my cost will be about $27k. Cars I drive are between $40-50k. My current car had $46k MSRP, my lease payment is $300/mo. That's no money down which is only way anyone should lease a car. I don't pay for maintenance as dealer covers the scheduled maintenance. I'm always under warranty, so any repairs are covered. I also get a free loaner when car is due for maintenance or warranty work, they bring the car to me. I don't drive massive miles, 12k/yr is sufficient for my driving needs, more so for past year due to Covid. So my out of pocket costs truly is just my payment, I'm ok with $3,600/yr (18 more months). Plus a new car with new tech and safety.

...
I'm impressed, and if you would ever want to share how you do this, I'd be happy to learn.
I will spend close to your $36,000 (10 yr period) on my van which is now 6 yrs old.

Paid $31,744 including tax for the van.
Oil changes for 4 yrs have been $400
Engine and cabin filters I changed: 40
Expecting new tires will be $700
Patched 2 tires for $50
Total so far is: $32,934
I have 1 more year warranty on the van.

Future oil changes: $400
Future Engine and cabin filters I change: 40

So known cost is $33,374 for 10 yrs.

However, my van even now is not $46K MSRP , so you are driving a nicer vehicle.
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Old 01-16-2021, 11:41 PM   #33
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I picked New and drive into the ground, but I do care how it looks.

When young, I'd buy real deals, beaters that I could drive for a few years, it taught me a LOT about car repair
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Old 01-17-2021, 12:16 AM   #34
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Lots of megacorp cars.

Last new vehicle bought in 1997. Drove it for 15 years and then passed to my son. Next was a 2006 Accord in 2009. Still have, only 130K miles. Expect to have it another 10 years. 2007 Solara summer car bought in 2016. 70K on the clock.

We have had so many new megacorp cars. At one time it was a new one every year.

We are not putting any mileage on the. Pre covid we were travelling for 4-5 months. What we have not spent on vehicles over the past eight years of retirement has been spent on travel. Hope to keep it that way for another 15 years!
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Old 01-17-2021, 12:31 AM   #35
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I chose #2 but really it just depends. The last car we bought we paid a large down payment (almost 50%) and financed it at a low rate. Since most of our money is in tax deferred accounts, it didn't make sense to take the immediate tax hit to pay it off. Our last main car we had for about 8-9 years. I'm sure we will do the same with this one.
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Old 01-17-2021, 12:41 AM   #36
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Quote:
Originally Posted by bobandsherry View Post
If you don't mind sharing, what's your all in cost for 5 year period for owning your car; loan payments, maintenance and repairs, less what you reasonably think your equity is today? How much you expect you'll spend on repairs and maintenance for the next 2 years when you enjoy the freedom of no payments?
1997 Lexus GS300, sticker price $41,963.

Last 5 years all in costs $14,270.13. Quicken report attached. (Miscellaneous category is basically registration and emissions tests plus one speeding ticket.) If you leave out fuel costs, which I think you might, the total drops to $9,219.44, or $153.66 per month.

I carry the vehicle in Quicken at $2,500 and don't really think it's depreciating or appreciating at this point. Zero loan payments, obviously.

It *is* old, I'll grant you. But it has everything I need (reliable, good MPG, cruise control, A/C, sound system, airbags, power everything) and a few things I like (heated seats, leather and wood interior).

And anyway, I think a lot of the newer fancier things are more likely to break down in expensive ways. I had a friend with a newer Jeep Grand Cherokee that he had to leave at the shop for several weeks because the DTE calculator broke, he wanted it fixed, and the DTE was integrated with the odometer so they had to keep it in the shop and replace the entire CPU for like $700.

Quote:
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I'm impressed, and if you would ever want to share how you do this, I'd be happy to learn.
I will spend close to your $36,000 (10 yr period) on my van which is now 6 yrs old.

Paid $31,744 including tax for the van.
Oil changes for 4 yrs have been $400
Engine and cabin filters I changed: 40
Expecting new tires will be $700
Patched 2 tires for $50
Total so far is: $32,934
I have 1 more year warranty on the van.

Future oil changes: $400
Future Engine and cabin filters I change: 40

So known cost is $33,374 for 10 yrs.

However, my van even now is not $46K MSRP , so you are driving a nicer vehicle.
I think you'd have to subtract what your net proceeds would be if you sold the van in order to make a fair comparison.
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Old 01-17-2021, 12:54 AM   #37
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Until about 55 (7 years after retirement) I paid $1k to $2k for very used cars, and drove them 2-4 years until they died. I bicycled almost everywhere, so did not drive much, and usually had my bike in the back so I could continue on when they died.

The last 7 years I have bought nicer used SUVs (cash) and driven/will drive them into the ground.
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Old 01-17-2021, 05:01 AM   #38
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Other than my college cars, I paid cash for new cars. Last new car I have ever purchased was a 1989 Pontiac Grand Prix and paid cash. All cars since then have been used cars, purchased for crash, usually 1-3 year old low mileage cars. Currently own a 2015 Jeep Cherokee with 66K miles and a 2017 Hyundia Sante Fe with 45K miles. The Sante Fe is the most expensive car I've ever purchased, cost me $23K in 2018
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Old 01-17-2021, 05:07 AM   #39
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Buying a new car makes no sense for us. We don't drive enough miles to absorb the depreciation. We try to find a relatively low mileage but older vehicle (lower level trim as well.) Then we drive it until repairs are more expensive than replacement. Oh, and we pay cash so YMMV.
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Old 01-17-2021, 05:42 AM   #40
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1st car #5
Every car since #1
Current car I am thinking #3 BTD
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