Why cant I buy a new car?

[VYBerlinaV8]

Modern cars are MUCH safer than older cars, regardless of the number of airbags. Construction and dynamic ability have come a long way in the last 10 years. The reality is that there is always the risk of serious injury or death in an accident, and how you drive has a lot more to do with having an accident than how general traffic behaves (although anyone can be truly unlucky). For what it's worth, I've had 2 major accidents (no, not my fault) in very small cars, and walked away uninjured from both.

Nowadays I tend to buy cars based on need (although the V8 will be around for a while because I like it). I firmly believe that we should view car purchases similarly to how we view investment property - focus on facts, numbers and outcomes, not hype and advertising.

 

[wylie]

I was told by someone who was in the car industry that 4WDs are not as safe as a sedan, their chassis is more like a ladder than a solid plate (or something like that) with more stress points, hence more chance of failure in a crash.

I was also told quite a few years ago that 4WDs do not have to pass the stringent crumple tests and other tests that sedans have to pass.

However, I also was given the advice by a chap at the RACQ when I phoned to ask about what cars were the safest that HE drove a 4WD because of their size, weight and height and that in an accident, the sedan will come off second best if it us up against 4WDs. I'm talking the huge tractors here, not the small sedan size 4WD.

Wylie

 

[Ausprop]

I think you have to break it down... you are more likely to have a crash in a large 4WD becuase they are bigger, their centre of gravity is higher etc. However if you had to have a crash and it was just a simple collision that didn't onvolve rolling then I believe mass is the key factor there. But then I am no engineer either.

Probably need to look at where you are likely to crash e.g local shopping centre - then go for a huge 4WD, rolling on country road - stick to a sedan, head on on the highway... not sure, large 4WD?

 

[BayView]

Everyone agrees that to buy a new car is not financially smart. Anyone who doesn't; re-read finance 101.
Of course; you can still do it if you want, but the trade-off is future wealth. I know which I prefer.
I like to drive a decent car, but will never buy a new one again.
I believe the smarter thing to do is buy a 1-2 (or ever 3-5) year old version of the new one and let someone else pay all the depreciation before you get it. Even a 10 year old Merc still looks great!
The 2 year old version of most modern cars is quite often mechanically and visually as good as the brand new one, still under warranty and 2/3rds the price (or less).

 

[Spectre]

W2BW

End of the day you have to do what is right for you. All a car is is a tool, to get from a to b...
I saw a guy named Ricardo Semler speak a while ago (google him). He said (along the lines) of
'when Henry Ford built the first car on an assembly line, it had 4 wheels, steering wheel, 4 seats, chassis and the average speed was about 13k p/h. Since then... what 100 years later, the transmission has changed and so has the technology but the car is still basically the same, and you havent seen great innovations like being able to parallel park without not really knowing where you are going to end up (with the exception of maybe now having parking sensors)... and the average speed of cars in London is 16 kph'

So theres a question of what has really changed inbetween new and old besides cosmetics.

But, for me right now, new cars are the way to go but its due to work and being able to claim things like milage, depr, repayments etc all back. If I couldnt do that then it would be a used car everyday for the reasons outlined previously.

I figure long term there is ideology of how can people afford a house due to rising prices and so on but lenders and mortgage insurers are always coming out with new products. If they didnt they'd be stale so they have to change with the markets they are in, or they get taken over by the lender who innovates. In saying that people have to change what they will and wont accept.

End of the day someone somewhere can get you the money, its just a question of what price you are willing to pay either now or later.

 

[tremolo]

W2BW

All a car is is a tool, to get from a to b...

To many, yes. To some (including me), nothing could be further from the truth.

It depends how much you want it and how much you're willing to sacrifice. I have to say it kind of gets on my nerves people saying "oh don't spend money on a car, you'll never get your money back, they depreciate, blah blah". If you stretch that far enough you could argue that you should only eat 2 meals a day because breakfast is a bad investment. There a some things that provide enormous pleasure to some people, and while they may not get their money back that doesn't mean it's poor value.

 

[Simon]

To many, yes. To some (including me), nothing could be further from the truth.

It depends how much you want it and how much you're willing to sacrifice. I have to say it kind of gets on my nerves people saying "oh don't spend money on a car, you'll never get your money back, they depreciate, blah blah". If you stretch that far enough you could argue that you should only eat 2 meals a day because breakfast is a bad investment. There a some things that provide enormous pleasure to some people, and while they may not get their money back that doesn't mean it's poor value.

I quite agree. But there is a time in your life where it makes less sense.

Met a lady who told me she encouraged her daughter to buy a brand new car on credit a month into her first job at 19. Her reasoning? You are only young once and you might never get the joy of a brand new car again.

I am guessing that with her Mum's financial acumen that may well be true.

 

[wish-ga]

You CAN buy a new car..... but you can only spend your money once.... so you may have to put some other financial plans on hold if you buy the new car... But if it is your dream and you are okay with other stuff on the back burner then go for it.

If, on the other hand, the desire to achieve the financial goals wins out then don't get the car.


Simple equation......... which is gonna feel better for longer.
New car now. financial goals later
OR
Financial goals stay the focus short/mid term.....but no new car for a while

Enjoy whatever it is you decide to drive.

 

[FrankGrimes]

Find a balance - Don't get something thats too old and will simply cost you money in maintenance. But don't get something thats so expensive you need to take out a non-deductable loan to buy it.

The $4000-$15000 price range will get you something pretty good that is less than 5 years old. Auctions are a great suggestion. You can pickup something pretty new for a good price.

I recently bought a 93 Pulsar in immaculate condition. It isn't my dream car, of course not. But I'm very much looking forward to getting my BMW M3 when I can afford it....

- Paid cash for it (it was about 2 weeks salary)
- Cost to run - Very little

 

[Sailesh Channan]

If you are starting out your main priority should be building or starting a portfolio after several properties you start to feel secure. This is when you can start indulging in cars and holidays.

When I was young and silly the only loans I had where personal loans on cars. I virtually worked to pay my loans and rent. The car was a bad investment but that was all I knew at the time. If I had known better I would have benefited from the late 80's boom and be in a much better position today.

However, I finally managed to turn my life around with several IP's and drive cars that I could only dream about back then. As my cars are owned by my business I can justify getting a new vehicle. After deductions my Mazda RX8 probably costs less than what a average Commodore would cost to own without deductions....my way of rationalising my indulgence.

Note on safety: after attending a Murcotts driving course a few years back I was surprised by the importance of safety aids such as ABS, airbags and dynamic stability control. In normal day to day driving you may never need these safety devices however, in an emergency it can make a huge difference. So, those who can afford a new car should get as many passive safety devices as you can afford.

 

[gooram]

Yes, I need a family type of car to carry all my guitar gear around, Ive got quadboxes [fits in most boots except for some smaller cars] amp heads, guitars and effects, sometimes even small PA systems and things.

Up here, we have to travel long distances sometimes and we have "the wet season" which lasts 6 months with rain almost evey day, travelling long distances at high speeds on a scooter? I feel much safer in a car.

So I do need a sedan or wagon,
I dont need a new car but I want something that I wont need to upgrade for a while and something thats going to be reliable and not have to replace much, if anything.

I can recommend a new Subaru Liberty wagon 3.0RB... you will NOT regret that purchase!

 

[want2bewealthy]

If you are starting out your main priority should be building or starting a portfolio after several properties you start to feel secure. This is when you can start indulging in cars and holidays.

When I was young and silly the only loans I had where personal loans on cars. I virtually worked to pay my loans and rent. The car was a bad investment but that was all I knew at the time. If I had known better I would have benefited from the late 80's boom and be in a much better position today.

However, I finally managed to turn my life around with several IP's and drive cars that I could only dream about back then. As my cars are owned by my business I can justify getting a new vehicle. After deductions my Mazda RX8 probably costs less than what a average Commodore would cost to own without deductions....my way of rationalising my indulgence.

Note on safety: after attending a Murcotts driving course a few years back I was surprised by the importance of safety aids such as ABS, airbags and dynamic stability control. In normal day to day driving you may never need these safety devices however, in an emergency it can make a huge difference. So, those who can afford a new car should get as many passive safety devices as you can afford.

Great post, I think Ive made my descision now,
I DO want to build wealth now, the car can wait, I just checked out my 2nd IP payment on my statement this afternoon and see that Ive already knocked off $75.00 per month from my total repayments! this adds up and will only keep on dropping the more I put into my offset account, then I can try and service another loan ;] cant wait.

 

[eggnog]

To many, yes. To some (including me), nothing could be further from the truth.

It depends how much you want it and how much you're willing to sacrifice. I have to say it kind of gets on my nerves people saying "oh don't spend money on a car, you'll never get your money back, they depreciate, blah blah". If you stretch that far enough you could argue that you should only eat 2 meals a day because breakfast is a bad investment. There a some things that provide enormous pleasure to some people, and while they may not get their money back that doesn't mean it's poor value.

funny that, I don't have a car and dont plan to buy one and I actually also skip breakfast

 

[eggnog]

W2BW, i'm with you all the way. Grow portfolio first then buy car later.

I've got my eyes set on this one before i'm 30 (fingers crossed )

went recently and had a look in brisbane show room and looks even nicer in person

 

[want2bewealthy]

Thanks for re-inforcing my descision cashflow, that car sure looks nice

 

[BoatBoy]

W2BW, i'm with you all the way. Grow portfolio first then buy car later.

I've got my eyes set on this one before i'm 30 (fingers crossed )



went recently and had a look in brisbane show room and looks even nicer in person

After seeing how much cars are expected to depreciate over the next few years on ACA or TT tonight, you'll be able to get it for a carton of beer in a few years.

Dave

 

[Twitch]

Here's one car that will not depreciate at all over the next 5, 10 or 20 years. The entry cost is a bit high though

 

[tremolo]

There's one for sale in Adelaide - yours for $850k.

 

[The Y-man]

If I was looking for a new runabout (and for the occasional trip), I would be checking out the Hyundai Getz, Toyota Yaris, Holden Barina and Suzuki Swift. If you are happy with small wheels, all of these work well.

Go the Yaris or Swift. They are more expensive but safer in a prang than the other 2. Also consider a Mazda2.

Cheers,

The Y-man

 

[VYBerlinaV8]

Good point. The new Mazda 2 is a cracker of a small car.