17 yr old car 140,000 kms Versus investing

Alex P Keaton

Alex P Keaton

Hi

How is everyone? :) I havent visited for ages. Haven't even lurked for a while. I am back now as I'm seriously thinking about investing again and i'm kind of at a turning point in my life. Car versus ip.

I have been thinking seriously about upgrading my car. I bought a hyundai excel hatch brand new back in 1996 for $17 K. Only had to pay $8 K to pay it off. This car has been great but i have been getting worried about how much longer it will last and also if it is still safe to drive.

I was just wondering what future repairs/replacement parts i'm looking at if i hold onto this car for a few more years. From memory I havent had to replace any large parts. I have been very lucky and this car has been great, hasnt caused any problems.

For the last couple of years I have been wanting to buy a sportswagon so i could fit my bike in the back but about 6 months ago I compromised and bought a bike carrier. I am able to gain access to my boot through the back seat. I dont know why i didnt think of this option sooner.

For the past few months I have been seriously thinking about buying another car. I have really wanted to get either a brand new subura xv, nissan dualis suv or hyundai ix35. This costs something around $30 K. Following this option I would hang onto this car for the next 15 years or more. I would be held back though. The investing would have to be put on hold for 5 years as it would take 5 years to pay off, spending $500 a month.

The other option was to buy a 3 year old suv which would cost a lot less. Maybe $20 K

I kept changing my mind. Do I go with my heart or my head. I know its important to have a balance in life and life is meant to be worth living and enjoying but at the same time i want to invest. I was looking over my records yesterday and can see im now only slightly negatively geared. My head has taken over the decision now. If its going to cost me $500 per month for 5 years to pay off the brand new car I could be putting this money to far better use buying an ip.

I've decided to go with my gut and to invest again in around 12 months time. My LVR is approx 65% now. When i bought my ip it was at 80% LVR. I also hear Perth is ready to move again. Values are going up ! :)

I dont want to look back and have regrets ! A new car can always wait for now. I have saved well whilst living at mum and dads. I've been here for 14 months now and plan to stay another 12 months. My highgate property is positively geared and my Dianella property is only slightly negatively geared now making them pretty much neutral atm before tax. I should see a nice little tax return this year, maybe $6 or 7 k, i really have no idea lol !!

So what im thinking of doing is just holding onto my 17 year old hyundai excel hatch for as long as possible. If it starts getting too expensive to hold because of the repairs/replacements thats when i'll have to look at buying a used car. i'll just have to admire those nice small SUV's from a afar lol.

In regards to my car what sort of costs will i be in for in the next few years. Its done just140,000km's in 17 years, not bad hey. Also when i do invest and then i find i need to buy another car because mine needs replacing im thinking of buying a 5 year old car thats done around 50,000 - 80,000 km. Pay no more than $10 K and just hang onto it for the next 10 + years. This way I'll be able to afford a car loan as well as afford my latest ip. I'll have to make sure the ip i buy is not too ng. I also wont make the same mistakes as last time and put any of my own cash into buying the new ip. and to make sure i can afford the ip at 9% IR and have enough buffer to pay for all kinds of expenses that pop up.

What does everyone think of this plan ? The only problem I see with buying used is you dont know what your going to get. You dont know how someone has treated the car but im thinking its worth taking that risk if it means you can invest again.

I can remember skater said that she only bought used cars and invested instead and she did well. Any other investors buy used cars in the beginning of their investing journey. I'm 40 and have 1 ppor (which is currently an ip) and one ip and I dont mind working till im 67 and retiring on the same salary as i am today, the same living standard. I want to live comfortably but nothing extravegent. Maybe a few luxuries every now and then. Or if possible maybe $20 K pa more than i get paid now, but im not fussed.

My highgate property that i bought for $255 k back in 2008 is worth approx $320 k now. My Dianella property that I bought for $210 K is worth approx $250 K now. I have a 177 k loan on my ppor and a $199 K loan on my Dianella ip. Highate property is renting for $320 per week, and Dianella renting for $280 per week.

Also what is happening in Perth atm with values. I havent visited for ages. If you could direct me to some topic links that would be great.

haha also I really dont mind delayed gratification and i'm good at it. I just bought my 1st digital tv and dvd/hard drive recorder last week and my brother is helping me to set it up this arvo. I just couldn't bring myself to parting with my money until the very last minute :) I'm really looking forward to all the new channels !! If you wait long enough for something its all the more sweeter when you finally get it, isn't it.

I guess in life you have to balance up what is the most important priority for you and atm I realise it is investing for me. :)
 
Last edited:
DOes it have to be a case of either or?

You can get perfectly good cars that would be a significant upgrade for 7-$12k instead of spending $35k and this would mean you might still be able to invest.

THe Perth market is extremely strong at the moment, im sure your 2 places (from memory) would have seen some good gains. You will also unfortunately be looking in a pretty competetive market. I remember you posting in the past about perhaps not timing the market right and being stuck in a position with no equity gains etc. The Perth market is in a growth phase at the moment and i think you'd be mad to spend all you money on a car and miss out on capital gains right now.
 
If it was me, and you are happy with the excel apart from worrying it may have issues in the future... drive it until it has issues and then get rid of it. It owes you nothing, and $500 a month in loans pays for an awful lot of repairs to the excel should it need it.
 
DaveM said:
If it was me, and you are happy with the excel apart from worrying it may have issues in the future... drive it until it has issues and then get rid of it. It owes you nothing, and $500 a month in loans pays for an awful lot of repairs to the excel should it need it.
Click to expand...

I agree with Dave.

We had a Rav4 bought new in 1998. We clocked up 300,000kms on it and it started to cost us in repairs. Got rid of it last year and bought another only 4 years younger than the first with around 150,000 on the clock. I love it and reckon its got a good few years in it before we need to get rid of it.
 
no one on here is going to tell you to buy a new car so you are probably barking up the wrong tree. If you pick one up around 6 years old it will probably make sense financially and give you a better lifestyle
 
I recently sold FIL's car because he's given away driving - 6 year old 5 door hatch Barina in immaculate condition, as always garaged and meticulously cared for, inc. service books, with 32,000Km on the clock for $5,750.

There were no serious bites over 6K, so good cars for small budgets are definately out there.
 
Alex, get a mechanic to check your car over to see if it is safe. The most important things are the brakes, tyres and steering. If any of these fail things could get ugly.

My opinion, get another IP rather than a another car.
 
Can't you have both and compromise on the car? If you want something for the bike, possibly a station wagon commo(n)dore that's a few years old. I'd imagine that would be a bucketload cheaper than a brand new softroader. What do you need a SUV/4WD for?

From memory you're a gov't worker? Can you look into salary sacrificing something?
 
can you not buy an ip then get a car loan straight after and do both at once rather than the car loan then stopping you getting the ip?
 
skater said:
I agree with Dave.

We had a Rav4 bought new in 1998. We clocked up 300,000kms on it and it started to cost us in repairs. Got rid of it last year and bought another only 4 years younger than the first with around 150,000 on the clock. I love it and reckon its got a good few years in it before we need to get rid of it.
Click to expand...

Skater, we did the same thing.
Our 1997 Rav4 was costing a bit, and we needed something reliable.
We didn't sell it, and when Rob gets some free time, he may repair it himself and use it as a second vehicle.
We bought a 2006 Kia Sportage last year for $7k. So we should be good for another 10 years.
 
TL;DR .. something about a car ?
Keep the one you have and invest.

Alex P Keaton said:
Hi

How is everyone? :) I havent visited for ages. Haven't even lurked for a while. I am back now as I'm seriously thinking about investing again and i'm kind of at a turning point in my life. Car versus ip.

I have been thinking seriously about upgrading my car. I bought a hyundai excel hatch brand new back in 1996 for $17 K. Only had to pay $8 K to pay it off. This car has been great but i have been getting worried about how much longer it will last and also if it is still safe to drive.

I was just wondering what future repairs/replacement parts i'm looking at if i hold onto this car for a few more years. From memory I havent had to replace any large parts. I have been very lucky and this car has been great, hasnt caused any problems.

For the last couple of years I have been wanting to buy a sportswagon so i could fit my bike in the back but about 6 months ago I compromised and bought a bike carrier. I am able to gain access to my boot through the back seat. I dont know why i didnt think of this option sooner.

For the past few months I have been seriously thinking about buying another car. I have really wanted to get either a brand new subura xv, nissan dualis suv or hyundai ix35. This costs something around $30 K. Following this option I would hang onto this car for the next 15 years or more. I would be held back though. The investing would have to be put on hold for 5 years as it would take 5 years to pay off, spending $500 a month.

The other option was to buy a 3 year old suv which would cost a lot less. Maybe $20 K

I kept changing my mind. Do I go with my heart or my head. I know its important to have a balance in life and life is meant to be worth living and enjoying but at the same time i want to invest. I was looking over my records yesterday and can see im now only slightly negatively geared. My head has taken over the decision now. If its going to cost me $500 per month for 5 years to pay off the brand new car I could be putting this money to far better use buying an ip.

I've decided to go with my gut and to invest again in around 12 months time. My LVR is approx 65% now. When i bought my ip it was at 80% LVR. I also hear Perth is ready to move again. Values are going up ! :)

I dont want to look back and have regrets ! A new car can always wait for now. I have saved well whilst living at mum and dads. I've been here for 14 months now and plan to stay another 12 months. My highgate property is positively geared and my Dianella property is only slightly negatively geared now making them pretty much neutral atm before tax. I should see a nice little tax return this year, maybe $6 or 7 k, i really have no idea lol !!

So what im thinking of doing is just holding onto my 17 year old hyundai excel hatch for as long as possible. If it starts getting too expensive to hold because of the repairs/replacements thats when i'll have to look at buying a used car. i'll just have to admire those nice small SUV's from a afar lol.

In regards to my car what sort of costs will i be in for in the next few years. Its done just140,000km's in 17 years, not bad hey. Also when i do invest and then i find i need to buy another car because mine needs replacing im thinking of buying a 5 year old car thats done around 50,000 - 80,000 km. Pay no more than $10 K and just hang onto it for the next 10 + years. This way I'll be able to afford a car loan as well as afford my latest ip. I'll have to make sure the ip i buy is not too ng. I also wont make the same mistakes as last time and put any of my own cash into buying the new ip. and to make sure i can afford the ip at 9% IR and have enough buffer to pay for all kinds of expenses that pop up.

What does everyone think of this plan ? The only problem I see with buying used is you dont know what your going to get. You dont know how someone has treated the car but im thinking its worth taking that risk if it means you can invest again.

I can remember skater said that she only bought used cars and invested instead and she did well. Any other investors buy used cars in the beginning of their investing journey. I'm 40 and have 1 ppor (which is currently an ip) and one ip and I dont mind working till im 67 and retiring on the same salary as i am today, the same living standard. I want to live comfortably but nothing extravegent. Maybe a few luxuries every now and then. Or if possible maybe $20 K pa more than i get paid now, but im not fussed.

My highgate property that i bought for $255 k back in 2008 is worth approx $320 k now. My Dianella property that I bought for $210 K is worth approx $250 K now. I have a 177 k loan on my ppor and a $199 K loan on my Dianella ip. Highate property is renting for $320 per week, and Dianella renting for $280 per week.

Also what is happening in Perth atm with values. I havent visited for ages. If you could direct me to some topic links that would be great.

haha also I really dont mind delayed gratification and i'm good at it. I just bought my 1st digital tv and dvd/hard drive recorder last week and my brother is helping me to set it up this arvo. I just couldn't bring myself to parting with my money until the very last minute :) I'm really looking forward to all the new channels !! If you wait long enough for something its all the more sweeter when you finally get it, isn't it.

I guess in life you have to balance up what is the most important priority for you and atm I realise it is investing for me. :)
Click to expand...
 
8500klms a year. Have you thought of hiring a car when you actually need one and using a taxi other times?
You'll probably be in front.
That or a less than 10 year old $5000 car or keep what you have.
 
Once a car gets to a certain age it pretty much stops going down in value until it dies. There is the 'still running' price and the 'dead' price.

I think it would be a massive change going to a brand new car/suv now - but then spending $17k on a car 17yrs ago was MASSIVE too.

If everything is still running in the Excel then I'd keep it. If however it doesn't have aircon then I don't think I would survive through our summers without it.

I'd probably rather an IP but you would need to be very smart about your choices. I would go for nuetral or CF+ not CF-

What do you want in IP#3? Will you be using equity in your other IPs for deposit?
 
To add my 2c worth..

Just need to look at it from a numbers pov. If the cost to maintain it is going to exceed the cost of upgrading, then you should upgrade. That rules out getting a new car so why not compromise and save up and get a $5k 10yo car as suggested?

I was in this situation about 18 months ago. Had a sh***y 17yo Euro car with maintenance bills through the roof. Sold it and bought a 10 yo Ford Laser which has been a dream. Will last me another 10 years if I look after it. There's no car loan so I can put my income towards an IP deposit :)

I'm a bit of a car nut and I always look at cars I would love to own. I could easily go out and blow all my savings on one. Having the discipline to keep focus on the investing is so important.
 
I think that having money in the bank or having money coming into your bank account from investments e.g.IP gives you much better enjoyment and sense of security, pride than even the best car ever would. Whilst I enjoy the look of nice Euro cars, I give priority to maximising my bank balance. Ultimately, the car is a means of getting one from A to B - a better car does not get you there faster, due to road laws. The major benefits of a newer/more expensive car may be greater reliability and safer in a crash. A 2013 corolla certainly has better safety features than a 2003 corolla.
 
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