Why cant I buy a new car?

[want2bewealthy]

Whats wrong with me!??

Im wanting to buy another IP with the money I have put away and reach financial freedom faster [dont want to buy in another year or two because prices will have inflated and I'll be paying much more]

I need a new car but cant bear to buy a depreciating asset, does anyone else feel the same way?

Can somebody talk me into it...

 

[steveadl]

LOL I think you're posting on the wrong site. You want www.autosalon.com.au

I've been the same way though W2BW, I've had the same crappy Daewoo for the last 5yrs or so now which I bought off my parents. Not very stylish, and it's automatic which I hate! But it's still relatively healthy, and even though the urge for a nice car hits me every few months, so far I have resisted as I know it's a waste of money at this early point in my investing life.

Console yourself with the fact that in 10yrs you'll be able to get whatever car you like, but by that time, you probably won't want it anymore. Until then, if you actually need another car (ie. you other one is gone), maybe buy a reliable 2nd hand one (but not a sexy one, as these cost too much )!

 

[dave99]

I agree, it is hard after paying down the mortgage bit by bit over several years, to blow the whole amount you've paid down in one day on a car!

Perhaps you could buy 2-3 years old used? You will save 30-40% that way and with most good car makers it will be "as new".

-dave99

 

[Harris]

Whats wrong with me!??

Im wanting to buy another IP with the money I have put away and reach financial freedom faster [dont want to buy in another year or two because prices will have inflated and I'll be paying much more]

I need a new car but cant bear to buy a depreciating asset, does anyone else feel the same way?

Can somebody talk me into it...

Find out a way to do both

If you tried hard enough, you may find enough capacity to buy the IP as well as the car you want.

I love buying IP's as agressively as I can however would 'nt sacrifice my lifestyle too much to keep on buying IP's.

Life is too short and unfortunately I cant take all I am making to my grave

 

[Simon]

http://www.somersoft.com/forums/showthread.php?t=24892&highlight=monster

My experience of buying a new car and the financial effect this had on my investing is detailed here.

With hindsight I wouldn't do it again unless my job required a late model car - even then I would buy an ex govt one from an auction rather than a brand new one.

Cheers,

 

[want2bewealthy]

Im starting to look at it this way,
I will need to spend about $1000 on my present "95" Commodore soon, brake discs need machining, pads are very low, tyres need a rotation, engine mounts need to be replaced, plus.. I towed the car [automatic] 300km without disconnecting the drive shaft now it makes strange noises in the gearbox when you push it hard.

If I sold it now, I could get around $4000 for it [it has sports brakes, lowered, new paint job, trans cooler, new air intake upgrade, sports wheel and C/D player, aircon, then that $1000 I saved on repairs plus the sale price could go towards a new [3 year old] car.

Or, I could pay for the repairs and let it depreciate to nothing, meaning, I still have to buy a new one someday.

 

[Les]

G'day W2BW,

I need a new car but cant bear to buy a depreciating asset

I'm with the others. Maybe your request should read "I need a NEWER car" - that way, the depreciation won't hammer you like it would with a NEW car.

And (as I'm sure you know, but I include for newer readers) any loans you take for a car will diminish the amount that most lenders will then offer for your next IP loan. So, by keeping the cost of the car lower, you allow the IP purchase sooner.

If you really NEED another car, (i.e. the current one is forever breaking down, or is falling apart) then I'd reckon it might be false economy to persist with the current one. When it's time, IT'S TIME.

FWIW, I particularly like "one owner" vehicles which have been owned by a person in their 70's plus. Often very low KM's, in "as new" condition, and very inexpensive by todays standard. (Common scenario: Person retires, gets payout, and buys a brand-new car that will "see them out" - then, down the track, they need to sell a 10+ year old car in top condition as they have found they just can't drive any more - or their estate sells it).

What would you prefer, W2BW? A brand new car for maybe $30k? Or a "like new" 10 year old car for maybe $6k to $8k?

It's a personal question, and I don't need an answer. Just laying it out there as an option.

Regards,

 

[Ausprop]

I'll go against the grain... if you shop hard for a new car (find a mate that gets good fleet deals, or use 'private fleet' or similar) I believe that you are better off buyign new. I could never be bothered with a second hand car again. But dont let me talk you into it - I need those who buy the argument that 2nd hand cars are great value in order to prop up the extremely high residuals that you get in this country - unlike any you will find in the likes of the UK, USA etc. The key is, buy it cheap as poss new, claim as much as you can on tax, flick it off for as much as you can, of course with bald tyres, rego up, major service due! Show people the RRP of the car and tell them you are bleeding. Be selective in your models too... I know my 200SX I got somehting like 75% residual after 3 years (against what I paid for it anyway).

 

[want2bewealthy]

I do know someone who buys a new car every three years, after the free scheduled servicing and warranty runs out, I do like the idea because that means you never have to pay for anything but petrol and you lose minimal money buying every three years.

 

[poyner]

I do know someone who buys a new car every three years, after the free scheduled servicing and warranty runs out, I do like the idea because that means you never have to pay for anything but petrol and you lose minimal money buying every three years.

I know a number of people who use this strategy with salary sacrificing. Some people absolutely claim by it that they'll be better in the long run.

 

[ems]

WOW what a great thread Simon.

Just finished reading and agree with everything said. Have to admit that we've had bad debt in the past but that's all gone now. Good debt all the way for us now!

This forum is great!

Cheers

Ems

 

[geoffw]

It's easy to buy near new cars- cars which were bought on a novated lease and which are being upgraded by the owners to a brand new car after 2-3 years or 30,000 - 40,000 km. I consider those to be excellent value as against new cars.

 

[phil]

G'day mate,

I bought a 5 yr old falcon last year. My reasoning was that they are relatively cheap to buy and maintain. I wasn't expecting the fuel costs to have such a impact though.

Most mornings I see people riding scooters to work now and wish that instead of this petrol guzzling machine I had bought a scooter. I was going to say I wished to feel the wind in my hair, but since I am almost bald now, I would be content to save a few dollars on petrol.

My advice would be join the revolution mate. Get rid of the urban stead and buy a scooter.

 

[sue78]

Find a way to buy both.

Shop around, get quotes and get them to beat each other, always check if there are demos or you can save 000's by buying last years model or around oct/nov towards end of year.

My car is almost 2 years old now and I can sell it for the same or a bit more than I paid for it right now.

With my previous car, bought it, drove it for 1 yr and sold it for the same price I paid for it.

I think ppl don't realize just how cheap cars are in Oz compared to other countries like Singapore, Malaysia where they charge sales tax on foreign cars. In Korea, most normal ppl can only afford korean cars.

For example a BMW 3 series is around $50k here but over AUD$100k in Malaysia.

Though if I had to finance the purchase I would choose something affordable and below my means.

Invest in IP first until you are at a level where you can afford a car with no personal finance.

 

[lowb]

How many people would be in your car normally? If 1-2, a small car would be more fuel efficient and it is also easier to park.

Good luck

 

[alexlee]

Im wanting to buy another IP with the money I have put away and reach financial freedom faster [dont want to buy in another year or two because prices will have inflated and I'll be paying much more]

I need a new car but cant bear to buy a depreciating asset, does anyone else feel the same way?

It's called actually thinking about the financial consequences of your actions. A rare skill that most people never learn. Congratulate yourself for learning it so young.

I'd advise buying a cheap car that retains a decent amount of value. Get a small one that has a good warranty, maybe a second hand car that's 2-3 years old? Most care depreciate fastest in the first couple of years so if you buy one that's a couple of years old, you would have avoided most of it.

Other than that, I can only tell you to keep at it. At your age, because of how your peers think, you're going to feel very isolated thinking about money and investments. I can honestly tell you (having gone through that myself, and being 30 now) it's WORTH it.

From your late 20s onwards everyone is going to be complaining about how hard it is to pay for a mortgage, have kids, schooling, etc. The memories of fast cars and drunken nights will be forgotten in the sobering reality of PPOR mortgages, one spouse not working for a time because of kids and worry about how you can afford to raise the kids, pay the mortgage and eat at the same time.

Meanwhile, you're going to be have a LOT more choices because you've been diligently building your wealth. The 'I want to do this while I'm young' thing only lasts about 10 years for most people. Often they then spend the next 50+ years in constant financial worry. I'd rather cut down the revelry in my 20s and not have to worry for the rest of my life.

Incidentally, talking about property at 20 makes you a boring geek. Saying you own a kicky investment portfolio at 30 makes you VERY popular, not least when you're trying to attract women. (Not saying women go for money only, of course, but financial stability is a MUCH more important trait starting from your mid-late 20s when it comes to relationships. Many of my female friends say they're worried about their financial future, even though they think their partners are great in terms of personality.)

Don't cave in to the judgements of your peers now. If you have to, think about their opinions in the future. You're only young once, but there's a VERY long road after that.
Alex

 

[Harris]

great post Alex

well articulated


Harris

It's called actually thinking about the financial consequences of your actions. A rare skill that most people never learn. Congratulate yourself for learning it so young.

I'd advise buying a cheap car that retains a decent amount of value. Get a small one that has a good warranty, maybe a second hand car that's 2-3 years old? Most care depreciate fastest in the first couple of years so if you buy one that's a couple of years old, you would have avoided most of it.

Other than that, I can only tell you to keep at it. At your age, because of how your peers think, you're going to feel very isolated thinking about money and investments. I can honestly tell you (having gone through that myself, and being 30 now) it's WORTH it.

From your late 20s onwards everyone is going to be complaining about how hard it is to pay for a mortgage, have kids, schooling, etc. The memories of fast cars and drunken nights will be forgotten in the sobering reality of PPOR mortgages, one spouse not working for a time because of kids and worry about how you can afford to raise the kids, pay the mortgage and eat at the same time.

Meanwhile, you're going to be have a LOT more choices because you've been diligently building your wealth. The 'I want to do this while I'm young' thing only lasts about 10 years for most people. Often they then spend the next 50+ years in constant financial worry. I'd rather cut down the revelry in my 20s and not have to worry for the rest of my life.

Incidentally, talking about property at 20 makes you a boring geek. Saying you own a kicky investment portfolio at 30 makes you VERY popular, not least when you're trying to attract women. (Not saying women go for money only, of course, but financial stability is a MUCH more important trait starting from your mid-late 20s when it comes to relationships. Many of my female friends say they're worried about their financial future, even though they think their partners are great in terms of personality.)

Don't cave into the judgements of your peers now: think about their opinions in the future.
Alex

 

[our obsession]

We actually have both, (new vehicle and IP's).

We live in a relatively rural and isolated area, any facilities or services are (at basic minimum) an hour round trip, more specialised and varied, five hours.

Roads are reasonable but not all sealed and prone to weather damage.

We have a great passion and hobby in horses, (we made a conscious decision to retain that hobby before we started investing in property), so our requirements were for a new, reliable and appropiate for weather/road conditions, and able to tow a horse float.

We bought a new 4 wheel drive, (Pajero)...which is fantastic, and I believe translates? into w*nker in a variant of Spanish slang

Maybe the trade off is our house, we only pay $20 p/week rent? Maybe we should dump the horse thing? But we are happy with our lot, doing what we choose to do, and yes, it is at a chewy price to our investing, but not stopping us investing...our horse thing at any given time can bring in an income, (and does)..not always a guarantee of course, but what in this life is guaranteed?

Our bottom line is we can accumulate IP's (and do), plus lead the lifestyle of our dreams and pursue an interest we love and enjoy...it is a great life.

Just another spin on cars, vs new and nearly new and used prolific and none

Your (informed) decision...as always..best to you.

 

[buzzlightyear]

When you say you need a new car, does the mean need or want?

 

[Dazz]

Most mornings I see people riding scooters to work now and wish that instead of this petrol guzzling machine I had bought a scooter. I was going to say I wished to feel the wind in my hair, but since I am almost bald now, I would be content to save a few dollars on petrol.

My advice would be join the revolution mate. Get rid of the urban stead and buy a scooter.

I agree Phil. Well said. I'm one of those commuting to work on a scooter every day.....a small inconsequential postie bike actually. Fuel cost is $ 4 per week.

I can afford a new car, but choose not to....mainly because of the parking nightmares in the city. Being able to sensibly zip through traffic helps as well, no such thing as a traffic jam for me.

Given we have about 280 or 300 days of clear sunshine per year, I'm at a loss as to why this isn't a more popular option. It's getting that way slowly I think by the increasing numbers of commuters I see out and about....but don't know why it hasn't taken a hold quicker.

Probably safety concerns and cheap fuel costs are why most stick with cars. The more people get out of their cages, the safer it'll become, because you become acutely aware how blissfully unaware...or pre-occupied with a range of irrelevant tasks some drivers are when you're out there with nothing between your legs and 2 tonnes of fast moving metal.

Great stuff.

W2BW - have you thought about why new ?? and why a car at all ??