Why do people waste so much money on cars?
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2013 Jan 25, 12:10am 56,262 views 312 comments
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BayArea
2013 Jan 25, 8:52am
Well whats the fucking point of working hard and going to college if u cant buy nice bling?
If everyone had the attitude of the OP our entire economy would collapse.
You are what you drive. Retire early!? Why so you can hoard cats? Keep
Working man!
Well put.
And the only reason I would ever want to "retire early" is so that I can "work" on other business ventures that I enjoy more than my current day job (without having to worry about whether those ventures will pay my bills).
Well whats the fucking point of working hard and going to college if u cant buy nice bling?
If everyone had the attitude of the OP our entire economy would collapse.
You are what you drive. Retire early!? Why so you can hoard cats? Keep
Working man!
With cars it all about value for me. For instance, I consider honda accord to be a better value vs either BMW or Kai Rio for that matter. The car that I currently own I bought new. Sure beats the hand me down beater mistubishi that I got as a hand me down college graduation present. Having been exposed to both of these scenarios, I don't think I will ever buy used or lease anything.
Thedaytoday
2013 Jan 25, 9:05am
Even though what you and I have said is accurate there will be people who think dropping $20K balloon on two beaters and owning them for 25years is better than getting a new care every 3 years at no cost.
Except in the end I have more money in my pocket, that's all.
Idiot, you don't the same equity, the balloon payment of $21k is GONE! You have lost your entire investment. Wow, you are stupid.
While I retain over $13k in equity with zero down and I still have the $23k in the bank instead of putting it down and losing it!
Edvard, your a foolish idiot. Start to listen or stop posting drivel.
Thedaytoday
2013 Jan 25, 9:10am
I've never heard anyone talk about "building" equity with a leased car (that only depreciates) and must be returned to it's rightful owner at the conclusion of the lease. Unless the dealership is willing to sell you the car for less than they are willing to buy it back from you at the conclusion of the lease, which would mean they are as insane as you.
NO NO NO!!!!! NO!
Seriously you guys are stupid
You have no idea what you are saying.
Which is why you have never leased a vehicle.
BayArea
2013 Jan 25, 9:10am
Well whats the fucking point of working hard and going to college if u cant buy nice bling?
If everyone had the attitude of the OP our entire economy would collapse.
You are what you drive. Retire early!? Why so you can hoard cats? Keep
Working man!
With cars it all about value for me. For instance, I consider honda accord to be a better value vs either BMW or Kai Rio for that matter. The car that I currently own I bought new. Sure beats the hand me down beater mistubishi that I got as a hand me down college graduation present. Having been exposed to both of these scenarios, I don't think I will ever buy used or lease anything.
I'm trying really hard but I can't see the point you are making here. At least not any well defended point.
Thedaytoday
2013 Jan 25, 9:12am
The only person here who seems to get it is Peter.
Peter these fools have no clue how to use the US tax system.
BayArea
2013 Jan 25, 9:16am
I've never heard anyone talk about "building" equity with a leased car (that only depreciates) and must be returned to it's rightful owner at the conclusion of the lease. Unless the dealership is willing to sell you the car for less than they are willing to buy it back from you at the conclusion of the lease, which would mean they are as insane as you.
NO NO NO!!!!! NO!
Seriously you guys are stupid
You have no idea what you are saying.
Which is why you have never leased a vehicle.
Stupid I'm not, but inexperienced in leasing vehicles I certainly am.
1.) What's the MSRP on you your last vehicle lease?
2.) What price did you agree to?
3.) You said your monthly payment is $250
4.) You said $0 down
5.) What's the duration of the lease?
6.) What will the car be worth at the conclusion of the lease roughly?
7.) What happens next?
8.) How are you using the US tax system to your advantage here?
Simple :-)
Peter P
2013 Jan 25, 9:16am
I am a fool too.
The system is also very complex. And if somone wants to drive old cars it is respectable too.
RealEstateIsBetterThanStocks
2013 Jan 25, 9:17am
building "equity" with a leased car? oh new stuff now i am going to seriously read this thread from start to finish.
Thedaytoday
2013 Jan 25, 9:17am
Car A cost $23k
$250 pm
Sold 3yr later $21k
Equity $6k ish after taxes
Car B cost $23k minus the roll over equity from trade (cost $17k)
$250PM
Sold 3yr later $21k
equity $12K ish
and on it goes.
Car C cost $21k got a $2k discount - trade in (got $12k equity towards) = cost $9k ish
$250PM
My credit is also now through the roof using this method.
ZERO DOWN ON ALL 3 CARS!
That's $7500 in my pocket people.
Did I say I get a new car to drive every36mos with no maintenance costs as well.
BayArea
2013 Jan 25, 9:18am
building "equity" with a leased car? oh new stuff now i am going to seriously read this thread from start to finish.
Don't bother, you and everyone else in this thread seems to be at the same point whether you read it or not.
Retire early!? Why so you can hoard cats?
Yes retire early in your 40s and meditate, hike in the mountains, ski,snowboard, surf, make music etc. and bone hot girls, no bling needed. The things you own end up owning you. But thank you for saving the economy ;)
zzyzzx
2013 Jan 25, 9:20am
Most luxury cars brands with the exception of the Japanese makes are fairly unreliable and failure-prone.
Lincolns, Cadillac, and Buick's are reliable (as is my Oldsmobile).
Thedaytoday
2013 Jan 25, 9:35am
So let's get this straight you drop over $20k cash on two cars, 20 years later they are now worthless. Great investment.
Yes, they still run. Congrats, your cars in 10 years will be crushed if not sooner.
By which time you will drop another $20k+ cash on two new cars.
That's now a 40k loss.
My 20K cash is still liquid , and growing. yours is not, yours is a total loss
I would also like to point out you EDVARD are not the average car owner! If you maintain it yourself you are in the 0.5% of people who do.
The rest get fucked and lose thousands as soon as they drive them off the lot.
I can show you how to make money off the lot.
I have owned 100's of cars.
zzyzzx
2013 Jan 25, 10:04am
From what I am beginning to understand, Thedaytoday would want us to read this to further our financial education:
http://www.edmunds.com/car-leasing/3-ways-to-turn-your-lease-into-cash.html
Leverage the Equity in Your Leased Car
Rising used-car prices mean that dealers will sometimes buy out a consumer's lease and pay him for the equity in the car.
As an example of what is at stake when a leased car has equity, Weintraub gives the example of a client who had a Mercedes-Benz GL450 that was near the end of its lease. The car had minor body damage, and the client was going to pay $1,800 in excess mileages fees, as well as a $400 disposition fee, charged at the end of some leases. By arranging to sell the car to a dealer, the client incurred none of those expenses and actually pocketed $3,200 in equity. The client was "in shock" at the windfall, Weintraub says.
zzyzzx
2013 Jan 25, 10:15am
still don't understand how on earth leasing is better than buying.
Your 7% figure is high. Also, I would assume higher insurance costs would be incurred with a lease (full coverage on a new car is going to cost way more than liability only insurance in an old car). 6K maintenance on a car over a period of 20 years sounds low to me. Assuming a low fixed lease rate over 20 years seems a bit optimistic as well.
PockyClipsNow
2013 Jan 25, 10:17am
Stock market dont return 7% anymore thats pre 911, now were in zirp. Its sideways.
Thedaytoday
2013 Jan 25, 10:20am
I still don't understand how on earth leasing is better than buying.
That's because you have never leased a vehicle. You also would not lease the same car for 20 Years!!!! Obvious to most people.
It's about down payment, residual and new purchase price. If you see the upside on all 3 expect to make out like bandit like me.
Your examples make no sense, you analogy comparing it to a stock market investment, MAKES NO SENSE.
So to recap A) Down Payment B) Purchase Price C) Residual
For the record a Nissan Maxima would not have a high enough residual after 36 mos to do this.
In your example where do you TRADE!!!! for a new car? Where is the residual equity?
EXAMPLE:
person 1 : leases nissan maxima 3.5 every three years at $280/per month. He does this for 20 years.
Person 2 : Buys nissan maxima 3.5 at 30K and keeps it for 20 years
costs after 20 years :
person 1 = 20 (years) * 12 ( months) * 280 = 67.2 K
person 2 = 30 K + maintenance = 30K + 6K = 36 K
Incorrect. Math is not your strong point.
Thedaytoday
2013 Jan 25, 10:28am
ets assume you have 1.5 K residual after 3 years,.
No, lets not. That's shit. $1.5k residual is a joke.
I avg. about $6k every 36 Mos.
Thedaytoday
2013 Jan 25, 10:29am
There is a reason you are not showing YOUR MATH because its obviously flawed. i think your drank the sales man's "lease it" kool aid.
are you serious, read the fucking thread fukwit!
Thedaytoday
2013 Jan 25, 10:30am
There is a reason you are not showing YOUR MATH because its obviously flawed. i think your drank the sales man's "lease it" kool aid.
You have never leased and it shows. I have leased over 20 company cars at a time for over a decade .
shut the fuck up.
Thedaytoday
2013 Jan 25, 10:30am
Today wants us to believe he can find new cars from the dealer, drive it for three years and return it close to the original price. Good luck believing that.
Yup. I am that good and you need the right car.
I have used this method in my everyday life with nearly everything I have.
Buy low , Sell High.
Thedaytoday
2013 Jan 25, 10:33am
No, lets not. That's shit. $1.5k residual is a joke.
I avg. about $6k every 36 Mos.
ok fine..thats $166 per month. substract that from your monthly payments. The difference is what you are paying for 20 years.
???????? I am not paying anything for 20 years.
Your math is shit.
My depreciation is muted, limited and restricted. Again buy low sell high.
You cannot keep the same car for 20 years it will depreciate.
The trick as I keep telling you is zero down, zero interest, buy low, sell high. repeat.with the highest residual car in it's class.
Thedaytoday
2013 Jan 25, 10:35am
its simple math
Not for you.
You are still using a 20 year analogy, WHY?
WTF is $166?
Look up the thread , I have detailed the costs and residuals.
Thedaytoday
2013 Jan 25, 10:37am
???????? I am not paying anything for 20 years.
Your math is shit.
whats your monthly payment and total cost of the car if i were to buy full down ?
seriously i am curious ?
Look up the thread.
Thedaytoday
2013 Jan 25, 10:39am
$166 = Residual value / 36 months = 6000 / 36 = $ 166
so effectively you are only paying = $monthly lease amount - $166
You also forget a percentage is deductible business taxes.
My residual goes up again. You also get 0.55c per mile.
Thedaytoday
2013 Jan 25, 10:42am
you need the right car.
For example?
One with an industry leading residual, which I have pointed out numerous times is a Subaru. Lowest finance costs, low to zero down payment and highest trade in value.
Leased $23k 36 mos traded value $21k
by the 3rd time around I got $2k off the sticker and ended up paying about $9k for a $23k car (LEASED)
12k or 14,000 (36mos) x 0.55c business miles tax deductible.
Thedaytoday
2013 Jan 25, 10:45am
compare that to full payment $Y distributed over 20 years.
whats so hard about the math.
over 20yrs the same car devalues to ZERO
while the value in a short term leased vehicle is retained.
you also get to drive a new car every 36 mos and you are not stuck with a pile of shit in 20 years.
ASK YOUR WIVES WHICH THEY PREFER? 20 yr old car worth $2500 or a brand new car!
Peter P
2013 Jan 25, 10:48am
I have been eyeing an Outback. Perhaps I should start running the numbers.
Car GPS is useful though. It is not as safe to rely on the smartphone while driving.
zzyzzx
2013 Jan 25, 10:48am
Personally I'd never buy a Subaru. You are still wasting a lot of money on gas for the 4WD gas mileage penalty. Plus Subaru still makes cars where the engine explodes if the timing belt breaks (almost nobody else does that). That last part probably is irrelevant if you only keep it 3 years though.
Thedaytoday is right about the residual value on these things, people wildly overpay for used Subarus.
Thedaytoday
2013 Jan 25, 10:50am
Thedaytoday is right about the residual value on these things, people wildly overpay for used Subarus.
Go fuck yourself you racist bigot. Who the fuck asked you?
Piss off.
Thedaytoday
2013 Jan 25, 10:50am
I have been eyeing an Outback. Perhaps I should start running the numbers.
Car GPS is useful though. It is not as safe to rely on the smartphone while driving.
Forget the extras if you want residual. Do your homework first.
The 2014 Outback has been refreshed as well.
Subarus are all AWD. Compare to Toyota,Ford, Mitsubishi, Honda 4x4 or AWD is $10k extra.
it seems many are terribly concerned about having whatever happens to be the newest model.
they are not from the SFBA... more likely from Boston...
Charlie (from Boston) dont Surf...
A real Californian would rather drive a 30 year old slug. They are much more fun
to own and drive...
Peter P
2013 Jan 25, 10:51am
Personally I'd never buy a Subaru. You are still wasting a lot of money on gas for the 4WD gas mileage penalty. Plus Subaru still makes cars where the engine explodes if the timing belt breaks (almost nobody else does that). That last part probably is irrelevant if you only keep it 3 years though.
Thedaytoday is right about the residual value on these things, people wildly overpay for used Subarus.
Can you elaborate on the engine issue?
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As someone who lives in the Bay Area, its clear that many people here just love their Bimmers, sports cars, and large luxury SUVs. What's more, it seems many are terribly concerned about having whatever happens to be the newest model.
On each and every day of the week I am surrounded on the freeways by cars that cost 60k,80k, or even 100k+. So much so that many might as well be Camrys and Accords. Oh- another 7 series? Yawn. There's another 50 I'll see on the way home. No, granted these are unquestionably nice cars. But then again, to me its a big waste of money.
I drive two beater Toyotas, one that I've actually had since high school. Both went past 250,000 miles years ago. Neither have any problems. I've always taken good care of them give them a nice wax job every few months, change the oil every 3,000 miles and keep them looking nice. Doesn't matter to me that they're almost 20 years old now. They still run, drive, and look like perfectly fine cars. I make a pretty good income and could quite easily go purchase the luxury car of my choice if I so chose. Its not that I can't afford a 90k car, but more that I'd rather not spend almost 100k on something that's going to depreciate massively as it ages.
If you think about it from a purely financial perspective, let's say that the average luxury car buyer buys the latest-greatest car every 6-7 years. Let's say the average price is around 60k. That equals close to 120k every decade or several million over the course of a lifetime. Had that money been invested in a 401k or stocks, that same person could have literally retired decades sooner.
Lastly, if your car goes 0-60 in 4 seconds and has a top speed of 200MPH, well who cares? The US has speed limits and thus you can't actually really use the car for what it was designed to do. Sort of like buying a blender and only ever being able to use the slowest setting.