Buy a car before retirement or after retiring?

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nerdybynauture
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Buy a car before retirement or after retiring?

Post by nerdybynauture »

Hi Everyone,

I would like to get your thoughts on the below.

I have a 10 year old car and I am thinking of buying a new car as a replacement.

I may retire in under a year from now.

Would you buy a new car before retiring or after retiring? Current car has no problems.

Thanks!
jebmke
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Re: Buy a car before retirement or after retiring?

Post by jebmke »

My rule is to buy a car when the one I have no longer meets my requirements, and not before. But -- I'm not a car guy.

I would not view the retirement date as a factor, whether you are a car person or like me, drive your car until it isn't suitable. The money has no idea when you retired nor does it care. The dealers certainly don't either.
When you discover that you are riding a dead horse, the best strategy is to dismount.
sailaway
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Re: Buy a car before retirement or after retiring?

Post by sailaway »

Why do you want to replace a car with no problems?

Before vs after retirement only comes into play if you are considering financing. Even then, if you still have income, such as a pension or regular distributions from your portfolio, the financing probably wouldn't be an issue.
makingmistakes
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Re: Buy a car before retirement or after retiring?

Post by makingmistakes »

Retiring seems almost irrelevant. Therefore, I’d wait given the current market, where almost everything is MSRP or higher and wait times can be long.
SRenaeP
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Re: Buy a car before retirement or after retiring?

Post by SRenaeP »

I'd buy a new car when the old one has expensive problems that aren't worth fixing. Depending on the make/model and mileage of your current car, that could be five years from now.
MMiroir
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Re: Buy a car before retirement or after retiring?

Post by MMiroir »

The market is improving, but this is not a good time to buy a new car. I would wait a year or two longer if possible.
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enad
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Re: Buy a car before retirement or after retiring?

Post by enad »

nerdybynauture wrote: Wed Nov 23, 2022 1:19 pm Hi Everyone,

I would like to get your thoughts on the below.

I have a 10 year old car and I am thinking of buying a new car as a replacement.

I may retire in under a year from now.

Would you buy a new car before retiring or after retiring? Current car has no problems.

Thanks!
I subscribe to the "if it ain't broken" philosophy. My car is 12 model years old. The prior one was 23 model years old. So I would wait until the current car is acting up and it would cost more to fix than to replace.
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Watty
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Re: Buy a car before retirement or after retiring?

Post by Watty »

nerdybynauture wrote: Wed Nov 23, 2022 1:19 pm Would you buy a new car before retiring or after retiring?
Some plusses for buying it now;

1) It will likely have better safety features than your current car.

2) The used car market is still real strong so you can likely sell your current car for a good price and you will not need to risk it having a major problem in the next year.

3) You can go out car shopping and you may find that you have a three to six month wait to get the car you want if the car is in short supply. It varies a lot but with most desirable models you will have to pay a huge premium to buy one off a dealers lot.

4) If you are planning to take a road trip after you retire then it would be good to have the car for at least a few months to make sure that there are not any initial problems and to break it in.

If I was in your position then I would go on and start car shopping now since you are in no hurry to buy and if you do not like the deals that you find you can change your mind and decide not to buy and to wait a year.

My normal car owning stragety is to buy relatively modest new cars that have a reputation for reliability that don't depreciate fast. Typically something like a Toyota Corolla/Camry or Honda Civic/Accord. I then replace them when they are about ten years old or have maybe 120k miles on them. A ten year old well maintained, one owner, never wrecked Toyota is sort of the holy grail of used cars for some car buyers and they will pay a lot for one. That makes the math for replacing a 10 year old work a lot better if you have a car like that.
adamthesmythe
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Re: Buy a car before retirement or after retiring?

Post by adamthesmythe »

Retirement has little to do with it.

Right now supply is very limited, not much choice, and prices are high. Maybe it will get better.
Jack FFR1846
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Re: Buy a car before retirement or after retiring?

Post by Jack FFR1846 »

It depends. Do you want to spend an extra $1000? If you pay cash, that's how much more you'll likely pay. Dealers make more money on finance kick backs than they do profit on the car itself. Being retired makes it more complicated to get approved for credit. So from that perspective, while you can give your employer and current annualized income, you'll be approved for the loan. After 3 or 4 payments, pay off the car.
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dbr
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Re: Buy a car before retirement or after retiring?

Post by dbr »

I don't think there is any connection between buying things and when you retire.
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Devil's Advocate
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Re: Buy a car before retirement or after retiring?

Post by Devil's Advocate »

dbr wrote: Wed Nov 23, 2022 2:50 pm I don't think there is any connection between buying things and when you retire.
I'm not sure I agree. If you can make a large purchase prior to retirement using income cash flow this should reduce your sequence of return risks, no? Is this any different than going into retirement without a mortgage?

DA
MDfan
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Re: Buy a car before retirement or after retiring?

Post by MDfan »

It's just a bad time to buy a car. Whether you're retiring or not.
Jack FFR1846
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Re: Buy a car before retirement or after retiring?

Post by Jack FFR1846 »

Devil's Advocate wrote: Wed Nov 23, 2022 5:02 pm
dbr wrote: Wed Nov 23, 2022 2:50 pm I don't think there is any connection between buying things and when you retire.
I'm not sure I agree. If you can make a large purchase prior to retirement using income cash flow this should reduce your sequence of return risks, no? Is this any different than going into retirement without a mortgage?

DA
It is different from retiring without a mortgage. I have no mortgage and will retire next year. I have zero plans to ever take out a mortgage again. But in the OP's case, if he wants to take out a car loan, the fact that he doesn't have a job may cause issues in being approved for a car loan. Perhaps not with assets disclosed to the lender. I don't know. But I would not assume that a car loan will come through when you don't have a job to provide regular, traditional income. And as my previous post mentioned, the reason to take out a loan is to get more off of the car you're buying. If buying a Tesla or don't care that you're giving away an extra grand, then ignore all this and just pay cash.
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SmileyFace
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Re: Buy a car before retirement or after retiring?

Post by SmileyFace »

I would buy it for myself the day I retire - a fun way to kick off retirement 😀
bcc1234
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Re: Buy a car before retirement or after retiring?

Post by bcc1234 »

I plan on buying one a few weeks before I retire. I've had a company vehicle since I was 27! I hope to call it quits next December. Hopefully cars will be more plentiful by then.

bcc
robphoto
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Re: Buy a car before retirement or after retiring?

Post by robphoto »

All this "bad time to buy a car" ignores that whether it's good times, or bad times, this is the time you have, which is finite.

If your finances are tight, sure, wait till it's financially optimal to buy a car.

If that amount of money won't make a difference, go ahead and shop for a car, if it's fun for you. If you find one you like, buy it and enjoy it.

You can shop now if you want, or after you're retired if you prefer, probably not the worst way to spend a day.
ForeverPunjabi
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Re: Buy a car before retirement or after retiring?

Post by ForeverPunjabi »

nerdybynauture wrote: Wed Nov 23, 2022 1:19 pm Hi Everyone,

I would like to get your thoughts on the below.

I have a 10 year old car and I am thinking of buying a new car as a replacement.

I may retire in under a year from now.

Would you buy a new car before retiring or after retiring? Current car has no problems.

Thanks!
I'll be retiring in a couple of years time. I will treat myself by buying a new nice car then regardless of whether I absolutely need one or not. Life is too short and getting shorter. :sharebeer
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snackdog
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Re: Buy a car before retirement or after retiring?

Post by snackdog »

Ten years is a good run for a car. Sounds like you want one now. If you can find what you want and are ok with price, get on with it.
JPM
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Re: Buy a car before retirement or after retiring?

Post by JPM »

Will car prices fall despite inflation?

Will your retirement income be inflation-protected?

Will you be paying for the car out of a fund you have saved for the purpose or over a longer term on a loan?

Will inflation be your friend (a favorable loan) or perhaps become your enemy (delaying a cash purchase)?

The interplay among the (lack of?) desirability of one's current car, inflation, current vs expected replacement car prices, loan terms, and one's cash position must all be considered.
tibbitts
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Re: Buy a car before retirement or after retiring?

Post by tibbitts »

nerdybynauture wrote: Wed Nov 23, 2022 1:19 pm Hi Everyone,

I would like to get your thoughts on the below.

I have a 10 year old car and I am thinking of buying a new car as a replacement.

I may retire in under a year from now.

Would you buy a new car before retiring or after retiring? Current car has no problems.

Thanks!
Unless I wanted a different type of car - certainly possible when you retire - I wouldn't replace a car that's working perfectly and 10 years old. But "working perfectly" might not mean the same to everyone. Some people have a low bar.
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whodidntante
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Re: Buy a car before retirement or after retiring?

Post by whodidntante »

My best car deals happened in a recession.
MikeG62
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Re: Buy a car before retirement or after retiring?

Post by MikeG62 »

My decision to buy a replacement vehicle would be no different whether I was working or retired (or I should say it has not been and I've been retired 7 years now). If there is a financial worry, then I would ask if you feel you have sufficient resources to retire in the first place.
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hudson
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Re: Buy a car before retirement or after retiring?

Post by hudson »

nerdybynauture wrote: Wed Nov 23, 2022 1:19 pm Hi Everyone,

I would like to get your thoughts on the below.

I have a 10 year old car and I am thinking of buying a new car as a replacement.

I may retire in under a year from now.

Would you buy a new car before retiring or after retiring? Current car has no problems.

Thanks!
Would I? Yes, I did...one year before retirement.
For you? Yes, if you find a deal that works for you.

Bottom line: Everything doesn't have to be optimal.

Once I've run a car 10 years, I figure that I've "earned" a new vehicle.
Last edited by hudson on Thu Nov 24, 2022 9:51 am, edited 2 times in total.
neilpilot
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Re: Buy a car before retirement or after retiring?

Post by neilpilot »

Give the OP a break. Retirement could impact the purchase of a replacement auto, although it’s certainly a stretch.

Could have a long commute that was going away after retirement. Or, conversely, if I currently worked from home but was planning long road trips after I retired.
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Sandtrap
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Re: Buy a car before retirement or after retiring?

Post by Sandtrap »

nerdybynauture wrote: Wed Nov 23, 2022 1:19 pm Hi Everyone,

I would like to get your thoughts on the below.
1
I have a 10 year old car and I am thinking of buying a new car as a replacement.
I may retire in under a year from now.. .. . . . Current car has no problems.

2
Would you buy a new car before retiring or after retiring?

Thanks!
to op:
Notes and questions:

1 What are "your reasons" for buying a new car for retirement?
a) Celebration of retirement, . . rewarding yourself, a milestone?
b) To have the feeling of starting out "new" in another stage of life and finances. . and you can afford a new car easily?
c) other?

2
"for DW and I". . .this question is incomplete. It depends on a bigger picture than retirement date.

3
What kind of car do you have now?

4
What kind of car are you shopping for. . or pondering over. . . ?

5
What is your budget for this new car?
All in cash?
Financing?


to op:
Good luck in your search for a exciting new car. :D :D
j
For myself and DW, when we "retired" per se. . we had used cars that ran great (Honda and Toyota).
However, I bought a brand new Toyota Tundra truck in 2012 when I "retired" per se because it was needed and made sense.
10 years later, DW bought a brand new Toyota because her aging Nissan Xterra was "thinking" about having repair issues based on age and mileage.
We also added another new car that fit my daily needs better than the truck, although keeping both.
(this example is our logic based on need vs want or event. . alone. . and might help you)
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gck1891
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Re: Buy a car before retirement or after retiring?

Post by gck1891 »

I am not a car person...

Unless you really want/value driving a new(er) car, I would drive your car until there is a maintenance cost (or on-going costs) which represents a large proportion of the KBB/trade-in value. For me, that is when I would think about upgrading.

Another reason I would sell a car is if my current car's bumper to bumper warranty runs out. For example, I have owned a few Hyundai's with 6 year/60k mi warranties that I owned for the full 6 years (without hitting the mileage limit), then would trade-in for a low mileage used Hyundai still under the 6/60.
JoeJohnson
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Re: Buy a car before retirement or after retiring?

Post by JoeJohnson »

OP: You may consider your options with respect to changing cash flow in retirement. Getting a loan may also be more difficult. This is a great foresight on your part to consider this scenario. Enjoy your new car, whatever you decide.

To all responding about driving a car until the wheels fall off: OP didn't ask for your opinion IF they should buy a new car. OP asked BEFORE or AFTER retirement :sharebeer
homebuyer6426
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Re: Buy a car before retirement or after retiring?

Post by homebuyer6426 »

I'd personally try to keep my expenses in the first few years of retirement lower than the rest of it. But you may have enough buffer where you don't need to consider that.
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TheTimeLord
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Re: Buy a car before retirement or after retiring?

Post by TheTimeLord »

nerdybynauture wrote: Wed Nov 23, 2022 1:19 pm Hi Everyone,

I would like to get your thoughts on the below.

I have a 10 year old car and I am thinking of buying a new car as a replacement.

I may retire in under a year from now.

Would you buy a new car before retiring or after retiring? Current car has no problems.

Thanks!
If you are financing it probably helps to have a job when purchasing, if you are paying cash it would seem to me not to matter. So if you need to or are planning to finance your new vehicle then I would consider making the purchase before you retire.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]
flyingaway
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Re: Buy a car before retirement or after retiring?

Post by flyingaway »

There will be no "good" time to buy a car, just buy it when you really need one.
Ron
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Re: Buy a car before retirement or after retiring?

Post by Ron »

flyingaway wrote: Thu Nov 24, 2022 9:25 am There will be no "good" time to buy a car, just buy it when you really need one.
I would agree.

I've purchased two vehicles since I've retired, some 15 years ago. The first was about a year after I retired (2007) and started doing Meals on Wheels volunteer food deliveries. At the time, I was driving an 18 year old Olds Cutlass Ciera sedan which still worked well but it was a pain trying to put the coolers in the back seat/trunk. I traded it in for a three year old off lease 2005 Caddy SRX which I drove for an additional 7 years and traded it at the 10 year mark.

Purchased a 2015 GMC Acadia (new) and still drive that car today. With only 25k currently on the odometer, it will probably driven to the graveyard about the same time as me :mrgreen: ...

- Ron
smitcat
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Re: Buy a car before retirement or after retiring?

Post by smitcat »

flyingaway wrote: Thu Nov 24, 2022 9:25 am There will be no "good" time to buy a car, just buy it when you really need one.
FWIW - there have been some great buying opportunities these past few years. Not sure it will last too much longer.
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TheTimeLord
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Re: Buy a car before retirement or after retiring?

Post by TheTimeLord »

flyingaway wrote: Thu Nov 24, 2022 9:25 am There will be no "good" time to buy a car, just buy it when you really need one.
I think that is correct from a utilitarian perspective but if one has the money is there a "bad" time to buy the car you want? My previous car was the car I wanted and I drove for 10+ years before recently replacing it.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]
dknightd
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Re: Buy a car before retirement or after retiring?

Post by dknightd »

My limited experience is that it does not matter. If you have good credit you can finance the car. If you need or want to.
Retired 2019. So far, so good. I want to wake up every morning. But I want to die in my sleep. Just another conundrum. I think the solution might be afternoon naps ;)
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