Buying a car - how much to spend?

[investor2009]

You know, I was thinking the other night: With all these newer cars such as the hybrid Prius, we are going to reach a point in the future where only the big (ie Toyota, Ford) service centres will be around. Unless the average corner mechanic has the propper test equipment these big-wigs are gonna rule the roost. They already do with the newer warranty vehicles but the joys of older cars is that you can either DIY or take them anywhere. Which average mechanic do you know who can fix a Prius in the same amount of time the service centre can? Thats a scary thought.

Newer cars cost lots, cost lots to service but offer warranty for 3 or so years

Older cars have no warranty (even a s/h Sentinel car warranty isn't worth the paper they're printed on IMO..) and can go at any time. Except YOU can fix it for a fraction of the cost anyone else will charge you if you know how.

CONCLUSION: If the car is not paid for by someone else they suck!

 

[Ocean Architect]

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

Not true, thankyouverymuch I bought a 98 corolla a few years ago for $1100, put a new engine in it for $800, stereo for $250, used it for 4 years, sold it for $5000, then bought a hiace van with new motor for $2500, had it painted for $1100, and it's presently worth about $10 000.

Anyway, before my head gets too big and explodes raining massive chunks of mega tightwad grey matter all over the SS forum, my suggestion is to make friends with people who work in finance companies that repossess cars. A couple of my relatives do this sort of thing, and leapfrog from newish car to newish car every couple of years, either breaking even or making money selling the older one privately.

 

[Aaron_C]

Cars are great if you are running a profitable business. With a chattel mortgage you get all the GST back from day 1, you can claim deductions for the car's depreciation (up to the luxury car limit of ~$65,000), claim the interest repayments, petrol etc. For a PAYG worker buying an expensive car is a very bad financial decision.

 

[buster]

Its nonsense to say no-body made ever made money buying a car. Try telling that to somebody who bought cars like Holden A9X Toranas or monaros. XY falcons. Could be bought in the 70s and 80s for a couple of thousand now worth 100s of thousands. Even HR or HQ holdens are worth more now .

 

[Indifference]

Its nonsense to say no-body made ever made money buying a car. Try telling that to somebody who bought cars like Holden A9X Toranas or monaros. XY falcons. Could be bought in the 70s and 80s for a couple of thousand now worth 100s of thousands. Even HR or HQ holdens are worth more now .

Every stereotype has its exceptions. Additionally, everyone one of the exceptions is not as "clear cut" as assertions would imply.

Take the A9X Torana (circa 1977-79) for example. Sure, it unknowingly (at the time of release) proved to be a profitable venture for the select few that realized the potential. But just how profitable? At the time it cost ~$12500 which in todays currency is ~$???????......

Assuming 3% inflation (ie. depreciation of currency per annum) then that ~$12500 circa 1977 would be ~$35173 in 2012 dollar terms. If you want to be more of a realist in real purchasing power and inflation terms, you might want to consider say, 6% inflation....... your new current value would be ~$96076. Now this does not count 35 yrs of insurance, storage, servicing & any other associated costs. Perhaps $100K is a fair price after all !!! Very few cars fetch multiples of this figure, but they do exist.

SO, your "investment" or "profit" may not be as lucrative as first thought.

Sure, people make money from buying and selling cars. There is a whole industry based upon it...... but the average punter tends to view the past with rose coloured glasses and often forgets (deliberately or otherwise) about all those expenses along the way and the fact that $12500 in 1977 meant a great deal more than it does in 2012.

BTW, the formula for my figures: FV = P (1 + r)^Y
where,
FV = Future Value
r = rate (inflation as %)
Y = # years

And, I didn't even deduct the potential investment gain from the original $12500 over the 35 yrs which would diminish the "profit" even further.

You might also like to run a similar calculation as that above on the HR & HQ Holdens you mention.... you might be surprised or even shocked at the result!

Happy Motoring

 

[Ideo]

Don't do the same sums on property then. You might find our water tight investments that we only bought for x amount 30 years ago aren't quite as good an investment as we though

 

[Indifference]

Don't do the same sums on property then. You might find our water tight investments that we only bought for x amount 30 years ago aren't quite as good an investment as we though

That is exactly WHY one should do the same to IPs.... it just might bring about the realization that cash flow has a bigger role than it is often granted. Sure, CG is great, but just how much CG is really CG???

 

[Ideo]

That is exactly WHY one should do the same to IPs.... it just might bring about the realization that cash flow has a bigger role than it is often granted. Sure, CG is great, but just how much CG is really CG???

True - and I agree with you.

It just might annoy a few people once they start doing the real calculations about how much money they appear to have made...

 

[Alex P Keaton]

What is a good sportswagon

I'm going to eventually get a sportswagon when I have replace my car. I'm thinking a Hyundai i30 wagon. A 1 or 2 year old for about $15 - $20 K. I want a wagon so I can fit my bike in the back.

What do you think a is good wagon?

 

[Jake D]

What do you think a is good wagon?

Ford Falcon that someone has already converted to gas. We can fit two prams in the back without folding them down, and still have room for other cargo.

 

[VYBerlinaV8]

That is exactly WHY one should do the same to IPs.... it just might bring about the realization that cash flow has a bigger role than it is often granted. Sure, CG is great, but just how much CG is really CG???

y...y...y...YIELD!!

(Excuse me)

 

[BayView]

What do you think a is good wagon?

The Toyota "Shaggin" .

We recently traded in the SSangyong Musso after 12 years on an '09 Toyota Kluger Altitude AWD.

The Musso was leaking oil like a sieve, but still going well, but we needed more room.

I am very impressed with how the Kluger feels; like a normal car to drive and handles very well.

Not so flash on the fuel, but not too concerned.

Loads of room, 7 seats but doesn't look like a soccer mom van, and the all-important built-in dvd player.

 

[Alex P Keaton]

Only problem is if I get a 1 or 2 year old car it's gonna put my investing on hold for quite a while as I can't afford to do both! Maybe when it's time to buy I should just get a $5,000 car and cross my fingers it'll be ok

 

[Edmond Dantes]

... Maybe when it's time to buy I should just get a $5,000 car and cross my fingers it'll be ok

In 2 years time you'll be looking to buy another one. I had the same situation, with the difference i've got kids. I ended up buying a decent car, safety another reason as well. It delayed my investments for couple ofyears, but what can you do..

 

[Alex P Keaton]

In 2 years time you'll be looking to buy another one. I had the same situation, with the difference i've got kids. I ended up buying a decent car, safety another reason as well. It delayed my investments for couple of years, but what can you do..

Yeah thats true! The other thing is if i do buy a 1 or 2 year old car how do I know the owner hasn't treated it badly. I mean I know you can get an RAC check done on it but that doesnt show up everything.

Maybe I could do what I did with my hyundai and buy brand new and just hold onto it for 15 - 20 years. It would set me back about 5 years in my investing but I guess it cant really be helped. Even if I didnt have to buy a car i'm not really in the position to be able to afford a 3rd property anyhow. I think it can be a sensible approach to take if you buy brand new as long as you hold it for a long time and dont upgrade every few years like some people.

 

[Alex P Keaton]

I like the look of the hyundai sportswagon over the holden and the toyota wagon. Its also cheaper and not so huge looking. The hyundai has enough space to fit my bike in which i'm happy about.

 

[BayView]

I like the look of the hyundai sportswagon over the holden and the toyota wagon. Its also cheaper and not so huge looking. The hyundai has enough space to fit my bike in which i'm happy about.

We get loads of Hyundai's in the workshop for services. Pretty good for the most part I reckon.

I've owned two myself an Excel and then an Accent (both low-end models for commuting at that time) and both were excellent value for money.

I reckon an ex-demo or 2 year old one if available from a dealer would be safe enough.