Help with car decision

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Topic Author
typicalmillenial
Posts: 19
Joined: Wed Feb 27, 2019 9:37 am

Help with car decision

Post by typicalmillenial » Mon Jun 17, 2019 10:34 am

Hello everyone,

I will give more context on my financial position below, but here is the situation:

I am driving a 2014 Honda accord that I bought in a haste because my hand-me-down car died and I needed a commuter asap. Don't love it, don't hate it. I want to trade in for a Subaru Outback as it will be more accommodating to winter activities, camping gear, bikes, etc (things that the current vehicle does not do well). I live in New England and these things are what I spend a great deal of time doing.

I genuinely think that cars are overprices pieces of steel, and I want something that I can drive into the ground and that will accommodate the things mentioned above. Gas mileage is about the same on the two cars, and the outback is AWD which is something I know I don't need, but think would benefit from greatly.

Could someone help me understand why I cannot move beyond this thought/ if this is a major mistake?

This has been an ongoing internal debate for the past 6 months, and I can't seem to get over it. Then again, a Subaru Outback being my "dream" car doesn't seem all that bad....


Financial Situation (rough)

Age- 24
Singe
HCOL area

Assets
401k-$7000 (24% of pay bi week)
Roth IRA- $12000
Cash- $6,000

Salary- $67,000 base + commission(expected $100k + for 2020- currently in software sales)

Expenses- $3500/ mo
-includes all spending (fixed and variable)

Car Breakdown

Accord

Loan- $11,700 left
Payment- $270/mo
Insurance- $67/mo

Outback

Loan- $16000 with a $7000-$10000 down payment
Payment/Insurance would rise, but not by very much based on my assessments.

Thanks for reading and any advice!

runner3081
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Re: Help with car decision

Post by runner3081 » Mon Jun 17, 2019 10:53 am

typicalmillenial wrote:
Mon Jun 17, 2019 10:34 am
I am driving a 2014 Honda accord that I bought in a haste because my hand-me-down car died and I needed a commuter asap. Don't love it, don't hate it. I want to trade in for a Subaru Outback as it will be more accommodating to winter activities, camping gear, bikes, etc (things that the current vehicle does not do well). I live in New England and these things are what I spend a great deal of time doing.
How often do you go? How treacherous are the locales? I haven't really had a problem in snow with FWD cars. Ground clearance could be an issue.

Could you keep the Honda and rent an AWD vehicle for certain outings?

Spending 40% of your base annual income on a car is insane, in my opinion. I understand there is a bonus, but even at 100K, that is still 25% of annual income on a car.

Afty
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Re: Help with car decision

Post by Afty » Mon Jun 17, 2019 11:24 am

Having lived in Boston, I understand where you are coming from. Outbacks are very popular there and make great winter cars.

What are the actual values/prices of your Accord and the Outback you want to buy? You should avoid thinking in terms of payment and focus on the overall cost of this upgrade.

Topic Author
typicalmillenial
Posts: 19
Joined: Wed Feb 27, 2019 9:37 am

Re: Help with car decision

Post by typicalmillenial » Mon Jun 17, 2019 4:01 pm

Afty wrote:
Mon Jun 17, 2019 11:24 am
Having lived in Boston, I understand where you are coming from. Outbacks are very popular there and make great winter cars.

What are the actual values/prices of your Accord and the Outback you want to buy? You should avoid thinking in terms of payment and focus on the overall cost of this upgrade.
runner3081 wrote:
Mon Jun 17, 2019 10:53 am
typicalmillenial wrote:
Mon Jun 17, 2019 10:34 am
I am driving a 2014 Honda accord that I bought in a haste because my hand-me-down car died and I needed a commuter asap. Don't love it, don't hate it. I want to trade in for a Subaru Outback as it will be more accommodating to winter activities, camping gear, bikes, etc (things that the current vehicle does not do well). I live in New England and these things are what I spend a great deal of time doing.
How often do you go? How treacherous are the locales? I haven't really had a problem in snow with FWD cars. Ground clearance could be an issue.

Could you keep the Honda and rent an AWD vehicle for certain outings?

Spending 40% of your base annual income on a car is insane, in my opinion. I understand there is a bonus, but even at 100K, that is still 25% of annual income on a car.
Thanks for responding. To be totally honest, I think I am just falling victim to marketing. I want an AWD car, but probably don't actually need one for what I am doing. At least I don't need it enough to take a large chunk of a bonus and put it into a vehicle at this point in my life/career (that money goes further invested the right way...)

If I put some racks on the accord it can fit whatever I need, coupled with good snow tires I will be able to get just about anywhere. Plus, the car will last forever.

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Toons
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Re: Help with car decision

Post by Toons » Mon Jun 17, 2019 4:06 pm

I would look at a Honda Fit.
Save some :moneybag :moneybag

https://automobiles.honda.com/fit?exper ... lsrc=aw.ds

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stoptothink
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Re: Help with car decision

Post by stoptothink » Mon Jun 17, 2019 4:18 pm

typicalmillenial wrote:
Mon Jun 17, 2019 4:01 pm
Afty wrote:
Mon Jun 17, 2019 11:24 am
Having lived in Boston, I understand where you are coming from. Outbacks are very popular there and make great winter cars.

What are the actual values/prices of your Accord and the Outback you want to buy? You should avoid thinking in terms of payment and focus on the overall cost of this upgrade.
runner3081 wrote:
Mon Jun 17, 2019 10:53 am
typicalmillenial wrote:
Mon Jun 17, 2019 10:34 am
I am driving a 2014 Honda accord that I bought in a haste because my hand-me-down car died and I needed a commuter asap. Don't love it, don't hate it. I want to trade in for a Subaru Outback as it will be more accommodating to winter activities, camping gear, bikes, etc (things that the current vehicle does not do well). I live in New England and these things are what I spend a great deal of time doing.
How often do you go? How treacherous are the locales? I haven't really had a problem in snow with FWD cars. Ground clearance could be an issue.

Could you keep the Honda and rent an AWD vehicle for certain outings?

Spending 40% of your base annual income on a car is insane, in my opinion. I understand there is a bonus, but even at 100K, that is still 25% of annual income on a car.
Thanks for responding. To be totally honest, I think I am just falling victim to marketing. I want an AWD car, but probably don't actually need one for what I am doing. At least I don't need it enough to take a large chunk of a bonus and put it into a vehicle at this point in my life/career (that money goes further invested the right way...)

If I put some racks on the accord it can fit whatever I need, coupled with good snow tires I will be able to get just about anywhere. Plus, the car will last forever.
FWIW, we're in Utah - so mountains and a lot of snow - we currently have a '17 VW jetta for a family of 4. I've never owned an AWD car and in 15yrs of driving here (with one RWD car and 2 FWD cars) I've gotten stuck or faced a scary traction issue a grand total of zero times. My brother and mother, each with Outbacks, both either got stuck or had traction issues more than once this past winter alone (my mom's resulting in a totaled vehicle). My sister, with a less than year old Impreza, busted a headlight when she couldn't stop and went slowly into a pole. AWD helps get you moving, but modern snow tires are pretty amazing. We also go camping, a lot, definitely more than all our Subaru-owning family members combined. In fact we did a 5-day trip the week before last - 4 of us, tent, sleeping bags, and pads, camping chairs, clothes, food (and we don't have any sort of rack). It's amazing how much you can stuff into even a compact car if you just pack smart.

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Sandtrap
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Re: Help with car decision

Post by Sandtrap » Mon Jun 17, 2019 4:27 pm

You already have a car loan.
Can the "dream car" wait until you pay that loan off?

It is generally inefficient to go from debt-mobile to debt-mobile and often ends up "upside down" where what you owe on a car is far greater than it's actual value.
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Tdubs
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Re: Help with car decision

Post by Tdubs » Mon Jun 17, 2019 4:30 pm

Lived in NE and near high mountain passes out West. A Subaru is useful out West for deeper snow, but I don't see as much value in icy NE. I loved my Subaru, but I would drive the Honda into the ground first. No new loan.

buhlaxtus
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Re: Help with car decision

Post by buhlaxtus » Mon Jun 17, 2019 5:02 pm

I don't know that I'd call it a major mistake. More of a significant splurge? Just considering the financial side of things, it's a bit on the high side - and unnecessary - and you have a good opportunity to build up your assets by putting this off for a year or three.

If you're anything like me, the glow will wear off after 6 months and you'll be five figures poorer with not too much to show for it.

mortfree
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Re: Help with car decision

Post by mortfree » Mon Jun 17, 2019 5:11 pm

What about a Crosstrek? Maybe not as different size wise versus Accord.

Does it have to be a Subaru or do you just want a roomier vehicle?

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wander
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Re: Help with car decision

Post by wander » Mon Jun 17, 2019 5:29 pm

I would keep the Honda if I were you. It doesn't make sense to have 2 car loans unnecessarily. But, it's your money, do what you like.

Jack FFR1846
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Re: Help with car decision

Post by Jack FFR1846 » Mon Jun 17, 2019 5:52 pm

Some comments.

Western snow is very different from Eastern snow. In the west, you see guys blasting through 2 feet of snow in a Fit with snow tires because it's fluffy, light snow. In the Northeast, we get lots of heavy, wet snow that my Wrangler on 34" tires, lifted 2.5 inches won't go more than 3 feet in locked 4 wheel drive before getting stopped with a foot and a half of snow.

A Crosstrek indeed has the same clearance as an Outback and is cheaper. It is way smaller. A Forester also has this clearance. Either should have snow tires in the winter.

Where you go, do you really need AWD and the clearance? With racks and storage containers, the size of the vehicle really isn't needed. I used to be an avid mountain biker and road biker and rode every day at lunch time. If I left the bike on a rack, it would be stolen. So it was stored inside my Honda CRX, which is a small 2 seater with a hatch. I'd take the wheels off and fit the bike. My point is that if you just need a place to put camping stuff and bikes, you can get a bike rack and likely fit all the camping stuff in the huge Accord trunk. If you're going places in the winter and having to leave the car a mile from where you want to go because it won't go through the snow, then sure....the AWD and clearance will help.

When I was in college, I'd go camping with my girl friend, 2 bikes and all our camping gear.....in a 76 MG Midget. So hearing that stuff won't fit in an accord is sort of suspect to me.
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doraemon
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Re: Help with car decision

Post by doraemon » Mon Jun 17, 2019 6:13 pm

I tend to agree with Jack FFR1846.

I would look into putting a trailer hitch/receiver and maybe a Thule (or similar) rooftop carrier on the Accord. The hitch/receiver can be installed by U-Haul or some other installer, and then you can get a good bike rack for it (see trailer hitch bike racks at REI). This would make it a lot easier to carry your bike(s). And a rooftop carrier would enable you to carry significantly more camping and other gear.

With respect to all-wheel drive, you should try to find some easy-to-install tire chains on Amazon or elsewhere. That should help in getting you through the worst of the winter weather. But, if all-wheel drive is really a must-have, I'd also look at a Crosstrek, Forester, Kia Sportage, and Hyundai Tucson.

As a financial matter, I think selling a car that still has an outstanding loan on it is generally unwise.

krafty81
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Location: San Diego, CA

Re: Help with car decision

Post by krafty81 » Mon Jun 17, 2019 6:15 pm

I don't see why anyone would NOT buy an AWD car, regardless of location. Why not get the safest drive system available? Subaru builds a superior AWD system. Crosstrek is a good option maybe.

stoptothink
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Re: Help with car decision

Post by stoptothink » Mon Jun 17, 2019 6:21 pm

krafty81 wrote:
Mon Jun 17, 2019 6:15 pm
I don't see why anyone would NOT buy an AWD car, regardless of location. Why not get the safest drive system available? Subaru builds a superior AWD system. Crosstrek is a good option maybe.
Because it isn't necessarily "safest" and you pay a premium when you purchase, at the gas pump, for tires, and in repairs.

dbr
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Re: Help with car decision

Post by dbr » Mon Jun 17, 2019 6:28 pm

It was always an article of faith with us that you don't borrow money to buy a car. You buy a used car at whatever price you can afford. I would think a used Outback would be an option.

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Watty
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Re: Help with car decision

Post by Watty » Mon Jun 17, 2019 7:06 pm

typicalmillenial wrote:
Mon Jun 17, 2019 10:34 am
Cash- $6,000
.....
Loan- $16000 with a $7000-$10000 down payment
Where is the downpayment coming from? You don't have enough cash for a good emergency fund so you don't want to use that and the Accord could likely only be sold for a few thousand dollars more than the loan balance if that.

typicalmillenial wrote:
Mon Jun 17, 2019 10:34 am
Could someone help me understand why I cannot move beyond this thought/ if this is a major mistake?

This has been an ongoing internal debate for the past 6 months, and I can't seem to get over it. Then again, a Subaru Outback being my "dream" car doesn't seem all that bad....
If that is what you want then don't "get over it", figure out a way to make it work.

I have not looked that them recently but if you are buying new I would assume that even for a lower trim line Outback you would be looking at over $30K when you add in things like sales tax, car registration, roof racks, snow tires, etc. Outbacks might not depreciate quickly enough to make buying used worthwhile.

Here is what you could do, your expenses are only $3,500 a month so if that is right then you should easily be able to save $2,000-$2,500 a month if you are willing to sacrifice your other discretionary spending(don't cut back on your retirement savings). It might take until the end of the year to save up $15K and when you sell the Accord you might clear a few thousand dollars after paying off your car loan. You could then buy the Outback with a car loan in the ballpark of $13,000 which you could pay off in a year or two.

You said that you have been having an internal debate on this for 6 months but unless you were paying off your student loans or something like that you could have been saving up to buy an Outback and be pretty well able to afford it by now. You need to ask yourself "If I want it that much why haven't I done anything about it?"

If there are other things that are more important to you that is OK, but the tradeoff is that you don't get to have an Outback in the near future. There are several variations on a saying, "You can have anything you want, but not everything you want." If you are willing to give up other things, including waiting a while, you should be able to afford the Outback before too long.

As far as the "major mistake" question, buying a high end Outback for $40K with zero down with a seven year loan would be getting into major mistake territory. Buying a pretty base model one with a 50% down payment and a three year loan would at most be a medium mistake if you buy it and don't get lots of enjoyment out of it.

One of the tradeoffs to consider though but be that buying even a $30K car now will impact your ability to buy a house when you are maybe 30. (There is no hurry!) In addition to current trade offs there are future trade offs too.

It would be good to back off a bit and instead of asking "Can I buy an Outback?" ask "What are some other cars that will allow me to do the things I want?" There are likely some much less expensive cars that are almost as good or even better in some ways for you. I am not up to speed on all the models that are available but I have heard good things about Hyundais and they come with a much better warranty so something like a base model Tuscan might be a reasonable alternative even though a bit different than the Outback.
typicalmillenial wrote:
Mon Jun 17, 2019 10:34 am
Insurance- $67/mo
That seems low for a late model car for a 24 year old. Be sure that you have high limits on your car insurance. You have a good income so you would be a good target for a lawsuit if you are in an accident. You may want to get an umbrella policy too.

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Watty
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Re: Help with car decision

Post by Watty » Mon Jun 17, 2019 7:33 pm

stoptothink wrote:
Mon Jun 17, 2019 4:18 pm
I've never owned an AWD car and in 15yrs of driving here (with one RWD car and 2 FWD cars) I've gotten stuck or faced a scary traction issue a grand total of zero times. My brother and mother, each with Outbacks, both either got stuck or had traction issues more than once this past winter alone (my mom's resulting in a totaled vehicle). My sister, with a less than year old Impreza, busted a headlight when she couldn't stop and went slowly into a pole. AWD helps get you moving, but modern snow tires are pretty amazing.
We do not get a lot of snow where I live but when we get snow or freezing rain I have consistently noticed that a high percentage of the cars in ditches are AWD or 4WD that people felt overconfident in and got into trouble.

Charon
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Re: Help with car decision

Post by Charon » Mon Jun 17, 2019 10:35 pm

I'll also chime in to recommend a look at the Crosstrek. You're single, so unless you normally go out with three buddies and a lot of gear, the Crosstrek should have enough space. (There's also now a plug-in hybrid version of it! But it's spendy, so probably don't go for that.) I've driven my Crosstrek through a foot of snow no problem.

Incidentally, snow should not be categorized as "East" or "West". A good division out West is continental, intermountain, and maritime ( https://www.tetongravity.com/story/ski/ ... w-climates ). Those of you on the East Coast can substitute the most appropriate one (probably maritime, for all those of you living very close to the coast).

HawkeyePierce
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Re: Help with car decision

Post by HawkeyePierce » Tue Jun 18, 2019 12:55 am

+1 on the Fit. I've taken mine all over Colorado and Utah down all sorts of dirt roads. Mud, snow, ice, no trouble whatsoever. Good winter tires are critical but that's a relatively cheap investment.

If you don't have space to store a second set of tires look around for tire storage companies. I pay $20/month to a company to store my extra set. That includes delivery and pickup to the shop that swaps them.

Olemiss540
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Re: Help with car decision

Post by Olemiss540 » Tue Jun 18, 2019 7:54 am

Nope. Get you NW up! These first few years are about delayed gratification to speed up the compounding process. Figure out how you can sell the accord and buy a similar aged subaru to scratch that itch. Due to not wanting to go into debt too deep early on in life, I actually learned quite a few valuable lessons with regards to mechanical abilities. Get something in the 80k mile range and tinker with it is my vote.

New cars are for the wealthy or broke amongst us. Take advantage of other's unending need to upgrade the drive enjoyable used cars at a fraction of the cost.
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helloeveryone
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Re: Help with car decision

Post by helloeveryone » Tue Jun 18, 2019 8:34 am

typicalmillenial wrote:
Mon Jun 17, 2019 4:01 pm
Afty wrote:
Mon Jun 17, 2019 11:24 am
Having lived in Boston, I understand where you are coming from. Outbacks are very popular there and make great winter cars.

What are the actual values/prices of your Accord and the Outback you want to buy? You should avoid thinking in terms of payment and focus on the overall cost of this upgrade.
runner3081 wrote:
Mon Jun 17, 2019 10:53 am
typicalmillenial wrote:
Mon Jun 17, 2019 10:34 am
I am driving a 2014 Honda accord that I bought in a haste because my hand-me-down car died and I needed a commuter asap. Don't love it, don't hate it. I want to trade in for a Subaru Outback as it will be more accommodating to winter activities, camping gear, bikes, etc (things that the current vehicle does not do well). I live in New England and these things are what I spend a great deal of time doing.
How often do you go? How treacherous are the locales? I haven't really had a problem in snow with FWD cars. Ground clearance could be an issue.

Could you keep the Honda and rent an AWD vehicle for certain outings?

Spending 40% of your base annual income on a car is insane, in my opinion. I understand there is a bonus, but even at 100K, that is still 25% of annual income on a car.
Thanks for responding. To be totally honest, I think I am just falling victim to marketing. I want an AWD car, but probably don't actually need one for what I am doing. At least I don't need it enough to take a large chunk of a bonus and put it into a vehicle at this point in my life/career (that money goes further invested the right way...)

If I put some racks on the accord it can fit whatever I need, coupled with good snow tires I will be able to get just about anywhere. Plus, the car will last forever.
Financially I would go with winter tires and roof rack OR trailer hitch with hitch bike rack.

stoptothink
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Re: Help with car decision

Post by stoptothink » Tue Jun 18, 2019 8:45 am

HawkeyePierce wrote:
Tue Jun 18, 2019 12:55 am
+1 on the Fit. I've taken mine all over Colorado and Utah down all sorts of dirt roads. Mud, snow, ice, no trouble whatsoever. Good winter tires are critical but that's a relatively cheap investment.

If you don't have space to store a second set of tires look around for tire storage companies. I pay $20/month to a company to store my extra set. That includes delivery and pickup to the shop that swaps them.
We've always had a dedicated set of winter/snow tires and wheels stored in the garage, but the new "all weather" tires have amazing reviews. We're going to pick up a set of Nokian wrg4s for this upcoming winter.

MichCPA
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Re: Help with car decision

Post by MichCPA » Tue Jun 18, 2019 9:01 am

krafty81 wrote:
Mon Jun 17, 2019 6:15 pm
I don't see why anyone would NOT buy an AWD car, regardless of location. Why not get the safest drive system available? Subaru builds a superior AWD system. Crosstrek is a good option maybe.
They are about $2k more, they hold value so buying used doesn't give you much of a discount. They are heavy (slow you down and uses gas), they add mechanical complexity, you have to replace all 4 tires at the same time. For that amount of money, winter tires are more cost effective IMO.

On the personal side, I live in Michigan where we had -40 with snow, but its flat where I am, so there is minimal advantage to AWD and if the weather is THAT bad, I can work from home.

Topic Author
typicalmillenial
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Re: Help with car decision

Post by typicalmillenial » Tue Jun 18, 2019 11:11 am

mortfree wrote:
Mon Jun 17, 2019 5:11 pm
What about a Crosstrek? Maybe not as different size wise versus Accord.

Does it have to be a Subaru or do you just want a roomier vehicle?
Really the AWD was the feature looking at most

Topic Author
typicalmillenial
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Joined: Wed Feb 27, 2019 9:37 am

Re: Help with car decision

Post by typicalmillenial » Tue Jun 18, 2019 11:13 am

Watty wrote:
Mon Jun 17, 2019 7:06 pm
typicalmillenial wrote:
Mon Jun 17, 2019 10:34 am
Cash- $6,000
.....
Loan- $16000 with a $7000-$10000 down payment
Where is the downpayment coming from? You don't have enough cash for a good emergency fund so you don't want to use that and the Accord could likely only be sold for a few thousand dollars more than the loan balance if that.

typicalmillenial wrote:
Mon Jun 17, 2019 10:34 am
Could someone help me understand why I cannot move beyond this thought/ if this is a major mistake?

This has been an ongoing internal debate for the past 6 months, and I can't seem to get over it. Then again, a Subaru Outback being my "dream" car doesn't seem all that bad....
If that is what you want then don't "get over it", figure out a way to make it work.

I have not looked that them recently but if you are buying new I would assume that even for a lower trim line Outback you would be looking at over $30K when you add in things like sales tax, car registration, roof racks, snow tires, etc. Outbacks might not depreciate quickly enough to make buying used worthwhile.

Here is what you could do, your expenses are only $3,500 a month so if that is right then you should easily be able to save $2,000-$2,500 a month if you are willing to sacrifice your other discretionary spending(don't cut back on your retirement savings). It might take until the end of the year to save up $15K and when you sell the Accord you might clear a few thousand dollars after paying off your car loan. You could then buy the Outback with a car loan in the ballpark of $13,000 which you could pay off in a year or two.

You said that you have been having an internal debate on this for 6 months but unless you were paying off your student loans or something like that you could have been saving up to buy an Outback and be pretty well able to afford it by now. You need to ask yourself "If I want it that much why haven't I done anything about it?"

If there are other things that are more important to you that is OK, but the tradeoff is that you don't get to have an Outback in the near future. There are several variations on a saying, "You can have anything you want, but not everything you want." If you are willing to give up other things, including waiting a while, you should be able to afford the Outback before too long.

As far as the "major mistake" question, buying a high end Outback for $40K with zero down with a seven year loan would be getting into major mistake territory. Buying a pretty base model one with a 50% down payment and a three year loan would at most be a medium mistake if you buy it and don't get lots of enjoyment out of it.

One of the tradeoffs to consider though but be that buying even a $30K car now will impact your ability to buy a house when you are maybe 30. (There is no hurry!) In addition to current trade offs there are future trade offs too.

It would be good to back off a bit and instead of asking "Can I buy an Outback?" ask "What are some other cars that will allow me to do the things I want?" There are likely some much less expensive cars that are almost as good or even better in some ways for you. I am not up to speed on all the models that are available but I have heard good things about Hyundais and they come with a much better warranty so something like a base model Tuscan might be a reasonable alternative even though a bit different than the Outback.
typicalmillenial wrote:
Mon Jun 17, 2019 10:34 am
Insurance- $67/mo
That seems low for a late model car for a 24 year old. Be sure that you have high limits on your car insurance. You have a good income so you would be a good target for a lawsuit if you are in an accident. You may want to get an umbrella policy too.
The main reason for not doing anything is because running the numbers makes me really wary of the opportunity cost that I would be incurring by throwing so much into a car. The best alternative is doing nothing, and it seems more and more to make the most sense!

Topic Author
typicalmillenial
Posts: 19
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Re: Help with car decision

Post by typicalmillenial » Tue Jun 18, 2019 11:16 am

Watty wrote:
Mon Jun 17, 2019 7:06 pm
typicalmillenial wrote:
Mon Jun 17, 2019 10:34 am
Cash- $6,000
.....
Loan- $16000 with a $7000-$10000 down payment
Where is the downpayment coming from? You don't have enough cash for a good emergency fund so you don't want to use that and the Accord could likely only be sold for a few thousand dollars more than the loan balance if that.

typicalmillenial wrote:
Mon Jun 17, 2019 10:34 am
Could someone help me understand why I cannot move beyond this thought/ if this is a major mistake?

This has been an ongoing internal debate for the past 6 months, and I can't seem to get over it. Then again, a Subaru Outback being my "dream" car doesn't seem all that bad....
If that is what you want then don't "get over it", figure out a way to make it work.

I have not looked that them recently but if you are buying new I would assume that even for a lower trim line Outback you would be looking at over $30K when you add in things like sales tax, car registration, roof racks, snow tires, etc. Outbacks might not depreciate quickly enough to make buying used worthwhile.

Here is what you could do, your expenses are only $3,500 a month so if that is right then you should easily be able to save $2,000-$2,500 a month if you are willing to sacrifice your other discretionary spending(don't cut back on your retirement savings). It might take until the end of the year to save up $15K and when you sell the Accord you might clear a few thousand dollars after paying off your car loan. You could then buy the Outback with a car loan in the ballpark of $13,000 which you could pay off in a year or two.

You said that you have been having an internal debate on this for 6 months but unless you were paying off your student loans or something like that you could have been saving up to buy an Outback and be pretty well able to afford it by now. You need to ask yourself "If I want it that much why haven't I done anything about it?"

If there are other things that are more important to you that is OK, but the tradeoff is that you don't get to have an Outback in the near future. There are several variations on a saying, "You can have anything you want, but not everything you want." If you are willing to give up other things, including waiting a while, you should be able to afford the Outback before too long.

As far as the "major mistake" question, buying a high end Outback for $40K with zero down with a seven year loan would be getting into major mistake territory. Buying a pretty base model one with a 50% down payment and a three year loan would at most be a medium mistake if you buy it and don't get lots of enjoyment out of it.

One of the tradeoffs to consider though but be that buying even a $30K car now will impact your ability to buy a house when you are maybe 30. (There is no hurry!) In addition to current trade offs there are future trade offs too.

It would be good to back off a bit and instead of asking "Can I buy an Outback?" ask "What are some other cars that will allow me to do the things I want?" There are likely some much less expensive cars that are almost as good or even better in some ways for you. I am not up to speed on all the models that are available but I have heard good things about Hyundais and they come with a much better warranty so something like a base model Tuscan might be a reasonable alternative even though a bit different than the Outback.
typicalmillenial wrote:
Mon Jun 17, 2019 10:34 am
Insurance- $67/mo
'

Also, down payment would come from a 20k commission payment at end of the year. I just think more and more the money could be deployed in a better way, but can't "scratch" the itch for wanting AWD for better accessibility. I think my emergency fund is sufficient. If need be, could entirely tighten the belt and I am adding to it monthly

That seems low for a late model car for a 24 year old. Be sure that you have high limits on your car insurance. You have a good income so you would be a good target for a lawsuit if you are in an accident. You may want to get an umbrella policy too.

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typicalmillenial
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Re: Help with car decision

Post by typicalmillenial » Tue Jun 18, 2019 11:17 am

Olemiss540 wrote:
Tue Jun 18, 2019 7:54 am
Nope. Get you NW up! These first few years are about delayed gratification to speed up the compounding process. Figure out how you can sell the accord and buy a similar aged subaru to scratch that itch. Due to not wanting to go into debt too deep early on in life, I actually learned quite a few valuable lessons with regards to mechanical abilities. Get something in the 80k mile range and tinker with it is my vote.

New cars are for the wealthy or broke amongst us. Take advantage of other's unending need to upgrade the drive enjoyable used cars at a fraction of the cost.
Definitely agree here. I was always planning on buying used, but I think that I would be able to delay this "need" for a car and it would not set me back as much as it would right now.

DesertDiva
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Re: Help with car decision

Post by DesertDiva » Tue Jun 18, 2019 11:18 am

Olemiss540 wrote:
Tue Jun 18, 2019 7:54 am
Nope. Get you NW up! These first few years are about delayed gratification to speed up the compounding process. Figure out how you can sell the accord and buy a similar aged subaru to scratch that itch. Due to not wanting to go into debt too deep early on in life, I actually learned quite a few valuable lessons with regards to mechanical abilities. Get something in the 80k mile range and tinker with it is my vote.

New cars are for the wealthy or broke amongst us. Take advantage of other's unending need to upgrade the drive enjoyable used cars at a fraction of the cost.
+1 This is solid advice for a young person, especially one in a HCOL area.

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Watty
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Re: Help with car decision

Post by Watty » Tue Jun 18, 2019 11:44 am

typicalmillenial wrote:
Tue Jun 18, 2019 11:13 am
The main reason for not doing anything is because running the numbers makes me really wary of the opportunity cost that I would be incurring by throwing so much into a car. The best alternative is doing nothing, and it seems more and more to make the most sense!
Just to play devil's advocate you could also argue that you are young, single, and presumably in good health and don't have any kids yet so there is an opportunity cost to missing out on some of the things you could do with a better car.

An Outback, even used, is likely overkill for what you really need but when you get the bonus paying something like $5K to upgrade from the Accord might not be unreasonable if you can get a car that will likely last ten or more years. A wild guess might be that the Accord might be worth something like $15-$17K now so upgrading to a $20K(ish) car is not a huge leap if can pay cash for it when you get your bonus.

One thing that is sometimes difficult to get a handle on is that being frugal can be more about getting good value with your money than actually buying the cheapest option.

abonder
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Re: Help with car decision

Post by abonder » Tue Jun 18, 2019 11:52 am

A 2014 accord is an incredibly useful vehicle. In my opinion, more useful than other suggestions like Honda Fit or crosstrek (despite the fact that I love the utility of hatchbacks). The accord is reliable, comfortable, and built to a better finish than the other suggested cars. I think it would be a step back unless you absolutely need AWD. You’ve already invested in racks to make your accord even more suited to your needs. It seems like a shame to get rid of such a solid and aptly-equipped vehicle when it had so much life left. Wait five years and reassess. At that time you wi have gotten even more value out of the current rig. And if winter driving is really the concern then go the snow tire route. It’s pricey upfront but will vastly improve winter traction and will save water on the non-winter tires as well.

lazydavid
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Re: Help with car decision

Post by lazydavid » Tue Jun 18, 2019 12:35 pm

I would keep the Accord. I have a much smaller car than you do (E90 3-series, which is shorter than a Civic), and on Friday I'll be taking my son to an out-of state lacrosse tournament, which I also did several times last year in the same car. We will be bringing a canopy tent (1' x 1' x 5.5' broken down in the bag), a huge bag with all his lacrosse gear, two short (42") and two long (6') poles, a good size cooler, duffel bag or two full of clothes, water jugs, extra shoes, two folding chairs, a wagon, and a 5 gallon bucket with a misting fan for the team. This is a LOT of stuff, and all of it will fit inside the car, with nothing obscuring my view out the rear windshield. For one local tournament last year, I also brought one of his friends/teammates and all his gear, but no duffel bags since we weren't staying overnight.

If I needed to bring bicycles, I'd put on a hitch and get a hitch-mount bike carrier. But an Accord should have more than enough space to do everything you described in your first post and more.

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