Advice about car purchase

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Topic Author
blaire951
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Joined: Fri Jun 10, 2022 6:50 am

Advice about car purchase

Post by blaire951 »

Hello all,

I recently got a new job and I've been considering getting a car. My old car was totaled (not at fault). I was looking at a couple of fun EVs (Mustang Mach-E, Polestar, Tesla Model 3) for around the $50k price point. I have never bought something for so much money before, the most expensive thing I've so far bought was a $2,000 computer. I am not looking to keep up with the Joneses or impress anybody, I just find the acceleration and fun of the car addicting.

Here's the thing: I don't really commute a lot right now due to hybrid WFH structure. So I commute 3 days a week to the office. Furthermore, my company provides shuttle services near my apartment. What the car would be nice for is a lot of things like going hiking, hanging out with friends who live in other cities, going to the gym, going

My total compensation (base salary + stocks + sign on bonus + target bonus) the first year is $230k because of signing bonus. But let's treat the stocks and bonuses like they don't exist and only look at salary.

$150k = $3,450 per bi-weekly paycheck after maxing 401k. So monthly budget is $6,900.

Just based on my base salary, I would be able to save $2,500 a month after all the expenses (rent, food, vacation savings, car loan payment, etc). When you add in my RSUs (if they do not increase or decrease), then I will save $5417 a month. The target bonus is 10-20% of my income, so that's an extra $1.2k a month. This totals $6,617 a month in savings. If we include my vacation savings, then it's closer to $7300 a month.

The median home price where I live is $984,000. I'm not sure if I want to settle down yet since I'm still young, but saving for a home in the meantime might be a good idea? This would require 20% times $1M or $200,000. At my savings rate, this would take me 30 months or 2.5 years. I plan on putting everything into VTI for house savings.

Is it irresponsible to put that much liquid into a car? I don't know about the other EVs, but historically Teslas have retained their value well and have one of the lowest depreciations in the market. However, let's assume in a year they end up depreciating like rocks. How much opportunity cost am I looking at by buying an EV for $50k? I would save a lot on gas and maintenance due to the relative simplicity of EVs compared to ICE.

Money management gives me a lot of anxiety since I'm only recently out of college. So any advice is appreciated.
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ClevrChico
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Re: Advice about car purchase

Post by ClevrChico »

That seems like a lot to spend for occasional use. Renting a car when you want to go out of town might save you a lot of money. If you work for a major company, you might be able to get corporate rates on a personal rental, which is around 50%+ off retail.
Topic Author
blaire951
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Re: Advice about car purchase

Post by blaire951 »

Would renting a car for constant weekend and 2 days weekday use be cheaper than owning one?
exodusNH
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Re: Advice about car purchase

Post by exodusNH »

blaire951 wrote: Fri Jun 10, 2022 7:20 am Hello all,

I recently got a new job and I've been considering getting a car. My old car was totaled (not at fault). I was looking at a couple of fun EVs (Mustang Mach-E, Polestar, Tesla Model 3) for around the $50k price point. I have never bought something for so much money before, the most expensive thing I've so far bought was a $2,000 computer. I am not looking to keep up with the Joneses or impress anybody, I just find the acceleration and fun of the car addicting.

Here's the thing: I don't really commute a lot right now due to hybrid WFH structure. So I commute 3 days a week to the office. Furthermore, my company provides shuttle services near my apartment. What the car would be nice for is a lot of things like going hiking, hanging out with friends who live in other cities, going to the gym, going

My total compensation (base salary + stocks + sign on bonus + target bonus) the first year is $230k because of signing bonus. But let's treat the stocks and bonuses like they don't exist and only look at salary.

$150k = $3,450 per bi-weekly paycheck after maxing 401k. So monthly budget is $6,900.

Just based on my base salary, I would be able to save $2,500 a month after all the expenses (rent, food, vacation savings, car loan payment, etc). When you add in my RSUs (if they do not increase or decrease), then I will save $5417 a month. The target bonus is 10-20% of my income, so that's an extra $1.2k a month. This totals $6,617 a month in savings. If we include my vacation savings, then it's closer to $7300 a month.

The median home price where I live is $984,000. I'm not sure if I want to settle down yet since I'm still young, but saving for a home in the meantime might be a good idea? This would require 20% times $1M or $200,000. At my savings rate, this would take me 30 months or 2.5 years. I plan on putting everything into VTI for house savings.

Is it irresponsible to put that much liquid into a car? I don't know about the other EVs, but historically Teslas have retained their value well and have one of the lowest depreciations in the market. However, let's assume in a year they end up depreciating like rocks. How much opportunity cost am I looking at by buying an EV for $50k? I would save a lot on gas and maintenance due to the relative simplicity of EVs compared to ICE.

Money management gives me a lot of anxiety since I'm only recently out of college. So any advice is appreciated.
Yes, you'll save on gas, but how much would that really be for occasional use?

On a new ICE vehicle, there is very little maintenance. It's really just oil changes. I've had my car since Jan 2019 and have done 3 oil changes. I'll be doing my fourth in a month or two.

There are very few independent mechanics that work on Teslas. While the maintenance, in general will be less, when you need to have it done, it will be more expensive due to lack of competition.

Look, you're young and have a lot of earning potential ahead of you. Blowing $50k on a car is not going to have any impact on your future, if you don't make it a habit.

However, cars are probably the biggest thing keeping people from being more wealthy. Either leasing $65,000 trucks or buying them with 7+ year loans, only to pick up a new lease or loan at the end of the term.

I am not a car person. They're tools to me. I'd be more inclined to buy a beater until you figure out what you want. The used car market might have made that impossible right now, though.

Don't forget to factor in car insurance and registration fees / annual property / excise taxes. Even in a state like NH with no income or sales tax, there's an annual tax on automobiles. We just call it a registration fee. On my new vehicle with a MSRP of $34k, the first year was something like $850. It declines a bit the second year, and then has a more linear drop for subsequent ones.

As for your plan to put your house deposit money in VTI, that's fine if you don't have a particular timeframe in mind and can hold off for a couple of years if necessary. As you know, the market is down quite a bit this year so far. If you had a $200k balance on Jan 3 and started shopping houses, it would only be $166k right now.

Stocks have a longer-term expected return, but, they can also do stuff like lose 17% in 5 months. 17% isn't even all that unusual. From November 2007 until February 2009, VTI lost over 50% and didn't recover until 2012. Do not look at the March 2020 crash and recovery as the standard. The grind down can take longer than you expect and may not even be obvious that it's happening. Getting back to even can take a very long time.
tashnewbie
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Re: Advice about car purchase

Post by tashnewbie »

blaire951 wrote: Fri Jun 10, 2022 7:20 am So I commute 3 days a week to the office. Furthermore, my company provides shuttle services near my apartment. What the car would be nice for is a lot of things like going hiking, hanging out with friends who live in other cities, going to the gym, going

I would save a lot on gas and maintenance due to the relative simplicity of EVs compared to ICE.
Sounds like the vehicle would really just be for weekend use. You didn't say how far those weekend excursions could be.

I doubt owning an EV would be be much cheaper, if at all, for you than an ICE. Because you're not going to be using either vehicle much.

I have a 2015 Honda Accord with ~50k miles (used a bit more than just a weekend vehicle) that hasn't needed anything other than routine maintenance like oil changes and tires. You'd save on the oil changes (I don't even pay anything for those because I get them free from the dealership).

I agree with someone above that ultimately this decision isn't going to make or break your financial future. If you want a Tesla, get one. But recognize that it's not necessarily a financially optimal decision. It's more of a lifestyle/image choice. And that's okay. I'd compare the opportunity cost of the difference between a Tesla and an ICE in terms of what else you could do with that money that might bring you more joy. If you value the Tesla greater than that other thing, go for the Tesla. You don't need anyone's permission to buy whatever vehicle you want or do whatever you want with your money.
bloom2708
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Re: Advice about car purchase

Post by bloom2708 »

This purchase won't break the OP, but if they do it 10 more times between now and 50-55, it will have a big impact.

A part-time $50k car is not a good use of money.

By this point, usually the money is mentally spent, so all we can do is give a thumbs up or thumbs down.

I'd spend $15k on a used gas sipper. Or $20k on a used Bolt or Leaf.
"We are here to provoke thoughtfulness, not agree with you." Unknown Boglehead
Topic Author
blaire951
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Re: Advice about car purchase

Post by blaire951 »

I think I’ll take a look at the opportunity cost between an used Accord and a Mustang Mach E/Tesla/Polestar. If I’m okay with losing that difference then I will buy the EV. If not then I will get the ICE.

My travel distances in the winter is 160 miles round trip for going snowboarding or 320 miles per weekend. Hiking in the places I enjoy going in the summer is about 60 miles round trip or 120 miles per weekend. The gym is 10 miles away, if I drive to work it’s 5 miles away or 10 round trip.
smitcat
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Re: Advice about car purchase

Post by smitcat »

blaire951 wrote: Fri Jun 10, 2022 9:03 am I think I’ll take a look at the opportunity cost between an used Accord and a Mustang Mach E/Tesla/Polestar. If I’m okay with losing that difference then I will buy the EV. If not then I will get the ICE.

My travel distances in the winter is 160 miles round trip for going snowboarding or 320 miles per weekend. Hiking in the places I enjoy going in the summer is about 60 miles round trip or 120 miles per weekend. The gym is 10 miles away, if I drive to work it’s 5 miles away or 10 round trip.
"Mustang Mach E/Tesla/Polestar."
I am curious what the walkin availability and prices are for all of these but specifically the Mach E.
If you have not ordered one from the factory how many are really out there and what are the dealer mark ups (ADM) if any?
Are there really a number of $50K Mach E's out there to purchase?
niagara_guy
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Re: Advice about car purchase

Post by niagara_guy »

Why don't you try renting for a few months to see how it works out? If you don't like it you will not have lost much. If you buy a $50k car and you don't like it you are stuck.
CletusCaddy
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Re: Advice about car purchase

Post by CletusCaddy »

blaire951 wrote: Fri Jun 10, 2022 9:03 am I think I’ll take a look at the opportunity cost between an used Accord and a Mustang Mach E/Tesla/Polestar.
Hint: it’s not as high as people think.
H-Town
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Re: Advice about car purchase

Post by H-Town »

blaire951 wrote: Fri Jun 10, 2022 7:20 am Hello all,

I recently got a new job and I've been considering getting a car. My old car was totaled (not at fault). I was looking at a couple of fun EVs (Mustang Mach-E, Polestar, Tesla Model 3) for around the $50k price point. I have never bought something for so much money before, the most expensive thing I've so far bought was a $2,000 computer. I am not looking to keep up with the Joneses or impress anybody, I just find the acceleration and fun of the car addicting.

Here's the thing: I don't really commute a lot right now due to hybrid WFH structure. So I commute 3 days a week to the office. Furthermore, my company provides shuttle services near my apartment. What the car would be nice for is a lot of things like going hiking, hanging out with friends who live in other cities, going to the gym, going

My total compensation (base salary + stocks + sign on bonus + target bonus) the first year is $230k because of signing bonus. But let's treat the stocks and bonuses like they don't exist and only look at salary.

$150k = $3,450 per bi-weekly paycheck after maxing 401k. So monthly budget is $6,900.

Just based on my base salary, I would be able to save $2,500 a month after all the expenses (rent, food, vacation savings, car loan payment, etc). When you add in my RSUs (if they do not increase or decrease), then I will save $5417 a month. The target bonus is 10-20% of my income, so that's an extra $1.2k a month. This totals $6,617 a month in savings. If we include my vacation savings, then it's closer to $7300 a month.

The median home price where I live is $984,000. I'm not sure if I want to settle down yet since I'm still young, but saving for a home in the meantime might be a good idea? This would require 20% times $1M or $200,000. At my savings rate, this would take me 30 months or 2.5 years. I plan on putting everything into VTI for house savings.

Is it irresponsible to put that much liquid into a car? I don't know about the other EVs, but historically Teslas have retained their value well and have one of the lowest depreciations in the market. However, let's assume in a year they end up depreciating like rocks. How much opportunity cost am I looking at by buying an EV for $50k? I would save a lot on gas and maintenance due to the relative simplicity of EVs compared to ICE.

Money management gives me a lot of anxiety since I'm only recently out of college. So any advice is appreciated.
The first million saved is the hardest. If you don't practice delay gratification, it will take you a long time to get there. Your income is not high enough for the cost of living, i.e. 50k car and 984k house. The rat race will be your fate if you are not careful in making those big 3 decisions: house, car, and marriage. Just be fiscally responsible in the first 5-7 years of your young professional career. Then you can afford to buy a lot of nice things while already saved up at least half a million.
Time is the ultimate currency.
Casper
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Re: Advice about car purchase

Post by Casper »

Ok, I'll just say it. Buying a $50k car for occasional use for someone recently out of college makes zero sense and is a terrible choice.
Golf maniac
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Re: Advice about car purchase

Post by Golf maniac »

Maybe some of these people can’t remember being young. I remember and I got a nice sporty two door Nissan 240 SX back in the day. It was a lot of fun and my favorite car. If your numbers are right and you can afford the car payment and still save over $2k per month while maxing your 401k, then enjoy life. As some have stated if you make a habit of doing impulsive, expensive buys then that can impact your long term retirement savings. The key to FIRE is always live below your means and watch out for lifestyle creep as you start to get salary increases.
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Watty
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Re: Advice about car purchase

Post by Watty »

Two basic questions;

1) Can you easily pay cash for the car? If you would need to get a car loan then it makes no sense to buy an expensive car.

2) Do you have a dedicated car charging station at your apartment in your parking place? A shared charging station would be a problem since it might not be available when you need it.

To me buying an electric car when you do not own a house now would be a non-starter since that would greatly limit your choice if you ever want to rent a different house or apartment.

In another 10+ years having charging stations might be more standard but not now.
blaire951 wrote: Fri Jun 10, 2022 7:20 am Here's the thing: I don't really commute a lot right now due to hybrid WFH structure. So I commute 3 days a week to the office. Furthermore, my company provides shuttle services near my apartment. What the car would be nice for is a lot of things like going hiking, hanging out with friends who live in other cities, going to the gym, going...
If you are not using it a lot having an electric car would not have any significant gas savings. The places where you would want to hike or visit friends at could also be out of of your electric range so finding a place to charge would be an additional complication.

Depending on where you want to hike the ground clearance on those cars could be a problem so be sure to look into that. Leaving a high profile expensive car on a remote trail head or marginal part of town might not feel comfortable even if it is insured.

Also get insurance quotes for those cars. The cost to insure an expensive car could be very high especially if you are not over 25 years old. You have a good job and good prospects so you need to get insurance with high limits and maybe an umbrella policy too so don't skimp on that.

I am not a "car guy" especially when it comes to sports cars but there have been many threads on cars and so there is a bit of an on going joke here and for different situations people will half jokingly post "The only Boglehead approved car is a ..." because prior threads repeatedly recommended the same car model for similar situations.

For less expensive spots cars that is the Mazda Miata.

other types of "Boglehead approved cars" are less clear but roughly.

Economy: Corolla - Runner up: Civic, Mazda 3, Elantra
Mid size: Camry - Runner up Accord, Subaru Legacy
small/mid SUV: CRV, RAV4, Outback, Forester.

Even if you could easily afford one of the higher end car you mentioned(you can't) a problem with that is if you buy a car like that right out of college then you may want to buy an even more expensive car when you are in your 30s, 40s, or older and it might feel difficult to move down to a less expensive car when your situation is different. There is lot to be said for starting out with a more modest car when you are young so you do not get used to having very expensive cars.

The new and used car market is rough right now and it will vary with the model but I would highly suggest that you look at some of those cars to see what is available, both new and used, then decide what you want to get.

As I mentioned before be sure to check the cost of insurance first since it will vary a lot more than you might think. I am retired so my insurance is a lot different than yours but last year I replaced a three year old Corolla with a new Forester which was worth about twice as much and to my surprise my insurance went down by 20%. My insurance agent said that was because the Forester had a lot better claims history.
blaire951 wrote: Fri Jun 10, 2022 7:20 am Is it irresponsible to put that much liquid into a car?
Yep.

About the only thing worse than spending that much money would be borrowing that much money to buy a car. :mrgreen:

There are several variations on a saying, "You can afford anything you want, but not everything you want."

You could make the numbers work to buy the car but the question is what you would need to give up in exchange. Economists call this the "opportunity cost". For example a teenager might has $12 which is enough to see a movie or buy a pizza but not both. The opportunity cost of seeing the moving is not getting to eat the pizza. There is not a right answer it is just a choice.

You need to think of what the opportunity cost of buying a $50k car instead of a $30K car would be for you. For example with that $20K you could;

1) Take several nice vacations.
2) Invest it and buy a house or condo years earlier. (There is no hurry and lots of reasons to not buy now but by the time you are in your 30s you may want to buy property.)
3) Invest it in retirement savings where it might double every ten years or so and allow you to retire a few years earlier.
4) Afford to take a chance and go to work with a startup company which does not pay as well but could pay off big in the long term.
Last edited by Watty on Fri Jun 10, 2022 11:21 am, edited 2 times in total.
caffeperfavore
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Re: Advice about car purchase

Post by caffeperfavore »

smitcat wrote: Fri Jun 10, 2022 9:11 am I am curious what the walkin availability and prices are for all of these but specifically the Mach E.
If you have not ordered one from the factory how many are really out there and what are the dealer mark ups (ADM) if any?
Are there really a number of $50K Mach E's out there to purchase?
As someone who recently looked into this, there are zero Mach E's available right now. They aren't even taking orders until they catch up.
smitcat
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Re: Advice about car purchase

Post by smitcat »

caffeperfavore wrote: Fri Jun 10, 2022 11:11 am
smitcat wrote: Fri Jun 10, 2022 9:11 am I am curious what the walkin availability and prices are for all of these but specifically the Mach E.
If you have not ordered one from the factory how many are really out there and what are the dealer mark ups (ADM) if any?
Are there really a number of $50K Mach E's out there to purchase?
As someone who recently looked into this, there are zero Mach E's available right now. They aren't even taking orders until they catch up.
Thank you - that is what I thought but had not done any research looking at this time.
rasputin
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Re: Advice about car purchase

Post by rasputin »

How often do you see yourself using the car? How much will it cost? Divide one by the other. Does it still make sense?

IMO it sounds like you should rent a car when needed OR get something thats cheap but runs.

$50k might not sound huge in the grand scheme of things but consider compound growth.

Do you see yourself working a long time or working to the point that you can afford not to?
zag00
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Re: Advice about car purchase

Post by zag00 »

forget renting a car nowadays, what a hassle.
Income is substantial, savings rate is substantial. $50-60k for an EV sounds reasonable even if its sporadically used. :beer
Topic Author
blaire951
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Re: Advice about car purchase

Post by blaire951 »

Two basic questions;

1) Can you easily pay cash for the car? If you would need to get a car loan then it makes no sense to buy an expensive car.

2) Do you have a dedicated car charging station at your apartment in your parking place? A shared charging station would be a problem since it might not be available when you need it.
1) I can pay 100% cash for the car but DCU offers loans for 2.49% APR for EVs which I would rather invest than buy outright.

2) My apartment has dedicated EV chargers and you get your own spot for charging.
If you are not using it a lot having an electric car would not have any significant gas savings. The places where you would want to hike or visit friends at could also be out of of your electric range so finding a place to charge would be an additional complication.
Nah I checked the range and it's not an issue. At least with Tesla's supercharging network. The other EVs I would need to check.
Depending on where you want to hike the ground clearance on those cars could be a problem so be sure to look into that. Leaving a high profile expensive car on a remote trail head or marginal part of town might not feel comfortable even if it is insured.
That is true.
Also get insurance quotes for those cars. The cost to insure an expensive car could be very high especially if you are not over 25 years old. You have a good job and good prospects so you need to get insurance with high limits and maybe an umbrella policy too so don't skimp on that.
I'm not 25 yet, but I got a quote from a major insurance company for a Tesla Model 3 for $560 for 6 months or $93. I think this isn't too bad? It was the highest plan you can get (I forget the terms but something 100/300).
Even if you could easily afford one of the higher end car you mentioned(you can't) a problem with that is if you buy a car like that right out of college then you may want to buy an even more expensive car when you are in your 30s, 40s, or older and it might feel difficult to move down to a less expensive car when your situation is different. There is lot to be said for starting out with a more modest car when you are young so you do not get used to having very expensive cars.
Why do you say I can't afford it? The car is 22% of my gross income. That doesn't seem so bad. And I can pay cash.
You need to think of what the opportunity cost of buying a $50k car instead of a $30K car would be for you. For example with that $20K you could;

1) Take several nice vacations.
2) Invest it and buy a house or condo years earlier. (There is no hurry and lots of reasons to not buy now but by the time you are in your 30s you may want to buy property.)
3) Invest it in retirement savings where it might double every ten years or so and allow you to retire a few years earlier.
4) Afford to take a chance and go to work with a startup company which does not pay as well but could pay off big in the long term.
I may be wrong but I don't think $20k over 7 years (I own cars for a long time) is going to be the difference between me buying a house and not. And I already budget in nice vacations and my 401K has been maxed for a couple years (recently passed the $100k mark). So has my Roth IRA.
[/quote]
iamlucky13
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Re: Advice about car purchase

Post by iamlucky13 »

blaire951 wrote: Fri Jun 10, 2022 7:20 amI don't know about the other EVs, but historically Teslas have retained their value well and have one of the lowest depreciations in the market. However, let's assume in a year they end up depreciating like rocks. How much opportunity cost am I looking at by buying an EV for $50k? I would save a lot on gas and maintenance due to the relative simplicity of EVs compared to ICE.

Money management gives me a lot of anxiety since I'm only recently out of college. So any advice is appreciated.
A lot of EV's are in development. Tesla themselves continue to plan for significant further increases in production. Supply of EV's is not going to be constrained forever. I am skeptical that the manufacturers will reach the point where they are capable of oversupplying EV demand and competition starts to become significant this year, but they will eventually, and the depreciation rate will change significantly when that happens.

My baseline expectation is ultimately depreciation of EV's will be similar to that of ICE's - very roughly about 50% remaining value in 5 years and 25% in 10 years.

An unstated element of the industry's plans is they will actually accelerate depreciation - making new EV's more affordable should mean used EV's won't command the same resale value anymore. The cheapest Model 3 currently costs $47,000. If Tesla ever does get the price persistently down to their $35,000 target, then then my 5 year used price approximation isn't $23,500, but $17,500.

Moving on from my cost outlook to your individual circumstances:

Based on your income and expenses, it does not look unreasonable to me to buy a $50,000 car. However, my own preference given your multiple priorities is to buy a more modest car now (eg - lightly used mainstream compact or mid-size), focus on savings for the home down payment, and leave the luxury purchase of a nice car until you reach your down payment goal, plus a little bit of longer to confirm your financial trajectory is still good with whatever your spending is at that time.

That's just my preferred path, not the only path I think is prudent. Part of the reason I like this is it reduces risk if your circumstances change, but I also like it because it establishes conservative spending habits early in your career. It's easier to loosen up later than to tighten the belt on luxuries you've grown accustomed to.
Jack FFR1846
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Re: Advice about car purchase

Post by Jack FFR1846 »

So I'm sure you're a math person, just based on your wording of things. So gather some facts and then do the math.

Gathering facts:

What will the EV actually cost you? A Tesla is easy because you get zip back from the federal government. IF I were to buy one, it would be a single motor Model 3 with zero options. This would make it about $48k. This is the cheapest they can be bought for. In my state, IF the selling price is under $50k, they credit $2500 in taxes.

For me, Kia and Ford and Subaru EVs are $5k over MSRP or higher (one Ford dealer is $20k over MSRP), so you should visit at least a couple dealers who have actual vehicles on the lot, drive them, then ask the price. They are far more willing to tell you these days because they've set the price in stone. Kia, Ford and Subaru, you do get $7500 tax credit from the feds. So do that math. Your state? Do that math.

What is your total electric rate? I know gas has gone through the roof. But electricity in wild west states like Texas seem to be able to go through the roof as well. If you lived in Mass like I do, then you're far safer as the state sets the rate and no electric company can increase it without the long time public hearings and justification because of things like natural gas going up. In any case, do the math. How much does it cost in electricity for your EV of choice to go 100 miles? How much for a gas car? Can you get free charging anywhere? I do know some workplaces use free charging as an incentive. I used to work next to Cisco and early on, they offered free charging and the first model Ss showed up there.

Can you charge at home at all? You don't have a house, so being able to charge is not so assumed that many people think.

How far do you normally drive? Plug in hybrids are far cheaper and easier to get than EVs. If you're driving around town all the time, then maybe a Prius Prime or the upcoming Mini hybrid would make more sense. Or a small battery MINI 2 door.

I've done all the math and all my homework. My use is split. Usually around town where 120V at home alone is fine. But that trip up to Burlington, VT means that I need to charge any EV during my trip. Also, even a Subaru at $48k for me minus $10k in tax incentives is going to get charged 6.25% sales tax and is double what I paid for my last car. I've driven a bunch of cars and in the end decided that my gas cars are going to stay around for at least a few more years.
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deltaneutral83
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Re: Advice about car purchase

Post by deltaneutral83 »

blaire951 wrote: Fri Jun 10, 2022 12:25 pm

Why do you say I can't afford it? The car is 22% of my gross income. That doesn't seem so bad. And I can pay cash.
You need to think of what the opportunity cost of buying a $50k car instead of a $30K car would be for you. For example with that $20K you could;

1) Take several nice vacations.
2) Invest it and buy a house or condo years earlier. (There is no hurry and lots of reasons to not buy now but by the time you are in your 30s you may want to buy property.)
3) Invest it in retirement savings where it might double every ten years or so and allow you to retire a few years earlier.
4) Afford to take a chance and go to work with a startup company which does not pay as well but could pay off big in the long term.
I may be wrong but I don't think $20k over 7 years (I own cars for a long time) is going to be the difference between me buying a house and not. And I already budget in nice vacations and my 401K has been maxed for a couple years (recently passed the $100k mark). So has my Roth IRA.

There is no "right answer" to all of your questions. Nothing about what the OP mentioned will break you numbers wise. BUT, as BH's, you're not going to get the majority of us saying this is the move they would make, many would, most wouldn't I presume. Again, not going to be "the difference" between anything. Keep in mind the post about getting such a nice car out of school gets the hedonic treadmill going pretty rapidly right out of the gate, its not all math, even on BH.

I bet if you go out and get a $15k reliable used car for 4 years and throw 35k into the market (that's down 18-20% as we type) you will be happy you did. But again, most on here have done damage at a young age that makes an extra $20-40k on a car look tame, but you can gain from others wisdom.
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burritoLover
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Re: Advice about car purchase

Post by burritoLover »

exodusNH wrote: Fri Jun 10, 2022 7:51 am On a new ICE vehicle, there is very little maintenance. It's really just oil changes. I've had my car since Jan 2019 and have done 3 oil changes. I'll be doing my fourth in a month or two.

There are very few independent mechanics that work on Teslas. While the maintenance, in general will be less, when you need to have it done, it will be more expensive due to lack of competition.
No, it will certainly be way less maintenance with a Tesla (or other EV) than ICE, not "generally" will be less. Here's all the maintenance required for a Tesla Model 3 - any brain dead mechanic could do these - you could even do these yourself. On ICE, you are talking air filter changes, fuel filter changes, oil/coolant/tranny/diff fluid changes, spark plug changes, injector cleaning, timing belt changes (if applicable), etc.
Brake fluid health check every 2 years (replace if necessary).
A/C desiccant bag replacement every 6 years.
Cabin air filter replacement every 2 years.
Clean and lubricate brake calipers every year or 12,500 miles (20,000 km) if in an area where roads are salted during winter
Rotate tires every 6,250 miles (10,000 km) or if tread depth difference is 2/32 in (1.5 mm) or greater, whichever comes first
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MikeWillRetire
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Re: Advice about car purchase

Post by MikeWillRetire »

Based on your salary, bonuses, and savings rate, yes you can afford this.
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Watty
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Re: Advice about car purchase

Post by Watty »

Sorry, I could not help posting this after seeing posts about how reliable and long lasting the Tesla(or some other electric car would be.)

https://www.cnn.com/videos/us/2021/12/3 ... kg-vpx.cnn

That is extreme but a 10 year old electric car may will be far past its prime and they have not been around to see how well they will age.
blaire951 wrote: Fri Jun 10, 2022 12:25 pm Why do you say I can't afford it?
One red flag is that you are talking about a 7 year car loan and talking about monthly payments.

I have had gotten car loans on new cars before but I tried to have them paid off by the time the full or at least the powertrain warranty ended. I have also found that when I am buying cars I tend to buy less expensive cars because writing a five figure check is hard for me to do and makes the money seem a lot more real.

Realistically if you can really get a car like that for $50K(which is not certain) then you are really just talking about spending something like $20K extra compared to a more practical $30K(or less) car.

(One caveat, buying a $50K five year old Tesla is not comparable to buying a $30K new Miata(or whatever))

If you make a $20K mistake you can afford it so that would not be not the end of the world but it is significant.
blaire951 wrote: Fri Jun 10, 2022 12:25 pm 1) I can pay 100% cash for the car but DCU offers loans for 2.49% APR for EVs which I would rather invest than buy outright.
Investing and earning a higher return is harder than it sounds because you have a sequence of returns risk. If your investments drop significantly early in the loan while you are making car payments it will be very hard to come out ahead.
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Re: Advice about car purchase

Post by niceguy7376 »

I have a 70 mile a day , 3 days a week commute. I recently sold my 16 year old, 154K mile corolla and splurged on Hyundai Ionic5. I am now enjoying my silent commute and no more visits to gas stations with the current prices. I have not checked if there were corollas or camrys that were available because i wanted to enjoy life and the commute needed to earn money.

Not all things be calculated in terms of money perspective. As long as you limit your splurges and live within your means, you should be good.
What use is having money when retired and living longer as the years at the end are not the same as life in 20s to 40s.

I looked at all the EVs that you mentioned and bought the best of the current ones is what I believe.
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blaire951
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Re: Advice about car purchase

Post by blaire951 »

Watty wrote: Fri Jun 10, 2022 2:41 pm Sorry, I could not help posting this after seeing posts about how reliable and long lasting the Tesla(or some other electric car would be.)

https://www.cnn.com/videos/us/2021/12/3 ... kg-vpx.cnn

That is extreme but a 10 year old electric car may will be far past its prime and they have not been around to see how well they will age.
blaire951 wrote: Fri Jun 10, 2022 12:25 pm Why do you say I can't afford it?
One red flag is that you are talking about a 7 year car loan and talking about monthly payments.

I have had gotten car loans on new cars before but I tried to have them paid off by the time the full or at least the powertrain warranty ended. I have also found that when I am buying cars I tend to buy less expensive cars because writing a five figure check is hard for me to do and makes the money seem a lot more real.

Realistically if you can really get a car like that for $50K(which is not certain) then you are really just talking about spending something like $20K extra compared to a more practical $30K(or less) car.

(One caveat, buying a $50K five year old Tesla is not comparable to buying a $30K new Miata(or whatever))

If you make a $20K mistake you can afford it so that would not be not the end of the world but it is significant.
blaire951 wrote: Fri Jun 10, 2022 12:25 pm 1) I can pay 100% cash for the car but DCU offers loans for 2.49% APR for EVs which I would rather invest than buy outright.
Investing and earning a higher return is harder than it sounds because you have a sequence of returns risk. If your investments drop significantly early in the loan while you are making car payments it will be very hard to come out ahead.
Sounds like that repair cost was out of warranty. The battery has a 8 year/million mile warranty IIRC.

I will consider paying in 100% cash then if I do decide to proceed with the purchase.

But also, if I put that cash into the S&P in the long term it will hit 7%.
sailaway
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Re: Advice about car purchase

Post by sailaway »

Have you priced Uber and public transit for what you want to do?

The car won't make or break you, but it may set "but I can afford it" lifestyle creep into motion. I suggest you take some time to explore being car free.
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blaire951
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Re: Advice about car purchase

Post by blaire951 »

sailaway wrote: Fri Jun 10, 2022 3:05 pm Have you priced Uber and public transit for what you want to do?

The car won't make or break you, but it may set "but I can afford it" lifestyle creep into motion. I suggest you take some time to explore being car free.
I’ve actually been car free since March. It is a big pain not having a car since I live in the suburbs of Seattle. Yes Lyft and Uber is cheaper (I think I’m paying around $600 a month) but even then, I like having my own car and having more freedom. To me that’s worth it.
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Re: Advice about car purchase

Post by exodusNH »

burritoLover wrote: Fri Jun 10, 2022 2:05 pm
exodusNH wrote: Fri Jun 10, 2022 7:51 am On a new ICE vehicle, there is very little maintenance. It's really just oil changes. I've had my car since Jan 2019 and have done 3 oil changes. I'll be doing my fourth in a month or two.

There are very few independent mechanics that work on Teslas. While the maintenance, in general will be less, when you need to have it done, it will be more expensive due to lack of competition.
No, it will certainly be way less maintenance with a Tesla (or other EV) than ICE, not "generally" will be less. Here's all the maintenance required for a Tesla Model 3 - any brain dead mechanic could do these - you could even do these yourself. On ICE, you are talking air filter changes, fuel filter changes, oil/coolant/tranny/diff fluid changes, spark plug changes, injector cleaning, timing belt changes (if applicable), etc.
Brake fluid health check every 2 years (replace if necessary).
A/C desiccant bag replacement every 6 years.
Cabin air filter replacement every 2 years.
Clean and lubricate brake calipers every year or 12,500 miles (20,000 km) if in an area where roads are salted during winter
Rotate tires every 6,250 miles (10,000 km) or if tread depth difference is 2/32 in (1.5 mm) or greater, whichever comes first
I said in a new ICE vehicle. All the fluids you're talking about are years into the service cycle besides the engine oil. The air filter is easily replaced. Spark plugs are good for 100k miles. Many cars have timing chains, but those with belts are usually 75k-100k miles. Injectors again are going to be many years of service before they need to be cleaned.

If you keep the car for 5-7 years, you'll likely never have to do anything besides engine oil, air filter, and probably a battery.

Look, electric cars are the future for the masses. Not arguing that. But a new ICE vehicle requires very little maintenance. I wouldn't buy a Tesla simply because their build quality is variable and I don't care for Musk. I'm excited to see what Toyota and Mazda have in store.
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Watty
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Re: Advice about car purchase

Post by Watty »

blaire951 wrote: Fri Jun 10, 2022 2:54 pm I will consider paying in 100% cash then if I do decide to proceed with the purchase.

But also, if I put that cash into the S&P in the long term it will hit 7%.
It very well could but you could still end up losing money because of the sequence of returns risk. After taxes that 7% might be more like 5% so keep that in mind too.

Here is a very simplistic example of the sequence of returns which for a home loan which I have posted before. You might play with your numbers to see how they would look if you run into a few bad investing years early in the car loan.
If you do not pay it off then you will have more sequence of returns risk. For example in rough numbers if you just kept a $100K mortgage and also put $100K into a separate investing account which you also pay a $500 a month mortgage out of then;

a) If you get unlucky and get a modest 10% decline in the portfolio the first year then it would be down to $90K
b) You would also need to pay the $500 a month mortgage($6,000) so your portfolio would be down to $84K
c) To pay off the mortgage at the end of the second year you would need about $96.5K so you would need to gain back $12.5K and another $6,000 for the next years mortgage payments which combined is $18.5K. That would take a 22% return on the remaining $84K to get back to the point where you could pay off the mortgage.

In the past portfolios have declined in roughly one of four or five years depending on the asset allocation. (20 to 25 percent of the time)

https://investor.vanguard.com/investing ... allocation

The sequence of returns risk can also go the other way and you could get lucky and have the first couple of years get good returns that would put you on the path for large gains over the years. There will sometimes be very optimistic projections on just how much better not paying off the mortgage could be but one limiting factor that needs to be considered is that few people actually keep a 30 year mortgage for the full 30 years. It is difficult to put a number on it but many people who own a home will sell it in less than 10 years.
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burritoLover
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Re: Advice about car purchase

Post by burritoLover »

exodusNH wrote: Fri Jun 10, 2022 4:02 pm
burritoLover wrote: Fri Jun 10, 2022 2:05 pm
exodusNH wrote: Fri Jun 10, 2022 7:51 am On a new ICE vehicle, there is very little maintenance. It's really just oil changes. I've had my car since Jan 2019 and have done 3 oil changes. I'll be doing my fourth in a month or two.

There are very few independent mechanics that work on Teslas. While the maintenance, in general will be less, when you need to have it done, it will be more expensive due to lack of competition.
No, it will certainly be way less maintenance with a Tesla (or other EV) than ICE, not "generally" will be less. Here's all the maintenance required for a Tesla Model 3 - any brain dead mechanic could do these - you could even do these yourself. On ICE, you are talking air filter changes, fuel filter changes, oil/coolant/tranny/diff fluid changes, spark plug changes, injector cleaning, timing belt changes (if applicable), etc.
Brake fluid health check every 2 years (replace if necessary).
A/C desiccant bag replacement every 6 years.
Cabin air filter replacement every 2 years.
Clean and lubricate brake calipers every year or 12,500 miles (20,000 km) if in an area where roads are salted during winter
Rotate tires every 6,250 miles (10,000 km) or if tread depth difference is 2/32 in (1.5 mm) or greater, whichever comes first
I said in a new ICE vehicle. All the fluids you're talking about are years into the service cycle besides the engine oil. The air filter is easily replaced. Spark plugs are good for 100k miles. Many cars have timing chains, but those with belts are usually 75k-100k miles. Injectors again are going to be many years of service before they need to be cleaned.

If you keep the car for 5-7 years, you'll likely never have to do anything besides engine oil, air filter, and probably a battery.

Look, electric cars are the future for the masses. Not arguing that. But a new ICE vehicle requires very little maintenance. I wouldn't buy a Tesla simply because their build quality is variable and I don't care for Musk. I'm excited to see what Toyota and Mazda have in store.
You just said about the Tesla: "While the maintenance, in general will be less, when you need to have it done, it will be more expensive due to lack of competition." So we are talking about maintenance "when it needs to be done" for Tesla (which is virtually non-existent BTW) but we don't care about ICE maintenance "when it needs to be done". Say what?
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Re: Advice about car purchase

Post by Watty »

Be sure to come back and give an update after you buy a car. It will be interesting to hear how that goes in this crazy car market. I suspect what you finally get may depend more on what is available than a well though out plan. I am thinking of ordering a Ford Maverick up in August when they will allow you to order one again and it may be a year before I get it.
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blaire951
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Re: Advice about car purchase

Post by blaire951 »

I haven’t made up my mind yet if I will purchase a car. I’m trying to consider the opportunity cost. It’s funny, because if I was 16 and was making what I was making I would somehow find a way to blow it all. But now that I’m an adult, I’m a lot more frugal and conscious of the future
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Re: Advice about car purchase

Post by NYCaviator »

blaire951 wrote: Fri Jun 10, 2022 12:25 pm
I may be wrong but I don't think $20k over 7 years (I own cars for a long time) is going to be the difference between me buying a house and not. And I already budget in nice vacations and my 401K has been maxed for a couple years (recently passed the $100k mark). So has my Roth IRA.
You make $150k a year and live outside of Seattle where you note the median home price is nearly $1m. If you are serious about wanting to buy a house in Seattle, you need to be realistic about income/expenses. I wouldn't count RSUs or discretionary bonuses in your overall income. Those can go away overnight if the economy runs into problems; in other words, there's no way I would be buying a $1m home if my "guaranteed" income was only $150k a year.

Yes, you can afford an EV, but its up to you whether you want to spend money on something you'll only use occasionally.
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blaire951
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Re: Advice about car purchase

Post by blaire951 »

So is home ownership not a possibility for me in this area then? Most people who live here work in tech and a good chunk of the total compensation is stock and bonuses. Until recently, Amazon had a salary cap of $160k but they would easily clear $400k+. Would those people not be able to afford $1M homes? Im a bit confused.

I always sell my RSUs immediately, so I do plan on reinvesting into VTI. And yeah guaranteed is $150k, but by the time my company’s stock reaches $0, I would anyway be out of a job.

What home prices should I be eyeing then?

I guess I’m also still early in my career, so eventually even solely on base I should be able to afford a home. But for now I’ll make sure I save as much as possible in cash so maybe I’ll put more than 20% down.
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Re: Advice about car purchase

Post by krafty81 »

If you have a dedicated charger, then go for an EV. I hate paying for gas and really enjoy my Mach E. Had it for a year now. Hard to find at 50K, but keep looking at used over the next six months. Great car and no gas!
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blaire951
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Re: Advice about car purchase

Post by blaire951 »

I ended up getting the car. For my needs and fun I found the opportunity cost worth it. Picking her up tomorrow. I rarely make these expensive purchases but life is short and I’m single and have no responsibilities so yeah.

Probably not the Bogleheads way, but oh well at least I thought it through a lot.
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Re: Advice about car purchase

Post by Casper »

blaire951 wrote: Tue Jun 21, 2022 6:32 pm I ended up getting the car. For my needs and fun I found the opportunity cost worth it. Picking her up tomorrow. I rarely make these expensive purchases but life is short and I’m single and have no responsibilities so yeah.

Probably not the Bogleheads way, but oh well at least I thought it through a lot.
Congrats. Curious—what did you get, what did it cost, how hard was it to get, and how did you end up paying for it (financing, etc.)?
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Re: Advice about car purchase

Post by cchrissyy »

blaire951 wrote: Sat Jun 11, 2022 9:51 am So is home ownership not a possibility for me in this area then? Most people who live here work in tech and a good chunk of the total compensation is stock and bonuses. Until recently, Amazon had a salary cap of $160k but they would easily clear $400k+. Would those people not be able to afford $1M homes? Im a bit confused.
i think the idea is don't count that money until it's in your hands. so the way to afford the million dollar house it to wait until a couple years of large bonuses or RSUs have created a fat down payment for you, and therefore your mortgage is a reasonable multiple (3x?) of your base salary.

when you start shopping for a house you can afford, you have the opportunity to make a separate decision about will you actually put all that down payment money in the house purchase or do you want to keep it in your savings and investments. in recent history with low interest rates, many people chose to do that. it results in a higher monthly payment but if you are careful with the money you kept, you can survive a long time without losing the house.
comfortable being all stock until age 40, now working towards 60-20-20 us-intl-bond
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blaire951
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Re: Advice about car purchase

Post by blaire951 »

Casper wrote: Tue Jun 21, 2022 8:51 pm
blaire951 wrote: Tue Jun 21, 2022 6:32 pm I ended up getting the car. For my needs and fun I found the opportunity cost worth it. Picking her up tomorrow. I rarely make these expensive purchases but life is short and I’m single and have no responsibilities so yeah.

Probably not the Bogleheads way, but oh well at least I thought it through a lot.
Congrats. Curious—what did you get, what did it cost, how hard was it to get, and how did you end up paying for it (financing, etc.)?
Tesla Model 3 long range. MSRP $50,990 but taxes (10.4% in my state/county) and fees it goes up to $59k.

Insurance is expensive because I’m under 25 ($550 over 6 months or a little under $100 a month)

I paid 50% down the out the door price since I prefer to not have a lot of debt. I could have done 100% down and been super comfortable but I wanted to invest a part of the money. So my monthly payments are also pretty reasonable.

I definitely could have gotten a cheaper car, but no regrets. Brings me joy.

I will sell it if a better EV competitor with better quality control and good charging network comes up in the future. The others did not do it for me personally. I wanted a sedan not a crossover (Mach-E).
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Re: Advice about car purchase

Post by JoeRetire »

blaire951 wrote: Fri Jun 10, 2022 7:20 am Is it irresponsible to put that much liquid into a car?
It's your money - you get to decide what is responsible and what isn't, based on your long term goals.

Don't waste your time trying to financially justify your purchase. You know you don't need the car and are just doing it for fun. Be honest with yourself.
This is gonna be my time. Time to taste the fruits and let the juices drip down my chin. I proclaim this: The Summer of George!
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Re: Advice about car purchase

Post by scienceguy »

Congrats on the exciting car purchase. I myself just bought a Volvo XC40 recharge EV and love it.
FWIW here is what I tell my kids (high school and college). If you are a reasonable Bogelhead type person, money that you don't spend today will be invested in a way that it will roughly double every ten years. So if you are 30 and you spend 50K on a car, that 50K unspent would be approx $400K when you turn 60 (and $1.6 mil when you turn 80). So the opportunity cost of spending money is much greater when you are young than when you are older because of the time that money could otherwise be invested.
But, on the flipside, you are only young once and you should definitely enjoy your youth. So the decisions are really about the opportunity cost of spending the money versus enjoying your relative youth. No easy answers there but it seems like you are thinking about it in a reasonable way IMO.
But that is why you see the oldsters tooling around in their Porsches or whatever (and why I just spent 50K on a car at age 53 when my last car was a 22K new Honda CRV lowest trim level that I kept for 13 years). I have benefited from lots of doublings of my invested money over 25 years and significantly added to it during that time through both earnings and inheritances from the relatively frugal previous generation, and benefitted from ridiculous hot stock market gains. So the 50K I spent last month is a small fraction of my wealth because of the time I have already been in the market and adding to it, and will be only $200K when I am 73. Though my years between 73 and say 93 could be fine in great health, of course there is significant risk that I either won't be alive anymore or will not be in a position to enjoy my saved $$. So for me I am carefully choosing things to spend $$ on that will bring me and my family joy (in addition to enormous college tuitions!). And also make sure that the inheritances I received will at minimum be saved and invested for the next generation. It sounds like you are doing the same at a younger age, which is not unreasonable to me as long as you understand the trade-offs.
Maybe that is all completely obvious but that is how I think about it.
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Re: Advice about car purchase

Post by blaire951 »

JoeRetire wrote: Thu Jun 23, 2022 6:49 am
blaire951 wrote: Fri Jun 10, 2022 7:20 am Is it irresponsible to put that much liquid into a car?
It's your money - you get to decide what is responsible and what isn't, based on your long term goals.

Don't waste your time trying to financially justify your purchase. You know you don't need the car and are just doing it for fun. Be honest with yourself.
True
Last edited by blaire951 on Fri Jun 24, 2022 1:20 am, edited 1 time in total.
gogreen
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Re: Advice about car purchase

Post by gogreen »

blaire951 wrote: Fri Jun 10, 2022 7:20 am I was looking at a couple of fun EVs (Mustang Mach-E, Polestar, Tesla Model 3) for around the $50k price point.
Lol what? It's easily 60+ nowadays - my neighbor just secured Tesla 3 (I guess it's a 'long range for 58'). I was shopping for Mach-E but the only available was 70+
If you're going to keep it 8-12 years it doesn't matter a lot - just grab a long loan and inflation will take care of the rest :sharebeer
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JoeRetire
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Re: Advice about car purchase

Post by JoeRetire »

blaire951 wrote: Thu Jun 23, 2022 9:41 am
JoeRetire wrote: Thu Jun 23, 2022 6:49 am
blaire951 wrote: Fri Jun 10, 2022 7:20 am Is it irresponsible to put that much liquid into a car?
It's your money - you get to decide what is responsible and what isn't, based on your long term goals.

Don't waste your time trying to financially justify your purchase. You know you don't need the car and are just doing it for fun. Be honest with yourself.
I already bought the car. I do need it lol. Life is so much easier with it already
Based on what you wrote, a $59k car seems a lot more like a want, than a real need.

That's fine. We all spend money in order to make our life easier and more fun, even when we don't actually need to do so.

I don't need to buy new cars. But when I need a car, I buy new (although not that expensive). I can afford it. And buying a new car every 10-15 years hasn't stopped me from achieving my financial goals.
This is gonna be my time. Time to taste the fruits and let the juices drip down my chin. I proclaim this: The Summer of George!
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Re: Advice about car purchase

Post by dknightd »

I would not buy an electric only vehicle unless I had a way to charge it at home.
Retired 2019. So far, so good. I want to wake up every morning. But I want to die in my sleep. Just another conundrum.
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Re: Advice about car purchase

Post by Jack FFR1846 »

I think the decision is fine. You're making good money and have low costs. If you decide in a year or 2 that you want something else, you can likely sell off the M3LR and get a good amount back. Is there a Washington State tax credit for the EV? I can understand the choice. I've lately driven a bunch of EVs and while I can save $30k by buying something other than the M3LR, I also don't want an SUV which is what the industry has been putting out. I haven't pulled the trigger because of cost, the fact that my state's $2500 tax credit is only for EVs that sell for under $50k and having watched youtube Rich Rebuild videos since he was the Car Guru and seeing fun things like Tesla won't sell me or my mechanic anything so any repairs have to be at a Tesla facility.
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Re: Advice about car purchase

Post by blaire951 »

dknightd wrote: Thu Jun 23, 2022 11:37 am I would not buy an electric only vehicle unless I had a way to charge it at home.
I have a dedicated parking space for charging it at my apartment. Pay nothing for fuel which is nice.
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blaire951
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Joined: Fri Jun 10, 2022 6:50 am

Re: Advice about car purchase

Post by blaire951 »

JoeRetire wrote: Thu Jun 23, 2022 10:14 am
blaire951 wrote: Thu Jun 23, 2022 9:41 am
JoeRetire wrote: Thu Jun 23, 2022 6:49 am
blaire951 wrote: Fri Jun 10, 2022 7:20 am Is it irresponsible to put that much liquid into a car?
It's your money - you get to decide what is responsible and what isn't, based on your long term goals.

Don't waste your time trying to financially justify your purchase. You know you don't need the car and are just doing it for fun. Be honest with yourself.
I already bought the car. I do need it lol. Life is so much easier with it already
Based on what you wrote, a $59k car seems a lot more like a want, than a real need.

That's fine. We all spend money in order to make our life easier and more fun, even when we don't actually need to do so.

I don't need to buy new cars. But when I need a car, I buy new (although not that expensive). I can afford it. And buying a new car every 10-15 years hasn't stopped me from achieving my financial goals.
Oh yeah I wasn’t saying a $59k is a need, but certainly a car in the suburbs of the United States is a need. The real opportunity cost was $25k, since a new car is roughly $20-$25k.

I mean I could have easily been carless but it makes life a lot more difficult.
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