re: Car Guys: Keep, Sell, or Trade

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Because you've been brainwashed that you have to have a car payment your whole life - that's the point - YOU DON'T HAVE TO - if you DO it costs you millions. If you don't, it doesn't - thus my original point.

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Can you read? Did I say I have to have it? And there you go again with that half truth millions number.

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Whew. I'm glad we agree on something. I'm tempted to leave it at that.

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Seriously starting to get convinced about your inability to read.

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No it isn't - I showed you how it is millions - over the time period you specified.

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You ignored all the costs you would have to use an older car. That's a half truth whether you feel like admitting it or not.

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Your MO appears to be using non-money factors to make decisions (which - of course is perfectly okay - as long as you do it with your eyes open) - and then do mental gymnastics to make it seem like a smart decision, financially. However, that is self-delusion - and good luck with it.

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how is looking at what costs me less money in the long run using mental gymnastics or looking at non money factors?

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We'll just leave it a that.

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Is it because you don't have an answer?

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Lunchbox is an engineer!!!!!!! Better tread lightly when you argue with him. Dude spends his entire day arguing about cars, apple products, and used books.

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Knew what your post would say the second I saw the last reply was you.

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That's assuming you are spending the 378k now, not over your lifetime.

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No. That's assuming you spend $500 per month on a car note.

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Buying a used car and paying cash isn't free either.

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No, but you do not have the power of compound interest working against you.

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If you can get a decent rate, sometimes it makes sense to take a note and invest your money instead(my last rate was 3%, I wasn't in any rush to pay that off).

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Even if the money is interest free, you're still spending $500 a month on a depreciating asset. Just think of the income stream that $500 a month can produce FOR you in just 4 or 5 years? Rather than just feeding the machine anew every 4 or 5 years.

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I'm not disagreeing with your arguement, but it's got plenty of holes.

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Not on the financial side of it, it doesn't. Look - I'm not trying to talk everybody out of buying cars - I'm just saying to not pretend you're "saving" money by spending money. You're buying a rapidly depreciating asset (with borrowed money in most cases, with interest in both cases) instead of making your money and compound interest work for you.

Obviously it is a better "financial" decision to amp up your 401k, rather than go to Hawaii for your 10th wedding anniversary - there are other benefits to going to Hawaii - just don't pretend you're making a good financial decision.

If you delay gratification - let's assume you make the commitment to buy a new car, drive it 10 years (rather than 4 or 5), and buy new cars every time - that decision - alone, pretty much regardless of interest rates - means you buy 6 cars in 60 years instead of 12 - so that's $200k, plus compounded interest - just on the cars you didn't buy. And that's still buying "new" cars every 10 years. Stretch it to 12, buy lightly used cars instead, pay for the car in advance so that you save depreciation and interest on the cars you do buy, means and extra $1 million or so lying around in your 80s to pass on to your grandchildren, travel the world - whatever.

Simply by being a little bit smart on this decision, rather than spending, effectively, millions of dollars on what is, essentially, a 5 year old car when you are 85 years old.

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Even if the money is interest free, you're still spending $500 a month on a depreciating asset. Just think of the income stream that $500 a month can produce FOR you in just 4 or 5 years? Rather than just feeding the machine anew every 4 or 5 years.

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As opposed to paying cash for it? This makes zero sense. If you could borrow money for free, you wouldn't do it?

ETA: For the record, I agree with your strategy of just buying new every 10 or so years, but some of your argument is exaggerated and has way too many assumptions.

I'm fairly certain no one has said buying new cars or going on expensive trips is a good financial decision. But boy life would be fricking boring if all we did was drive old accords and pinched every penny we ever had. You can have fun doing that, others obviously choose not to.

I'm also pretty sure no one said you'd save money buying cars often. And I'm not working to pass all my money down to my kids. They can work just like I did to get the things they want.

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Getting a new car is never a smart financial decision

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This is nearly always correct, the only exception is if you plan to drive it until it turns into dust. Then you may get full value.

You will never get full value out of a resale though, nearly all used vehicles are priced as though they have something wrong with them. There's actually a very influential academic paper showing why that got a Nobel Prize ( The Market for Lemons) believe it or not. It's important for the current healthcare debate as well.

But I digress. If you're going to drive your vehicle into the ground and keep it up accordingly, then buying something new can work out. If you're going to sell the vehicle before then you will pay a high price for doing so.

Use NADA. No one goes off of kbb.
the supercrew F150 is holding its value over all trucks.

OP, are you commuting or working out of this vehicle to put 20k miles on it each year? Also do you tow a boat and/or hunting gear with it?
If all you are doing is commuting to work, I would pay it off fast, keep it forever for hunting/boating, and get a little commuter car.
If you work out of it, keep it for two more years then get another one that is almost new. Let someone else take the initial depreciation hit. This is what my BIL does, then drives them for 300k miles.

We use NADA at the dealership. Reason I said go off of it. Banktec pretty much sets the tone