Kevin O'Leary: owning a car is a terrible idea

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CULater
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Kevin O'Leary: owning a car is a terrible idea

Post by CULater » Tue Oct 30, 2018 9:58 am

Here's a thought inspired by all the headaches I've had with my lousy 2017 Honda CRV. Kevin O'Leary suggests they are a terrible waste of money. I'll add that they just take up too much of your valuable time dealing with all the overhead of owning one. You would think Bogleheads would be talking up this idea.
Our country has long had a love affair with the open road. Getting your first car was long a teenage rite of passage.

Financially speaking, though, car ownership today is a terrible idea, O’Leary said.

“You’re thinking about buying a car. Let me give you a new idea: Don’t,” O’Leary said on CNBC.

“Cars cost a fortune in maintenance and insurance and just the amortization, which means as they go down in value, you’re losing money,” O’Leary explained.

“Let’s say I pay $25,000 for it. Two years later, it might be worth only 12 [thousand dollars].”
https://www.marketwatch.com/story/kevin ... 018-10-29
May you have the hindsight to know where you've been, The foresight to know where you're going, And the insight to know when you've gone too far. ~ Irish Blessing

PFInterest
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Re: Kevin O'Leary: owning a car is a terrible idea

Post by PFInterest » Tue Oct 30, 2018 10:00 am

who?
and no, not currently possible.

daheld
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Re: Kevin O'Leary: owning a car is a terrible idea

Post by daheld » Tue Oct 30, 2018 10:00 am

CULater wrote:
Tue Oct 30, 2018 9:58 am
Here's a thought inspired by all the headaches I've had with my lousy 2017 Honda CRV. Kevin O'Leary suggests they are a terrible waste of money. I'll add that they just take up too much of your valuable time dealing with all the overhead of owning one. You would think Bogleheads would be talking up this idea.
Our country has long had a love affair with the open road. Getting your first car was long a teenage rite of passage.

Financially speaking, though, car ownership today is a terrible idea, O’Leary said.

“You’re thinking about buying a car. Let me give you a new idea: Don’t,” O’Leary said on CNBC.

“Cars cost a fortune in maintenance and insurance and just the amortization, which means as they go down in value, you’re losing money,” O’Leary explained.

“Let’s say I pay $25,000 for it. Two years later, it might be worth only 12 [thousand dollars].”
https://www.marketwatch.com/story/kevin ... 018-10-29
"Don't buy a car--take your private jet you morons!"

Seriously-what does he think is the alternative? Does he understand that most of the world is not serviced by any type of public transit. Uber ain't a thing where I'm from.

uncaD
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Re: Kevin O'Leary: owning a car is a terrible idea

Post by uncaD » Tue Oct 30, 2018 10:02 am

You could say the same thing about a refrigerator, but I still need one.

Glockenspiel
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Re: Kevin O'Leary: owning a car is a terrible idea

Post by Glockenspiel » Tue Oct 30, 2018 10:05 am

I agree with him, but until we get every person to live in a highly dense city with a robust public transit system, that ain't happening. The world is moving in that direction, but it will take generations to get there.

MichCPA
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Re: Kevin O'Leary: owning a car is a terrible idea

Post by MichCPA » Tue Oct 30, 2018 10:06 am

This depends a great deal on where you live. Public transport and Uber would not be a cost effective replacement for me. That being said, any one who refers to a car as an 'investment' is just being foolish.

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by NHRATA01 » Tue Oct 30, 2018 10:07 am

They are a terrible idea for his reasons. However he neglects the fact that in most cases an automobile is a net contributor to your income: that is, you often can't get to a job and make money without incurring transportation costs.

You could live in the city and walk, however it is more likely your savings on not having a vehicle will be consumed by the higher cost of residence and overall cost of living.

You could take public transportation, but often the duration of the commute is longer - thus costing you $ in the form of your time.

The real options to potentially reduce costs would obviously be telecommuting/working from home, ridesharing, or car sharing. But I would venture to guess that still for a majority of the working population showing up to brick and mortar, you are going to be stuck with the need to own your own vehicle.

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by Jags4186 » Tue Oct 30, 2018 10:07 am

That’s right. Don’t buy a car. Rent from “O’Rentals!” We only rent the finest cars with no maintenance issues. That’s O’Rentals. And make sure you purchase my new auto-ETF “O’Share” OCAR. We only invest in the finest stable automobile companies in the world. That’s OCAR.

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by randomguy » Tue Oct 30, 2018 10:24 am

daheld wrote:
Tue Oct 30, 2018 10:00 am
CULater wrote:
Tue Oct 30, 2018 9:58 am
Here's a thought inspired by all the headaches I've had with my lousy 2017 Honda CRV. Kevin O'Leary suggests they are a terrible waste of money. I'll add that they just take up too much of your valuable time dealing with all the overhead of owning one. You would think Bogleheads would be talking up this idea.
Our country has long had a love affair with the open road. Getting your first car was long a teenage rite of passage.

Financially speaking, though, car ownership today is a terrible idea, O’Leary said.

“You’re thinking about buying a car. Let me give you a new idea: Don’t,” O’Leary said on CNBC.

“Cars cost a fortune in maintenance and insurance and just the amortization, which means as they go down in value, you’re losing money,” O’Leary explained.

“Let’s say I pay $25,000 for it. Two years later, it might be worth only 12 [thousand dollars].”
https://www.marketwatch.com/story/kevin ... 018-10-29
"Don't buy a car--take your private jet you morons!"

Seriously-what does he think is the alternative? Does he understand that most of the world is not serviced by any type of public transit. Uber ain't a thing where I'm from.
He recommends public transit and not ride sharing. So basically it is great advice for people that live in NYC and another half dozen metro areas and doesn't work for anyone else:) And even for the NYC it is really close depending on your opportunity cost. O'Learly probably loses 1000 bucks for every 15 min he wastes. That pays for a lot of car service.

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by dsmil » Tue Oct 30, 2018 10:32 am

NHRATA01 wrote:
Tue Oct 30, 2018 10:07 am
They are a terrible idea for his reasons. However he neglects the fact that in most cases an automobile is a net contributor to your income: that is, you often can't get to a job and make money without incurring transportation costs.

You could live in the city and walk, however it is more likely your savings on not having a vehicle will be consumed by the higher cost of residence and overall cost of living.

You could take public transportation, but often the duration of the commute is longer - thus costing you $ in the form of your time.

The real options to potentially reduce costs would obviously be telecommuting/working from home, ridesharing, or car sharing. But I would venture to guess that still for a majority of the working population showing up to brick and mortar, you are going to be stuck with the need to own your own vehicle.
Good points! Yes, I spend a lot of time and money driving, but it allows me to commute to a well-paying job while living in a reasonably priced area with great schools. I wouldn't want to live in the area within walking/biking distance of my current job.

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by stoptothink » Tue Oct 30, 2018 10:34 am

Glockenspiel wrote:
Tue Oct 30, 2018 10:05 am
I agree with him, but until we get every person to live in a highly dense city with a robust public transit system, that ain't happening. The world is moving in that direction, but it will take generations to get there.
This is the reality. FWIW, wife and I (both with professional careers, and we have 2 young children) have shared a single car for almost the entirety of our marriage. I used to ride my bike to work, now we purchased a home which is ~7min walk from my office. In the 5yrs we've been married, I can count on a single hand how many times not having a second car has created a challenge. Interestingly, a lot of my neighbors also work for the same employer; there are 20+ people in my neighborhood who work for my same employer. From what I know, I am the only person that walks and I am pretty sure it takes less time for me to walk then any of them to get in their car, pull it out of the garage, park in the massive parking structure, and walk to their respective work areas. It is going to take a long time to break people's connection to their cars.

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by alfaspider » Tue Oct 30, 2018 10:40 am

His depreciation assumptions are absurd. Very few cars depreciate that quickly, and of course nobody says you have to buy a brand new vehicle if your problem is depreciation.

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monkey_business
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Re: Kevin O'Leary: owning a car is a terrible idea

Post by monkey_business » Tue Oct 30, 2018 10:42 am

What car sells for $25k and is worth $12k two years later? A two year old Honda is going to be worth $21k.

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by Valuethinker » Tue Oct 30, 2018 10:50 am

uncaD wrote:
Tue Oct 30, 2018 10:02 am
You could say the same thing about a refrigerator, but I still need one.
That would be reasoning by false analogy:

1. fridges don't require a lot of maintenance

2. electricity, particularly for Americans, is pretty cheap

3. by allowing preservation of food, fridges save people money*

The argument re cars is not right (for most Americans) because American cities are very spread out and have limited and sometimes unsafe public transport (one journey by local bus in Baltimore convinced me of that).

But the fridge analogy does not work.

A fridge is one of the first things people in emerging markets buy (before or after a TV) when they get electric power. There's a reason for that.

* we buy too much food, and throw away too much food. But, again, American food shopping is built around the drive to the grocery store, not a daily shop. Anyways the local shop has to have fridges as well or the milk, etc. would spoil.

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by Valuethinker » Tue Oct 30, 2018 10:53 am

randomguy wrote:
Tue Oct 30, 2018 10:24 am



He recommends public transit and not ride sharing. So basically it is great advice for people that live in NYC and another half dozen metro areas and doesn't work for anyone else:) And even for the NYC it is really close depending on your opportunity cost. O'Learly probably loses 1000 bucks for every 15 min he wastes. That pays for a lot of car service.
Parking. Parking charges in Manhattan are brutal - London levels. And you get to be stuck in midtown traffic, trying to get to the bridges. I swear it's faster to walk in midtown than to take a cab.

Transit did not look that great in the Boroughs, unless you lived close to a subway or train stop. I took the bus from Brighton Beach/ Coney Island to Prospect Park once, which was great fun (a vertical slice through the layer cake of American diversity - Russian, Afro-American, Asian, Orthodox Jewish etc.) but not to be recommended for those in a hurry.

I also took the bus once up to the top of Harlem (Morris Jumel Mansion). We reached the point where the bus was 2 white tourists and Afro-Americans over 65 - it really was a charming moment (a young woman had been discussing her various lovers loudly on the phone, when she got off the comments were hilarious) . Not sure I would have done it at night but in the middle of a weekday?

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by Valuethinker » Tue Oct 30, 2018 11:02 am

Glockenspiel wrote:
Tue Oct 30, 2018 10:05 am
I agree with him, but until we get every person to live in a highly dense city with a robust public transit system, that ain't happening. The world is moving in that direction, but it will take generations to get there.
Not sure it is really moving that way. Yuppies move downtown, but they displace flop houses and immigrant families, who live much more densely. See Richard Florida's latest work on gentrification.

Autonomous Vehicles up end this. They probably make congestion worse, and sprawl greater, because they reduce the cost of congestion to the commuter - your car worries about the driving whilst you nap/ watch video/ work/ surf. Electric Vehicles, oddly, also, because they have the potential to radically reduce the cost of driving - electricity is cheap compared to gasoline even at America's very low gas prices and the much simpler drivetrains imply far lower costs of maintenance and longer vehicle lives.

The population flow of the USA is still southward and westward - Houston, DFW, Phoenix, Atlanta, Florida etc. Unless something radically changes that's towards post war cities that are not configured for mass transit.

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munemaker
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Re: Kevin O'Leary: owning a car is a terrible idea

Post by munemaker » Tue Oct 30, 2018 11:11 am

Personally I would not make any decisions based on the opinions of a television entertainer.

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by warner25 » Tue Oct 30, 2018 11:19 am

stoptothink wrote:
Tue Oct 30, 2018 10:34 am
Interestingly, a lot of my neighbors also work for the same employer; there are 20+ people in my neighborhood who work for my same employer. From what I know, I am the only person that walks and I am pretty sure it takes less time for me to walk then any of them to get in their car, pull it out of the garage, park in the massive parking structure, and walk to their respective work areas. It is going to take a long time to break people's connection to their cars.
That's pretty astonishing. Have you ever asked any of them about it? I was thinking the same thing: at 7 minutes on foot, taking a car must be slower. I once had an 11-minute walk to work, but I think most others in my building also walked or bicycled. A couple times I tried driving when there was rain and it was definitely slower with traffic and parking challenges.

I very much wish we could live car-free. As we've moved to various places, I've done a mix of walking, bicycling, public transit, and getting dropped off and picked up by my wife or taxis. Kids really reduce the possibility. Options like Uber are certainly a positive development, but they have a long way to go before they solve the needs of a family with three kids, car-seats, etc.

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by David Jay » Tue Oct 30, 2018 11:26 am

randomguy wrote:
Tue Oct 30, 2018 10:24 am
He recommends public transit...
Yea, right... When was the last time O'Leary actually took public transit? I'll bet it was sometime before the 21th Century.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by Doom&Gloom » Tue Oct 30, 2018 11:29 am

The only worse idea is not owning one. For me. YMMV

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by caffeperfavore » Tue Oct 30, 2018 11:41 am

In theory, this is true.
In practice, I'm keeping my car.

However, I do wish more developers/planners would make walking or biking easier. Case in point, I'm what should be a short bike ride to a couple of grocery stores, but each is separated from me by busy roads with no crosswalks and islands of concrete. It's too bad, because it would mean cleaner air and and healthier people.

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by TropikThunder » Tue Oct 30, 2018 11:49 am

CULater wrote:
Tue Oct 30, 2018 9:58 am
Here's a thought inspired by all the headaches I've had with my lousy 2017 Honda CRV. Kevin O'Leary suggests they are a terrible waste of money. I'll add that they just take up too much of your valuable time dealing with all the overhead of owning one. You would think Bogleheads would be talking up this idea.
Our country has long had a love affair with the open road. Getting your first car was long a teenage rite of passage.

Financially speaking, though, car ownership today is a terrible idea, O’Leary said.

“You’re thinking about buying a car. Let me give you a new idea: Don’t,” O’Leary said on CNBC.

“Cars cost a fortune in maintenance and insurance and just the amortization, which means as they go down in value, you’re losing money,” O’Leary explained.

“Let’s say I pay $25,000 for it. Two years later, it might be worth only 12 [thousand dollars].”
https://www.marketwatch.com/story/kevin ... 018-10-29
This is silly. The problem is you (unfortunately) bought a lemon. That doesn’t make car ownership a universally bad idea, regardless of what a talking head has to say. As a counterpoint, I bought my 2015 Mazda 6 in April 2015 for $25,000 (three and a half years ago). 50,000 miles later with zero repair/maintenance cost other than oil changes, and KBB says it’s still worth $14,000. Oh, and I use it to drive to a job that takes me ~20 to get to, vs an hour and a half by public transit. 40 minutes daily commute vs 3 hours? How much spare time do you have?

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by uncaD » Tue Oct 30, 2018 12:00 pm

Valuethinker wrote:
Tue Oct 30, 2018 10:50 am
uncaD wrote:
Tue Oct 30, 2018 10:02 am
You could say the same thing about a refrigerator, but I still need one.
That would be reasoning by false analogy:

1. fridges don't require a lot of maintenance

2. electricity, particularly for Americans, is pretty cheap

3. by allowing preservation of food, fridges save people money*

The argument re cars is not right (for most Americans) because American cities are very spread out and have limited and sometimes unsafe public transport (one journey by local bus in Baltimore convinced me of that).

But the fridge analogy does not work.

A fridge is one of the first things people in emerging markets buy (before or after a TV) when they get electric power. There's a reason for that.

* we buy too much food, and throw away too much food. But, again, American food shopping is built around the drive to the grocery store, not a daily shop. Anyways the local shop has to have fridges as well or the milk, etc. would spoil.
Both a fridge and a car are tools that are costly to own and operate but that are essential to maintaining my quality of life. I disagree that the analogy is "false".

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by sport » Tue Oct 30, 2018 12:07 pm

Valuethinker wrote:
Tue Oct 30, 2018 10:50 am
1. fridges don't require a lot of maintenance
This is not true for my GE fridge. :annoyed

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by sport » Tue Oct 30, 2018 12:08 pm

We must be double dumb. We have two cars. :shock:

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by Valuethinker » Tue Oct 30, 2018 12:19 pm

uncaD wrote:
Tue Oct 30, 2018 12:00 pm
Valuethinker wrote:
Tue Oct 30, 2018 10:50 am
uncaD wrote:
Tue Oct 30, 2018 10:02 am
You could say the same thing about a refrigerator, but I still need one.
That would be reasoning by false analogy:

1. fridges don't require a lot of maintenance

2. electricity, particularly for Americans, is pretty cheap

3. by allowing preservation of food, fridges save people money*

The argument re cars is not right (for most Americans) because American cities are very spread out and have limited and sometimes unsafe public transport (one journey by local bus in Baltimore convinced me of that).

But the fridge analogy does not work.

A fridge is one of the first things people in emerging markets buy (before or after a TV) when they get electric power. There's a reason for that.

* we buy too much food, and throw away too much food. But, again, American food shopping is built around the drive to the grocery store, not a daily shop. Anyways the local shop has to have fridges as well or the milk, etc. would spoil.
Both a fridge and a car are tools that are costly to own and operate but that are essential to maintaining my quality of life. I disagree that the analogy is "false".
Costly to own and operate? How did you come to that conclusion?

My Bosch fridge is "upper middle" on the scale of kitchen appliances - cost me about USD 500-600 -- that's with 20% retail Value Added Tax. I pay an electricity price which is up there with the most expensive in the USA (say c. 26 cents/ kwhr) but it costs me about $78 pa to run. So shall we say an American fridge (which is a lot bigger) costs $750 and burns 550 kwhr but at half my electricity price? (13 cents/ kwhr would still be well above the American domestic average) so roughly similar cost pa.

How do you compare that with a car, which costs at a minimum, what, USD 15k? And costs $2-3k pa in gasoline (even at your very low prices) and insurance? Parking? So 20x as much to buy, and a similar amount more to own & drive?

Would you make the same analogy between a car and a microwave oven?

I in fact have a fridge (with a freezer) and a freezer (cost me about $300 US and costs about $45 US to run).

The point is the fridge transforms the life of almost anyone on the planet (who has electricity) and it costs a small fraction of what a car does. They also don't cost that much (in developed countries, relative to incomes). Cars? It's a lot more money, and it's not always useful (I haven't needed one).

A related truth is that fridges last 10+ years (my mother's fridge is 30+ years old) -- cars don't if they are used every day (depending upon mileage, maintenance, whether you do a lot of winter driving etc.).

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by stoptothink » Tue Oct 30, 2018 12:20 pm

warner25 wrote:
Tue Oct 30, 2018 11:19 am
stoptothink wrote:
Tue Oct 30, 2018 10:34 am
Interestingly, a lot of my neighbors also work for the same employer; there are 20+ people in my neighborhood who work for my same employer. From what I know, I am the only person that walks and I am pretty sure it takes less time for me to walk then any of them to get in their car, pull it out of the garage, park in the massive parking structure, and walk to their respective work areas. It is going to take a long time to break people's connection to their cars.
That's pretty astonishing. Have you ever asked any of them about it? I was thinking the same thing: at 7 minutes on foot, taking a car must be slower. I once had an 11-minute walk to work, but I think most others in my building also walked or bicycled. A couple times I tried driving when there was rain and it was definitely slower with traffic and parking challenges.

I very much wish we could live car-free. As we've moved to various places, I've done a mix of walking, bicycling, public transit, and getting dropped off and picked up by my wife or taxis. Kids really reduce the possibility. Options like Uber are certainly a positive development, but they have a long way to go before they solve the needs of a family with three kids, car-seats, etc.
I've asked my directly across the street neighbor, who is a good friend and colleague; his response is that walking would make it difficult for him to eat lunch. We have a massive on-site cafeteria that offers almost anything you could want, it is literally one of the most popular "restaurants" in our city (it is open to the public), so I didn't really understand the response but that is the first thing he came up with.

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by Valuethinker » Tue Oct 30, 2018 12:27 pm

caffeperfavore wrote:
Tue Oct 30, 2018 11:41 am
In theory, this is true.
In practice, I'm keeping my car.

However, I do wish more developers/planners would make walking or biking easier. Case in point, I'm what should be a short bike ride to a couple of grocery stores, but each is separated from me by busy roads with no crosswalks and islands of concrete. It's too bad, because it would mean cleaner air and and healthier people.
Once set, the built environment is practically forever. I live in a 120 year old "suburb" and it's walkable because in those days people walked (and bicycled).

The premium awarded to walkable neighbourhoods in America suggests that this is a desired feature by home buyers. Suburbs are basically built in the USA as large developments by development corporations, and I don't know if they have reacted to this market information. I think local officials and local governments are slow to react - the concern that such 'hoods will bring the wrong type of inhabitants, in part. Certainly the "new Urbanism" movement (Seaside, Florida?) seems to have petered out. But I notice American magazines and articles citing walkability scores.

I could name any number of places in North America that I have been to where it is difficult or impossible for pedestrians to cross the road - downright dangerous. The British 1950s and 60s solution was to build pedestrian walkways under the roads, but those became dark, smelly, decayed and dangerous (the urban horror in Clockwork Orange, the movie, was filmed in a real place, Thamesmead, downriver in Greater London - that's now being rebuilt in line with more modern theories) -- they have not worked (see Birmingham).

In essence we are prisoners of the urban planning conventions of 50 or 100 years ago. In your 'hood, people will still live in a very similar way in 50 years time.

If gasoline became unaffordable or unobtainable one might see some quite big changes, but it appears the momentum is going the other way.

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by caffeperfavore » Tue Oct 30, 2018 12:28 pm

stoptothink wrote:
Tue Oct 30, 2018 12:20 pm
I've asked my directly across the street neighbor, who is a good friend and colleague; his response is that walking would make it difficult for him to eat lunch. We have a massive on-site cafeteria that offers almost anything you could want, it is literally one of the most popular "restaurants" in our city (it is open to the public), so I didn't really understand the response but that is the first thing he came up with.
I'm not surprised. People have forgotten that walking is even an option. It just doesn't fit in their paradigm.

Whenever I return to my small hometown, which you could walk the length of in 15 minutes, I'm amazed by the many people that will drive two blocks to pick up a single item at the grocery store. As kids, I remember hopping in my parents' car to drive a block and a half to my grandparents. In fact, you never see adults walking there. People would consider it odd.

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by Alexa9 » Tue Oct 30, 2018 12:30 pm

Not having a car is freedom: no rapid depreciation, insurance, repairs, maintenance, washing it, vacuuming it, dealing with car salesman.
Having a car is also freedom: you can go wherever you want and it can be fun to drive.

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by helloeveryone » Tue Oct 30, 2018 12:32 pm

CULater wrote:
Tue Oct 30, 2018 9:58 am
Here's a thought inspired by all the headaches I've had with my lousy 2017 Honda CRV. Kevin O'Leary suggests they are a terrible waste of money. I'll add that they just take up too much of your valuable time dealing with all the overhead of owning one. You would think Bogleheads would be talking up this idea.
Our country has long had a love affair with the open road. Getting your first car was long a teenage rite of passage.

Financially speaking, though, car ownership today is a terrible idea, O’Leary said.

“You’re thinking about buying a car. Let me give you a new idea: Don’t,” O’Leary said on CNBC.

“Cars cost a fortune in maintenance and insurance and just the amortization, which means as they go down in value, you’re losing money,” O’Leary explained.

“Let’s say I pay $25,000 for it. Two years later, it might be worth only 12 [thousand dollars].”
https://www.marketwatch.com/story/kevin ... 018-10-29
if you need a car you need a car. yes they depreciate if the CRV was price appropriate for your situation then so be it.
Sorry you've had such problems with the CRV. It's frustrating. Not all car ownerships result in the headaches you have had with your CRV though. Hopefully you can resolve the issues or perhaps can trade in for used more reliable mid-sized SUV.

helloeveryone
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Re: Kevin O'Leary: owning a car is a terrible idea

Post by helloeveryone » Tue Oct 30, 2018 12:35 pm

warner25 wrote:
Tue Oct 30, 2018 11:19 am
stoptothink wrote:
Tue Oct 30, 2018 10:34 am
Interestingly, a lot of my neighbors also work for the same employer; there are 20+ people in my neighborhood who work for my same employer. From what I know, I am the only person that walks and I am pretty sure it takes less time for me to walk then any of them to get in their car, pull it out of the garage, park in the massive parking structure, and walk to their respective work areas. It is going to take a long time to break people's connection to their cars.
That's pretty astonishing. Have you ever asked any of them about it? I was thinking the same thing: at 7 minutes on foot, taking a car must be slower. I once had an 11-minute walk to work, but I think most others in my building also walked or bicycled. A couple times I tried driving when there was rain and it was definitely slower with traffic and parking challenges.

I very much wish we could live car-free. As we've moved to various places, I've done a mix of walking, bicycling, public transit, and getting dropped off and picked up by my wife or taxis. Kids really reduce the possibility. Options like Uber are certainly a positive development, but they have a long way to go before they solve the needs of a family with three kids, car-seats, etc.
I agree driving for a 7 minute walk is pretty crazy. I just mapped the walk to work and it would take 1h8min to walk. Reading this thread I was feeling bad that I drive to walk since by drive it's super close by walking is a long ways.

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by Jordan4FI » Tue Oct 30, 2018 12:39 pm

Getting a cheap car and keeping it running while getting out of debt good, keeping a car that you can save money fast is good, but keeping a car around that is a problem and you lose $$ by paying for all the services and extras are bad. If you are past the debt, and over the hump of your starting out investing, then a lease is a good idea if you can get the right type in your personal situation.

I can not wait to get to Thailand and never have a car again! I will get a scooter though..,..

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by uncaD » Tue Oct 30, 2018 12:41 pm

Valuethinker wrote:
Tue Oct 30, 2018 12:19 pm

Costly to own and operate? How did you come to that conclusion?
It costs money to purchase one and to run it.
Valuethinker wrote:
Tue Oct 30, 2018 12:19 pm

My Bosch fridge is "upper middle" on the scale of kitchen appliances - cost me about USD 500-600 -- that's with 20% retail Value Added Tax. I pay an electricity price which is up there with the most expensive in the USA (say c. 26 cents/ kwhr) but it costs me about $78 pa to run. So shall we say an American fridge (which is a lot bigger) costs $750 and burns 550 kwhr but at half my electricity price? (13 cents/ kwhr would still be well above the American domestic average) so roughly similar cost pa.
So it costs money to own and operate.
Valuethinker wrote:
Tue Oct 30, 2018 12:19 pm

How do you compare that with a car, which costs at a minimum, what, USD 15k? And costs $2-3k pa in gasoline (even at your very low prices) and insurance? Parking? So 20x as much to buy, and a similar amount more to own & drive?
You're arguing that's a matter of degree but not of kind. We're in agreement there.
Valuethinker wrote:
Tue Oct 30, 2018 12:19 pm

Would you make the same analogy between a car and a microwave oven?
Yes.
Valuethinker wrote:
Tue Oct 30, 2018 12:19 pm

I in fact have a fridge (with a freezer) and a freezer (cost me about $300 US and costs about $45 US to run).
So they cost money to own and operate. Just not as much as a car does.
Valuethinker wrote:
Tue Oct 30, 2018 12:19 pm

The point is the fridge transforms the life of almost anyone on the planet (who has electricity) and it costs a small fraction of what a car does. They also don't cost that much (in developed countries, relative to incomes). Cars? It's a lot more money, and it's not always useful (I haven't needed one).
Again, it's a matter of degree. My point is simply that without a car my standard of living would be seriously degraded, just as it would without a fridge.
Valuethinker wrote:
Tue Oct 30, 2018 12:19 pm

A related truth is that fridges last 10+ years (my mother's fridge is 30+ years old) -- cars don't if they are used every day (depending upon mileage, maintenance, whether you do a lot of winter driving etc.).
My cars last 10+ years. And they they're fun to drive, unlike my fridge :sharebeer

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by stoptothink » Tue Oct 30, 2018 12:46 pm

caffeperfavore wrote:
Tue Oct 30, 2018 12:28 pm
stoptothink wrote:
Tue Oct 30, 2018 12:20 pm
I've asked my directly across the street neighbor, who is a good friend and colleague; his response is that walking would make it difficult for him to eat lunch. We have a massive on-site cafeteria that offers almost anything you could want, it is literally one of the most popular "restaurants" in our city (it is open to the public), so I didn't really understand the response but that is the first thing he came up with.
I'm not surprised. People have forgotten that walking is even an option. It just doesn't fit in their paradigm.

Whenever I return to my small hometown, which you could walk the length of in 15 minutes, I'm amazed by the many people that will drive two blocks to pick up a single item at the grocery store. As kids, I remember hopping in my parents' car to drive a block and a half to my grandparents. In fact, you never see adults walking there. People would consider it odd.
Pretty much my perspective. I've walked or commuted by bicycle most of my adult/working life, in 4 different cities, mostly because it flat out is faster and more convenient than driving for my situation (financial cost is a factor, but a small one). When people find out I ride my bike (with a trailer) to the grocery store (all of 2 blocks away) or the library (2 blocks in the other direction) or we as a family usually ride our bikes to the local park, the responses are generally quite amusing.

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by FrugalInvestor » Tue Oct 30, 2018 12:54 pm

CULater wrote:
Tue Oct 30, 2018 9:58 am
Here's a thought inspired by all the headaches I've had with my lousy 2017 Honda CRV. Kevin O'Leary suggests they are a terrible waste of money. I'll add that they just take up too much of your valuable time dealing with all the overhead of owning one. You would think Bogleheads would be talking up this idea.
They are, in a way that works for more people......and that is to buy a fairly basic but reliable used car, maintain it well and drive the wheels off of it.
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by Glockenspiel » Tue Oct 30, 2018 12:55 pm

munemaker wrote:
Tue Oct 30, 2018 11:11 am
Personally I would not make any decisions based on the opinions of a television entertainer.
I.E. 63 million people disagreed with you in 2016.

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by warner25 » Tue Oct 30, 2018 1:11 pm

stoptothink wrote:
Tue Oct 30, 2018 12:20 pm
...his response is that walking would make it difficult for him to eat lunch...
Maybe he eats in his car? It can serve as one's personal sanctuary.

I could sort of understand his thinking if he goes home for lunch. Twice I've had the option of a 20-minute bicycle ride, which is nice, but I chose to drive instead because it was faster and allowed me to go home and see my family at lunchtime. The extra round-trip time on the bicycle would have made that impossible. Being home for an extra hour in the middle of the day is significant with small children when working long hours. But for your neighbor, if walking is still faster, I don't get it.

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by stoptothink » Tue Oct 30, 2018 1:17 pm

warner25 wrote:
Tue Oct 30, 2018 1:11 pm
stoptothink wrote:
Tue Oct 30, 2018 12:20 pm
...his response is that walking would make it difficult for him to eat lunch...
Maybe he eats in his car? It can serve as one's personal sanctuary.

I could sort of understand his thinking if he goes home for lunch. Twice I've had the option of a 20-minute bicycle ride, which is nice, but I chose to drive instead because it was faster and allowed me to go home and see my family at lunchtime. The extra round-trip time on the bicycle would have made that impossible. Being home for an extra hour in the middle of the day is significant with small children when working long hours. But for your neighbor, if walking is still faster, I don't get it.
I'm pretty sure the thought process is that it allows him to go to lunch wherever he wants. I guess it buys them a sense of freedom. If they are willing to pay the time and financial cost for that sense of freedom, more power to them; it makes no sense to me, but I'm definitely the outlier.

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by blueman457 » Tue Oct 30, 2018 1:29 pm

Many of the responses are approaching it in a narrow fashion.

1. Cars are more expensive than the list purchase price. Maintenance, fuel, insurance are often not considered.
2. Yes public transportation needs to get better; but much like the "google bus", can you get more work done sitting on a bus/train for 1.5h instead of driving yourself 45-60min?
3. Our country is getting obese: it would be better if we took the time to bike/walk/etc... to work because it combines our transportation + exercise time.

Blue Man

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by randomguy » Tue Oct 30, 2018 1:39 pm

Valuethinker wrote:
Tue Oct 30, 2018 10:53 am
randomguy wrote:
Tue Oct 30, 2018 10:24 am



He recommends public transit and not ride sharing. So basically it is great advice for people that live in NYC and another half dozen metro areas and doesn't work for anyone else:) And even for the NYC it is really close depending on your opportunity cost. O'Learly probably loses 1000 bucks for every 15 min he wastes. That pays for a lot of car service.
Parking. Parking charges in Manhattan are brutal - London levels. And you get to be stuck in midtown traffic, trying to get to the bridges. I swear it's faster to walk in midtown than to take a cab.

Transit did not look that great in the Boroughs, unless you lived close to a subway or train stop. I took the bus from Brighton Beach/ Coney Island to Prospect Park once, which was great fun (a vertical slice through the layer cake of American diversity - Russian, Afro-American, Asian, Orthodox Jewish etc.) but not to be recommended for those in a hurry.

I also took the bus once up to the top of Harlem (Morris Jumel Mansion). We reached the point where the bus was 2 white tourists and Afro-Americans over 65 - it really was a charming moment (a young woman had been discussing her various lovers loudly on the phone, when she got off the comments were hilarious) . Not sure I would have done it at night but in the middle of a weekday?
Parking is in the noise for a guy like O'Leary. Seriously if he isn't paying a driver so that he can work in the back of car and not waste time both driving and parking, he is being foolish with his money. There are some cases where mass transit is faster overall but most of the time you end up paying for it with more time. The trips can be faster but you lose too much by having to wait for service. Obviously there are some exceptions.

For people of more moderate means, you end up having to decide if money is more or less important to you than time.

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by 2pedals » Tue Oct 30, 2018 1:40 pm

Financially speaking, though, car ownership today is a terrible idea, O’Leary said.
Financially speaking, though, an entertainment center and furniture ownership today is a terrible idea -- 2pedals

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by BoggledHead2 » Tue Oct 30, 2018 1:48 pm

i fully paid off 22K out the door for my car and plan on owning for at least 5 years [warranty] ... over that time paying a 300/month lease would equate to 18K with nothing whatsoever to show for it. I assume @ 5 years I'll either know if I want to just keep it or get something to trade in

a car is an absolute necessity for me, so I went with something that's fun to drive and gets me 35 MPG even in traffic.

if he said "owning an expensive car is a terrible idea from a financial perspective", than yeah he's right.

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Re: Kevin O'Leary: owning a car is a terrible idea

Post by LadyGeek » Tue Oct 30, 2018 2:01 pm

This thread has run its course and is locked (general rant). See: Personal Consumer Issues
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