# Dropping the car payment for a cheap used car?



## Guvner (Oct 22, 2012)

In an attempt to dig myself out of debt and get closer to saving up for a downpayment on a house I have been trying to find any way to cut my expenses so that I can increase my monthly debt payments. Until now I have done everything I can to not spend money unless its absolutely needed, trying cutting food expenses, but its not enough so I've considered the idea of getting rid of my $500/mth car and just getting a cheap $3-4000 used car so that I can be free of my car payment which in turn would free up that money to pay off debt quicker. 
The issue here is that I just bought the car (2012 VW GTI) last year so I'm still lacking equity in the car, my estimate is that if I sell privately I will be about $3000 short based on the average selling price for an equivalent car. Also I do not have any money saved up to buy a replacement car so I would have to put that on credit until I can pay it off. If I were to go ahead with this it would take several months before I would have the loss on the old car and cost of the new car paid off. 
The way I see it is that it would be a short term cost to save me in the long run as right now I'm paying $6000/yr in car payments that could instead go towards debt/savings for a new house.

Thoughts?


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## namelessone (Sep 28, 2012)

If you can't give up driving, forget about what you are thinking, keep driving the same car for as long as possible. and concentrate on paying off the highest interest loan first. 
Changing a car with 10 years useful life left to a car with 5 years useful life left is NOT a saving. It's just taking out equity out of a depreciating asset. 
You'll only make a meaningful difference by downgrading from a luxury brand to a cheap brand in the same condition. e.g. Mercedes to Hyundai.


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## Guvner (Oct 22, 2012)

namelessone said:


> If you can't give up driving, forget about what you are thinking, keep driving the same car for as long as possible. and concentrate on paying off the highest interest loan first.
> Changing a car with 10 years useful life left to a car with 5 years useful life left is NOT a saving. It's just taking out equity out of a depreciating asset.
> You'll only make a meaningful difference by downgrading from a luxury brand to a cheap brand in the same condition. e.g. Mercedes to Hyundai.


This is how I see it.

My present car has $27,500 owing on a 3yr old car, lets say I drive the car for 7 years making it 10yrs old. After the basic warranty runs out next year and powertrain the year after I will be paying for repairs which I figure to be about $1000/yr, perhaps that is on the low end considering it is a VW. Total car cost over 7yrs including interest and maintanence costs for 5 years is *$35,217.*
Now as a comparison assuming I break even on the sale of the car I would buy a $4000 car which would last me 3.5 years and cost $1500yr in maintanence costs, so for a 7 year period I would buy 2 cars ($8000) and put in $10,500 in maintanence costs totaling *$18,500 *in car costs. People will probably say cheap cars for $4000 will not last long and cost me more than $1500/yr, however I would disagree as every car I have owned before my GTI was a cheap used car under $5000, each car lasted for at least 3years and most often cost me just oil changes, tires and brakes over their lifetime, far less than $1500/yr so it's safe to say I'm being very generous with my $1500/yr maintanence costs.

So in theory the cheap car approach would save almost $17,000 over the alloted time frame.

As for my debt situation at my present rate it will take me over 4 years to be debt free, if I dump the car loan for the cheap car adding the cost of the replacement car (assume I break even on car sale) I would be just over 2yrs to be debt free.


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## DollaWine (Aug 4, 2015)

Said it before and I'll say it again... buy older used cars. Just make sure you do your research and thoroughly inspect it (with your mechanic). Cars last as long as you make them last. Take care of them and buy them from people that TOOK care of them. Plenty of cars can be bought for under 5k that will last you years.


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## namelessone (Sep 28, 2012)

Guvner said:


> This is how I see it.
> 
> My present car has $27,500 owing on a 3yr old car, lets say I drive the car for 7 years making it 10yrs old. After the basic warranty runs out next year and powertrain the year after I will be paying for repairs which I figure to be about $1000/yr, perhaps that is on the low end considering it is a VW. Total car cost over 7yrs including interest and maintanence costs for 5 years is *$35,217.*
> Now as a comparison assuming I break even on the sale of the car I would buy a $4000 car which would last me 3.5 years and cost $1500yr in maintanence costs, so for a 7 year period I would buy 2 cars ($8000) and put in $10,500 in maintanence costs totaling *$18,500 *in car costs. People will probably say cheap cars for $4000 will not last long and cost me more than $1500/yr, however I would disagree as every car I have owned before my GTI was a cheap used car under $5000, each car lasted for at least 3years and most often cost me just oil changes, tires and brakes over their lifetime, far less than $1500/yr so it's safe to say I'm being very generous with my $1500/yr maintanence costs.
> ...



The maintenance cost is too high. Even as a newbie owning a car for just 2 years,I learned how to cut down maintenance cost to less than $500 per year. (8 years old car)


Some people even buy a car for $500 and keep it running for years. I said "useful" life. I didn't mean the car will drop dead after certain number of years.


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## Guvner (Oct 22, 2012)

Even with maintanence costs at $0 my current car is costing significantly more than the cheap used car route, my maintanence costs mentioned were just for an example. 
I appreciate your input, but I feel like just driving my car as long as I can is counterproductive when it comes to saving money.


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## AirPro (Mar 31, 2014)

Guvner said:


> This is how I see it....
> 
> ...So in theory the cheap car approach would save almost $17,000 over the alloted time frame.


You're correct. If you can take a $3K loss on your current car and pick up something used for $5K all in you can have that $8K debt all paid off at your current $500/mo rate in 18 months even if you were to put it all on a credit card!

The real trade off you're making here is downgrading the vehicle that you drive. For example, you can pick up a nice 5 year old Accent with ~50K on the clock for around $5000. Are you prepared to do what it takes?

Leasing or borrowing to buy a vehicle is a mugs game. Stick to something that you can actually afford to buy.


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## DollaWine (Aug 4, 2015)

Another thing to consider is your own knowledge of cars. How much do you know about them? People's annual "maintenance" costs are usually for things they don't even know about. I'll never forget when my girlfriend went in for an oil change (and paid WAY too much for it, another reason maintenance costs are inflated - people get them done at ridiculously overpriced places). The guy told her "by the way, your air filter needs to be cleaned out, we'll do it for about $40." She shrugged and didn't know if it was a good idea, so she said no thanks. Air filters don't get CLEANED OUT, they get REPLACED. She brought it home, I looked at the air filter (which wasn't even that dirty), and replaced it myself in literally 15 seconds. The air filter itself costed $20 at Wal-Mart. Just an example of how you can get conned into spending more than you need to in maintenance. People's maintenance costs are often higher than they need to be because they lack knowledge and pick places to get things done that aren't necessary. They'll go to Canadian Tire for a $50 oil change that my local mechanic does at his shop for $32 with the same high quality tools and equipment. 

People's dealers will tell them "it's been xxx KMs, you should replace the _____", even if there is no problem with it or any signs that it's going to fail. A lot of "maintenance" costs aren't even necessary - people are just told they should pay for them because dealers want your money. And people who don't know about cars will go, "Uhh... sure? Sounds important I guess... here, take my money". Learn about cars and find a reliable local mechanic who won't recommend you spend $500 changing something that doesn't even need to be changed. You can save hundreds if not thousands. I have a '97 Nissan Maxima that I bought for $700 3 years ago, and have probably spent about $1500 MAX in maintenance over those 3 years. Brakes, oil changes, and other small things. People who talk about "$3000 a year in annual maintenance on my 2001 Civic" make me ask myself what in the HELL are you maintaining? You buy new tires every year just because you're recommended to by Canadian Tire? Your tires are in fine condition and still have 70% tread on them. Do you even know what tread is? "Uhh.. no... but Canadian Tire said I should buy a new set...". Yeah, because Canadian Tire wants that $600. Often times people just blindly throw money at their car because they're recommended they should. Not picking on Canadian Tire specifically by the way. Anyway that's my little rant about people who look down on older cars and praise newer ones as almighty. Just.... educate yourselves.

I'm a big disapprover of _steal_erships.


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## naysmitj (Sep 16, 2014)

You can buy out of favour vehicles with low kilometres for under $5K.


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## Guvner (Oct 22, 2012)

DollaWine said:


> Another thing to consider is your own knowledge of cars. How much do you know about them?


That's why buying a cheap car is best for me because I can fix almost anything on a car and I know how to find either used parts of good condition or cheap parts online.


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## DollaWine (Aug 4, 2015)

Guvner said:


> That's why buying a cheap car is best for me because I can fix almost anything on a car and I know how to find either used parts of good condition or cheap parts online.


Yeah, that too - used parts. Another way to save on maintenance. People just don't know how much they could be saving.


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## Afp (Mar 19, 2013)

Guvner said:


> *In an attempt to dig myself out of debt and get closer to saving up for a downpayment on a house* I have been trying to find any way to cut my expenses so that I can increase my monthly debt payments. Until now I have done everything I can to not spend money unless its absolutely needed, trying cutting food expenses, but its not enough so I've considered the idea of getting rid of my $500/mth car and just getting a cheap $3-4000 used car so that I can be free of my car payment which in turn would free up that money to pay off debt quicker.
> The issue here is that I just bought the car (2012 VW GTI) last year so I'm still lacking equity in the car, my estimate is that if I sell privately I will be about $3000 short based on the average selling price for an equivalent car. Also I do not have any money saved up to buy a replacement car so I would have to put that on credit until I can pay it off. If I were to go ahead with this it would take several months before I would have the loss on the old car and cost of the new car paid off.
> The way I see it is that it would be a short term cost to save me in the long run as right now I'm paying $6000/yr in car payments that could instead go towards debt/savings for a new house.
> 
> Thoughts?


While trying to dig yourself out of one hole (debt), you are just about to get yourself into a bigger hole. If $500 per month is an issue now, wait until you get all the bills coming with the house!


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## Guvner (Oct 22, 2012)

I never said $500/mth was an issue, I manage just fine. It's just taking that $500 payment and putting it towards debt instead of a car in the long term will be better. I don't plan to buy a house until my debt is paid for and it won't be my first house, I'm very familiar with housing costs. I'm just trying to get a clean slate sooner than later.


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## sags (May 15, 2010)

People are talking about "standard maintenance costs" for a $5000 used car. 

A likely scenario for a $5000 vehicle is the "repair and replacement" costs will be significant. That is why the vehicle is only worth $5000.

A 3 year old luxury model (better quality) with a good record of maintenance and low kilometers is one thing..........but they aren't sold for $5000.

For $5000.............you will be buying someone else's headache.


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## Guvner (Oct 22, 2012)

Buying someone else's headache is an assumption, it's only true if you buy without knowing anything about cars. That is not the case for me. 
I bought a 2002 protege 5 years ago, had high km but was in great condition with full maintenance history, that car cost me $3200 and lasted me 4 years with basic maintenance. I sold it to a friend with over 300,000km on it for $1500 and he still has that car 2yrs later. That is just one example of the many cheap, but solid used cars I have owned over the years.
Assuming a cheap car is a money pit is wrong, that said an older car will likely need more care and maintenance that a newer car but still will be cheaper than $6000/yr in car payments.


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## DollaWine (Aug 4, 2015)

sags said:


> People are talking about "standard maintenance costs" for a $5000 used car.
> 
> A likely scenario for a $5000 vehicle is the "repair and replacement" costs will be significant. That is why the vehicle is only worth $5000.
> 
> ...


You're really unaware of the good quality cars out there for $5,000 that don't come equipped with a headache. Just because a car is $5,000 and has 190,000KMs on it, doesn't make it a headache or a bad purchase. I don't know how many used cars you've bought but you must either have really bad luck with them, or little to no experience buying used.

See my post about over-inflated maintenance costs paid for by naive car owners.....


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## Guvner (Oct 22, 2012)

DollaWine said:


> You're really unaware of the good quality cars out there for $5,000 that don't come equipped with a headache. Just because a car is $5,000 and has 190,000KMs on it, doesn't make it a headache or a bad purchase. I don't know how many used cars you've bought but you must either have really bad luck with them, or little to no experience buying used.
> 
> See my post about over-inflated maintenance costs paid for by naive car owners.....


Hey, at least we get the idea of cheap used cars.


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## carverman (Nov 8, 2010)

Guvner said:


> Buying someone else's headache is an assumption, it's only true if you buy without knowing anything about cars. That is not the case for me.
> I bought a 2002 protege 5 years ago, had high km but was in great condition with full maintenance history, that car cost me $3200 and lasted me 4 years with basic maintenance. I sold it to a friend with over 300,000km on it for $1500 and he still has that car 2yrs later. That is just one example of the many cheap, but solid used cars I have owned over the years.
> Assuming a cheap car is a money pit is wrong, that said an *older car will likely need more care and maintenance that a newer car but still will be cheaper than $6000/yr in car payments*.


absolutely, but you have to do some of the work yourself if you have the tools and are capable. 

Talking about a 2002 Mazda protege. My friend has one. Bought it used in 2008, already 6 yrs old. Now it has 182,500km and other than minor repairs, brakes, battery, alternator tires it has been a very reliable car. Last year he had to find an aftermarket catalytic and two oxygen sensors. The car is now 13 years old and still going strong. The major issue is the rust around the wheel wells and under the car.
He has been doing his own repairs, other than finding a guy to replace the exhaust parts. The body rust is the achilles heel of this model, but with some CTC fiberglass resin he patches
up the fender wells, rocker panels and floor boards, and plans on keeping it a couple years longer as he can't afford another car..he is on ODSP and barely has enough to live on for the month
and pay subsidized rent.

Other than the body, I am very impressed with this model of car. Too bad they are not making the Protege anymore.


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## LBCfan (Jan 13, 2011)

Guvner said:


> That's why buying a cheap car is best for me because I can fix almost anything on a car and I know how to find either used parts of good condition or cheap parts online.


I'd say go for it. OOC why did you buy the VW in the first place?

On second thought, will your VW sell for as much today as when you started the thread?


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## hystat (Jun 18, 2010)

There is some risk to used, but my wife's cheap 09 Kia Spectra5 that we bought 3 years ago has been great. We paid $8K tax in at a Nissan dealer. The car only had 36K on it. Now at 78K it hasn't cost us a dime beyond regular maintenance.


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## OurBigFatWallet (Jan 20, 2014)

Has the value of VW's gone down on the resale market since the emissions scandal?


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## My Own Advisor (Sep 24, 2012)

I was wondering the same thing....I drive by a VW lot now and then on my way to work....


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## lost in space (Aug 31, 2015)

Guvner said:


> Buying someone else's headache is an assumption, it's only true if you buy without knowing anything about cars. That is not the case for me.
> I bought a 2002 protege 5 years ago, had high km but was in great condition with full maintenance history, that car cost me $3200 and lasted me 4 years with basic maintenance. I sold it to a friend with over 300,000km on it for $1500 and he still has that car 2yrs later. That is just one example of the many cheap, but solid used cars I have owned over the years.
> Assuming a cheap car is a money pit is wrong, that said an older car will likely need more care and maintenance that a newer car but still will be cheaper than $6000/yr in car payments.


Andrew Hallam shares a great story in the opening of his book Millionaire teacher. He did basicly what you did, bought a "fully deprecated vehicle, drove it for a year, no repairs, and then sold it for what he paid for it. For myself personally what I tend to buy if off lease cars or rental cars (I live in Germany so there is some differences) generally speaking I can get a low mileage less than a year old vehicle at a huge discount. In the case of our current car (Ford C-Max) I could sell it today for what I paid for it. My plan is trade it in at around the 5 year mark


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## wendi1 (Oct 2, 2013)

Buy a car every year? I guess he enjoyed the process... For me it is a headache, and the fewer times I have to do it, the better.

I prefer to buy a 3-5 year old lease return and run it for a decade or more. That way, I know the maintenance has been done, and can do other things with my life than purchase and look after cars.


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## DollaWine (Aug 4, 2015)

lost in space said:


> Andrew Hallam shares a great story in the opening of his book Millionaire teacher. He did basicly what you did, bought a "fully deprecated vehicle, drove it for a year, no repairs, and then sold it for what he paid for it. For myself personally what I tend to buy if off lease cars or rental cars (I live in Germany so there is some differences) generally speaking I can get a low mileage less than a year old vehicle at a huge discount. In the case of our current car (Ford C-Max) I could sell it today for what I paid for it. My plan is trade it in at around the 5 year mark


That's what I've done several times... The process doesn't bother me. I'm young, now is my chance to drive multiple different types of cars and enjoy them. When I'm older with a family and kids, you can't be changing cars ever year or two, so I enjoy it while it lasts. I've had (older) luxury cars, fuel efficient cars, coupe/sports cars... loved them all. I just enjoy cars. Every single car I've ever bought, I've sold for as much as I bought it for, or sometimes more. I never take a loss, because I know how to negotiate when buying and market/promote when selling. I love cars and it's fun to me.


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## Guvner (Oct 22, 2012)

lost in space said:


> Andrew Hallam shares a great story in the opening of his book Millionaire teacher. He did basicly what you did, bought a "fully deprecated vehicle, drove it for a year, no repairs, and then sold it for what he paid for it. For myself personally what I tend to buy if off lease cars or rental cars (I live in Germany so there is some differences) generally speaking I can get a low mileage less than a year old vehicle at a huge discount. In the case of our current car (Ford C-Max) I could sell it today for what I paid for it. My plan is trade it in at around the 5 year mark



Nice to know I think the same way as a millionaire, too bad I'm not one.


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## lost in space (Aug 31, 2015)

Guvner said:


> Nice to know I think the same way as a millionaire, too bad I'm not one.


Makes two of us:biggrin:

Asked my niece about this and this is what she wrote

We have purchased a brand new car (Toyota Yaris) and many used cars. We will never buy a new car again. When they say you lose 5-10k as soon as you drive it off the lot its completely true. I cant wait for the minivan version of the Prius to be 5 years old for us to grab one 
I love how my dad breaks down the cost of car ownership. You take the purchase price, plus all maintenance expenses and divide by the number of years you got out of it. 

Every Honda I have owned has cost me less than 800$ per year to own. The Toyota.... We sure hope it makes it to 15 years (and it should) but that will still be over $1500 a year to own, not including any further maintenance >(

Also, From now on I am buying rich peoples problems. We bought a fully loaded ford freestyle 2 years ago and man are all the options fun. They still work in year 9, and even if it only lasts us another 2 years, it will cost us less than 1300$ a year to own, which isn't bad considering its a large 7 passenger vehicle. 
My dad did the run down on how much it cost my mom to own her Rav 4 for the 8 years she did and nearly fainted, almost 4 k a year. When she could buy a 6 or 7 year old one now, get 5 more years out of it at 10k, thats only 2k per year to own.

My first car cost 1600$ needed 1000$ worth of work and lasted me 8 months.... So there is such a thing as too cheap too....
Have you ever bought brand new?

Also I know 4 mechanics very well and most of them say the type of car you buy matters less than the day of the week it was built (friday car = a lemon) lol.


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## DollaWine (Aug 4, 2015)

lost in space said:


> Makes two of us:biggrin:
> 
> Asked my niece about this and this is what she wrote
> 
> ...


Serious or joke? If it's real thats incredibly fascinating and good to know.. lol


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## Guvner (Oct 22, 2012)

I found this last night and thought I would share it. It really puts things into perspective about how bad financing a car really is and that owning a cheaper paid for car is the way to go. I fell for the trap of financing a car and thinking "oh, its just a car payment", now I'm doing everything I can to get out of it.






I found that video from this link about upside down car loans and how to get out of them. http://thegarage.jalopnik.com/how-do-i-buy-a-car-when-im-upside-down-on-my-current-lo-1638064679


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## Karlhungus (Oct 4, 2013)

I had the same car as you, (Vw gti, just different year). Worst car ever, never left the shop. I don't know how many thousands I spent on it. Every mechanic I talked to said stay away from Vw. One mechanic I talked to said they are okay for the first 150k then look out. So true. I would get rid of that thing asap. 

Read this for help, http://www.mrmoneymustache.com/2012/03/19/top-10-cars-for-smart-people/


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## DollaWine (Aug 4, 2015)

Guvner said:


> I found this last night and thought I would share it. It really puts things into perspective about how bad financing a car really is and that owning a cheaper paid for car is the way to go. I fell for the trap of financing a car and thinking "oh, its just a car payment", now I'm doing everything I can to get out of it.
> 
> 
> 
> ...


Brilliant. Sums it up well why it's _stupid_ to buy a new car, or even a 1 or 2 year old one, in my opinion. Except some things were inflated obviously


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## AirPro (Mar 31, 2014)

Guvner said:


> I found this last night and thought I would share it. It really puts things into perspective about how bad financing a car really is and that owning a cheaper paid for car is the way to go. I fell for the trap of financing a car and thinking "oh, its just a car payment", now I'm doing everything I can to get out of it......


Yeah, this is a great strategy that can be applied to most things in life but it's missing one vital ingredient - instant gratification. 99% of the population are addicted to instant gratification and the other 1% make their money enabling that instant gratification.

Now, if someone could tell which mutual fund gives a consistent 12% return I'd be happy.


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## Guvner (Oct 22, 2012)

Hey everyone, I just wanted to run this by everyone to make sure I'm doing the right thing before I commit.

So here are my financial details.

The car has $26,700 owing and I might have it potentially sold for $21,000 leaving me $5,700 short. The replacement car would be about $4500 tax in for a private sale 2005 Subaru Outback, original owner with full service records and parked underground in the winter, seems like a great car. 
At the end of the day I will be out $10,200 to get rid of my $27,000 "upside down" car. I'll be saving myself almost $17,000 by doing this.

Now to see the full picture I have existing student and "bad past decisions" debt amounting to $23,500 + $10,200=$33,700 compared to $50k if I keep the VW. I would have this debt spread out over lines of credit, low interest credit cards and family loans with an average interest rate of 7.25%.

Currently with keeping my VW and total debt of $50,500 while making my $1000 in combined monthly debt payments I calculate it to be 58months until I am debt free based on an average interest rate of 5.2%.
By selling the VW and dropping my debt to $34,000 (roughly) while maintaining the $1000 in monthly payments I could be debt free in 36-39months, that will save me about 1.5yrs in my goal to be debt free.

Am I making the right decision??


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## lonewolf (Jun 12, 2012)

Guvner since your in debt I would go with an economy car to save even more.


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## Guvner (Oct 22, 2012)

lonewolf said:


> Guvner since your in debt I would go with an economy car to save even more.


I considered that, but since I have 2 big dogs and enjoy camping I really need the utility. I only drive about 12,000km a year so the difference in fuel costs is not huge. Compared to a Mazda 3 its about $150/yr.


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## lonewolf (Jun 12, 2012)

If you need it you need it ? If I owed money I would not have 2 dogs & would drive an economy car which is also cheaper to buy.


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## Guvner (Oct 22, 2012)

lonewolf said:


> If you need it you need it ? If I owed money I would not have 2 dogs & would drive an economy car which is also cheaper to buy.


So you would get rid of loving pets/family members just to save a few dollars? Good thing I'm not you.


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## lonewolf (Jun 12, 2012)

A friend of mine works 10 -12 hours a day 6-7 days a week, She sends money like crazy to her single daughter that makes more then her. Her daughter goes to expensive restaurants, pays to get nails done, flies to different locations to party for the weekend, pays for massages while her mother waists no money except on her daughter.

When it comes to family I still treat all money like a business while putting family first then money then things. I come from a family that promotes no leaches or enablers in the family. Guess that's why I would never have a dog dogs are not responsible for themselves when kept as a pet.


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## namelessone (Sep 28, 2012)

lost in space said:


> Andrew Hallam shares a great story in the opening of his book Millionaire teacher. He did basicly what you did, bought a "fully deprecated vehicle, drove it for a year, no repairs, and then sold it for what he paid for it.





wendi1 said:


> Buy a car every year? I guess he enjoyed the process... For me it is a headache, and the fewer times I have to do it, the better.
> 
> I prefer to buy a 3-5 year old lease return and run it for a decade or more. That way, I know the maintenance has been done, and can do other things with my life than purchase and look after cars.


Kindred spirit! 
Buy/sell a car every year is like day trading in investing. I believe in least effort with maximum return. many people move to a new place every few years. I plan to live at the same place for decades..
There's a limit in frugality. That millionaire teacher is just basically driving a 10+ years old car every year in exchange for saving $3000/year assuming he has no appreciation cost. For me, $3000/year is just a one time saving of $25k in a life time. Why? I am able to select individual stocks returning over 10% per year. That guy is saving one time 25k and drives a 10 years car forever. is it worth it? To me. it's not. A person driving a car of 3 years old to 10 years old has higher quality of life than a guy driving 10+ years old car forever. For me, even a 1 time break down of the car on the road is worth thousands of dollars for the safety, headache, and time wasted. The materials on the car age with time. The metal rusts. The rubber becomes brittle. I would think during identical crash, the person driving a relatively new car has a higher survival rate than a person driving in the same but older car. 

Buying a new car is not bad. It's just that new car needed to be owned for at least 10 to 13 years to fully utilize the depreciation. It's also a matter of affordability: can you afford what you buy? I think the good rule of thumb for car affordability is the ability to pay for the car in just 1 year. For house, I think it should be 5 to 10 year paid off time. 

The good thing about buying a several years old car is that we get to drive a different car every few years rather than stuck with the same car for 13 years. 
My first car was 6 years old when I bough it.(paid with cash) I had no idea what I was doing. I plan to own it for 6 years. Now I know about car rusting, my next car will be a 3 years old car (will pay with cash again) and will drive it for 7 years. I anticipate the depreciation per year is around $3000 per year. I am ok with that since it's not worth it to push it further down to $2000. A saving of $1000 per year means a one time saving of $8000 for me. Is a one time $8000 saving worth it to drive a 15 years old car than a 10 years old car? At least not for me. Not to even mention driving a car with no depreciation left. BTW, my coworkers 18 years truck's tail light has a hole in it, and he used duct tape to patch it. He's driving a 18 years car because he's poor and doesn't know about investing.


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