When should I buy my first car?

Hi all,

I've never owned a car. Relied heavily on public transport, mum and dad's old car (for 3 years) and the bicycle. But unfortunately, being the young gen y male, I love my cars and want to be able to attain what I want which is a V2/VZ Holden Monaro (currently varies $30k-45k depending on the model). In reality if I was forced to buy a car tommorow though it'd be some $5k econobox japanese sedan.

In terms of "debt", I've just purchased my first IP and have a small margin loan to service at the moment. My aims over the next few years is to pump every dollar into my offset account to use as a deposit on my PPOR. I have zero credit card debt.

But I realised, if I keep to this track, I won't get my car until say I've paid off my PPOR. So thus it would take me ages! (10 years? 15 years?) Because after my PPOR, I'd want to buy my 2nd IP, then the 3rd and the list goes on...

Could I still buy my dream car even whilst investing in property? I'd like to do it without taking out a loan and paying interest on it.

When did you put aside reason/logic and take the plunge and buy the car you wanted? (please note, I intend to buy my car with cash and not take out a loan).

The solutions to this problem I've thought of:
a) Increase my income/cashflow.
b) Take a brief break from property/shares Investment but miss out on potential gains?

Sorry, but as your typical GenY, I can't help but tickle the thought of getting my first dream car as soon as possible.
 
If you can get by without a car, do it.
The price of fuel is going crazy, it is going to get worse.Add insurance, registration, maintenace etc and it starting to add up.
If you must get a car, buy the most reliable for the cheapest amount of money. Never buy new!!!
 
Ditto what Kathryn said.

We got our first "new" car (actually a demo model driven by the sales manager for a couple of months with a few thousand on the clock - hence several thousand off the new price) when I was about 43 years old. Until then, we drove a two door Corolla until we had to get baby seats inside.

Upgraded to a Corona wagon, until it got to the stage of not being worth the repair bills. Next another bigger "flasher" Corona wagon. Next a crappy Mitsubishi wagon (bought a lemon :mad:) and finally our Nimbus.

First Corolla the heater was on all the time, which was fun in Summer. And if we had to reverse, we had to sit for sometimes half a minute until the motor would go forwards again, which got a bit tricky in traffic :eek:. Lucky it had corner windows to deflect the hot air a bit. First time we got air-con was the third car..... pure luxury!! (Now we are really lording it up because we have electric windows and side mirrors AND air-con :D.)

Cars have never been that important to us. They are big lumps of metal with wheels to get you around. Don't get sucked in trying to show your value by the car you drive.

My 19 year old son occasionally uses our car, but doesn't need one. I have told him to put off buying one until he absolutely cannot do without one. It would cost him $2400 per annum to insure it, plus registration, plus fuel. It would put him back years if he got one now, when he goes to uni and work by bus and just doesn't need one yet.

I actually used to quite enjoy that we owned IPs but people would possibly look at our car and think we had nothing :D.

Hire a Monaro for a weekend every now and then and get your feed that way. Save your dollars until you can afford it. If you need a car, get a cheap but reliable and safe one and check your ego at the door ;).

Good luck.
 
I love my cars and want to be able to attain what I want which is a V2/VZ Holden Monaro (currently varies $30k-45k depending on the model). In reality if I was forced to buy a car tommorow though it'd be some $5k econobox japanese sedan.

Look I understand. I bought the hot car then my PPOR then IP1. Its not a car per se that is the problem (I am pretty certain 95% of the investors on the forum own some sort of car) its what type of car and what you do with it. As a result I am driving around a 4 year old Jap sports car with a broken tail light and a somewhat crushed front quarter panel because the 2k it would cost to repair is better spent invested. And I wont be modding it anymore or trading it in for a new model - I intend to keep it for at least 10 more years.

I have completely pulled out of club level motorsport because it is just a massive money sink. Broken gearbox, shattered front diff... I am content to wait until my 40s or 50s and then I can have a really good bash at Targa Tasmania with a properly funded effort - numerous times.

In your case I think its a matter of getting something reasonable now secure in the knowledge that you will be able to have whatever the hell you want 20 years from now. Delayed gratification is a $#(*&U$ isnt it?
 
why not pick youre self up and old secondhand commodore if you spend enough time looking you can pick youre self up a damn sweet commodore for 10-20 grand why by some new flash bomb?
 
I got a Commodore Wagon you can have for $5K. Will last forever and do anything you want it to do.

Cheers,
 
I think that some of us can survive driving any old thing (with air con and power steering being the minimum for me).....then there are others who really yearn for the "nice" car.

I've found that those people I have know who yearn for decent wheels, never get it out of their system and they just end up factoring a decent car into their expenses. It's a lifestyle choice thing. I can live without it, you might not be able to.

....I might have other expensive habits :rolleyes:
 
hi beekay,

i remember being young with a HSV lol (damn, that thing depreciated fast!)

if you have a reasonable job have a chat to your boss, payroll manager and accountant (and check the recent Budget changes). you MAY (I stress MAY) be able to package the lease of a car and salary sacrifice it. this means you are not committing a lump sum of savings to it, AND you can get rid of it easily once the thrills with your mates disappear or you need the extra money.

my suggestion assumes that you ARE going to get the car anyway - if you want to be talked out of it listen to the others here instead :)
 
Just remembered a few years ago, a friend's brother works for HSV and he said they don't hold their value, and he would never buy one. That is obviously his opinion, but he does work there.
 
you couldn't have picked a faster depreciating asset than a) a car and b) a holden/ford.

do you REALLY need it? you sound like you're a smart person with your money. why not pick up a worked small car and save on running costs and intial outlay. then when you're 35 and your friends are tied down with kids and mortgages and the same commodore, you'll be on your tenth property and have buy whatever car you want.
 
Sorry, but as your typical GenY, I can't help but tickle the thought of getting my first dream car as soon as possible.

Hey BK, forget the dream car - leave it as just that, a dream. I too am a genY'er but I have been driving around in a 12 year old falcon on gas for the last few years - cheap to run and doesn't depreciate much. This has left me with much more spare cash to invest with. I could now buy the new car that I always thought about getting when I could afford it (with cash), but I decided to still buy a 6 year old car when I chose to upgrade recently. It still feels like luxury compared to the old one!:)
 
Q: When should I buy my first car?
A: When you have saved the cash to pay for it

If you follow that advice then you will avoid the biggest financial mistake young people make.
 
the trouble with life is that when you can afford any car that you want you will be too old to care or look like a pratt driving it, so it's all about balance.
 
Thanks for the responses guys, my intentions are not to even buy a Monaro anytime soon. I've got too many investment loans to service =(. I'd prefer to be financially free in a shorter period of time and buying the car will only delay this.

I'd just wanted to get an idea if anyone stopped briefly or purchased a vehicle whilst they were building their wealth. Or if they hit their investment target of being fincially free and taking the plunge!
 
beekay you will find an argument either way to support yuour actions. Personally I believe in negotiating hard on a brand new mid level car every 3 years, i find the cost negligible in the scheme of things plus i like new cars. others see it as a cardinal sin, for me $4-6k a year to drive a headache free new car is well worth it.
 
I'd just wanted to get an idea if anyone stopped briefly or purchased a vehicle whilst they were building their wealth. Or if they hit their investment target of being fincially free and taking the plunge!

not stopped specifically to buy a car - i have picked up an 05 TD pathfinder on 80% business use - so i get to claim most of it's expenses.

you can have a new car and invest - no-one is saying you can't, but structure the finance right from go.
 
beekay you will find an argument either way to support yuour actions. Personally I believe in negotiating hard on a brand new mid level car every 3 years, i find the cost negligible in the scheme of things plus i like new cars. others see it as a cardinal sin, for me $4-6k a year to drive a headache free new car is well worth it.

I'm not in a position to buy a $35-40k car, hence I'm still dreaming.

Now that I have my 1st IP, the next few years will be dedicated into reducing the interest to a level where I'm comfortable and start the hunt for my PPOR. When i get my PPOR, I'll be aiming to pay it off or turn it into a 2nd IP and rent somewhere else (and pay it off).

So until I have my PPOR my first choice car will be a $5k Japanese econobox or a VY/VZ/BA/BF Falcore (because by the time I can afford them they will be cheap as chips).

However with my work situation I've looked at novated leasing, however my salary isn't high enough yet for it to be tax effective. Plus my job doesn't require to me travel... yet so there's no requirement for my boss to negotiate a vehicle for me. =(
 
forget about the new car.. you get sick of it in 6 months time, but it will set you back years in investing.

buy it when you reach a reasonable level in your investment path.

Calculate the REAL cost of buying the car. ie funnel the money into a investment and calculate the return in 10 years time compounded.. then ask your self, is the new car worth the opportunity cost?
 
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