Your opinion on buying a car. Finance/Cash, New/Old, Expensive/Cheap

[chargers 09]

Again this is where people get it wrong. 12% are personal loan rates. Ifyou're paying over $70K for a car, you can get rates in the mid-high 4's. At the highest in the 5's.

Some lenders have had deals in the past at 3.7% if you were a professional.

Whose paying 12% on car loans when you're borrowing $70K?




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[chargers 09]

Can assure you any large successful company doesn't pay for anything in cash also. Particularly cars because they write the depreciation and interest charges off at tax time.


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[chargers 09]

Car loan finance will be a substantially higher interest rate, though.

If you are borrowing $70k @ 12% on a 5 year term then you are paying back about $23.5k in interest over that time. If you take $70k out of equity with an interest rate of 5%, the to pay it back in 5 years will cost you about $14k less in interest. In fact if you paid back half as much each month as required by the 5 year car loan you'd have the $70k paid off in under 10 years having paid less interest.

You are right if you don't have the financial discipline to do this it can be risky, but really car loans and any other high interest finance should be avoided at all costs.

Again this is where people get it wrong. 12% are personal loan rates. Ifyou're paying over $70K for a car, you can get rates in the mid-high 4's. At the highest in the 5's.

Some lenders have had deals in the past at 3.7% if you were a professional.

Whose paying 12% on car loans when you're borrowing $70K?




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[Hamingja]

Financing a car destroys your borrowing capacity if looking to also borrow for a house in the future.

 

[chargers 09]

Financing a car destroys your borrowing capacity if looking to also borrow for a house in the future.

Depends on your income like anything- also gives you borrowing history as well.


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[Hamingja]

Depends on your income like anything- also gives you borrowing history as well.


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If you are single, no kids, median $75k gross income and no liabilities you have a borrowing capacity of $470k.

If you are single, no kids, median $75k gross income and only liability a modest $100p/w car loan you have a borrowing capacity of $405k.

That's an enormous difference if you are trying to get into the property market.

Borrowing history only really matters if it is poor borrowing history.

 

[chargers 09]

If you are single, no kids, median $75k gross income and no liabilities you have a borrowing capacity of $470k.

If you are single, no kids, median $75k gross income and only liability a modest $100p/w car loan you have a borrowing capacity of $405k.

That's an enormous difference if you are trying to get into the property market.

Borrowing history only really matters if it is poor borrowing history.

Of course it will affect your borrowing income- again most of these expensive new cars you see driven around are run through a company not an individual.


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[RolandF1]

I bought new for the first time a few years back because I got sick of buying what I thought was a decent used car only to find nasty surprises from previous owners.

No problems after buying new, don't regret it at all.

 

[Nuggs Bunny]

I don't think the real lunacy is whether you're financing a new car or not, the difference in money spent works out to be a few thousand dollars at the end of a sensible length lease for a reasonably priced new car.

The real lunacy is buying a new car full stop. Never bought one new and never will. I'm a huge car fan but can't justify spending my money like that, would rather spend it wisely and buy a Porsche when I'm 40.

 

[sabre_ac]

The real lunacy is buying a new car full stop. Never bought one new and never will. I'm a huge car fan but can't justify spending my money like that, would rather spend it wisely and buy a Porsche when I'm 40.

Do you mean a second-hand Porsche at 40?

Buying a new car was a bad move for me, but ultimately we all have that extravagant want item that we go a little overboard on.

 

[Nuggs Bunny]

Do you mean a second-hand Porsche at 40?

Buying a new car was a bad move for me, but ultimately we all have that extravagant want item that we go a little overboard on.

If you set some strict savings goals for the long term, find yourself a good returning investment and let the magic of compound interest do its work, you can have any sort of Porsche you want when you're 40. But like you said, we all want different things in life. No point in living if you aren't enjoying yourself after all.

And granted, not everybody is in a position where they can save money that easily and granted there are more necessary things in the world people would save for than a sports car.

 

[Power Raid]

never get car finance; and
never waste money on a car until you have enough to waste

 

[BIRDBRAIN]

One thing to consider is that new expensive cars are a hell a lot safer than older/cheap cars. No point saving money if you're dead knowhatimsayin?

 

[worldcashforcars]

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[Oraaaaazio]

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[Power Raid]

I'm at the age where I can afford to waste money on cars.

However I would urge everyone to avoid car finance and full comprehensive insurance (always have third party property). "If you can't afford to lose it.......you can't afford it".

There is nothing more embarrassing than seeing people get caught up on debt traps being finance, credit cards, insurance, monthly subscriptions like mobiles, pay tv, internet etc etc.

Live within your means until money doesn't mean anything. Work hard, save, set yourself up and then let your hair down and enjoy your wealth.

 

[Lyyynnnchy]

I'm at the age where I can afford to waste money on cars.

However I would urge everyone to avoid car finance and full comprehensive insurance (always have third party property). "If you can't afford to lose it.......you can't afford it".

There is nothing more embarrassing than seeing people get caught up on debt traps being finance, credit cards, insurance, monthly subscriptions like mobiles, pay tv, internet etc etc.

Live within your means until money doesn't mean anything. Work hard, save, set yourself up and then let your hair down and enjoy your wealth.

Not sure I entirely agree with this

Plenty of 0-2% finance offers out there and a lot of people would back themselves to earn better in their own money

Also, it’s very much a different experience spending your money now rather than when you’re older. i’ve lived 5 different cities, been on month long holidays etc all of which have cost me money. But, i’ve don’t things i would’ve have been able or wanted to have done if i experienced them as a much older person

 

[sabre_ac]

Also, it’s very much a different experience spending your money now rather than when you’re older. i’ve lived 5 different cities, been on month long holidays etc all of which have cost me money. But, i’ve don’t things i would’ve have been able or wanted to have done if i experienced them as a much older person

Overall I agree with this sentiment, particularly someone's '20s, this decade you'll never get back. I feel that 30s,40s and 50s are fairly similar in terms of what you can and can't do. Easily bonding with new people and living in the now is very much a 20 something game, a true luxury. I know given the option of first-class travel (5 start resorts) as a 50 something compared to budget airlines and hostels as a 20 something is a no brainer for me, take me back to travelling in my 20s.

That said, few things would be harder than living in poverty at the end of your life, short of handouts of winning the lottery, there isn't a lot you can do to rectify the situation.

 

[Power Raid]

Not sure I entirely agree with this

Plenty of 0-2% finance offers out there and a lot of people would back themselves to earn better in their own money

Also, it’s very much a different experience spending your money now rather than when you’re older. i’ve lived 5 different cities, been on month long holidays etc all of which have cost me money. But, i’ve don’t things i would’ve have been able or wanted to have done if i experienced them as a much older person

travel to me is a wonderful part of living and is worth more than people value education. It is a personal experience that provides so much insight into culture, an opportunity to grow as an individual and become self sufficient outside of your comfort zone.

We all value things different but travel vs being held in bondage by a depreciating asset, a slave to a finance company and having to ensure something you can't afford to buy let alone loose is embarrassing.

I would put expensive mobile phone in the same embarrassing category as cars. Get these things when you can afford it.



I'm quite fortunate that I'm not a car person and drove a suziki ignis when I was on $1m a year. When most of my peers were driving Porche, ferrari and other luxury brands.

One guy I was dealing with was so embarrassed for me, he bought me a BMW. Others guys gave me cars for periods that they didn't use as they weren't practical cars for families:



Sometimes it pays to be a tight arse

 

[Falchoon]

travel to me is a wonderful part of living and is worth more than people value education. It is a personal experience that provides so much insight into culture, an opportunity to grow as an individual and become self sufficient outside of your comfort zone.

We all value things different but travel vs being held in bondage by a depreciating asset, a slave to a finance company and having to ensure something you can't afford to buy let alone loose is embarrassing.

I would put expensive mobile phone in the same embarrassing category as cars. Get these things when you can afford it.



I'm quite fortunate that I'm not a car person and drove a suziki ignis when I was on $1m a year. When most of my peers were driving Porche, ferrari and other luxury brands.

One guy I was dealing with was so embarrassed for me, he bought me a BMW. Others guys gave me cars for periods that they didn't use as they weren't practical cars for families:

View attachment 882074View attachment 882075View attachment 882076

Sometimes it pays to be a tight arse

Everybody has differing levels of embarrassment, I for one would be embarrassed if I couldn't spell lose.

 

[sabre_ac]

travel to me is a wonderful part of living and is worth more than people value education. It is a personal experience that provides so much insight into culture, an opportunity to grow as an individual and become self sufficient outside of your comfort zone.

I tend to agree, though unless you are a natural salesman, you need some kind of technical background to start-out. Gap years + technical training straight out of high school are a good idea. As is working abroad once you have a few years under your belt.

We all value things different but travel vs being held in bondage by a depreciating asset, a slave to a finance company and having to ensure something you can't afford to buy let alone loose is embarrassing.

I would put expensive mobile phone in the same embarrassing category as cars. Get these things when you can afford it.

Some people truly value passing away with as much money as possible above all else, each to their own. For the rest of us, there is always some kind of stupid purchase on the horizon.

Sometimes it pays to be a tight arse

The definition of "tight arse" has to be delved into a little bit.

There is the tight arse that denies themselves to get ahead and
The tight ass that takes advantage of others to get ahead.

In my experience, I've found the split to be about 50/50.

The tight ass that takes advantage of others to get ahead is the guy who avoids his round, or the family that always spends less on other family members at Christmas. There is very little nobility in being a tight ass through taking advantage of others.

Being a tight ass through self sacrifice is definitely something to aspire to at some level.

 

[Power Raid]

I tend to agree, though unless you are a natural salesman, you need some kind of technical background to start-out. Gap years + technical training straight out of high school are a good idea. As is working abroad once you have a few years under your belt.



Some people truly value passing away with as much money as possible above all else, each to their own. For the rest of us, there is always some kind of stupid purchase on the horizon.



The definition of "tight arse" has to be delved into a little bit.

There is the tight arse that denies themselves to get ahead and
The tight ass that takes advantage of others to get ahead.

In my experience, I've found the split to be about 50/50.

The tight ass that takes advantage of others to get ahead is the guy who avoids his round, or the family that always spends less on other family members at Christmas. There is very little nobility in being a tight ass through taking advantage of others.

Being a tight ass through self sacrifice is definitely something to aspire to at some level.

I would describe someone who shirks a round a scab or a user rather than a tight arse. you have to be generous in life and I believe you will always be rewarded with good things and opportunity. where a scab will inevitably fail as others are less likely to present opportunities to the ungrateful and scabs.


I feel being a sensible tight arse is only buying things you can afford and keeping an eye on your goal in life.

 

[Weiterbot23]

Overall I agree with this sentiment, particularly someone's '20s, this decade you'll never get back. I feel that 30s,40s and 50s are fairly similar in terms of what you can and can't do. Easily bonding with new people and living in the now is very much a 20 something game, a true luxury. I know given the option of first-class travel (5 start resorts) as a 50 something compared to budget airlines and hostels as a 20 something is a no brainer for me, take me back to travelling in my 20s.

That said, few things would be harder than living in poverty at the end of your life, short of handouts of winning the lottery, there isn't a lot you can do to rectify the situation.

0-18 - School

18-28 - Travel, do some different jobs, find out what you like, if you know are good at/want to do and get a degree/apprenticeship by 28 I think you can call that decade a win

28-38 -Parties over, start earning, long hours, climb the ladder, get married, buy house, have a kid, get the index fund rolling

38-48 - Try not to get divorced, become too unhealthy, survive the stress of your job senior position

48-58 - Pay off the house, wind back the work hours or go into consulting/sell business

60 - Buy Porsche, complain to council about everything, call 3aw and complain about council

 

[sabre_ac]

18-28 - Travel, do some different jobs, find out what you like, if you know are good at/want to do and get a degree/apprenticeship by 28 I think you can call that decade a win

All other decades (outside of being a child) can be moved around, shortened, lengthened, delayed, brought forward.

18-28 is the only decade you can really live worry-free and on very little. While enjoying all the upside of your physical prime such as endless energy, attractive mates, and ease of making friends. Very little of this decade can be delayed or enjoyed in another decade.

It is a fine line between making the most of that the 18-28 period and getting trapped in it though, at the very least people should aim to leave it without regret.

 

[BuddysBiggestFan]

Bought a Ford Ranger for $30,000 on finance 12 months ago. Repayments $700 a month over 4 years. Rego and insurance on top. Put on $1700 worth of wheels and tyres.

Already had another cheap vehicle for work on gas.

Been trying to sell it for 3 months now. Finally sold it for $26,500. Have lost $5,000 just on the value of vehicle, a years rego, transfer fees, transported over from WA for $700, a years insurance, 20000km of diesel fuel, $700 per month repayments, 2 x service of vehicle at about $500 per service, $400 early exit fee from my finance, I’ve probably left out other costs....

What a waste of money and a massive mistake. Never again.