Financial graphic comparison of buying a new or used car

[Jetronic]

I am Sarah, 40 years later - and now, I am able to buy new cars - because I had my priorities straight when I was young.

That's my take also. Sarah can afford a new or newer car 6 years later, with no interest payments but Sam either keeps driving what he has, or buys a beaterif this one gets totalled, or stays in the vicious circle of endless payments.

Btw, still 30% of new value after 10 years? Can't do that here, but new car loans are cheaper and I guess that inflated cost in the US keeps used car prices high aswell. 10-15% of new is my reality after 10 years.

 

[Astro14]

That's my take also. Sarah can afford a new or newer car 6 years later, with no interest payments but Sam either keeps driving what he has, or buys a beaterif this one gets totalled, or stays in the vicious circle of endless payments.

Btw, still 30% of new value after 10 years? Can't do that here, but new car loans are cheaper and I guess that inflated cost in the US keeps used car prices high aswell. 10-15% of new is my reality after 10 years.

Thanks.

Now - as far as my "residual value" - even if it were zero, the monthly total would still be below the average payment. But yeah, used cars command a crazy price these days, particularly the desirable ones.

 

[CKN]

Go try it. Drive 55mph and pick a spot to start braking, using excessive force on the brake so the ABS is very active, chattering away. Then do the same thing at 50mph with you threshold braking, trying not use ABS. I think almost all of us could stop faster from 50 without using the ABS. Maybe not on the first try, but after a couple attempts.
My main point is that driver awareness, and risk management, is worth something, and if you are simply carrying too much speed into a bad situation, no system on your car is going to change the laws of physics and avoid the accident.
After all lots of commercial vehicles have nearly double the stopping distances of the average car, yet have much lower incident per mile rates than passenger cars?

Commercial drivers (generally) have a skill set superior of those who drive around and talk and text on their phone.
How old are you?
Yes-that last question is pertinent.

 

[Dave Hess]

Some people just don’t care about driving a fancy new(er) vehicle.

There’s some wealthy folks driving cars under $20,000

 

[02SE]

Some people just don’t care about driving a fancy new(er) vehicle.

There’s some wealthy folks driving cars under $20,000

Very true. The aforementioned brother of my Brother-In-Law, COULD buy pretty much any car. He doesn't care in the slightest about cars, other than it being reliable.

 

[CKN]

Some people just don’t care about driving a fancy new(er) vehicle.

There’s some wealthy folks driving cars under $20,000

Define "wealthy".

 

[Dave Hess]

Define "wealthy".

In my world, minimum net worth of $5M…….. EXCLUDING any homes, rental properties, cars, Rolex, gold chains, boats, toys, etc….

 

[goblin]

...
There’s some wealthy folks driving cars under $20,000

The real wealthy folks are often folks who own no cars at all.

They live in Manhattan and are wealthy enough to cough for a parking spot, but have better use for $25k+/yr on parking/garaging alone.

They have a chunk of that going for taxis, and the occasional helicopter shuttle to JFK for $195. Which ends up less expensive than a cab if they work, as the helicopter shuttle from Manhattan to JFK is 12 minutes guaranteed, vs unknown hour(s) in a cab.

One of the best ads I've seen was for that shuttle: "Get to JFK in 12 minutes guaranteed. Leave the office later. Bill an extra hour".

Whoever came up with this is seeing things from the right perspective.

 

[emmett442]

Some people just don’t care about driving a fancy new(er) vehicle.

There’s some wealthy folks driving cars under $20,000

Yup.

I work for a local municipality, writing up residential building permits and conducting site inspections. This is a rural area where the wealthy come to buy large parcels to split up/profit on as well as build their dream homes. Homes WELL into the millions.

They frequently meet up in older Highlanders, Silverados, Subarus, and the like. Occasionally a C5/C6 Corvette. Dressed in blue jeans and a polo. Regular people, but with money. Seems they prefer to spend on non-consumables and/or appreciating assets.

 

[goblin]

...

They frequently meet up in older Highlanders, Silverados, Subarus, and the like. Occasionally a C5/C6 Corvette. Dressed in blue jeans and a polo. Regular people, but with money. Seems they prefer to spend on non-consumables and/or appreciating assets.

Or they have a beater specifically for this function

The legend goes that on the morning after one of the classic internet companies made all its original employees into teenage millionaires (Yahoo style, but probably not Yahoo), the boss held a short speech, baseball bat in hand, along the lines of "...Given the change in your financial status and the typical things that I've seen happening in similar situations, I would like to inform you all that effective tomorrow, ANY new car in our parking lot that is fancier than a well optioned 3 Series or equivalent, will be acquainted with this bat. You guys are now all millionaires, do whatever you want at home, but as far as the company's image goes - don't rock the boat...".

Could be an urban legend, or a movie, but it makes sense to me

 

[IndyIan]

Commercial drivers (generally) have a skill set superior of those who drive around and talk and text on their phone.
How old are you?
Yes-that last question is pertinent.

Age is just a number?
Getting up near 50 now, but still have decent reflexes, 20-15 vision , ok hand eye co-ord, but I need my boys to call their pitches now, when I'm back catcher, so I don't take a 4 seamer to the head! I was one of the quicker guys at my local autocross, and haven't injured myself on the YZ250 lately...
30+ years of driving now, and I try to drive like I'm on a motorcycle, predicting and avoid potential bad spots, keep an eye on the mirror at a stop light, etc.

 

[MCompact]

In my experience with ABS on my BMWs as well as the C43 I've almost never activated ABS on dry pavement. Ditto when driving on the track.

 

[MCompact]

I roll my eyes when people say, "I could buy any car I want, but I don't need to let people know how wealthy I am."
Um, you just did, you pretentious wingnut...

 

[slo town]

In my world, minimum net worth of $5M…….. EXCLUDING any homes, rental properties, cars, Rolex, gold chains, boats, toys, etc….

Dang! That eliminates me! My self image is ruined. I need to call my therapist.

Scott

PS Of course you know I'm not throwing stones at you @Dave Hess!

 

[SC Maintenance]

Cars really are not a status symbol anymore for most people under 40.

Warren Buffet still drives his 2014 Caddy I think.

 

[97prizm]

Lots of missing pieces in this equation to include maintenance , upkeep, piece of mind, etc .. but the theme of buying a new to used vehicle is eye opening.

View attachment 283897

It's funny you posted this. Ed Bolian recently posted that he figures 60% of Social media "wealthy car owners " lease or are paying ridiculous interest.

 

[CKN]

Age is just a number?
Getting up near 50 now, but still have decent reflexes, 20-15 vision , ok hand eye co-ord, but I need my boys to call their pitches now, when I'm back catcher, so I don't take a 4 seamer to the head! I was one of the quicker guys at my local autocross, and haven't injured myself on the YZ250 lately...
30+ years of driving now, and I try to drive like I'm on a motorcycle, predicting and avoid potential bad spots, keep an eye on the mirror at a stop light, etc.

At 50 years of age-you don't have the reflexes of a 25 year old nor can you beat ABS.
But ...hey we can disagree.

 

[blueglide88]

Cars really are not a status symbol anymore for most people under 40.

Warren Buffet still drives his 2014 Caddy I think.

Not only does he drive a 2014 Caddy, he bought one with hail damage to save money.
I think that fact might shine some light upon the Sam vs Sarah argument as far as money goes.

Personally, I have never bought a new car because I knew I could do better things with it. I also don't like the depreciation and added insurance costs vs used.

That said, I understand money isn't everything and if someone wants a new car, go buy one. I talked my sister into a new Rav4 in 2018 because I didn't want to see her break down anywhere. And I've bought 6 new Harley's and never regretted it because I love riding.

 

[emmett442]

Or they have a beater specifically for this function

The legend goes that on the morning after one of the classic internet companies made all its original employees into teenage millionaires (Yahoo style, but probably not Yahoo), the boss held a short speech, baseball bat in hand, along the lines of "...Given the change in your financial status and the typical things that I've seen happening in similar situations, I would like to inform you all that effective tomorrow, ANY new car in our parking lot that is fancier than a well optioned 3 Series or equivalent, will be acquainted with this bat. You guys are now all millionaires, do whatever you want at home, but as far as the company's image goes - don't rock the boat...".

Could be an urban legend, or a movie, but it makes sense to me

Seems unlikely, trying to hide your value by driving the 2013 Highlander to City Hall where you will talk about planning your $3M home. But maybe.

 

[goblin]

I think what you'll usually be doing at City Hall will be talking about planning your 7-bedroom home. How much it will cost is for the City Hall to salivate on.