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Why do people waste so much money on cars?
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2013 Jan 25, 12:10am 58,380 views 312 comments
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how much did they cost!!!!! answer the questin
Sure, and no need to use 10,000 exclamation points. One was $11,000 and the other around $10,000. So $21,000 total. Spread out over around 20 years, that works out to roughly $1,000 a year, or $83.3333 per month. As you can see, no matter how you cut it the math works out heavily in my method.
Nothing of value is simple. It took me a very long time to get what I wanted. But I was patient and demanding with the dealers and got my way.
NOTHING DOWN, NO INTEREST, MAXIMUM RESIDUAL ON TRADE IN!
And your monthly lease payment is how much?
$250 as I said.
I keep every penny of the equity on trade in and carry it over into the new lease.
How are you making equity off a lease? I lease...it is renting the car. The only way you can profit is if you agree to purchase from the leasing company for the residual, mark it up to retail, and sell to someone else, which I have done several times. Otherwise, you turn in the car.
As for the no maintenance costs, I have been leasing for 20+ years. There are a few brands out there that do this, but most don't. You are responsible for oil changes, tires, brakes, etc. Same with not getting a loaner unless it is major. And dont tell me Subaru does. I am looking at a 2014 Outback now and they never mentioned this to me.
Thedaytoday
2013 Jan 25, 4:21am
For every penny I invest the government deducts it off my tax bill
For every penny I invest I retain at the end of the lease!!!!
after 4, 3yr leases the car is mine, brand new, zero finance, 100% deducted.
FREE FREE FREE!!!!
12 years I retain 100% value
You edvard have lost over 95% value like everyone else.Congrats.
and you get to drive a 15 years car. how nice.
so come 2017/2020 my car will be new, I would retain 100% of what I have invested and your cars will be CRUSHED!
Thedaytoday makes a good point: you can't put a price on new car smell.
Yeah.... nuttin' like the lovely smell of out-gassing plastics and chemicals.
Thanks you Jeff Bezos for starting this thread.
Has anyone been tempted by the 2013 Nissan Leaf? With the price cuts and tax credits it's sub $19k.
Thedaytoday makes a good point: you can't put a price on new car smell.
Im tempted to lease a new Volt. Under $300/month with $2500 down. That for a $40K car with no gas cost.
For every penny I invest the government deducts it off my tax bill
For every penny I invest I retain at the end of the lease!!!!
after 4, 3yr leases the car is mine, brand new, zero finance, 100% deducted.
FREE FREE FREE!!!!
12 years I retain 100% value
You edvard have lost over 95% value like everyone else.Congrats.
You are still making payments that I am not. I'm not sure how to make this any more simple than that. But if leasing makes you pleased, then go for it. If everyone was like me the car makers would have gone under a long time ago.
Thedaytoday
2013 Jan 25, 4:23am
Thanks you Jeff Bezos for starting this thread.
Has anyone been tempted by the 2013 Nissan Leaf? With the price cuts and tax credits it's sub $19k.
Thedaytoday makes a good point: you can't put a price on new car smell.
Im tempted to lease a new Volt. Under $300/month with $2500 down. That for a $40K car with no gas cost.
That's probably a terrible idea.
Do the math, ask the dealer the residual. The volt will not help you maintain value. I would go look at the highest residual car to lease. It is a SUBARU! This is true. You get more, lower borrowing costs and higher trade ins.
A volt is a toy. Never by a first generation car. Never!
Thedaytoday
2013 Jan 25, 4:27am
For every penny I invest the government deducts it off my tax bill
For every penny I invest I retain at the end of the lease!!!!
after 4, 3yr leases the car is mine, brand new, zero finance, 100% deducted.
FREE FREE FREE!!!!
12 years I retain 100% value
You edvard have lost over 95% value like everyone else.Congrats.
You are still making payments that I am not. I'm not sure how to make this any more simple than that. But if leasing makes you pleased, then go for it. If everyone was like me the car makers would have gone under a long time ago.
I make payments yes, congrats on figuring out how a lease works. Continue to ignore what I am saying. Every payment I make builds equity until I own in the car FREE!
In 10 years your toyotas will be 25 years old , how nice for you. While I continue to drive a brand new car year after year with no maintenance costs.
My 25k-27k will still be in my pocket and your will be at the DUMP!
edvard2 said: Yeah.... nuttin' like the lovely smell of out-gassing plastics and chemicals.
You can tell it hasn't affected his mental faculties.
I wonder is this type of thing is genetic? My dad bought his first brand new car when he was over seventy and I'll probably go down that path as well. It's so hard to buy new when you've got folks willing to take the initial depreciation hit.
Thedaytoday
2013 Jan 25, 4:30am
Cars have become more expensive to run, maintain and hence people hold onto their car longer. Newer cars cost more and more to maintain by deisgn.
What costly maintenance are you talking about? Oil change intervals on current (post-2000) cars are much longer at 7.5K-30K vs 3-5K 20 years ago.
Spark plugs? First change at 100K+ in most newer cars.
Timing belt? 90-105K.
Timing chain? Good for the life of the car.
Air filter - 30-60K.
Auto trans fluid - lifetime (if you don't tow). Differential oil (if separate from transmission) - 60K.
Coolant - first change at 60-90K.
And so on and so forth. Basically you can drive new car off the lot and don't have any scheduled maintenance except oil changes until 30Kmiles. Or no maintenance at all if the car is Porsche with their 30K oil change intervals. ;)
Your point please?
Are you really saying cars have no maintenance costs? You must be in real estate. You also seem to be dismissing the fact I have no out of pocket expense year over year for my car.
The gas and payments are deductible and the payments build equity which I keep.
My car is an INVESTMENT is yours?
Thedaytoday
2013 Jan 25, 4:33am
you've got folks willing to take the initial depreciation hit.
Go talk to a Subaru dealer. I drive the highest residual vehicle in the market today. Lower finance costs and very high trade-in.
You will not lose if you negotiate a deal, SIMPLE.
Don't ever pay sticker.
I make payments yes, congrats on figuring out how a lease works. Continue to ignore what I am saying. Every payment I make builds equity until I own in the car FREE!
In 10 years your toyotas will be 25 years old , how nice for you. While I continue to drive a brand new car year after year with no maintenance costs.
The angle that you are coming from is "if" I too were to buy a new car and continue to want to always have a new car. That is not the case with me. I simply bought and held onto them with the key notion of not having to pay for them anymore. That's the difference here: I don't see having a new car on a lease as a financial advantage because having a new car also means payments and out of pocket expenses that I do not have. Thus the value of my cars are irrelevant: The value they represent is the money I've saved not having any car payments.
Thedaytoday
2013 Jan 25, 4:35am
I've saved not having any car payments.
No you have not. You have lost 100% of your investment.
Edvard, Again for the third of fourth time how much did your $2500 car cost you 15 years ago, i bet over $35K.
You lost $32.5K over 15 years. Well done.
So you have two toyota trucks 15 years old you paid $60k + and now they are worthless!
Well Done. Your a smart investor.
What costly maintenance are you talking about? Oil change intervals on current (post-2000) cars are much longer at 7.5K-30K vs 3-5K 20 years ago.
Exactly. I intentionally bought cars that have timing chains for that very reason. Ive done the belt change on my Brother's car and it is a ROYAL PAIN.
A lot of the fluids in cars these days will last a very long time. I recall my mom, who was always really bad at remembering to do any maintenance, had me change the coolant on her Camry at 200,000 miles. Surprisingly the coolant was clear and clean. Back in the day that would have been rusty mud.
No you have not. You have lost 100% of your investment.
Again for the third of fourth time how much did your $2500 car cost you, i bet over $35K.
You lost $32.5K over 15 years. Well done.
I give up. This is a very simple mathematic comparison. If you cant see that I have clearly saved a lot more money than anyone with any car payment then I suppose nothing can be done to remedy that situation. Oh well.
Thedaytoday
2013 Jan 25, 4:39am
I give up. This is a very simple mathematic comparison.
you still refuse to answer the question. .
how much did your cars cost 60k?
Thedaytoday
2013 Jan 25, 4:40am
I give up. This is a very simple mathematic comparison. If you cant see that I have clearly saved a lot more money than anyone with any car payment then I suppose nothing can be done to remedy that situation. Oh well.
You clearly have lost more money. Clearly.
Every cent you invested, all 60k in two 15 year old Toyota's you have lost, CORRECT?
Thedaytoday
2013 Jan 25, 4:41am
You are still making payments that I am not.
Aren't we forgetting couple more things here? First: new leased car must have collision and comprehensive. For paid-off car you can afford to replace from savings - liability only. Then there are taxes: sales tax every time one leased car is replaced by the next and higher registration fees on newer car. Taxes might not be an issue in some free states, but in our beloved PRK it sure is.
insurance is $80 a month
I only have max coverage.
you still refuse to answer the question. .
how much did your cars cost 60k?
You clearly didn't read my response above. These are both cheap econocars. Combined they were $21,000 new and spread over the course of 20 years that equals $83 per month for BOTH cars. Like I said, the savings equation is very grossly in my favor. If that is not something you agree with then so be it. I do not really care.
Thedaytoday
2013 Jan 25, 4:42am
you still refuse to answer the question. .
how much did your cars cost 60k?
You clearly didn't read my response above. These are both cheap econocars. Combined they were $21,000 new and spread over the course of 20 years that equals $83 per month for BOTH cars. Like I said, the savings equation is very grossly in my favor. If that is not something you agree with then so be it. I do not really care.
Yes spread your loss over 20 years, i'm sure it looks better.
Your cars are not worth $2500 today.
You have admittedly now lost over $18000 over 20yrs. Well done.
Exactly the point of this thread:
Why do people waste so much money on cars!
Also, I would never ever drive a car that old. NEVER!
Yes spread your loss over 20 years, i'm sure it looks better.
Your cars are not worth $2500 today.
You have admittedly now lost over $18000 over 20yrs. Well done.
Exactly the point of this thread:
Why do people waste so much money on cars!
No.... I did not "lose" any money. I still own the cars.
Let's step back for a moment and make this even more simple.
So let's imagine that I have $100 in my pocket. Still with me? Good.
Now let's say that someone else also has $100 in their pocket.
I have to pay someone $2 per month. The other person has to pay $10 a month.
Who in the end is spending more money?
Thedaytoday
2013 Jan 25, 4:48am
No.... I did not "lose" any money. I still own the cars.
You own something with 95% less value like the majority of cash buyers.
and at some point those cars will be in the ground netting you a 100% loss.
You own something with 95% less value.
so. what. This is a very simple debate about monthly outflows of cash. So if I am paying zero in car payments and you- as you admitted- are, then how is it that I am "losing" money when I'm not losing any at all? The only way that your side of the argument works is if I too were in the new car market, using my cars as a down payment. If I did so, then I would be spending money every single month on payments. Car dealers sell and lease cars because you as the buyer pay them for their product. I am not paying anyone anything. You are. End of story.
Peter P
2013 Jan 25, 4:51am
One more thing. In CA you only pay taxes on the payments. Leasing is the best way to get a new car every few years.
Cars today have more safety features than cars just 5 yesrs ago.
My 10 year old Lexus does not even have rear curtain air bags.
Thedaytoday
2013 Jan 25, 4:54am
I'm not dismissing anything, I just point to the fact that cost of maintenance in really not that big for newish cars. But your statement re zero out of pocket expenses is interesting. How do you get around paying for insurance, registration, sales tax (if you state has such thing)?
yes I paid registration, so do you. I pay insurance so do you. sales tax was swallowed by the dealer :)
I think we need to take a step back and look at where Thedaytoday is coming from. Early on he said:
For every penny I invest the government deducts it off my tax bill
Do you use this car for business purposes?
Perhaps he is in a sales position where he needs to have a newer car to create a good impression. Thedaytoday please clarify.
Thedaytoday
2013 Jan 25, 4:56am
You sound like a sixth grader.
Here's what happens in lease; You lease for 3 years or 30K miles, you pay X amount for that privilage. It's the most expensive 3 years in the car life cycle.
After three years, you hand the car back to the lessor. There is no equity. no car. In fact, you may be penalized for mileage or condition convenent.
Ask your mom and dad.
Nope, it does not have to be this way. I have profited as I have explained.
Just the fact you chose to ignore every word I posted shows your lack of intelligence.
Peter P
2013 Jan 25, 4:56am
One more thing. In CA you only pay taxes on the payments. Leasing is the best way to get a new car every few years.
On the difference between initial price and residual value, to be exact.
On financing costs too.
Thedaytoday
2013 Jan 25, 4:57am
One more thing. In CA you only pay taxes on the payments. Leasing is the best way to get a new car every few years.
On the difference between initial price and residual value, to be exact.
On financing costs too.
Zero finance costs and a much improved credit score.
Nope, it does not have to be this way. I have profited as I have explained.
Just the fact you chose to ignore every word I posted shows your lack of intelligence.
The only person who actually profited was the dealer who leases the car to you.
Thedaytoday
2013 Jan 25, 5:02am
means payments and out of pocket expenses
It is not an out of pocket expense for me. That is the difference between your tax bill and mine.
Peter P
2013 Jan 25, 5:02am
For every penny I invest I retain at the end of the lease!!!!
after 4, 3yr leases the car is mine, brand new, zero finance, 100% deducted.
FREE FREE FREE!!!!
You sound like a sixth grader.
Here's what happens in lease; You lease for 3 years or 30K miles, you pay X amount for that privilage. It's the most expensive 3 years in the car life cycle regardless of your negotiating skills.
After three years of payments, you hand the car back to the lessor. There is no equity/car and definitely no money. In fact, you may be penalized for mileage or condition convenent. Your problem is how much you have to pay to get another car.
Ask your mom and dad.
Try leasing a used car. You will find that new cars are cheaper.
You need to play numbers with the depreciaion curve and the dealer incentives.
Thedaytoday
2013 Jan 25, 5:03am
Let's not kid ourselves: all it means is that you left enough money on the table while negotiating the price for them to be able to do that. ;)
Not in my case. I screwed them to the wall.
They were desperate to trade. It was during the fukishima meltdown which i took advanatge of.
It is not an out of pocket expense for me. That is the difference between your tax bill and mine.
Writing a $25,000 car off of my taxes would do absolutely zero for me. And sorry, but you already said you have a car payment so yep- you're paying money every month while I'm not
Thedaytoday
2013 Jan 25, 5:04am
Try leasing a used car. You will find that new cars are cheaper.
You need to play numbers with the depreciaion curve and the dealer incentives.
Yes and get a good deal or don't buy or trade. You must benefit from all the upsides not the dealer.
Peter P
2013 Jan 25, 5:09am
Try leasing a used car. You will find that new cars are cheaper.
You need to play numbers with the depreciaion curve and the dealer incentives.
Yes and get a good deal or don't buy or trade. You must benefit from all the upsides not the dealer.
Also, first and foremost, negotiate a low sell price. Then, you talk about money factors separately. Pay no cap cost reduction and buy extra miles you need upfront.
Peter P
2013 Jan 25, 5:15am
One more thing. In CA you only pay taxes on the payments. Leasing is the best way to get a new car every few years.
On the difference between initial price and residual value, to be exact.
On financing costs too.
I didn't know that.
Moreoever, financing is on the entire sell price. Even if you prepay all lease payments you will still have a financing cost. So you need to get rock bottom money factors.
Peter P
2013 Jan 25, 5:17am
You need to play numbers with the depreciaion curve and the dealer incentives.
Isn't it like gambling: both you and manufacturer trying to guess the residual for particular car in 2-3 years. The one who guesses better - wins.
But you have the option to buy at the fix price. :-)
Remember, the dealer and the manufacturers want different things. This is how good deals can exist at all.
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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.