How do Bogleheads buy cars?

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
Topic Author
simplesauce
Posts: 140
Joined: Tue Jan 17, 2017 8:22 am

How do Bogleheads buy cars?

Post by simplesauce » Sun May 07, 2017 4:21 pm

I'm in the market for a new car. Looking at a newer Buick or something similar. My job calls for a nice looking "expensive" car.

Anyway, brand new cars are off the table (yes?) because they are not a good value. Better to buy 1-2 years old, certified from the dealer with solid warrantys. Does this line of thinking make sense?

Also, I don't know if I want to spend all $20-25k in one shot. I may prefer to finance with the dealership. However, I know interest can hurt.

Any surprise fees to watch out for? What is gap insurance? Just trying to make sure I don't get messed around.

What do Bogleheads do when buying cars? Thanks!

retire57
Posts: 384
Joined: Fri Oct 28, 2016 3:03 pm

Re: How do Bogleheads buy cars?

Post by retire57 » Sun May 07, 2017 4:39 pm

We seldom buy cars, but this is has been our long-time tried-and-true method. Used, 2-3 years old, just off lease under 35,000 miles. Prefer to pay cash.

However, if the interest rate is sufficiently low, you could consider putting 1/4 - 1/2 down and pay the loan off within a year. Then drive it for 5 - 10 years.

We avoid sedans as their styling tends to age more quickly than, say, an SUV.

jebmke
Posts: 9780
Joined: Thu Apr 05, 2007 2:44 pm

Re: How do Bogleheads buy cars?

Post by jebmke » Sun May 07, 2017 4:42 pm

retire57 wrote:We avoid sedans as their styling tends to age more quickly than, say, an SUV.
My wife is looking to replace her car. I commented on one of the models she is considering - "the grill looks a little weird, don't you think?"

Reply: "What do I care? I'm going to be on the inside."
When you discover that you are riding a dead horse, the best strategy is to dismount.

mortfree
Posts: 1775
Joined: Mon Sep 12, 2016 7:06 pm

Re: How do Bogleheads buy cars?

Post by mortfree » Sun May 07, 2017 4:47 pm

simplesauce wrote:
Anyway, brand new cars are off the table (yes?) because they are not a good value. Better to buy 1-2 years old, certified from the dealer with solid warrantys. Does this line of thinking make sense?

Also, I don't know if I want to spend all $20-25k in one shot. I may prefer to finance with the dealership. However, I know interest can hurt.
I'll focus on these 2 items...

Although you are looking at Buick, if you were looking at a Honda or Toyota brand new is probably the way to go as the 2-3 year old vehicles cost almost just as much.

In 3 cases for myself with those 2 brands, I actually paid less for the new versions (pilot, accord, corolla) than if I bought used. Plus, the manufacturer's financing was really good (1.9%, 0.9% and 0%) and the dealer seemed to give me a deeper discount since they knew I was taking out a loan. We just got rid of the corolla and got a 2 year old RAV4. The CPO version was the way to go in this case compared to the price of the 2017 model; and we got 1.9% financing.

For a new car, if you know the model and options you want, go on your dealer's website. Find the stock number of the vehicle and email them to give you a price. You can also do similar with other nearby dealerships (within say 30 miles) to get the best price without doing a lot of leg work.

For a used car, we just ended up at the dealership where the corolla was serviced. we did search online at the various other local dealerships for a RAV4 but didn't see any we liked.

Helo80
Posts: 1022
Joined: Sat Apr 29, 2017 8:47 pm

Re: How do Bogleheads buy cars?

Post by Helo80 » Sun May 07, 2017 4:53 pm

simplesauce wrote: Anyway, brand new cars are off the table (yes?) because they are not a good value. Better to buy 1-2 years old, certified from the dealer with solid warrantys. Does this line of thinking make sense?

If you have to have something that is "expensive" looking and you are indifferent to brand and model, look for a vehicle that has the biggest depreciation hit and go from there.

But, if you're aiming for a specific brand or model, yes, def check out off-leases and cars 1-3 years old. Though, when you narrow things down, be sure to check out pricing on new models as well. Sometimes used vehicle prices are not significantly cheaper than new vehicle prices (e.g. Toyota Tacoma). Some cars just hold their value really well.

finite_difference
Posts: 1453
Joined: Thu Jul 09, 2015 7:00 pm

Re: How do Bogleheads buy cars?

Post by finite_difference » Sun May 07, 2017 4:57 pm

My current strategy boils down to:

-Buy a new Toyota, Honda or Subaru.
-Don't buy the absolute lowest trim but buy the lowest trim that has most of what you really want.
-Try to negotiate price down as much as possible by competing dealers against each other, but without killing yourself. Settle on a price over email/phone before you walk in.
-Agree to the extended warranty if they wear you down and cancel it later.
-Drive it for at least 10 years/100,000 miles. This point is key to make buying new affordable. Also I don't feel cars change that much on small timescales so waiting this long should make it feel like a true "upgrade".
-Do all required maintenance (and then some, drain and fill "lifetime" fluids every 3 years like brake/transmission fluid.)
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh

gator1
Posts: 174
Joined: Tue Sep 03, 2013 5:58 pm
Location: Smoky Mountains of East Tennessee

Re: How do Bogleheads buy cars?

Post by gator1 » Sun May 07, 2017 5:19 pm

Personally: I buy cars with cash only. It's a depreciating value, so it should be paid in cash. I also stay under 10% of my net worth, usually closer to 5% of net worth. So, I will get whatever I feel I can get with that, which usually is no more than $15,000. I then keep it for years.

If your employer wants you to get a certain vehicle do they help pay for the vehicle? My Dad's employer wants them to have a certain type of vehicle, so they help pay for the vehicle with a monthly payment as well as gas reimbursement.

Anyway, look into a used Lexus IS or Lexus ES. Maybe even a Lexus GS. You could also get into a used 3 or 5 series BMW, just know their maintenance costs will be more than a Lexus.

I've never bought a new vehicle, and never will.

User avatar
LadyGeek
Site Admin
Posts: 57365
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: How do Bogleheads buy cars?

Post by LadyGeek » Sun May 07, 2017 6:06 pm

This thread is now in the Personal Consumer Issues forum (car).
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

NibbanaBanana
Posts: 247
Joined: Sun Jan 22, 2017 10:34 pm

Re: How do Bogleheads buy cars?

Post by NibbanaBanana » Sun May 07, 2017 6:09 pm

If you have to have an expensive looking car then I would buy used, needs repair, and fix it myself.

I buy the absolute cheapest car available in the market regardless of manufacturer, and get no options whatsoever. I do all maintenance and repairs myself and keep them running until they rust to pieces. At which point I drive them to the bone yard and sell for scrap. (If I need a truck/van, expensive vehicle, I buy used that needs repair and do whatever it takes to get them on the road.) I am very cheap when it comes to depreciating assets. My last 4 new cars:
2013 Kia Reo 85K, on the road
2006 Chevy Aveo 211K, on the road
1997 Geo Metro 186K, dead and buried
1996 Geo Metro 185K, dead and buried

rec7
Posts: 2369
Joined: Tue Oct 28, 2008 7:22 pm

Re: How do Bogleheads buy cars?

Post by rec7 » Sun May 07, 2017 6:27 pm

jebmke wrote:
retire57 wrote:We avoid sedans as their styling tends to age more quickly than, say, an SUV.
My wife is looking to replace her car. I commented on one of the models she is considering - "the grill looks a little weird, don't you think?"

Reply: "What do I care? I'm going to be on the inside."
I don't know about the car but it sounds like you picked a good wife.
Disclaimer: You might lose money doing anything I say. Although that was not my intent. | Favorite song: Sometimes He Whispers Jay Parrack

User avatar
Kenkat
Posts: 5275
Joined: Thu Mar 01, 2007 11:18 am
Location: Cincinnati, OH

Re: How do Bogleheads buy cars?

Post by Kenkat » Sun May 07, 2017 6:37 pm

If you are looking at something like a Buick LaCrosse, you can get a certified 2014 - 2016 in the low to mid 20's. Looks like this model takes a big depreciation hit so used is the way to go. As others have said with Toyota, Honda, etc., depreciation is much slower so new might make sense.

I'd look at cars.com, autotrader.com or cargurus.com to get a feel for pricing. Most of the cars on these sites are at dealers vs. sites like Craigslist which tend more towards private parties.

User avatar
blueblock
Posts: 871
Joined: Sun Oct 19, 2014 6:06 pm
Location: Wisconsin

Re: How do Bogleheads buy cars?

Post by blueblock » Sun May 07, 2017 6:39 pm

I've had good luck asking dealers what they have in current-year models, but used. You'd be surprised how many there are. This way, you get an almost new car with few miles, plus nearly all of the manufacturers warranty, but you avoid the new car price premium.

I live in a state where disclosure of collisions is mandatory. I stay away from those.

I pay cash.

User avatar
Watty
Posts: 17369
Joined: Wed Oct 10, 2007 3:55 pm

Re: How do Bogleheads buy cars?

Post by Watty » Sun May 07, 2017 7:17 pm

simplesauce wrote:My job calls for a nice looking "expensive" car.
Unless you are something like a high end real estate agent I would take a hard look at assumption.
simplesauce wrote:I'm in the market for a new car. Looking at a newer Buick or something similar. My job calls for a nice looking "expensive" car.
Since this seems to be job related is there any chance you can deduct your car expenses?

If so that could greatly affect the cost of different ways of purchasing and paying for a car and that could be one of the few times that leasing would make sense if you are not driving excessive miles.

simplesauce wrote: I may prefer to finance with the dealership
A local credit union would be be a better choice.

Helo80
Posts: 1022
Joined: Sat Apr 29, 2017 8:47 pm

Re: How do Bogleheads buy cars?

Post by Helo80 » Sun May 07, 2017 7:41 pm

blueblock wrote:I've had good luck asking dealers what they have in current-year models, but used. You'd be surprised how many there are. This way, you get an almost new car with few miles, plus nearly all of the manufacturers warranty, but you avoid the new car price premium.
The only thing about that is that sometimes it's cheaper to go new with that route. Manufacturer incentives aren't passed down on used sales. Auto sales are slumping in 2017 and on track to be about 500,000 fewer than last year if memory serves. 2018 and 2019 are predicted to continue the downward trend.

It's more common than one would think that a 2017 "used" car clocks in at about the same price as a 2017 new car... sometimes used is more when new manufacturer incentives come out.

Bottom line --- do your homework like a good boglehead.

Jack FFR1846
Posts: 10313
Joined: Tue Dec 31, 2013 7:05 am
Location: 26 miles, 385 yards west of Copley Square

Re: How do Bogleheads buy cars?

Post by Jack FFR1846 » Sun May 07, 2017 7:50 pm

I just did a little research and indeed, Buick LaCrosse is a model that drops like a rock. I was able to find (in 15 seconds) a current year one with 900 miles for $10k off MSRP. I work near a Buick dealer and do note that they're one of the brands that has the cars with signs on them at various times of the year touting humungous discounts from GM. While the pickups have $12k off signs, the Buicks only "seem" to have $8k off. That's brand new. So I wouldn't go buying a new Buick as it seems the used market assumes that everyone buys when the huge discounts are in place.

I did look at car gurus for 1,2,3 year old cars and man.....the prices continue to dive towards zero. A 5 year old car? 20% of the new MSRP number. Seems like a bad choice to buy new.
Bogle: Smart Beta is stupid

jerryk68
Posts: 180
Joined: Wed Jan 22, 2014 7:56 pm

Re: How do Bogleheads buy cars?

Post by jerryk68 » Sun May 07, 2017 8:04 pm

I buy new cars and the last car I bought (Sept 15) was thru the USAA car buying service. No hassles,no arguing. They tell you the price and features of the vehicle before you set foot in any of the dealerships. I could not beat USAA's price.

inbox788
Posts: 6575
Joined: Thu Mar 15, 2012 5:24 pm

Re: How do Bogleheads buy cars?

Post by inbox788 » Sun May 07, 2017 8:10 pm

simplesauce wrote:I'm in the market for a new car. Looking at a newer Buick or something similar. My job calls for a nice looking "expensive" car.
...I may prefer to finance with the dealership.
I would AVOID financing with the dealership unless it was 1) standard manufacturer financing 2) low cost and low interest rate. Watch out for those financing and lease fees, especially with 3rd party financing at dealerships. There are lots of gotchas. Like someone mentioned, credit unions are often competitive with rates and usually standard/simple/straight forward loans with no or minimal fees.

As far as what car to buy, how "expensive" do you need to go? Consider a 2014 Lexus IS sedan for around $20-25k.

https://www.carmax.com/car/13805544

Will you be transporting clients? You might need a bigger car or SUV, but its going to be a challenge to come up with something without being a little older (and appear aged), or taking a risk with higher mileage or less reliable brand. Look at the Uber Black or Select list for good options:

http://www.idrivewithuber.com/uber-car-requirements/

If you don't need something so showy, high end Accord EXL, Camry and the like are quiet respectable.

HAL 9000
Posts: 90
Joined: Thu Apr 13, 2017 10:23 pm
Location: USA

Re: How do Bogleheads buy cars?

Post by HAL 9000 » Sun May 07, 2017 10:24 pm

I wouldn't buy a Buick. When I think luxury I think european. Audi, BMW, Benz, then maybe Volvo, Porsche and VW. I also think highly of Lexus. But I recommend Subaru. Yesterday, I saw a new Subaru Impreza Sport Sedan Silver and though that is a very very nice looking car, AWD, safe and sporty, I might have to get one. Cash. New. Buy a 2017 once the 2018's are out, maybe Labor Day. Truecar.com

User avatar
bottlecap
Posts: 6215
Joined: Tue Mar 06, 2007 11:21 pm
Location: Tennessee

Re: How do Bogleheads buy cars?

Post by bottlecap » Mon May 08, 2017 6:05 am

My thoughts are:

1. CPO is not necessary, especially if you have a mechanic who can look it over for you. You pay a premium for CPO cars and the seller makes sure they get the better end of the deal. Some people feel better with an extended warranty on an almost new car, so they pay that premium.

2. Buying used can be better than buying new if you do a lot of leg work yourself. You have to find the seller that hasn't priced it right, for whatever reason. Otherwise, the market has priced in the depreciation and buying new vs. buying used should be about a wash over the car's lifetime.

Good luck,

JT

dennisswal
Posts: 5
Joined: Tue Jul 12, 2016 8:41 pm

Re: How do Bogleheads buy cars?

Post by dennisswal » Mon May 08, 2017 7:06 am

I have purchased 2 Honda's new in the last 4 years and did everything on the internet. You need to know exactly what you want. Probably easier with a Honda, since very few options and packages. I purchased a 2016 CR-V on December 31, 2015 and got internet bids from 5 Honda dealers within 75 miles of where I live. They try to get you in their dealership to negotiate, but I have better luck just having them email me their price or give me the price over the phone. I knew exactly what I wanted. I also tried the Costco program, but saved about $850 by doing the way I did.

jharkin
Posts: 2358
Joined: Mon Mar 28, 2016 7:14 am
Location: Boston suburbs

Re: How do Bogleheads buy cars?

Post by jharkin » Mon May 08, 2017 7:18 am

Can you be more specific about what "my job calls for expensive looking car" means ? Buick's are really not that expensive or upscale (Ive had a couple as rentals and frankly the interiors felt cheap) and if you job is in law, finance or something like that the people who set this expectation are probably expecting to see you in something... European... or at least a Lexus.


Anyway, I do what a lot of people on here do:

I typically buy Honda's and Toyota's.

I stopped buying them used, only new now because the depreciation is so low.

I buy whatever trim has all the features I want, Usually this is on the mid-high side - not the top but not the stripped down bottom trim either. That's where the volume and the best deals are. Frankly, for something I'm going to spend a good part of my time in for the next 10 years I'm not going to sacrifice comfort to save a hundred bucks just to gloat "I got a deal"

I have a dealer that I like working with and usually gets me good deals plus they are low pressure and have good service. I will get quotes from a few competitors to negotiate but usually go with my preferred dealer as long as they are in the ballpark. Again, not worth my time to waste 10s or hundreds of hours just to squeak out a couple hundred bucks on a 5 figure purchase.

I dont buy ANY extras. no extended warranties, no service plans, no protection package, nothing. Just say No No No in the F&I office.

Sometimes I pay cash, but there have been times I financed when the rate was 1.5% or less and I had better things to do with the money. If the dealer wants financing to offer the best price I take it and then just pay it off.

I usually keep the car 8-10 years and maintain it well.

Topic Author
simplesauce
Posts: 140
Joined: Tue Jan 17, 2017 8:22 am

Re: How do Bogleheads buy cars?

Post by simplesauce » Mon May 08, 2017 7:40 am

jharkin wrote:Can you be more specific about what "my job calls for expensive looking car" means ? Buick's are really not that expensive or upscale (Ive had a couple as rentals and frankly the interiors felt cheap) and if you job is in law, finance or something like that the people who set this expectation are probably expecting to see you in something... European... or at least a Lexus.


Anyway, I do what a lot of people on here do:

I typically buy Honda's and Toyota's.

I stopped buying them used, only new now because the depreciation is so low.

I buy whatever trim has all the features I want, Usually this is on the mid-high side - not the top but not the stripped down bottom trim either. That's where the volume and the best deals are. Frankly, for something I'm going to spend a good part of my time in for the next 10 years I'm not going to sacrifice comfort to save a hundred bucks just to gloat "I got a deal"

I have a dealer that I like working with and usually gets me good deals plus they are low pressure and have good service. I will get quotes from a few competitors to negotiate but usually go with my preferred dealer as long as they are in the ballpark. Again, not worth my time to waste 10s or hundreds of hours just to squeak out a couple hundred bucks on a 5 figure purchase.

I dont buy ANY extras. no extended warranties, no service plans, no protection package, nothing. Just say No No No in the F&I office.

Sometimes I pay cash, but there have been times I financed when the rate was 1.5% or less and I had better things to do with the money. If the dealer wants financing to offer the best price I take it and then just pay it off.

I usually keep the car 8-10 years and maintain it well.
Great post, thank you. I am a Real Estate agent and I need a nice looking car. If I were to buy 2017, I am looking at Buick or Kia. I haven't test driven yet....not interested if they feel cheap on the inside.

I also found a few used cars like a 2012 Lexus or 2015 Infiniti that look very nice and cost the same $20-25k. Think that's a better route? What do I need to weigh here?

And what do I need to look out for? These dealers are quick talking and will probably hit me with charges and fees.

User avatar
sunny_socal
Posts: 2093
Joined: Tue Mar 24, 2015 4:22 pm

Re: How do Bogleheads buy cars?

Post by sunny_socal » Mon May 08, 2017 8:45 am

simplesauce wrote:
Great post, thank you. I am a Real Estate agent and I need a nice looking car. If I were to buy 2017, I am looking at Buick or Kia. I haven't test driven yet....not interested if they feel cheap on the inside.

I also found a few used cars like a 2012 Lexus or 2015 Infiniti that look very nice and cost the same $20-25k. Think that's a better route? What do I need to weigh here?

And what do I need to look out for? These dealers are quick talking and will probably hit me with charges and fees.
As a real estate agent I would avoid Buick, it's a dead brand and a total "old person" car.

The used Lexus is the way to go if you want to 'appear' successful.

Buy a new Honda if you just want wheels, but even a loaded Accord won't be as nice as the CPO Lexus.

Topic Author
simplesauce
Posts: 140
Joined: Tue Jan 17, 2017 8:22 am

Re: How do Bogleheads buy cars?

Post by simplesauce » Mon May 08, 2017 8:56 am

sunny_socal wrote:
simplesauce wrote:
Great post, thank you. I am a Real Estate agent and I need a nice looking car. If I were to buy 2017, I am looking at Buick or Kia. I haven't test driven yet....not interested if they feel cheap on the inside.

I also found a few used cars like a 2012 Lexus or 2015 Infiniti that look very nice and cost the same $20-25k. Think that's a better route? What do I need to weigh here?

And what do I need to look out for? These dealers are quick talking and will probably hit me with charges and fees.
As a real estate agent I would avoid Buick, it's a dead brand and a total "old person" car.

The used Lexus is the way to go if you want to 'appear' successful.

Buy a new Honda if you just want wheels, but even a loaded Accord won't be as nice as the CPO Lexus.
Anything to look out for when buying pre owned? I assume do it through a dealer, correct? I'll find a Lexus dealer.

User avatar
lthenderson
Posts: 4334
Joined: Tue Feb 21, 2012 12:43 pm
Location: Iowa

Re: How do Bogleheads buy cars?

Post by lthenderson » Mon May 08, 2017 9:32 am

When looking for specific cars, I have bought several on ebay over the years. I call up the seller to verify its history and working order status and if they would be willing to pick me up at the local airport before I big on it. If everything sounds good, I bid on the car and if I win, I pick up a cashier's check at the bank, have my spouse drop me off at the airport and buy a one-way plane ticket. Once at the car I give it an inspection and test drive, hand over the check and drive it back home. I've never bought one that I regretted.

When buying non-specific cars like our commuting vehicles, I generally buy new, with cash and in person at my local dealership. Some of the perks I get by negotiating in person versus email is that I have always got free car washes for the life of the vehicle using the dealer car wash. On my last vehicle, I got free servicing, including oil changes, for the first 100,000 miles. They pick it up at work, service and return it the same day so I don't have to make an appointment. They also throw in the rubber floor mats and cargo trays as well. Other perks are they give me first dibs on cars that are hard to find such as popular color schemes with new vehicles or rare trim levels.

Jack FFR1846
Posts: 10313
Joined: Tue Dec 31, 2013 7:05 am
Location: 26 miles, 385 yards west of Copley Square

Re: How do Bogleheads buy cars?

Post by Jack FFR1846 » Mon May 08, 2017 9:40 am

lthenderson wrote:When looking for specific cars, I have bought several on ebay over the years. I call up the seller to verify its history and working order status and if they would be willing to pick me up at the local airport before I big on it. If everything sounds good, I bid on the car and if I win, I pick up a cashier's check at the bank, have my spouse drop me off at the airport and buy a one-way plane ticket. Once at the car I give it an inspection and test drive, hand over the check and drive it back home. I've never bought one that I regretted.

When buying non-specific cars like our commuting vehicles, I generally buy new, with cash and in person at my local dealership. Some of the perks I get by negotiating in person versus email is that I have always got free car washes for the life of the vehicle using the dealer car wash. On my last vehicle, I got free servicing, including oil changes, for the first 100,000 miles. They pick it up at work, service and return it the same day so I don't have to make an appointment. They also throw in the rubber floor mats and cargo trays as well. Other perks are they give me first dibs on cars that are hard to find such as popular color schemes with new vehicles or rare trim levels.
This might work but be aware that in some states, the license plate does not stay with the car and has to be returned to cancel insurance and registration. Some states (Massachusetts, where I live, in particular) has no such thing as a temporary tag. So getting the car home might be more difficult. I sold my Lotus a year ago and left the car registered and insured. He drove it home to Detroit and mailed me back the license plate. It was somewhat of a risk for me because if something happened, my insurance was on the car. Of course with a Lotus, if he hit a raccoon, the car would be totaled and the raccoon would be mildly annoyed and would scamper away.
Bogle: Smart Beta is stupid

User avatar
lthenderson
Posts: 4334
Joined: Tue Feb 21, 2012 12:43 pm
Location: Iowa

Re: How do Bogleheads buy cars?

Post by lthenderson » Mon May 08, 2017 9:44 am

Jack FFR1846 wrote:
lthenderson wrote:When looking for specific cars, I have bought several on ebay over the years. I call up the seller to verify its history and working order status and if they would be willing to pick me up at the local airport before I big on it. If everything sounds good, I bid on the car and if I win, I pick up a cashier's check at the bank, have my spouse drop me off at the airport and buy a one-way plane ticket. Once at the car I give it an inspection and test drive, hand over the check and drive it back home. I've never bought one that I regretted.

When buying non-specific cars like our commuting vehicles, I generally buy new, with cash and in person at my local dealership. Some of the perks I get by negotiating in person versus email is that I have always got free car washes for the life of the vehicle using the dealer car wash. On my last vehicle, I got free servicing, including oil changes, for the first 100,000 miles. They pick it up at work, service and return it the same day so I don't have to make an appointment. They also throw in the rubber floor mats and cargo trays as well. Other perks are they give me first dibs on cars that are hard to find such as popular color schemes with new vehicles or rare trim levels.
This might work but be aware that in some states, the license plate does not stay with the car and has to be returned to cancel insurance and registration. Some states (Massachusetts, where I live, in particular) has no such thing as a temporary tag. So getting the car home might be more difficult. I sold my Lotus a year ago and left the car registered and insured. He drove it home to Detroit and mailed me back the license plate. It was somewhat of a risk for me because if something happened, my insurance was on the car. Of course with a Lotus, if he hit a raccoon, the car would be totaled and the raccoon would be mildly annoyed and would scamper away.
Agreed. I should note that I normally limit my search to dealers and they provide me with temporary tags in the window to get home and I always call my insurance company before I fly out so that I'm insured.

DaftInvestor
Posts: 4764
Joined: Wed Feb 19, 2014 10:11 am

Re: How do Bogleheads buy cars?

Post by DaftInvestor » Mon May 08, 2017 10:35 am

finite_difference wrote:My current strategy boils down to:

-Buy a new Toyota, Honda or Subaru.
-Don't buy the absolute lowest trim but buy the lowest trim that has most of what you really want.
-Try to negotiate price down as much as possible by competing dealers against each other, but without killing yourself. Settle on a price over email/phone before you walk in.
-Agree to the extended warranty if they wear you down and cancel it later.
-Drive it for at least 10 years/100,000 miles. This point is key to make buying new affordable. Also I don't feel cars change that much on small timescales so waiting this long should make it feel like a true "upgrade".
-Do all required maintenance (and then some, drain and fill "lifetime" fluids every 3 years like brake/transmission fluid.)
This has been our strategy almost exactly with the exception I never let them sell me the extended warranty to begin with (even though they always drop the price 2 or 3 times and keep asking - that tells you how much they make on these).
retire57 wrote: We avoid sedans as their styling tends to age more quickly than, say, an SUV.
We avoid SUVs as their price seems to be nearly double compared to what you can pay for a good Sedan due to popularity/cost-of-goods not to mention the higher maintenance costs over the lifetime of the car. For instance, if you look at Toyota - you can get a Camry well below invoice which might be half the price that you'd pay for a similar trim-lined Highlander (and .75 of what you'd pay for a Rav4). The years we needed the extra space due to young children with lots of stuff we went with a minivan.
I never thought about an "aging" in style difference but suppose if there is one I don't care. ( To me, a 10 year old SUV looks as dated as a 10 year old Sedan so not sure I agree - but not really worth debating).

PinotGris
Posts: 667
Joined: Tue Feb 14, 2012 9:38 pm

Re: How do Bogleheads buy cars?

Post by PinotGris » Mon May 08, 2017 11:00 am

jebmke wrote:
retire57 wrote:We avoid sedans as their styling tends to age more quickly than, say, an SUV.
My wife is looking to replace her car. I commented on one of the models she is considering - "the grill looks a little weird, don't you think?"

Reply: "What do I care? I'm going to be on the inside."
:D Is this a Lexus?

inbox788
Posts: 6575
Joined: Thu Mar 15, 2012 5:24 pm

Re: How do Bogleheads buy cars?

Post by inbox788 » Mon May 08, 2017 11:01 am

sunny_socal wrote:As a real estate agent I would avoid Buick, it's a dead brand and a total "old person" car.
If your clientele is from China, they may have a totally different impression of Buick.

China numbers help Buick surpass 1 million sales
http://www.freep.com/story/money/cars/g ... /92301986/

GM's Buick sees sales soar -- all because of China
https://www.usatoday.com/story/money/ca ... /92363996/

Review: Buick Envision is worthy Chinese import
https://www.usatoday.com/story/money/ca ... /96473430/

Why Buick's future lies in China
http://www.autoblog.com/2017/04/10/why- ... -in-china/

Buick is a lot more than a dad wagon in China
http://money.cnn.com/2017/02/22/news/co ... ory-brand/

Check out this small Mercedes car under 25k euros. They sell tons of these. It's like their Honda Accord. The marketing in different parts of the world can be quite different.
http://www.mercedes-benz.de/content/ger ... light.html

And here's the Audi A1, so when in Europe or UK and someone says they drive a Mercedes or Audi, it might not be that big a deal.
https://www.audi.co.uk/new-cars/a1/a1.html

Looks like Buick re-branding efforts may not be working all that well.

https://www.youtube.com/watch?v=KNgZ241PMhU

https://www.youtube.com/user/Buick/videos

BTW, GM is seriously impacted by import/export taxes and trade agreements and changes cuts both ways. It's not clear to me whether they would be helpful or harmful.

User avatar
gunn_show
Posts: 1532
Joined: Wed Jun 06, 2007 3:02 pm

Re: How do Bogleheads buy cars?

Post by gunn_show » Mon May 08, 2017 11:16 am

retire57 wrote:We seldom buy cars, but this is has been our long-time tried-and-true method. Used, 2-3 years old, just off lease under 35,000 miles. Prefer to pay cash.
Similar playbook to this, except we go even older, 5-10 year used. Really depends on a/ your usage model (how many miles per year), and b/ your cost model, what do you want to pay. I work from home and wife is about to be a SAHM, so we won't have to drive a lot, but we still wanted nicer vehicles with flashy tech and some appearance of quality and brand. So I just bought our 2nd car, after work eliminated the fleet car program, and went shopping for 5-10 year old Lexus sedans that were clean Carfax, 1-owner, well maintained, 50k-150k mileage, for under $15k. I set an alert on Craigslist - you'd be amazed how many of these types of cars pop up every single day, a 100 a week. Found a super cherry mint '07 Lexus GS350 that looks 5 years old inside and out, has 100k miles, and was easily affordable in cash. Since it is a Lex/Toyo it will be reliable and easy to maintain at nearly any neighborhood shop. I did the same last year when I decided to upgrade my old Honda Pilot, went out and got a used Lexus GX 470 AWD v8 snow hauler beast with a ton of miles but super well maintained by a local RE agent. With proper care both of these Lexus vehicles should last us 5-10 years or longer. And at this cost, you can plug & play any time you want to upgrade, without spending $45k sticker or financing.
"The best life hack of all is to just put the work in and never give up." Bas Rutten

ENT Doc
Posts: 157
Joined: Sun Jan 22, 2017 9:14 pm

Re: How do Bogleheads buy cars?

Post by ENT Doc » Mon May 08, 2017 11:37 am

I only buy used certified that comes with a good warranty. Prefer Toyota, Honda, or possibly Subaru. Check the Carfax, but don't trust it entirely - get it inspected by an independent mechanic. I also do a regression analysis on the cars in a 50 mile radius (also do this in another area if willing to drive and costs are generally cheaper). Last one I did was a used RAV4 search where I did a regression of price on year, mileage, and used dummy variables for the trims. Immediately showed which ones were under/overvalued. Long story short, I found one $1500 under value that my wife liked (it was for her), had it inspected by an independent mechanic who I trust, found a minor issue that I used as a bargaining chip to get another $500 off. Paid in cash after maxing out the dealer's allowance on the 2% cash back card. Plan on driving it for well over a decade. Put <10k on per year.

IMO
Posts: 572
Joined: Fri May 05, 2017 6:01 pm

Re: How do Bogleheads buy cars?

Post by IMO » Mon May 08, 2017 11:59 am

I guess it is debatable on what a client expects their real estate agent to be driving. Interesting thought as I've bought a number of homes, and trying to remember was I focused on their car? I get it though, one needs a nice presentable car, and perhaps if one is dealing with very high end homes those clients may be more concerned about what brand car you are driving.

You can consider looking at some of the rental agencies. The last car I bought was helping my elderly parents, and was a 1 yr old Hyundai Sonata with leather interior and about 18,000 miles from enterprise car sales. Looked a number of the cars, and seems they pick only the best of the best in their fleet to sell (I was told the other's go to places like CarMax). The car looked new/flawless and came with a 1 yr warranty and the price was the price without having to haggle. Of note, the 100,000 mile Hyundai warranty is no longer fully valid, instead Hyundai warranties the car for 1/2 or 50,000 miles. They let me charge the entire car on my credit card and I got my flight points and parents wrote me a check. If I was financing, I would have gone ahead of time to my credit union because dealing with dealership financing is an unpleasant experience from my past experiences. One of our current cars was also from enterprise car sales.

Other thoughts:

Watch the color of the car. I've owned a high end black sports car and the black finish can look pretty bad if it's not constantly cleaned.
White/Grey seem to be the best to not have to constantly be worried if the car finish is spotless when you take out clients.

Personally if it were me, I'd keep my beater car (10 yr old+) for my personal day to day driving, taking dog, sport activities (racks, etc) and
get a nicer car that was reserved for the real estate clients. It takes a lot of effort to keep the everyday car spotlessly clean (especially if you have kids). Wouldn't that also be easier for tax purposes to have an entirely separate work car that every expense on that car was for work only (I suppose lease best for that)?

Broken Man 1999
Posts: 3297
Joined: Wed Apr 08, 2015 11:31 am

Re: How do Bogleheads buy cars?

Post by Broken Man 1999 » Mon May 08, 2017 12:05 pm

We have only had new cars after our marriage. They were typically modest, and we usually financed. Though, we usually paid them off long before the loan's interval. Most were driven about eight years at the minimum, 100,000+ miles. I used to load everyone into the car, and we would watch the odometer roll to 100,000. Hey, we were easily amused! Funny thing, one daughter sent us a photo of her Camry turning over 200,000 miles. She has 230,000 according to her last update.

The last two vehicles were purchased with cash, our latest is a 2008 purchased in 2009. We only have 70,000 miles on it, since it is a van I expect 15 years usage at the least, as it is pretty stout. Next vehicle will probably be our last, if the current one isn't. Though when I kick off wife will most likely donate whatever we have at the time, and buy a Mercedes SUV. She has been wheeling full size vans around for about 20 years, and she likes to sit up higher than a driver in typical car seating.

Though, who knows what the typical transportation answer might be in 10-15 years.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

AdmiralSnackbar
Posts: 29
Joined: Tue Jan 10, 2017 3:06 pm

Re: How do Bogleheads buy cars?

Post by AdmiralSnackbar » Mon May 08, 2017 12:20 pm

If you want a glimpse as to how car salespeople are being trained, you might consider watching some of the videos on this YouTube channel:

https://www.youtube.com/user/jsteverichards

I have heard much of his verbiage coming from car salespeople in my recent past, and sadly, I think I fell for a lot of the sales pitch! :oops: However, I have also had fantastic sales staff that were honest and forthcoming, and gave me great deals. In any case, watching a few of these videos might help prepare shoppers for whatever the dealer may throw at them. Good luck!

puravida
Posts: 33
Joined: Sun Apr 21, 2013 3:01 pm
Location: Central Florida

Re: How do Bogleheads buy cars?

Post by puravida » Mon May 08, 2017 3:02 pm

I've always purchased new cars with cash and held them as long as possible, until mileage was 150K or so. This seems to be the best cost-effective route and BH style. We're a 2 car family and mine is a 17-year-old Mercedes SLK 230 with 95K miles; ready to upgrade soon given the age. All others have been Honda's & Lexus. I agree with and will most likely buy a used/CPO 2-3 year old car next, given car quality & longevity these days. A 2014 SLK can be had for almost half the price of new. I'd recommend Lexus highly for your business needs. Good luck!
Simple, passive, effective - the Bogle way...

FraggleRock
Posts: 362
Joined: Sun Feb 12, 2017 6:50 pm

Buick?

Post by FraggleRock » Mon May 08, 2017 3:14 pm

Isn't the minimum age to buy a Buick 80?

surfstar
Posts: 1797
Joined: Fri Sep 13, 2013 12:17 pm
Location: Santa Barbara, CA

Re: How do Bogleheads buy cars?

Post by surfstar » Mon May 08, 2017 3:15 pm

Assuming the subject was riddle, my answer was "infrequently."

denovo
Posts: 4414
Joined: Sun Oct 13, 2013 1:04 pm

Re: How do Bogleheads buy cars?

Post by denovo » Mon May 08, 2017 4:34 pm

jerryk68 wrote:I buy new cars and the last car I bought (Sept 15) was thru the USAA car buying service. No hassles,no arguing. They tell you the price and features of the vehicle before you set foot in any of the dealerships. I could not beat USAA's price.

https://www.usaa.com/inet/pages/car_buy ... irect=true

The USAA Car Buying Service is just a rebranding of TrueCar as you see by reading the fineprint.
USAA Car Buying Service provided by TrueCar, Inc. USAA Bank receives marketing fees in connection with the Car Buying Service.
TrueCar does not provide good deals and everyone on this site who has attempted negotiating has easily beaten TrueCar pricing.
"Don't trust everything you read on the Internet"- Abraham Lincoln

mortfree
Posts: 1775
Joined: Mon Sep 12, 2016 7:06 pm

Re: How do Bogleheads buy cars?

Post by mortfree » Mon May 08, 2017 4:44 pm

surfstar wrote:Assuming the subject was riddle, my answer was "infrequently."

exactly....

my original answer was going to be "with cash"

but I haven't achieved boglehead status.

lilvixen
Posts: 25
Joined: Thu Dec 22, 2016 12:40 pm

Re: How do Bogleheads buy cars?

Post by lilvixen » Mon May 08, 2017 5:08 pm

May I suggest checking out the latest generation of the Nissan Murano? It's competing against the Lexus RX 350:
http://www.thecarconnection.com/car-com ... urano_2016

I bought a 2016 model in January, taking advantage of a $4000 factory incentive after negotiating the price down 10% from the sticker, which skips at least the first year's depreciation. I'm quite pleased with the car, and I've had a few coworkers comment that they thought it was a Lexus. I recommend avoiding black unless you have the time to maintain it: the black paint is thin and scratches and chips easily. I ended up with black because I bought an in-stock vehicle. I negotiated with the dealership for accessories to have a detailer of my choice clean up the scratches in the car at delivery, after which I had the detailer install a ceramic coating. It looks incredible, but I already have small rock chips from one road trip.

User avatar
Watty
Posts: 17369
Joined: Wed Oct 10, 2007 3:55 pm

Re: How do Bogleheads buy cars?

Post by Watty » Mon May 08, 2017 5:45 pm

simplesauce wrote:I am a Real Estate agent and I need a nice looking car.
Some real estate agents drive a lot of miles, and you need reliable car.

If you buy something like a two year old Buick it might not be reliable enough to last more than a few years if you are driving a lot of miles.

User avatar
goingup
Posts: 3660
Joined: Tue Jan 26, 2010 1:02 pm

Re: How do Bogleheads buy cars?

Post by goingup » Mon May 08, 2017 6:32 pm

chabil wrote:
jebmke wrote:
retire57 wrote:We avoid sedans as their styling tends to age more quickly than, say, an SUV.
My wife is looking to replace her car. I commented on one of the models she is considering - "the grill looks a little weird, don't you think?"

Reply: "What do I care? I'm going to be on the inside."
:D Is this a Lexus?
That was my thought too! Looks like a cowcatcher on a train. :wink:

User avatar
oldcomputerguy
Moderator
Posts: 6105
Joined: Sun Nov 22, 2015 6:50 am
Location: In the middle of five acres of woods in East Tennessee

Re: How do Bogleheads buy cars?

Post by oldcomputerguy » Mon May 08, 2017 6:38 pm

As seldom as possible. I hate having a car payment.
"I’ve come around to this: If you’re dumb, surround yourself with smart people; and if you’re smart, surround yourself with smart people who disagree with you." (Aaron Sorkin)

Pigeon
Posts: 242
Joined: Mon Mar 06, 2017 8:50 am

Re: How do Bogleheads buy cars?

Post by Pigeon » Mon May 08, 2017 8:51 pm

My brother sells real estate at a variety of price points, some of it high end. He has done very well and drives an impeccably clean Camry. It isn't new but it isn't noticibly old. I can't remember what any of our realtors drove. A Buick is a geezer mobile.

We buy Toyotas, Hondas or Nissans with low trim levels new at the end of the model year. Th. last couple of times I got bids from dealers over the Internet and it has saved time, money and headache. We drive the cars at least 12 years.

HAL 9000
Posts: 90
Joined: Thu Apr 13, 2017 10:23 pm
Location: USA

Re: How do Bogleheads buy cars?

Post by HAL 9000 » Mon May 08, 2017 10:20 pm

About 4 years ago I used zag.com which is now truecar. I recommend it for looking/browsing but not for buying. In short, the price we negotiated wasn't honored. At the last second, the price went up $500. I should have walked away, but after 3 hours of trying to buy the car, what took so long, I just wanted to get it done. I think they dfo that stuff to wear you down so you cave like I did. I hear there are online negotiation services you can use to get the best deal. My advice, have a price and model/trim quote in writing when you go in, and if they start playing games go to the competition. This dealer also tried to sell me a 'new' car with 1600 miles on it.

lazydavid
Posts: 2527
Joined: Wed Apr 06, 2016 1:37 pm

Re: How do Bogleheads buy cars?

Post by lazydavid » Tue May 09, 2017 5:43 am

IMO wrote:Personally if it were me, I'd keep my beater car (10 yr old+) for my personal day to day driving, taking dog, sport activities (racks, etc) and
get a nicer car that was reserved for the real estate clients. It takes a lot of effort to keep the everyday car spotlessly clean (especially if you have kids). Wouldn't that also be easier for tax purposes to have an entirely separate work car that every expense on that car was for work only (I suppose lease best for that)?
Real Estate agents tend to put on a LOT of miles, so leasing is usually not a good idea, unless you have an arrangement with a dealer where they forgive the mileage in exchange for a new lease.

However, your strategy is a sound one. Assuming the OP is his/her own business and not an employee, go buy a nice SUV with a GVWR over 6,000 lbs. The curb weight doesn't have to be over 6k, just the total capacity. Something like a Lexus GX, Audi Q7, upper trim Jeep Grand Cherokee, BMW X5, etc. IRS rules allow you to fully depreciate such vehicles in just 5 years if they are used exclusively for business use, and most of that depreciation comes in year 1. For example, you can write off $43k of a $55k SUV purchase in the first year--$25k Section 179 deduction, plus $15k (50% of remaining value) bonus depreciation, plus $3k (20% of remaining after the first two) standard depreciation. This reduces both income and self-employment taxes.

If you buy a pickup with at least a 6' bed (think F-150 King Ranch or Platinum), you take a Section 179 deduction for the full purchase price in the first year, as long as it is used more than 50% for business for the first five years.

After 5 years you have a few options:
1) Keep driving it for the business, though now you can also drive it for personal use, and potentially get rid of the DD
2) Sell it and buy another, repeat the depreciation process
3) Sell your DD and demote the original SUV, buy another for the business

jlcnuke
Posts: 434
Joined: Thu Mar 16, 2017 10:26 am

Re: How do Bogleheads buy cars?

Post by jlcnuke » Tue May 09, 2017 6:55 am

I buy cars that are 1-2 years old with less than 30,000 miles. I also only buy cars that I enjoy/find comfortable. My current car is a 2010 Infiniti G37 sedan. I bought it in 2011 and financed everything but the trade-in (my previous car, the 2002 BMW 330i that I got in 2004 with 26k miles on it). With financing at less than 2%, I'd rather leave my money invested in the market than pay cash for a car. When I have the loan I tend to go ahead and pay it off early anyway though. Psychologically this works best for me because my savings/investing rate doesn't change but I don't like debt so extra income (overtime pay or travel pay) tends to go towards paying off the car. It works well for me. I plan on trading in for a new car in another 2-4 years unless this one starts giving me problems (118k miles so far with nothing but regular maintenance needed, knock on wood).

User avatar
just frank
Posts: 1455
Joined: Sun Nov 02, 2014 4:13 pm
Location: Philly Metro

Re: How do Bogleheads buy cars?

Post by just frank » Tue May 09, 2017 6:58 am

Buy a **used** Tesla Model S. :D

Caduceus
Posts: 2017
Joined: Mon Sep 17, 2012 1:47 am

Re: How do Bogleheads buy cars?

Post by Caduceus » Tue May 09, 2017 1:39 pm

I think the new generation of Bogleheads will just uber everywhere. No more car purchases. :D

Post Reply