How do you pay for purchase of a vehicle in retirement?

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Cody
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How do you pay for purchase of a vehicle in retirement?

Post by Cody » Sun Aug 19, 2018 8:22 am

I've posted this years ago when I just started retirement but here it is again.

How do you save and pay for new/used vehicles. If you pay cash where does that money come from (yearly withdrawal?). Or do you save a bit each month in a savings account (those budget it)? Plan on making payments and thus budget it that way? Other methods of paying for purchase of vehicles?

Thanks,
Cody

PFInterest
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Re: How do you pay for purchase of a vehicle in retirement?

Post by PFInterest » Sun Aug 19, 2018 8:25 am

since you are retired your entire portfolio is available. i would take money from where it will impact taxes the least.

Helo80
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Re: How do you pay for purchase of a vehicle in retirement?

Post by Helo80 » Sun Aug 19, 2018 8:28 am

Likely the same way you buy a car before retirement....
You see the money in the pool... the money being added to the pool (pension, ss, RMDs, passive income streams, etc.)... and the money being taken from the pool (the tax man, bills, home repairs, gas, etc.)... and then decide how how car you can buy without upsetting the pool...

I will say that people who are in retirement age should consider leasing more so than yester-years. Cars are increasingly coming with improved safety features, both pre-crash warning systems, as well as, crumple zones... and sometimes keeping a newer car is better for that reason alone. If you are on a fixed income stream and can budget $400 a month (or whatever) for a safe car, it's not the worst mistake in the world. I know cars are a very polarizing and hot button issue with financial gurus, but I'm more than half the age of some of the posters here and I personally do not want to be debilitated or dead because I was penny wise and pound foolish with my car buying. With the amount of safety tech being packed into today's vehicles, I'm less thrilled with the "buy it and drive it until the wheels fall off" mentality.

Yellowjacket1
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Re: How do you pay for purchase of a vehicle in retirement?

Post by Yellowjacket1 » Sun Aug 19, 2018 12:26 pm

Will probably do it the same way we purchased our last car. We typically put about half the cost from our savings and then use our HELOC for the other half. In the past the interest for the HELOC was less than getting a car loan. Also, could deduct the HELOC interest on our taxes. Not sure about being able to still deduct the HELOC interest with the new 2018 tax law changes.

Using the HELOC gives us a lot of flexibility. It typically only requires a very small payment each month. However, we typically pay as much as we can each month. These payments are typically in lieu of what we would be putting towards savings each month.

Gill
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Re: How do you pay for purchase of a vehicle in retirement?

Post by Gill » Sun Aug 19, 2018 12:30 pm

Yellowjacket1 wrote:
Sun Aug 19, 2018 12:26 pm
Will probably do it the same way we purchased our last car. We typically put about half the cost from our savings and then use our HELOC for the other half. In the past the interest for the HELOC was less than getting a car loan. Also, could deduct the HELOC interest on our taxes. Not sure about being able to still deduct the HELOC interest with the new 2018 tax law changes.

Using the HELOC gives us a lot of flexibility. It typically only requires a very small payment each month. However, we typically pay as much as we can each month. These payments are typically in lieu of what we would be putting towards savings each month.
Forget about deducting that HELOC interest now.
Gill

deikel
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Re: How do you pay for purchase of a vehicle in retirement?

Post by deikel » Sun Aug 19, 2018 6:27 pm

you withdraw more from your retirement accounts

you pay cash for a car for best offer

you buy a mildly used car for optimal value

you set aside money each month for the depreciation till the next car
Everything you read in this post is my personal opinion. If you disagree with this disclaimer, please un-read the text immidiatly and destroy any copy or remembrance of it.

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CaliJim
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Re: How do you pay for purchase of a vehicle in retirement?

Post by CaliJim » Sun Aug 19, 2018 7:27 pm

I needed to rebalance, so I sold some of my TSM fund.
-calijim- | | For more info, click this Wiki

22twain
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Re: How do you pay for purchase of a vehicle in retirement?

Post by 22twain » Sun Aug 19, 2018 11:31 pm

Helo80 wrote:
Sun Aug 19, 2018 8:28 am
You see the money in the pool... the money being added to the pool (pension, ss, RMDs, passive income streams, etc.)...
Nit-pick: RMDs do not add money to the pool. They simply transfer money that you already have from one part of the pool to another, accompanied by payment of taxes which actually decreases the total amount of money in the pool. :wink:
My investing princiPLEs do not include absolutely preserving princiPAL.

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catdude
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Re: How do you pay for purchase of a vehicle in retirement?

Post by catdude » Mon Aug 20, 2018 1:09 am

I've been retired for a few years now, and last fall I bought my niece's car (she and her husband were moving to NYC/Manhattan). I took most of the money from my taxable account (VG 500 Fund), and thanks to being in a low tax bracket, my long-term capital gains tax rate was 0%. It was wonderful! I took the rest of the money needed from VG Prime Money Market Fund (also in my taxable account). No car payments for me!
catdude | | All generalizations are false, including this one.

CurlyDave
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Re: How do you pay for purchase of a vehicle in retirement?

Post by CurlyDave » Mon Aug 20, 2018 1:43 am

When i needed a new car a year ago, I decided on the brand and model. Negotiated the price and then took the factory-incentive 0% interest rate financing.

Before anyone tells me I am rallying paying for that rate, I negotiated hard for the best price. Several dealers.

Essentially at 0%, any positive return I get on my portfolio is a net gain for us.

3feetpete
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Re: How do you pay for purchase of a vehicle in retirement?

Post by 3feetpete » Mon Aug 20, 2018 9:03 am

CurlyDave wrote:
Mon Aug 20, 2018 1:43 am
When i needed a new car a year ago, I decided on the brand and model. Negotiated the price and then took the factory-incentive 0% interest rate financing.

Before anyone tells me I am rallying paying for that rate, I negotiated hard for the best price. Several dealers.

Essentially at 0%, any positive return I get on my portfolio is a net gain for us.
I did the same as Curly Dave. Got 48 month manufacturer interest free financing. I had to give up a $700 manufacturer incentive but that only amounted to the equivalent of a 1% loan. The average of dividends on my IRA's is around 2%.

flyingaway
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Re: How do you pay for purchase of a vehicle in retirement?

Post by flyingaway » Mon Aug 20, 2018 9:15 am

I will do that with cash.

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Watty
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Re: How do you pay for purchase of a vehicle in retirement?

Post by Watty » Mon Aug 20, 2018 9:31 am

One thing I ran into was that withdrawing the money to pay for a new car would have increased my taxable income to the point where I would have lost my ACA healthcare subsidy. I ended up getting a car loan to keep my income below those limits. When I get under Medicare I will likely pay off the car loan then.

You also have to consider how your social security will be taxed if you make a large IRA withdrawal in one year to buy a car.

Ron
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Re: How do you pay for purchase of a vehicle in retirement?

Post by Ron » Mon Aug 20, 2018 10:21 am

I've been retired 11+ years and in that time I've purchased two vehicles; a CPO (3-years old, off lease) in 2007 - the year I retired, and a new vehicle in 2015. In both cases, I paid cash. I have $500/month in my budget earmarked for this purpose.

My wife does the same and her savings were used to purchase a new vehicle in 2015, to replace her 2002 model purchased as a used vehicle in 2007. FWIW, she puts away $600/month toward this expense. She has been retired six years, thus far.

In retirement, if we can't do something for cash, we don't do it :wink: ...

- Ron

smitcat
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Re: How do you pay for purchase of a vehicle in retirement?

Post by smitcat » Mon Aug 20, 2018 11:00 am

Ron wrote:
Mon Aug 20, 2018 10:21 am
I've been retired 11+ years and in that time I've purchased two vehicles; a CPO (3-years old, off lease) in 2007 - the year I retired, and a new vehicle in 2015. In both cases, I paid cash. I have $500/month in my budget earmarked for this purpose.

My wife does the same and her savings were used to purchase a new vehicle in 2015, to replace her 2002 model purchased as a used vehicle in 2007. FWIW, she puts away $600/month toward this expense. She has been retired six years, thus far.

In retirement, if we can't do something for cash, we don't do it :wink: ...

- Ron
Interesting - in retirement you seem to be budgeting $13,200 per year just in repalcemnet costs for vehicles. In addition to that your vehicle costs will include insurance, gas, repairs etc. that will likely exceed $18,000 year for that one category.

MathWizard
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Re: How do you pay for purchase of a vehicle in retirement?

Post by MathWizard » Mon Aug 20, 2018 1:05 pm

My plan includes $5K/year aftertax (inflation adjusted) for vehicle replacement.
That provides for a $25K (used) car every 5 years, so for 2 cars we will be replacing at 10 year mark.

I plan on pulling from tax advantaged for this (or doing ROTH conversions) each year to avoid a $25K (or more
due to SS taxation) jump in my taxable income.

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Sheepdog
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Re: How do you pay for purchase of a vehicle in retirement?

Post by Sheepdog » Mon Aug 20, 2018 1:10 pm

I purchase from my planned saving's investments "cash" accounts from which I receive all spending needs. We have 2 cars and usually replace each one about every 8 years with 1 or 2 year old used ones with less than 15000 miles on them and paid with cash.
It's not what you gather, but what you scatter which tells what kind of life you have lived---Helen Walton

nguy44
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Re: How do you pay for purchase of a vehicle in retirement?

Post by nguy44 » Mon Aug 20, 2018 2:04 pm

Part of my retirement planning was to set aside enough cash to pay for replacement cars in a few years. We are happy with 2-3 year old certified used cars. The money is in a relatively high interest online bank account for now.

Down the road we will have to draw down my 401K and if future cars are needed it will come partly from that money.

The Wizard
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Re: How do you pay for purchase of a vehicle in retirement?

Post by The Wizard » Mon Aug 20, 2018 2:29 pm

22twain wrote:
Sun Aug 19, 2018 11:31 pm
Helo80 wrote:
Sun Aug 19, 2018 8:28 am
You see the money in the pool... the money being added to the pool (pension, ss, RMDs, passive income streams, etc.)...
Nit-pick: RMDs do not add money to the pool. They simply transfer money that you already have from one part of the pool to another, accompanied by payment of taxes which actually decreases the total amount of money in the pool. :wink:
This is quite true, but I think the point is, it's the After Tax pool as opposed to the Pre-Tax pool.
It's not generally a good idea to withdraw a $50k lump from tax-deferred 401(k) or IRA each time you want to buy a car. Better to withdraw mostly uniform amounts each year and accumulate in After Tax pool.

That's basically what I did for a couple years before I bought my F-150 in late 2015, 2-1/2 years after retiring.
But I accumulated the $$ in Ally HY savings plus an intermediate bond fund, both of which generated additional Ordinary Income for tax purposes.
I've decided I didn't like that so much.
So I am presently accumulating After Tax funds in total stock market VTSAX for my next new car purchase in a few years...
Attempted new signature...

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dm200
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Re: How do you pay for purchase of a vehicle in retirement?

Post by dm200 » Mon Aug 20, 2018 2:46 pm

DW and I (with much lower annual mileage) have gone to older, used cars - pay cash. One was $2,700 and the other 2 years later was $3,800 (net $1,800 after getting $2,000 for car with bad engine).

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celia
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Re: How do you pay for purchase of a vehicle in retirement?

Post by celia » Mon Aug 20, 2018 2:52 pm

Cody wrote:
Sun Aug 19, 2018 8:22 am
I've posted this years ago when I just started retirement but here it is again.

How do you save and pay for new/used vehicles. If you pay cash where does that money come from (yearly withdrawal?). Or do you save a bit each month in a savings account (those budget it)? Plan on making payments and thus budget it that way? Other methods of paying for purchase of vehicles?
How did you do it last time? Were you satisfied with the decision you made? If so, do it again. :happy

rasta
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Re: How do you pay for purchase of a vehicle in retirement?

Post by rasta » Mon Aug 20, 2018 2:53 pm

Lease

il0kin
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Re: How do you pay for purchase of a vehicle in retirement?

Post by il0kin » Mon Aug 20, 2018 3:07 pm

I’m a long ways from retiring, but it seems like most married people are still driving two cars in retirement based on the posts here. Wouldn’t it make sense to go to a single car? I guess it depends on your lifestyle, but it seems like an easy way to free up $500+ monthly whether you’re making a payment or saving for a cash purchase.

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Watty
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Re: How do you pay for purchase of a vehicle in retirement?

Post by Watty » Mon Aug 20, 2018 3:08 pm

rasta wrote:
Mon Aug 20, 2018 2:53 pm
Lease
One huge disadvantage of leasing is that if your die or get sick and have to give up driving that does not automatically get you out of the lease. There have been posts with situations like that.

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dm200
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Re: How do you pay for purchase of a vehicle in retirement?

Post by dm200 » Mon Aug 20, 2018 3:10 pm

il0kin wrote:
Mon Aug 20, 2018 3:07 pm
I’m a long ways from retiring, but it seems like most married people are still driving two cars in retirement based on the posts here. Wouldn’t it make sense to go to a single car? I guess it depends on your lifestyle, but it seems like an easy way to free up $500+ monthly whether you’re making a payment or saving for a cash purchase.
DW and I are in that "situation". "Tradeoffs" are involved - both financial and lifestyle. We, for now at least, have chosen to have two cars - but much older ones.

Beehave
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Re: How do you pay for purchase of a vehicle in retirement?

Post by Beehave » Mon Aug 20, 2018 3:10 pm

Helo80 wrote:
Sun Aug 19, 2018 8:28 am
Likely the same way you buy a car before retirement....
You see the money in the pool... the money being added to the pool (pension, ss, RMDs, passive income streams, etc.)... and the money being taken from the pool (the tax man, bills, home repairs, gas, etc.)... and then decide how how car you can buy without upsetting the pool...

I will say that people who are in retirement age should consider leasing more so than yester-years. Cars are increasingly coming with improved safety features, both pre-crash warning systems, as well as, crumple zones... and sometimes keeping a newer car is better for that reason alone. If you are on a fixed income stream and can budget $400 a month (or whatever) for a safe car, it's not the worst mistake in the world. I know cars are a very polarizing and hot button issue with financial gurus, but I'm more than half the age of some of the posters here and I personally do not want to be debilitated or dead because I was penny wise and pound foolish with my car buying. With the amount of safety tech being packed into today's vehicles, I'm less thrilled with the "buy it and drive it until the wheels fall off" mentality.
I agree. I bought a vehicle three years ago and paid extra not only for safety features, but also for add-ons I did not want which were required to get the safety feature. I'm rapidly moving away from the drive-it-'till-the-wheels-fall-off way of thinking. Now I'd say go for the lease. I wish I had done that. Today, the safety features are better and standard now on even base models of the car I bought. There will be incredible advances in the next few years (Cadillac and Tesla already have versions with remarkable capability) and year by year these aids will become even more robust and more reliable. I will probably end up trading in or selling in about three or four years, quite earlier than I had planned, because I believe by that time the safety features available will be flat-out compelling.

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Watty
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Re: How do you pay for purchase of a vehicle in retirement?

Post by Watty » Mon Aug 20, 2018 3:14 pm

il0kin wrote:
Mon Aug 20, 2018 3:07 pm
I’m a long ways from retiring, but it seems like most married people are still driving two cars in retirement based on the posts here. Wouldn’t it make sense to go to a single car? I guess it depends on your lifestyle, but it seems like an easy way to free up $500+ monthly whether you’re making a payment or saving for a cash purchase.
It will vary a lot but for a normal car it will not cost most people anywhere near that much per month since if they are not driving a lot a car can last for 15+ years without any heroic measures. If it is more like $150 a month then a second car can easily be worth the extra cost for the convenience.

I am not there yet but I would expect that any car that I buy in my 70's will likely last me the rest of my life, or until I give up driving.

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celia
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Re: How do you pay for purchase of a vehicle in retirement?

Post by celia » Mon Aug 20, 2018 3:15 pm

22twain wrote:
Sun Aug 19, 2018 11:31 pm
Helo80 wrote:
Sun Aug 19, 2018 8:28 am
You see the money in the pool... the money being added to the pool (pension, ss, RMDs, passive income streams, etc.)...
Nit-pick: RMDs do not add money to the pool. They simply transfer money that you already have from one part of the pool to another, accompanied by payment of taxes which actually decreases the total amount of money in the pool. :wink:
I think of the "pool" as being that set-aside budget category that covers infrequent expenses. You would allocate the same amount of money to it every month. But once or twice a year, you pay a big expense from it. Of course, you have to be funding the pool each month based on future expected large expenses. It doesn't matter where the money comes from as it is just part of your living expenses (like taxes should be), rather than an emergency.

In fact, there was a thread a few years ago that asked what people ended up using their Emergency Fund for. A good number of Bogleheads said they never had a need for spending from it as they carried various insurances and allocate part of their living expenses to future unknowns. Does it really matter if your emergency is for expensive dental work (after you have used up dental insurance), lost jewelry, or damage an animal did? We all have something unexpected happen occasionally and need to plan for it, even though we don't know what "it" is.

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dm200
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Re: How do you pay for purchase of a vehicle in retirement?

Post by dm200 » Mon Aug 20, 2018 3:16 pm

Beehave wrote:
Mon Aug 20, 2018 3:10 pm
Helo80 wrote:
Sun Aug 19, 2018 8:28 am
Likely the same way you buy a car before retirement....
You see the money in the pool... the money being added to the pool (pension, ss, RMDs, passive income streams, etc.)... and the money being taken from the pool (the tax man, bills, home repairs, gas, etc.)... and then decide how how car you can buy without upsetting the pool...

I will say that people who are in retirement age should consider leasing more so than yester-years. Cars are increasingly coming with improved safety features, both pre-crash warning systems, as well as, crumple zones... and sometimes keeping a newer car is better for that reason alone. If you are on a fixed income stream and can budget $400 a month (or whatever) for a safe car, it's not the worst mistake in the world. I know cars are a very polarizing and hot button issue with financial gurus, but I'm more than half the age of some of the posters here and I personally do not want to be debilitated or dead because I was penny wise and pound foolish with my car buying. With the amount of safety tech being packed into today's vehicles, I'm less thrilled with the "buy it and drive it until the wheels fall off" mentality.
I agree. I bought a vehicle three years ago and paid extra not only for safety features, but also for add-ons I did not want which were required to get the safety feature. I'm rapidly moving away from the drive-it-'till-the-wheels-fall-off way of thinking. Now I'd say go for the lease. I wish I had done that. Today, the safety features are better and standard now on even base models of the car I bought. There will be incredible advances in the next few years (Cadillac and Tesla already have versions with remarkable capability) and year by year these aids will become even more robust and more reliable. I will probably end up trading in or selling in about three or four years, quite earlier than I had planned, because I believe by that time the safety features available will be flat-out compelling.
I guess I have come to the opposite conclusion. In my opinion, while useful, the most recent safety improvements are somewhat marginal - and in retirement our miles driven is much lower.

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dm200
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Re: How do you pay for purchase of a vehicle in retirement?

Post by dm200 » Mon Aug 20, 2018 3:18 pm

Watty wrote:
Mon Aug 20, 2018 3:14 pm
il0kin wrote:
Mon Aug 20, 2018 3:07 pm
I’m a long ways from retiring, but it seems like most married people are still driving two cars in retirement based on the posts here. Wouldn’t it make sense to go to a single car? I guess it depends on your lifestyle, but it seems like an easy way to free up $500+ monthly whether you’re making a payment or saving for a cash purchase.
It will vary a lot but for a normal car it will not cost most people anywhere near that much per month since if they are not driving a lot a car can last for 15+ years without any heroic measures. If it is more like $150 a month then a second car can easily be worth the extra cost for the convenience.
I am not there yet but I would expect that any car that I buy in my 70's will likely last me the rest of my life, or until I give up driving.
There are sometimes "personality" issues with one car. DW says I am too impatient when we go places (like shopping) together, while I feel she takes forever to buy 2 or 3 things at a store.

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Re: How do you pay for purchase of a vehicle in retirement?

Post by rj49 » Mon Aug 20, 2018 3:28 pm

Instead of withdrawing from assets to buy a vehicle, I prefer a cheap lease. To me retirement is a time to enjoy life, which I get from variety and freedom, so I don't want to be tied to expensive payments or spending a lot of money on a depreciating asset, or to get my thrills from expensive toys that are rarely used, like an RV, boat, or pricey vehicle. That's especially true now that every senior in the US seems to feel the need to buy an overpriced SUV (my parents just replaced a perfectly fine Volvo SUV with a Subaru SUV, because they were bored, and my sister made the mistake of trading her roomy and reliable Toyota Sienna for a Nissan Murano, which she hates). If I ever need to haul stuff, I can rent a pickup truck from a local place for $40.

Right now I'm leasing a 2016 Toyota Corolla I got for zero down and $185 a month. It pays for itself by giving me a car to drive Uber and Lyft, and when the lease ends in 4 months I'll get another cheap lease and try out a different car, without any dings or stains or smells or potential for mechanical problems or maintenance. While going through the sales process every 3 years is a pain, it also means I'm not tempted to buy something as a splurge when I'm bored or lured by advertising or a salesperson, since I'm tied to a lease. It's also convenient not to have to deal with the trade-in hassles. I also like being able to take advantage of new models, new safety features, and try different cars, which means I can get variety and the excitement of a new car without the costs and hassles of ownership, loans, and selling appreciating assets to buy a depreciating one. I also have the advantage of top-tier credit, so I can get the teaser lease rates that most people can't.

Ron
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Re: How do you pay for purchase of a vehicle in retirement?

Post by Ron » Mon Aug 20, 2018 5:01 pm

smitcat wrote:
Mon Aug 20, 2018 11:00 am
Ron wrote:
Mon Aug 20, 2018 10:21 am
I've been retired 11+ years and in that time I've purchased two vehicles; a CPO (3-years old, off lease) in 2007 - the year I retired, and a new vehicle in 2015. In both cases, I paid cash. I have $500/month in my budget earmarked for this purpose.

My wife does the same and her savings were used to purchase a new vehicle in 2015, to replace her 2002 model purchased as a used vehicle in 2007. FWIW, she puts away $600/month toward this expense. She has been retired six years, thus far.

In retirement, if we can't do something for cash, we don't do it :wink: ...

- Ron
Interesting - in retirement you seem to be budgeting $13,200 per year just in repalcemnet costs for vehicles. In addition to that your vehicle costs will include insurance, gas, repairs etc. that will likely exceed $18,000 year for that one category.
If you think that's something, wait until you see our (or I really should say my wife's) travel budget :mrgreen:

Two Euro cruises this year; one down and the other in November.

BTW, our budget for cars/travel have always been at that level, even during our working years. We just continued to budget in the same manner in retirement.

- Ron

Helo80
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Re: How do you pay for purchase of a vehicle in retirement?

Post by Helo80 » Mon Aug 20, 2018 5:54 pm

dm200 wrote:
Mon Aug 20, 2018 3:16 pm
I guess I have come to the opposite conclusion. In my opinion, while useful, the most recent safety improvements are somewhat marginal - and in retirement our miles driven is much lower.

...and your reflexes are slower, vision is worse, and mistakes happen. Part of the improved collision technology is protect you from others mistakes even if you do everything 100% correctly. I have seen cars at auto auction lots that were rear-ended with 150 miles on the Odo. Granted, the owner of said car could have made an emergency stop or cut somebody off... but hey... I'm pulling an assumption here.

https://www.nhtsa.gov/press-releases/us ... crash-data

Approx 37,500 people died in motor vehicle accidents in 2016 (the latest year we have data). I would bet you that most of those people did not start the day off planning to die on the road. Sure, some of those deaths were from people under the influence or driving recklessly... but not all. Some did nothing more than be at the wrong place at the wrong time.

Buying or driving a good, safe car is like having good life and car insurance.... if everything goes as planned, you will not ever have to use it.

It's one of those things where I look at car finance and lease payments.... look at BHs comments on cars.... look at monthly payments.... look at BHs comments.... look at payments... and I'm doing the math here, and I just shake my head.... I highly doubt a $400 monthly car payment... in perpetuity for the average BH's retirement is going to change one thing.

What changed my mind is that I was almost rear-ended, while stopped, at 80 mph.... I saw what was about to happen.... and gunned the motor as much as I could.... fortunately the guy behind me realized the mistake and swerved off the road... there may have been contact had I not gunned the motor. There was so little time to react that I could not turn off the A/C to get that slight (like 3-5 hp) boost. Yeah, the guy probably should have been paying more attention... no I did not see my life crash before my eyes... but I was like "oh s*** this is happening...." and braced myself. Had I been in a Tesla... especially the super fast trim one... I would have been up to 80 in no time. (but not saying I should go buy a Tesla for that reason ;) ).

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dm200
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Re: How do you pay for purchase of a vehicle in retirement?

Post by dm200 » Mon Aug 20, 2018 5:58 pm

In retirement and "aging" I am now driving a slightly larger car - and (other factors being equal) a larger car is probably safer. In my opinion, even if my reflexes slow a bit, I still have plenty of margin.

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Re: How do you pay for purchase of a vehicle in retirement?

Post by Traveler » Mon Aug 20, 2018 8:47 pm

In planning retirement expenses, I plan for a $25K car purchase expense every 10 years. I've never spend that much on a car and usually keep cars longer than 10 years so I may be overestimating the expense. My anticipated travel expense is much greater than my car expense.

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Sheepdog
Posts: 5160
Joined: Tue Feb 27, 2007 3:05 pm
Location: Indiana, retired 1998 at age 65

Re: How do you pay for purchase of a vehicle in retirement?

Post by Sheepdog » Tue Aug 21, 2018 1:07 am

il0kin wrote:
Mon Aug 20, 2018 3:07 pm
I’m a long ways from retiring, but it seems like most married people are still driving two cars in retirement based on the posts here. Wouldn’t it make sense to go to a single car? I guess it depends on your lifestyle, but it seems like an easy way to free up $500+ monthly whether you’re making a payment or saving for a cash purchase.
Not for us. We aren't one person. We are individuals.
She goes to her beauty parlor. I go to the grocery store.
She goes to the drug store. I go to my place to volunteer.
I go to the airport. She goes to the department store.
I go to my doctor. She goes to Indianapolis.

Two cars....freedom
One car....captive misery.

The extra cost? not enough to lose the freedom.
It's not what you gather, but what you scatter which tells what kind of life you have lived---Helen Walton

The Wizard
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Location: Reading, MA

Re: How do you pay for purchase of a vehicle in retirement?

Post by The Wizard » Tue Aug 21, 2018 6:34 am

I'm a single person and keep two vehicles in retirement: a full size pickup and a Mustang convertible. Quite different vehicles, so not much overlap in functionality, aside from the point a to point b thing.

The F-150, bought new 2-1/2 years ago, replaced a smaller Ford Ranger that I had for almost 12 years.

My 2008 Mustang is up to the ten year ownership mark now, so I'll be looking for a new one in a few years. With two vehicles, I don't put huge mileage all on one of them, so just over 100,000 miles on the Mustang now.

I do have a conceptual monthly budget number for vehicle replacement, similar to Ron (above). But the reality is that my other travel expenses are quite lumpy and large, so I don't always make a monthly contribution to my taxable investment account (my New Car fund)...
Attempted new signature...

Ron
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Joined: Fri Feb 23, 2007 7:46 pm

Re: How do you pay for purchase of a vehicle in retirement?

Post by Ron » Tue Aug 21, 2018 9:09 am

The Wizard wrote:
Tue Aug 21, 2018 6:34 am
I'm a single person and keep two vehicles in retirement: a full size pickup and a Mustang convertible. Quite different vehicles, so not much overlap in functionality, aside from the point a to point b thing.

The F-150, bought new 2-1/2 years ago, replaced a smaller Ford Ranger that I had for almost 12 years.

My 2008 Mustang is up to the ten year ownership mark now, so I'll be looking for a new one in a few years. With two vehicles, I don't put huge mileage all on one of them, so just over 100,000 miles on the Mustang now.

I do have a conceptual monthly budget number for vehicle replacement, similar to Ron (above). But the reality is that my other travel expenses are quite lumpy and large, so I don't always make a monthly contribution to my taxable investment account (my New Car fund)...
Similar story here, except I'm married and we have three cars between us. Like the Wizard, I also have a Mustang (GT Vert, 2002 with 22K on the odometer).

We're both retired, however we've never been "joined at the hip". I use my GMC SUV primarily like a truck, hauling lawn/garden remains to the local recycling center and hauling coolers/hot bags for my weekly volunteer work for Meals on Wheels.

My wife? She's a visitor for Meals on Wheels (different day/different delivery partner) along with her performing food shopping duties for folks (aged/disabled) who can't get to the market; this is also done through the MOW program.

Most days, she's going to her church functions, Pilates & Zumba classes, or going to our disabled son's apartment to aide in his support. In addition, you will find her with her friends going to lunch several times a week, along with movies/local/Broadway plays (I'm a homebody, luckily she has friends that want to go, go, go (heck, I even fell asleep during Phantom on Broadway, among many other plays we attended in the city :wink: ).

I don't drive her vehicle, she doesn't drive mine (anyway, she can't drive the Stang - it's manual :mrgreen: ).

Certainly it would be different if we could not afford it; however we're fortunate that it's not the situation in our retirement.

- Ron

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dm200
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Location: Washington DC area

Re: How do you pay for purchase of a vehicle in retirement?

Post by dm200 » Tue Aug 21, 2018 9:21 am

I don't drive her vehicle, she doesn't drive mine (anyway, she can't drive the Stang - it's manual :mrgreen: ).
I started driving tractors, trucks, pickup trucks (manual transmission) from about six years old on the farm. I prefer manual transmissions - I tried to teach DW 40 years ago several times - and she claims she cannot learn. I concluded any further attempts to "teach" her would result in a murder or a divorce.

So, now with 2 older cars - the practicalities are that she needs to be able to drive each car - so both automatics :(

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