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

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

  • Finance / > $15,000

    Votes: 2 4.7%
  • Finance / <$15,000

    Votes: 1 2.3%
  • Cash / > $15,000

    Votes: 10 23.3%
  • Cash / < $15,000

    Votes: 30 69.8%

  • Total voters
    43
Sep 10, 2000
14,443
1,158
Perth
AFL Club
Fremantle
My first car out of Uni was brand new and almost entirely on loan. The funny part is the insane interest rates on a depreciating asset isn't even the part that I regret the most. I regret spending such a large chunk of my salary on something I didn't even get that much enjoyment out of.

If I could do it all over again I would either get an older sports car or a second hand version of the car I had, I'd probably still load up on a loan if it was the sports car, though at least I wouldn't go new.

Everyone has an ego and everyone cares to some degree what others think, I would never recommend spending the bare minimum on a car that looks ridiculous. I'd also argue that most people's earning capacity increases dramatically through their 30's,40's and 50's. Therefore being overly frugal in your 20's is something you may come to regret (This is a whole different discussion), each to their own though.

I've revisited my opinion on this of late, especially with near-zero interest rates on car financing (at least in North America). I'd argue that a finance rate of less than 2% to finance a new car over 5 years might be the better option than buying a 2-year-old car with cash. Or at the very least, the benefit of going used is significantly less than it once was.

With the cost of money now essentially being free and the maintenance/customization benefits of new having some weight, I'd probably almost go new now! Quite the change from my post 7 years ago..
 

Weiterbot23

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I've revisited my opinion on this of late, especially with near-zero interest rates on car financing (at least in North America). I'd argue that a finance rate of less than 2% to finance a new car over 5 years might be the better option than buying a 2-year-old car with cash. Or at the very least, the benefit of going used is significantly less than it once was.

With the cost of money now essentially being free and the maintenance/customization benefits of new having some weight, I'd probably almost go new now! Quite the change from my post 7 years ago..

Im sure you pay the dealer extra

Eg it's 36k but we can do 34k if you have cash.

Your post is right that everyone cares what other people think to a degree. I wish I could completely kill my ego, and drive a complete shitbox

"Drive the cheapest car your ego can afford" is mantra I'd love to take with cars until financially independent.

Driving s**t cars and retiring at 55 or driving nice cars and retiring at 65?


I'm currently looking for a new car, thinking a 2-3 year Tucson for 23-26k. A lot cheaper than the 80k VW Suvs etc some of my mates have been getting
 

Cash is King

Quiet Australian
Sep 8, 2016
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Tactical option: don't buy a car over $7k because the cops can't take it.

So buy in full in cash.

If you're a car enthusiast then it's a different story (e.g. Ferrari, Lambo).

Absolutely this.

I had an issue with some moronic client saying we damaged his property in the removalist truck (yeah we did but not to the extent he is claiming I don’t think) and had this gone to VCAT and he won I’d have had nothing for debt collectors to seize given my 2nd hand ford utility Ute is 6k and most of my savings is tied up in betting accounts for arbitrage.

It was a good middle finger to give him and very satisfying.
 

utility

Brownlow Medallist
Sep 26, 2003
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I had an issue with some moronic client saying we damaged his property in the removalist truck (yeah we did but not to the extent he is claiming I don’t think) and had this gone to VCAT and he won I’d have had nothing for debt collectors to seize given my 2nd hand ford utility Ute is 6k and most of my savings is tied up in betting accounts for arbitrage.
Not sure if the amount is based on redbook value or purchase price, but one can get some nice second-hand cars imported from Japan under 7k.
 
May 5, 2006
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Anyone sold a car recently? Prices are nuts with international travel off the table. Everyone has suddenly discovered the great outdoors.

4WDs generally hold their value pretty well, but I've heard of people selling 3-5 year old cars and barely taking a loss.
 
Anyone sold a car recently? Prices are nuts with international travel off the table. Everyone has suddenly discovered the great outdoors.

4WDs generally hold their value pretty well, but I've heard of people selling 3-5 year old cars and barely taking a loss.
5 year old caravans are being sold at a profit. It is nuts. The good news, in 12-24 months time, there's going to be a lot of cheap caravans and 4WDs available.
 

Weiterbot23

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5 year old caravans are being sold at a profit. It is nuts. The good news, in 12-24 months time, there's going to be a lot of cheap caravans and 4WDs available.


Buying a second hand 4wd would be quite daunting as a car novice, you never know how long it's been sitting on sand at Fraser island or how big the caravan it was towing was.
 

Tigger Please!

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Oct 24, 2005
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Anyone sold a car recently? Prices are nuts with international travel off the table. Everyone has suddenly discovered the great outdoors.

4WDs generally hold their value pretty well, but I've heard of people selling 3-5 year old cars and barely taking a loss.

A mate of mine bought a 2015 Dual Cab Hilux a year ago for $28k, he just sold it for $31k after putting another 20 000kms on it.
 

Covertackle

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Jan 26, 2012
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I've revisited my opinion on this of late, especially with near-zero interest rates on car financing (at least in North America). I'd argue that a finance rate of less than 2% to finance a new car over 5 years might be the better option than buying a 2-year-old car with cash. Or at the very least, the benefit of going used is significantly less than it once was.

With the cost of money now essentially being free and the maintenance/customization benefits of new having some weight, I'd probably almost go new now! Quite the change from my post 7 years ago..
Used car prices have risen. I have no figures but as i have 2 teens 17-18yo looking for used cars ive kept my eye on the market for the past year or so. If i had to put a figure on it they seemed to have risen by about 30% since covid. While ive always been against borrowing 'plus interest' to purchase depreciating assets, the $ is also devaluing, so buying new with money that will lose purchasing power over the term of the loan (as government prints money to pay those out of work etc) makes borrowing money for a new car a much more attractive option than in the past.
 

Caesar

Ex-Huckleberry
Mar 3, 2005
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The financially sensible option is to pay cash for a 4-7 year old low-km mass-market vehicle with good reliability (e.g. Toyota Camry), drive it into the ground, then repeat.

I appreciate that not everyone wants to drive an old Camry.
 

Big_Luch

Premiership Player
Apr 13, 2011
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Just sold my 2015 Mazda 3 SP25 for a profit! Bought it in 2017 for $20k and sold it today for $20.5k. Market is absolutely f’ed in Victoria...
I'm in he market and I'm noticing the prices are bloody

Looking around it appears to be the lack of supply in the market for cars. Hopefully the volumes increase in the new car market.
 

BuddysBiggestFan

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Oct 24, 2008
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I've revisited my opinion on this of late, especially with near-zero interest rates on car financing (at least in North America). I'd argue that a finance rate of less than 2% to finance a new car over 5 years might be the better option than buying a 2-year-old car with cash. Or at the very least, the benefit of going used is significantly less than it once was.

With the cost of money now essentially being free and the maintenance/customization benefits of new having some weight, I'd probably almost go new now! Quite the change from my post 7 years ago..

It costs a fortune to service new cars though
 
I'm in he market and I'm noticing the prices are bloody

Looking around it appears to be the lack of supply in the market for cars. Hopefully the volumes increase in the new car market.

Yeah during COVID car prices, especially the 2nd hand market have gone nuts.

Massive lack of supply as the factories aren't pumping them out at the same rate.
 
The financially sensible option is to pay cash for a 4-7 year old low-km mass-market vehicle with good reliability (e.g. Toyota Camry), drive it into the ground, then repeat.

I appreciate that not everyone wants to drive an old Camry.

Yeah that's probably fair if your happy to drive a shitty 2nd hand car but if you want a new car It depends on your situation to be honest. We bought a brand new Volkswagen Passat Alltrack about 3 years ago - roughly 60k

We did the math's vs Financing, Leasing and Cash payment.

We actually found out that Pre Tax Leasing was the cheapest Option over 5 years once you factor in servicing and running costs.

Financing was a straight loss due to a straight up better better interest rate and pre tax being the clear winner from the lease company. But surprisingly leasing was a lot better than paying Cash. Because when we did the numbers we were better off keeping 60k in our offset account on our mortgage which meant over 5 years we were actually paying less when you factor in mortgage loan interest.

Leasing is also a lot more convenient, literally everything is covered by the lease so we don't have to worry about adhoc payments. Not to mention you pay monthly which gives you flexibility without depositing a huge amount of cash upfront.
 

Caesar

Ex-Huckleberry
Mar 3, 2005
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Yeah that's probably fair if your happy to drive a shitty 2nd hand car but if you want a new car It depends on your situation to be honest. We bought a brand new Volkswagen Passat Alltrack about 3 years ago - roughly 60k

We did the math's vs Financing, Leasing and Cash payment.

We actually found out that Pre Tax Leasing was the cheapest Option over 5 years once you factor in servicing and running costs.

Financing was a straight loss due to a straight up better better interest rate and pre tax being the clear winner from the lease company. But surprisingly leasing was a lot better than paying Cash. Because when we did the numbers we were better off keeping 60k in our offset account on our mortgage which meant over 5 years we were actually paying less when you factor in mortgage loan interest.

Leasing is also a lot more convenient, literally everything is covered by the lease so we don't have to worry about adhoc payments. Not to mention you pay monthly which gives you flexibility without depositing a huge amount of cash upfront.
Leasing can be more attractive than cash depending on how what kind of car you’re buying, what your tax situation is, and what your priorities are when buying a car

If you’re dipping into your mortgage to buy something new and expensive every five years then leasing is definitely a good alternative

If your priority is saving as much money as possible then usually paying cash for something 3-5 years old that you can drive for an extended period is going to be better
 

Golden_6

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Aug 15, 2014
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What are the cheapest interest rates for cars that anyone has seen? I'm not really seeing any super low rates for cars at the moment. My 2001 Ford Falcon, which has serviced me beautifully as my first car since 2012 is finally on it's last legs. I'm in a position where I can afford the repayments on a new car (say $30k over 5 years) but don't have the income to pay for it in cash.

I've never been one for new cars or cared much for them, but as a family is soon to be on the horizon I'll need a much larger and safer family car. A Mazda CX-5 is pretty high up on the list. I can potentially save a little more and buy a 2nd hand model for around 15k in a couple of years (if my current car can last that long). Financing a car goes against everything I know (as an accountant) but if the interest rate could be incredibly low then I would consider it.
 
Anyone sold a car recently? Prices are nuts with international travel off the table. Everyone has suddenly discovered the great outdoors.

4WDs generally hold their value pretty well, but I've heard of people selling 3-5 year old cars and barely taking a loss.

We bought a brand new VW Passat Alltrack in 2018 for about 50k. We don't really flog ours too much so we only have 30,000km on it after almost 3.5 years.

they are selling for 45k LOL.

crazy.
 
Sep 10, 2000
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Perth
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Is it a supply or demand issue that is driving the current state of the used car market ? If it is demand , where is the demand coming from ?

I suspect like Canada and other fortunate parts of the world, a large driver of the demand is a decent proportion of people have actually gotten wealthier during COVID.


Sent from my iPhone using Tapatalk
 
Apr 12, 2010
14,674
23,284
Melbourne
AFL Club
Geelong
Is it a supply or demand issue that is driving the current state of the used car market ? If it is demand , where is the demand coming from ?

I suspect like Canada and other fortunate parts of the world, a large driver of the demand is a decent proportion of people have actually gotten wealthier during COVID.


Sent from my iPhone using Tapatalk

Supply:

 
Feb 23, 2009
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These days even most basic cars have all the required amenities to a decent standard and have for quite a while. Unless you are a car enthusiast with cash to burn there is no way I'd ever spend >20k on a car if it's purely just a mode of transport for you. 10-20k is probably the sweet spot for value to quality of a used car that I'd be looking at. I'm a cash man, but some people swear by novated leases. Depends on your financial situation as to whether it's worth it.

Far better places to spend your money for me than a ride from A to B*

*assumes you don't just have cash to burn or cars are a passion hobby for you in which case the above doesn't apply
 
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