Buying a car - how much to spend?

B

bene313

So no one's ever made money buying a car.

However, it's time to upgrade from the 1993 Laser.

I've been talking about this for a while but can't bring myself to part with the dollars upfront, or the cashflow drain over a 5 year finance contract.

But it must be done. I need something half decent for work, plus must be able to get on the beach, no serious 4x4ing, but must be capable.

So Subaru Forester gets the gig. Question is how much to spend?

This will be a work car - I can claim majority of the costs. I can also salary sacrifice to get the GST back. So I could get something decent, eg:

2008 Forester XT

Hesitating on this. Buying a depreciating asset. Goes against my instincts.

I could go the cheaper option, no salary packaging available, can pay cash or personal loan. However the risk exists - is buying a cheap car a false economy??

2000 Forester X

So many stories about cheap second hand cars gone wrong. The risk of high maintenance. The '93 Laser has been good to me, I got lucky. Might not be lucky twice.

Your opinions please :)
 
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If you can afford it get a decent car. With salary sacrificing available to you it's actually not that expensive to finance it over 5 years...
 
I agree with the guys above - the newer model should provide less grief. At least you're not getting too carried away and buying something brand new.

Cheers

Jamie
 
Do you think that everything you buy in your life will be an appreciating asset?

Just buy a car, you have salary sacrifice and deductions for work use. The decision wont kill you either way. :rolleyes:

bene313 said:
So no one's ever made money buying a car.

However, it's time to upgrade from the 1993 Laser.

I've been talking about this for a while but can't bring myself to part with the dollars upfront, or the cashflow drain over a 5 year finance contract.

But it must be done. I need something half decent for work, plus must be able to get on the beach, no serious 4x4ing, but must be capable.

So Subaru Forester gets the gig. Question is how much to spend?

This will be a work car - I can claim majority of the costs. I can also salary sacrifice to get the GST back. So I could get something decent, eg:

2008 Forester XT

Hesitating on this. Buying a depreciating asset. Goes against my instincts.

I could go the cheaper option, no salary packaging available, can pay cash or personal loan. However the risk exists - is buying a cheap car a false economy??

2000 Forester X

So many stories about cheap second hand cars gone wrong. The risk of high maintenance. The '93 Laser has been good to me, I got lucky. Might not be lucky twice.

Your opinions please :)
Click to expand...
 
Right well the consensus is get something decent!

Mr Fish the CRV goes well offroad but not as well as the Subaru and no turbo option ;)
 
if you have $40,000 to buy a car, i recommend the following.

spend $10,000 on a good second hand car.

spend the remaining $30,000 running the car for the next 8 years, including $5000 on depreciation.

as opposed to

buying a $40,000 car.

spend $5000 per year running the car for the next 8 years and spend $20,000 on depreciation.

long term wealth preservation begins with your choices.

one option costs you $45,000 for 8 years.

the other option costs you $100,000 for 8 years.
 
If you didn't need a car for work I would suggest you not get one. Imagine how much you would save if you didn't have to pay all the running costs, and opportunity cost with what you could have purchased.

e.g $40,000 car bought outright means you could have had this money in your home loan saving you $2,800 per year. Plus you have have invested the $40,000 at around 10% making $4,000 per year. Think of the compounding effect too.

Have a look at www.goget.com.au instead.
 
Ahhh cars.. ;) I've had so many troubles over the years with even 'good' s/h cars that I'm pretty well a mechanic now! Which I've always wanted to be so it's a blessing in discuise really.

Rule of thumb is: the older it is, the more things need to be replaced. All parts will eventually let go eg alternators, starters, mufflers, radiators will rust out, all oil seals, pump seals brake lines, ABS sensors will require cleaning etc etc ETC. You will spend a premium on newer vehicles and will probably spend about the same in the ling run with an older bomb. Unless it's like a Kingswood or something cause there are onbly like 2 working parts on them to break anyway :D

If you can stand fixing things yourself every few weeks/months if you're lucky then an older car over 120k on the clock may be okay for you.

It's very hard to 'win' financially with cars, it's just lose lose no matter which way you go usually.
 
How many kms do you think you'll do per year?
How many years do you intend to keep the car?

If you only intend to keep the vehicle for 5 years, and then sell it, it might be better to buy a 10 year old car. If you intend to hold it for 10 years buy a near-new one. You can get a 30% discount on some models just a couple of years old.
 
We just bought a car about 2 weeks ago. Forrester was on the list of options, but we ended up with a (more expensive) 2007 Rav4 instead. We paid about $20k after all the extra charges, not helped by the fact the car had less than a week's rego on it when we bought it. Boom, we don't have a buffer anymore. Kept the old car as its trade-in value was "a couple of hundred".

So now we're one of *those* two car families ... and one is a SUV. On the upside, we now won't have to pay other people to deliver things for us or take things away for us.
 
My advice: buy a second hand car that is about ~1 year old. You'll basically have a new car with years of warranty left on it, and someone else has taken the instant depreciation hit from buying it off the showroom floor.

And best to stick with Japanese (made) cars as they tend to hold their value better than most due to their better build quality.
 
I bought a $2000 car and has lasted 3 years now with no trouble apart from regular servicing :)
I do have a work car tho and the $2000 one dosen't get used that much.
 
zimby said:
I bought a $2000 car and has lasted 3 years now with no trouble apart from regular servicing :)
I do have a work car tho and the $2000 one dosen't get used that much.
Click to expand...

same here - carby fed, 2WD 1988 hilux.

has AC and a good heater and uses light truck tyres which are cheap as, bro.
 
bene313 said:
So no one's ever made money buying a car.

However, it's time to upgrade from the 1993 Laser.

I've been talking about this for a while but can't bring myself to part with the dollars upfront, or the cashflow drain over a 5 year finance contract.

But it must be done. I need something half decent for work, plus must be able to get on the beach, no serious 4x4ing, but must be capable.

So Subaru Forester gets the gig. Question is how much to spend?

This will be a work car - I can claim majority of the costs. I can also salary sacrifice to get the GST back. So I could get something decent, eg:

2008 Forester XT

Hesitating on this. Buying a depreciating asset. Goes against my instincts.

I could go the cheaper option, no salary packaging available, can pay cash or personal loan. However the risk exists - is buying a cheap car a false economy??

2000 Forester X

So many stories about cheap second hand cars gone wrong. The risk of high maintenance. The '93 Laser has been good to me, I got lucky. Might not be lucky twice.

Your opinions please :)
Click to expand...

Don't buy either.

The '08 model has way too many K's for it's age.

The '00 model is too old and approaching the age of many dollars to be spent, and who knows what's wrong with it now that you can't (and won't) see.

Subarus are often
a) more expensive to service and
b) harder to get for parts (unless you take it to Subaru dealers for servicing - see point a)).

We service a few of 'em, and they are like every other car; they break down.

My suggestion is to buy a car within your price range for work expense deductions, but look at the more common and reliable versions such as Toyota Camry. Boring car, but they go forever and are easy to get parts for etc.

Just make sure you service it on time and do what is required when it is due...just like no-one ever does. :rolleyes:
 
Bayview. I disagree. Have a 97 liberty wagon as a hack car. 360000 on the clock. Cheap to run and very reliable.

Cars are my vice. Took delivery of a 55k golf last year and just spent another 2k modifying it...
 
BayView said:
We service a few of 'em, and they are like every other car; they break down.

:
Click to expand...

BayView, can you give a ball park quote for a head gasket replacement on the flat four vs say a conventional straight 4?

(I know what our local dealer is quoting BTW - be interested at your guesstimate)

The Y-man
 
Ideo said:
Bayview. I disagree. Have a 97 liberty wagon as a hack car. 360000 on the clock. Cheap to run and very reliable.

Cars are my vice. Took delivery of a 55k golf last year and just spent another 2k modifying it...
Click to expand...

Good to hear you have had a good run with yours so far.
 
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