Is there boglehead consensus on buying a car?

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
TheHouse7
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Re: Is there boglehead consensus on buying a car?

Post by TheHouse7 » Thu Oct 12, 2017 9:58 am

I think if you are in the accumulation phase, buy used.

If you have enough money get whatever you want. :wink:
"PSX will always go up 20%, why invest in anything else?!" -Father-in-law early retired.

bloom2708
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Re: Is there boglehead consensus on buying a car?

Post by bloom2708 » Thu Oct 12, 2017 10:40 am

My current strategy as I approach 50 is to have as little into my car as possible, but still have a "nice ride, safe, comfortable" car.

No loan, liability only insurance.

It is an ongoing experiment. I went "too low" with my previous car. 2001 Toyota Echo. $1,600. Gas sipper, met all my "cheap and reliable" criteria but failed at the ride, safety and comfort factors. Utilitarian, but a good experiment for a year.

I sold it after a year and bought a 2001 Lexus LS 430 for $5,400. A couple notches up on the price category, but exceeding my nice ride, safe and comfortable standards. Hopefully in a long "holding" pattern. :D

At every stage, my car buying strategy was sound, but only for that particular car. Things change. And fast. Adopt a strategy and plan to update it accordingly.
Last edited by bloom2708 on Thu Oct 12, 2017 3:45 pm, edited 1 time in total.
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flamesabers
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Re: Is there boglehead consensus on buying a car?

Post by flamesabers » Thu Oct 12, 2017 10:49 am

I think the boglehead consensus is to buy a car you can afford. If you have enough money and your finances are solid, you could probably afford a newer, fancier car if you so desire. If on the other hand you're swamped in debt or you don't have good job security, I think the consensus would be to get a used car that isn't too extravagant.

cjking
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Re: Is there boglehead consensus on buying a car?

Post by cjking » Thu Oct 12, 2017 11:23 am

My strategy used to be to buy a used car that cost in the region of a month or two's income, then keep it for several years. As someone who worked on fixed-term contracts of a year or less, with niche specialims, I always assumed my income might permanently disappear within a year, so I didn't want to lay out a large amount (or commit to finance) on something I might no longer need a year later. On the other hand, I didn't much mind what I spent on servicing and maintenance, as I only needed to spend that money at times I needed transport to work that could easily pay for it. My biggest ever bill was the equivalent of 5 days income.

With my most recent car it was a case of having enough money to buy whatever pleased me. Prioritising getting what I wanted instead of value-for-money meant buying a new one. (In the end it turned out the car that ticked all the boxes was a standard one with lots of options, rather than an obvious luxury model.)

It turned out that buying that new car coincided almost to the day with the permanent end of my need to commute.

I still find it ironic that I commuted to work for more than 20 years, spending 15,000 miles a year and 2 hours a day in relatively cheap cars, and that now I have a car where budget was not a constraint, I only do 3,000 miles a year in it. But I don't think my decisions then or now were wrong. The decision to spend more than usual on a car and to decline work that required a commute were both a consequence of where I had got to with accumulation.

dbr
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Re: Is there boglehead consensus on buying a car?

Post by dbr » Thu Oct 12, 2017 11:26 am

cjking wrote:
Thu Oct 12, 2017 11:23 am
My strategy used to be to buy a used car that cost in the region of a month or two's income, then keep it for several years. As someone who worked on fixed-term contracts of a year or less, with niche specialims, I always assumed my income might permanently disappear within a year, so I didn't want to lay out a large amount (or commit to finance) on something I might no longer need a year later. On the other hand, I didn't much mind what I spent on servicing and maintenance, as I only needed to spend that money at times I needed transport to work that could easily pay for it. My biggest ever bill was the equivalent of 5 days income.

With my most recent car it was a case of having enough money to buy whatever pleased me. Prioritising getting what I wanted instead of value-for-money meant buying a new one. (In the end it turned out the car that ticked all the boxes was a standard one with lots of options, rather than an obvious luxury model.)

It turned out that buying that new car coincided almost to the day with the permanent end of my need to commute.

I still find it ironic that I commuted to work for more than 20 years, spending 15,000 miles a year and 2 hours a day in relatively cheap cars, and that now I have a car where budget was not a constraint, I only do 3,000 miles a year in it. But I don't think my decisions then or now were wrong. The decision to spend more than usual on a car and to decline work that required a commute were both a consequence of where I had got to with accumulation.

It is an irony that we spend so many years in lesser cars when we really need a good car and then have a really good car when we don't need it. I wonder of that is an argument for buying new cars but cutting the lifetime cost by not replacing them too quickly.

njdealguy
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Re: Is there boglehead consensus on buying a car?

Post by njdealguy » Thu Oct 12, 2017 11:32 am

AntsOnTheMarch wrote:
Sun Oct 08, 2017 4:49 pm
My opinion: if you're buying something like civic, buy it new (or really old if you like a beater). I doesn't pay to buy a 2 year old civic or Accord because they hold a lot of their value. You don't know how the previous owner treated the car and to save a couple of thousand on a 20k plus car doesn't make sense to me. Again, imho.

Now if your buying something more costly, many models really dip in price when used. So get a used one. A couple of years old will drop the price drastically. I have friend who's got a bogglehead philosophy of life and he's bought 2-3 year old volvos for each of his last 3-4 cars. He keeps them a good long time and likes this approach. A really expensive luxury car like an expensive Mercedes usually drops so much in value, I'd probably never buy one new. Don't know about Acura and Lexus.

My 2 cents.
I recently bought a 3 year old bare bones automatic Civic, 2014 model with 22k miles and near perfect condition/no salvage title for $12k plus tax from a private seller when the going sticker price on a new model is about 19.5k. So I basically paid about 61% of the new car price which is about the same as a lease end residual value. Depending on where its purchased from (defintely not a certified model from a official Honda dealer), the savings I think will surely be more than just a couple thousand!

Id basically vouch for buying any 3 year old car for a target price of the approximate residual value posted on new car leases at 36k miles, and of course pay for a professional mechanic inspection before taking any plunge!

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bengal22
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Re: Is there boglehead consensus on buying a car?

Post by bengal22 » Thu Oct 12, 2017 12:14 pm

I do not believe that there is a boglehead consensus on buying a car. In my humble opinion, the boglehead investment philosophy enables us to buy those things that we want to buy. If one works hard, lives WITHIN his means, invests wisely, then one can enjoy a brand new car of his choosing. Life is to be lived. Being a boglehead just opens up the options.

MDfive21
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Re: Is there boglehead consensus on buying a car?

Post by MDfive21 » Thu Oct 12, 2017 12:16 pm

10 yr old lexus with less than 80k miles.

Mitchell777
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Re: Is there boglehead consensus on buying a car?

Post by Mitchell777 » Thu Oct 12, 2017 12:47 pm

It often depends where you are in life. For many years I assumed I had more time left than I had money. Much later, more money than time left. It can really change ones spending habits.

The Wizard
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Re: Is there boglehead consensus on buying a car?

Post by The Wizard » Thu Oct 12, 2017 12:58 pm

Mitchell777 wrote:
Thu Oct 12, 2017 12:47 pm
It often depends where you are in life. For many years I assumed I had more time left than I had money. Much later, more money than time left. It can really change ones spending habits.
This is an excellent observation!
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bikechuck
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Re: Is there boglehead consensus on buying a car?

Post by bikechuck » Thu Oct 12, 2017 1:12 pm

I have purchased both new and used cars over the years, I do think that the best value has been when I purchased new cars and drove them for ten or more years and 150,000 or more miles.

I purchase pretty boring cars and have owned three Civics in my lifetime. The most expensive car that I have ever purchased has been my Honda Odyssey. I purchased that because I can roll my tandem bicycle right into the back without removing seats etc. It has been a great vehicle for me as have been my Civics.

I like the Civic because I can buy three of them for what some people pay for one luxury car of similar size and capability. I have also owned two Camrys and if you go back far enough a new Chevy Nova.

I have had mixed results with used cars. I have never sold a car less than ten years old and with less than 100,000 miles on it.

Slacker
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Re: Is there boglehead consensus on buying a car?

Post by Slacker » Thu Oct 12, 2017 2:08 pm

You can pick up a new Prius Prime Plus for almost the same price as a 3-4 year old Prius after incentives in Colorado. Makes it hard to justify buying used in Colorado if a Prius or plug-in Prius is your desired vehicle.

finite_difference
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Re: Is there boglehead consensus on buying a car?

Post by finite_difference » Thu Oct 12, 2017 3:43 pm

Yes, there is: Toyota, Honda or Subaru. 8-)

(Nissan, Mazda, Hyundai, and American carmakers since ~2012 may also be acceptable choices.)
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh

Rupert
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Re: Is there boglehead consensus on buying a car?

Post by Rupert » Thu Oct 12, 2017 4:05 pm

Slacker wrote:
Thu Oct 12, 2017 2:08 pm
You can pick up a new Prius Prime Plus for almost the same price as a 3-4 year old Prius after incentives in Colorado. Makes it hard to justify buying used in Colorado if a Prius or plug-in Prius is your desired vehicle.
This is an important point, and it doesn't just apply to Priuses (or Prii?). OP, I think you'll find that gently used (by which I mean, less than 3 years old and less than 36,000 miles or so) popular cars, which includes most Hondas and Toyotas, are not a good deal in most cases. When you take dealer and manufacturer incentives in account, you can often negotiate a price on a new model that is very close to the price of a used one. But you do have to be patient and wait for the incentives. A quick Google search will tell you when those incentives are likely to be offered. If you prefer to buy used, I'd stick with the Hyundais (which have a 5-year bumper to bumper warranty, I think, making them a really nice choice used), the Kias, and (sad to say) the Americans.

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Leesbro63
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Re: Is there boglehead consensus on buying a car?

Post by Leesbro63 » Thu Oct 12, 2017 4:30 pm

Just my humble opinion: The most Bogleheadish car purchase is a brand new Honda Civic or Accord or a Toyota Corolla or Camry...the smaller or bigger of each brand based on size needed. Or a Subaru if you must have all wheel drive. And drive them for 10 years. Again, this is just my opinion, but the depreciation curve favors those cars new as being the cheapest per mile if you hold them for lots of miles/years.

dbr
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Re: Is there boglehead consensus on buying a car?

Post by dbr » Thu Oct 12, 2017 4:32 pm

Leesbro63 wrote:
Thu Oct 12, 2017 4:30 pm
Just my humble opinion: The most Bogleheadish car purchase is a brand new Honda Civic or Accord or a Toyota Corolla or Camry...the smaller or bigger of each brand based on size needed. Or a Subaru if you must have all wheel drive. And drive them for 10 years. Again, this is just my opinion, but the depreciation curve favors those cars new as being the cheapest per mile if you hold them for lots of miles/years.
I don't think that is too far off, if you want Bogleheadish.

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DaftInvestor
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Re: Is there boglehead consensus on buying a car?

Post by DaftInvestor » Thu Oct 12, 2017 4:35 pm

flamesabers wrote:
Thu Oct 12, 2017 10:49 am
I think the boglehead consensus is to buy a car you can afford. If you have enough money and your finances are solid, you could probably afford a newer, fancier car if you so desire. If on the other hand you're swamped in debt or you don't have good job security, I think the consensus would be to get a used car that isn't too extravagant.
^ This is the only consensus. Don't buy a car you can't afford and if you don't value luxury - don't spend the money on it even if you can afford it. Some Bogleheads drive Teslas while others drive 20 year old Corrolas.
There does seem to be a Boglehead tilt towards reliability (and resale value) thus a lot of Toyota, Honda, Subaru, and Nissan fans.

Personally I like to buy new. I get enjoyment out of choosing my own colors and options and since the cars I buy tend to have high resale values whenever I run the numbers the saving of buying something 2 or 4 years old aren't enough to justify not buying new. Yes I know a car drops a lot of value as soon as you drive it off the lot - but unfortunately you can't buy a car that has just been driven off the lot so you are stuck looking at cars that are at least 2 years old - and if you are looking at Honda or Toyota and compare that to a new car's price (at the right time) then you really have to wonder why you would buy used.

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Leesbro63
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Re: Is there boglehead consensus on buying a car?

Post by Leesbro63 » Thu Oct 12, 2017 4:40 pm

dbr wrote:
Thu Oct 12, 2017 4:32 pm
Leesbro63 wrote:
Thu Oct 12, 2017 4:30 pm
Just my humble opinion: The most Bogleheadish car purchase is a brand new Honda Civic or Accord or a Toyota Corolla or Camry...the smaller or bigger of each brand based on size needed. Or a Subaru if you must have all wheel drive. And drive them for 10 years. Again, this is just my opinion, but the depreciation curve favors those cars new as being the cheapest per mile if you hold them for lots of miles/years.
I don't think that is too far off, if you want Bogleheadish.
And why would anyone here want anything else? :sharebeer

MrNewEngland
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Re: Is there boglehead consensus on buying a car?

Post by MrNewEngland » Thu Oct 12, 2017 4:41 pm

I think the consensus is that you should do whatever makes you happy.

Angelus359
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Re: Is there boglehead consensus on buying a car?

Post by Angelus359 » Sat Oct 14, 2017 7:49 am

I just bought a new Prius, and the Costco price beat everyone
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kenoryan
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Re: Is there boglehead consensus on buying a car?

Post by kenoryan » Sat Oct 14, 2017 4:11 pm

I bought a Limited Toyota Tundra, my third, and got it through the Costco Auto purchase program. I got it for at least $4500 under the local Carmax price and $4700 under the local Toyota dealers ‘best price’. $48,000 out the door including taxes and remote start and spray in truck bed.

dsuttr
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Re: Is there boglehead consensus on buying a car?

Post by dsuttr » Sat Oct 14, 2017 4:26 pm

Don't read bogelheads.org., read Consumer Reports and then buy a Subaru Forester..safe and dependable.

Helo80
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Re: Is there boglehead consensus on buying a car?

Post by Helo80 » Sat Oct 14, 2017 4:40 pm

No, there is no BH consensus on car buying... at all. You have a few camps:

1. Buy 5-10 year old car and drive it to the wheels fall off
2. Buy new car and drive it to the wheels fall off
3. Buy slightly used car 2-3 years and drive it for a handful of years (5-6 years) and then repeat.

At the end of the day, there are so many makers and models that there is no rule of thumb. If you want long-term reliability and a decent trade-in for value for the age after 6-10 years, go Camry, Accord, Corolla, Civic.

dbr
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Re: Is there boglehead consensus on buying a car?

Post by dbr » Sun Oct 15, 2017 9:19 am

Helo80 wrote:
Sat Oct 14, 2017 4:40 pm
No, there is no BH consensus on car buying... at all. You have a few camps:

1. Buy 5-10 year old car and drive it to the wheels fall off
2. Buy new car and drive it to the wheels fall off
3. Buy slightly used car 2-3 years and drive it for a handful of years (5-6 years) and then repeat.

At the end of the day, there are so many makers and models that there is no rule of thumb. If you want long-term reliability and a decent trade-in for value for the age after 6-10 years, go Camry, Accord, Corolla, Civic.
Other camps include:

1. Buy a new car every year because you can afford it and you want to. BH has more to do with not doing what you can't afford than with any particular viewpoint about how you choose to use money.

2. Don't own a car at all. If BH are people who want to live ecologically this might be or should be a BH consensus.

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