Paying cash for a vehicle

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SmallCityDave
Posts: 129
Joined: Thu Feb 21, 2019 10:04 am

Re: Paying cash for a vehicle

Post by SmallCityDave » Fri Mar 22, 2019 8:35 am

sunny_socal wrote:
Thu Mar 21, 2019 8:41 am
8foot7 wrote:
Tue Mar 19, 2019 11:45 am
Careful. Some people on this board apparently believe you’re driving around a tin can death trap with no safety features.
True. No backup camera? No lane departure sensing? You've living on borrowed time.

I'm with you OP. As long as you have seatbelts and an airbag you're GTG.
Half the people on this forum are so concerned about safety you'd think that they walk around the house wearing a helmet and holding a pillow.

fittan
Posts: 208
Joined: Wed Mar 30, 2016 1:58 pm

Re: Paying cash for a vehicle

Post by fittan » Fri Mar 22, 2019 9:09 am

BogleMelon wrote:
Wed Mar 20, 2019 7:43 am
Fieldsy1024 wrote:
Tue Mar 19, 2019 8:42 pm
GerryL wrote:
Tue Mar 19, 2019 8:41 pm
Fieldsy1024 wrote:
Tue Mar 19, 2019 8:23 pm
Do not let the dealer know you plan to pay cash. This way they will drop the price more. They want you to have a loan from them.
Absolutely. No discussion of financing (or not financing) until price is nailed down. Also, don't discuss trading in the old car until the end.
Also this. If they think you will need a large loan the price drops instantly. Vice Versa.
Once the dealer becomes aware that the customer is paying cash, what prevents him from changing the agreed price, claiming that it was a financing only price?
Once the buyer realizes that he dealer is changing the agree price, what prevents him from walking away from dealership? An agreed price is an agreed price...I can't think of any other product I buy that is otherwise.

DNeal
Posts: 4
Joined: Mon Oct 19, 2015 5:56 pm

Re: Paying cash for a vehicle

Post by DNeal » Sat Jul 06, 2019 12:44 pm

harrington wrote:
Wed Mar 20, 2019 11:05 am
8foot7 wrote:
Tue Mar 19, 2019 11:45 am
Careful. Some people on this board apparently believe you’re driving around a tin can death trap with no safety features.
Man you nailed it.....People always convince themselves that they need all the latest safety features and its an extremely overrated theory. Whatever happened to paying attention. You don't buy a new car based on the safety features. Thanks for speaking the truth.
Depends on how much value you put on not being involved in an accident. I consider myself a safe/alert driver I just bought a new car yesterday with blind spot detection. On the test drive on the freeway, it sensed a motorcycle in my blind spot I never saw. In the area where I live drivers are driving much faster and taking more chances. I like my odds with the safety features.

2beachcombers
Posts: 615
Joined: Sat Jul 31, 2010 5:10 pm
Location: Savannah

Re: Paying cash for a vehicle

Post by 2beachcombers » Mon Jul 08, 2019 2:16 pm

MikeG62 wrote:
Wed Mar 20, 2019 7:34 am
rashad3000 wrote:
Tue Mar 19, 2019 11:38 am
Yesterday, I truly realized why Dave Ramsey says to pay cash for a vehicle. I was thinking about “upgrading” my 2003 Honda Pilot with 228,000 miles. Found a decked out 2011 Honda Pilot Touring for $10,990 with 149,000 miles. If I was focused on payments, it would have been easy to pull the trigger. However, placing the focus on paying cash, it made me think twice. Do I want to write a check for $11,000 when my current vehicle is getting me around just fine? Nope, I’ll just continue driving the 2003 until I can’t drive it anymore.
Counterpoint. For the last 20 years of my work career, I bought all of my/our cars for cash. They were all new cars, consisting of higher end brands (BMW, Mercedes, Audi, Land Rover, Lexus). Paying cash did not give me pause. It is what it is. I did not want to pay interest on a loan. One time I had my DW write out the check at the dealership just so that she appreciated how much the vehicle cost. Did not change the decision though, but did open her eyes a bit (had never written out a check that large before).

It's different strokes for different folks. No one size fits all. We lived well below our means, but far from frugally.

We have now sold all owned cars and we are leasing. Prefer the new car every three years thing, new technology, always under warranty, etc... We are now in our 4th year of retirement and are living up to the level of our means.
We also pay cash for cars. Mine is now 20yrs old(Lexus SC400) and purs(no plan on ever selling). Total repair cost to date-400$ for an alternator.

DW cars are also cash, last one was 10yrs old and gave to our son. Cash for the new one--love the new safety features. I also found going into the dealership on the last afternoon of the month(usually Jan), no trade in, cash negotiation yields 8-10% less than TrueCar min for our area.

Which brings me to a question for you. I have not looked into leasing, but the new safety features have me thinking about changing more frequently.
What additional items drove you to change to leasing? Is the cost significantly higher?

2beachcombers
Posts: 615
Joined: Sat Jul 31, 2010 5:10 pm
Location: Savannah

Re: Paying cash for a vehicle

Post by 2beachcombers » Mon Jul 08, 2019 2:37 pm

harrington wrote:
Wed Mar 20, 2019 11:05 am
8foot7 wrote:
Tue Mar 19, 2019 11:45 am
Careful. Some people on this board apparently believe you’re driving around a tin can death trap with no safety features.
Man you nailed it.....People always convince themselves that they need all the latest safety features and its an extremely overrated theory. Whatever happened to paying attention. You don't buy a new car based on the safety features. Thanks for speaking the truth.
Not for those of us with a broken neck from an idiot doing a uturn on the interstate

MikeG62
Posts: 1813
Joined: Tue Nov 15, 2016 3:20 pm
Location: New Jersey

Re: Paying cash for a vehicle

Post by MikeG62 » Mon Jul 08, 2019 3:14 pm

2beachcombers wrote:
Mon Jul 08, 2019 2:16 pm
MikeG62 wrote:
Wed Mar 20, 2019 7:34 am
rashad3000 wrote:
Tue Mar 19, 2019 11:38 am
Yesterday, I truly realized why Dave Ramsey says to pay cash for a vehicle. I was thinking about “upgrading” my 2003 Honda Pilot with 228,000 miles. Found a decked out 2011 Honda Pilot Touring for $10,990 with 149,000 miles. If I was focused on payments, it would have been easy to pull the trigger. However, placing the focus on paying cash, it made me think twice. Do I want to write a check for $11,000 when my current vehicle is getting me around just fine? Nope, I’ll just continue driving the 2003 until I can’t drive it anymore.
Counterpoint. For the last 20 years of my work career, I bought all of my/our cars for cash. They were all new cars, consisting of higher end brands (BMW, Mercedes, Audi, Land Rover, Lexus). Paying cash did not give me pause. It is what it is. I did not want to pay interest on a loan. One time I had my DW write out the check at the dealership just so that she appreciated how much the vehicle cost. Did not change the decision though, but did open her eyes a bit (had never written out a check that large before).

It's different strokes for different folks. No one size fits all. We lived well below our means, but far from frugally.

We have now sold all owned cars and we are leasing. Prefer the new car every three years thing, new technology, always under warranty, etc... We are now in our 4th year of retirement and are living up to the level of our means.
We also pay cash for cars. Mine is now 20yrs old(Lexus SC400) and purs(no plan on ever selling). Total repair cost to date-400$ for an alternator.

DW cars are also cash, last one was 10yrs old and gave to our son. Cash for the new one--love the new safety features. I also found going into the dealership on the last afternoon of the month(usually Jan), no trade in, cash negotiation yields 8-10% less than TrueCar min for our area.

Which brings me to a question for you. I have not looked into leasing, but the new safety features have me thinking about changing more frequently.
What additional items drove you to change to leasing? Is the cost significantly higher?
Read my posts below for more of my views on lease v. buy:

viewtopic.php?f=2&t=232795&p=3628638&hi ... e#p3628638

viewtopic.php?f=2&t=255483&p=4049045&hi ... e#p4049045

viewtopic.php?f=2&t=258929&p=4119215&hi ... e#p4119215

viewtopic.php?f=2&t=258929&p=4120019&hi ... e#p4120019

On the point about maintenance costs, we had an '09 Range Rover (bought new). In around 2016, the heat failed on the drivers side. Turned out it needed a new heater core. Dealer wanted $3,500 (plus tax) assuming no other issues identified during the repair. Found an independent LR mechanic who fixed for 1/3rd the cost, but required a lot of my time to find him and he was not all that close to where we live. On the same vehicle a few years earlier, tire pressure warning light went on. Ended up replacing all sensors and light still on. Required the TPMS main control module to be replaced. That cost something like $1,250. Wife was driving an Audi S4 (bought new in 2014). About a month before it rolled off warrant, developed an oil leak. Turned out to be a leaking engine mount. That was repaired under warranty, but would have cost $1,500 had it happened one month later.

Does all that help answer your question?
Real Knowledge Comes Only From Experience

2beachcombers
Posts: 615
Joined: Sat Jul 31, 2010 5:10 pm
Location: Savannah

Re: Paying cash for a vehicle

Post by 2beachcombers » Tue Jul 09, 2019 8:43 am

Thanks for your experiences and the links.(half way thru the links). Have found I have a lot to learn about leases.
I am also retired(20yrs) and always looking to eliminate any distractions to our lives.
Will educate myself and feel Leasing will be in DW's future.
MY 1999 SC400 will outlive me.
Thanks again :sharebeer

2beachcombers
Posts: 615
Joined: Sat Jul 31, 2010 5:10 pm
Location: Savannah

Re: Paying cash for a vehicle

Post by 2beachcombers » Tue Jul 09, 2019 8:48 am

MikeG62 wrote:
Mon Jul 08, 2019 3:14 pm
2beachcombers wrote:
Mon Jul 08, 2019 2:16 pm
MikeG62 wrote:
Wed Mar 20, 2019 7:34 am
rashad3000 wrote:
Tue Mar 19, 2019 11:38 am
Yesterday, I truly realized why Dave Ramsey says to pay cash for a vehicle. I was thinking about “upgrading” my 2003 Honda Pilot with 228,000 miles. Found a decked out 2011 Honda Pilot Touring for $10,990 with 149,000 miles. If I was focused on payments, it would have been easy to pull the trigger. However, placing the focus on paying cash, it made me think twice. Do I want to write a check for $11,000 when my current vehicle is getting me around just fine? Nope, I’ll just continue driving the 2003 until I can’t drive it anymore.
Counterpoint. For the last 20 years of my work career, I bought all of my/our cars for cash. They were all new cars, consisting of higher end brands (BMW, Mercedes, Audi, Land Rover, Lexus). Paying cash did not give me pause. It is what it is. I did not want to pay interest on a loan. One time I had my DW write out the check at the dealership just so that she appreciated how much the vehicle cost. Did not change the decision though, but did open her eyes a bit (had never written out a check that large before).

It's different strokes for different folks. No one size fits all. We lived well below our means, but far from frugally.

We have now sold all owned cars and we are leasing. Prefer the new car every three years thing, new technology, always under warranty, etc... We are now in our 4th year of retirement and are living up to the level of our means.
We also pay cash for cars. Mine is now 20yrs old(Lexus SC400) and purs(no plan on ever selling). Total repair cost to date-400$ for an alternator.

DW cars are also cash, last one was 10yrs old and gave to our son. Cash for the new one--love the new safety features. I also found going into the dealership on the last afternoon of the month(usually Jan), no trade in, cash negotiation yields 8-10% less than TrueCar min for our area.

Which brings me to a question for you. I have not looked into leasing, but the new safety features have me thinking about changing more frequently.
What additional items drove you to change to leasing? Is the cost significantly higher?
Read my posts below for more of my views on lease v. buy:

viewtopic.php?f=2&t=232795&p=3628638&hi ... e#p3628638

viewtopic.php?f=2&t=255483&p=4049045&hi ... e#p4049045

viewtopic.php?f=2&t=258929&p=4119215&hi ... e#p4119215

viewtopic.php?f=2&t=258929&p=4120019&hi ... e#p4120019

On the point about maintenance costs, we had an '09 Range Rover (bought new). In around 2016, the heat failed on the drivers side. Turned out it needed a new heater core. Dealer wanted $3,500 (plus tax) assuming no other issues identified during the repair. Found an independent LR mechanic who fixed for 1/3rd the cost, but required a lot of my time to find him and he was not all that close to where we live. On the same vehicle a few years earlier, tire pressure warning light went on. Ended up replacing all sensors and light still on. Required the TPMS main control module to be replaced. That cost something like $1,250. Wife was driving an Audi S4 (bought new in 2014). About a month before it rolled off warrant, developed an oil leak. Turned out to be a leaking engine mount. That was repaired under warranty, but would have cost $1,500 had it happened one month later.
Mike, I owned a MG coup years ago--learned I would never by a British car again. At the time, they were in the dark ages with the electron.

Vanguard Fan 1367
Posts: 949
Joined: Wed Feb 08, 2017 3:09 pm

Re: Paying cash for a vehicle

Post by Vanguard Fan 1367 » Tue Jul 09, 2019 11:37 am

I know of several people who finance things like vehicles and they should not. Those people aren't as up on financial matters as the typical Boglehead.

I have paid cash for vehicles all my life and I think it has helped me in my quest for financial independence. If someone has 10 million in Vanguard Total Stock Market and wants to take advantage of low interest financing that works too.

POLO
Posts: 46
Joined: Tue Aug 04, 2015 6:08 pm

Re: Paying cash for a vehicle

Post by POLO » Tue Jul 09, 2019 12:14 pm

The thing that really gets me is that even here of all places you will find the argument to leverage your car note. To buy more stocks. Instead of just buying a cheaper car.

Incredible.

PluckyDucky
Posts: 108
Joined: Tue Jan 15, 2019 8:29 pm

Re: Paying cash for a vehicle

Post by PluckyDucky » Tue Jul 09, 2019 2:07 pm

POLO wrote:
Tue Jul 09, 2019 12:14 pm
The thing that really gets me is that even here of all places you will find the argument to leverage your car note. To buy more stocks. Instead of just buying a cheaper car.

Incredible.
I'd rather have a brand new Honda Civic with lifetime powertrain warranty and 36k bumper to bumper than a used higher class vehicle for the same price with no warranty. I swore off used stuff a long time ago for the big ticket items. It's not financially required to live within my means anymore.

I'm also willing to pay an extra bill or 2 per month to interest rate arbitrage and have my internet bill effectively paid for every month.

Incredible.

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steelerfan
Posts: 186
Joined: Fri Mar 13, 2009 10:51 am
Location: near Savannah, GA

Re: Paying cash for a vehicle

Post by steelerfan » Thu Jul 11, 2019 12:37 pm

Nissanzx1 wrote:
Wed Mar 20, 2019 7:07 am

Side note on Dave Ramsey: I’m a fan. When I first heard Dave, I had 3 car loans, 11 credit cards, and couldn’t rub two $100 bills together. 10 years later I have 5 Paid for vehicles, 3 paid for homes, retirement on track, no debt of any kind, significant cash emergency fund. His personal story somehow resonated with me, and impacted my life in a fantastic way. If you follow his steps and make at least $50-60K, you’ll likely become a millionaire...
I have a very similar story. It was truly rags to riches. A negative net worth to high six figures in about 10 years. I attribute it all to DR and this forum. Somehow paying cash for stuff just works - at least it worked for me.
"Honor the Lord with your wealth and with the firstfruits of all your produce;" Prov 3:9

User avatar
whodidntante
Posts: 5587
Joined: Thu Jan 21, 2016 11:11 pm

Re: Paying cash for a vehicle

Post by whodidntante » Thu Jul 11, 2019 12:54 pm

SmallCityDave wrote:
Fri Mar 22, 2019 8:35 am
sunny_socal wrote:
Thu Mar 21, 2019 8:41 am
8foot7 wrote:
Tue Mar 19, 2019 11:45 am
Careful. Some people on this board apparently believe you’re driving around a tin can death trap with no safety features.
True. No backup camera? No lane departure sensing? You've living on borrowed time.

I'm with you OP. As long as you have seatbelts and an airbag you're GTG.
Half the people on this forum are so concerned about safety you'd think that they walk around the house wearing a helmet and holding a pillow.
For the longest time I didn't know what people meant when they said a new car was safer than e.g. a five year old car. After all, crash test results, restraints, vehicle weight, and height have not changed much in that time. But then I started seeing examples of what they mean. They want the steering wheel to buzz when they drift out of the lane, self braking, adaptive cruise, a little light that turns on when the adjacent lane is occupied, and whatnot. I would file those under driving nannies instead of safety features, but whatever.

2beachcombers
Posts: 615
Joined: Sat Jul 31, 2010 5:10 pm
Location: Savannah

Re: Paying cash for a vehicle

Post by 2beachcombers » Thu Jul 11, 2019 8:55 pm

MikeG62 wrote:
Mon Jul 08, 2019 3:14 pm
2beachcombers wrote:
Mon Jul 08, 2019 2:16 pm
MikeG62 wrote:
Wed Mar 20, 2019 7:34 am
rashad3000 wrote:
Tue Mar 19, 2019 11:38 am
Yesterday, I truly realized why Dave Ramsey says to pay cash for a vehicle. I was thinking about “upgrading” my 2003 Honda Pilot with 228,000 miles. Found a decked out 2011 Honda Pilot Touring for $10,990 with 149,000 miles. If I was focused on payments, it would have been easy to pull the trigger. However, placing the focus on paying cash, it made me think twice. Do I want to write a check for $11,000 when my current vehicle is getting me around just fine? Nope, I’ll just continue driving the 2003 until I can’t drive it anymore.
Counterpoint. For the last 20 years of my work career, I bought all of my/our cars for cash. They were all new cars, consisting of higher end brands (BMW, Mercedes, Audi, Land Rover, Lexus). Paying cash did not give me pause. It is what it is. I did not want to pay interest on a loan. One time I had my DW write out the check at the dealership just so that she appreciated how much the vehicle cost. Did not change the decision though, but did open her eyes a bit (had never written out a check that large before).

It's different strokes for different folks. No one size fits all. We lived well below our means, but far from frugally.

We have now sold all owned cars and we are leasing. Prefer the new car every three years thing, new technology, always under warranty, etc... We are now in our 4th year of retirement and are living up to the level of our means.
We also pay cash for cars. Mine is now 20yrs old(Lexus SC400) and purs(no plan on ever selling). Total repair cost to date-400$ for an alternator.

DW cars are also cash, last one was 10yrs old and gave to our son. Cash for the new one--love the new safety features. I also found going into the dealership on the last afternoon of the month(usually Jan), no trade in, cash negotiation yields 8-10% less than TrueCar min for our area.

Which brings me to a question for you. I have not looked into leasing, but the new safety features have me thinking about changing more frequently.
What additional items drove you to change to leasing? Is the cost significantly higher?
Read my posts below for more of my views on lease v. buy:

viewtopic.php?f=2&t=232795&p=3628638&hi ... e#p3628638

viewtopic.php?f=2&t=255483&p=4049045&hi ... e#p4049045

viewtopic.php?f=2&t=258929&p=4119215&hi ... e#p4119215

viewtopic.php?f=2&t=258929&p=4120019&hi ... e#p4120019

On the point about maintenance costs, we had an '09 Range Rover (bought new). In around 2016, the heat failed on the drivers side. Turned out it needed a new heater core. Dealer wanted $3,500 (plus tax) assuming no other issues identified during the repair. Found an independent LR mechanic who fixed for 1/3rd the cost, but required a lot of my time to find him and he was not all that close to where we live. On the same vehicle a few years earlier, tire pressure warning light went on. Ended up replacing all sensors and light still on. Required the TPMS main control module to be replaced. That cost something like $1,250. Wife was driving an Audi S4 (bought new in 2014). About a month before it rolled off warrant, developed an oil leak. Turned out to be a leaking engine mount. That was repaired under warranty, but would have cost $1,500 had it happened one month later.

Does all that help answer your question?
Finished all your recommended threads. Now you've go me thinking, leasing looks pretty interesting for us retired dudes.(less mileage, safer car, etc)
But my Boglehead/Bernstein mind wants to do some calculations.

I read the web site-http://www.realcartips.com/leasing/0439 ... .shtml--to educate myself and was excited by his easy way to calculate if you have a good lease deal(real monthly cost/MSRP).

I am sure a lease is more expensive, but is it 20% or 5% ?

Some quick calculations show me that purchasing vs lease may not be so different?
For example--in either case--cars depreciate, taxes, fees etc are almost the same.
The total lease price should be compared to the Purchace Price - Depreciation and minus 3 yrs gain of the purchase price if invested. ?
I do see that by churning a car every 3 yrs also adds to the taxes every 3 years?

User avatar
CyclingDuo
Posts: 2353
Joined: Fri Jan 06, 2017 9:07 am

Re: Paying cash for a vehicle

Post by CyclingDuo » Thu Jul 11, 2019 9:35 pm

steelerfan wrote:
Thu Jul 11, 2019 12:37 pm
Nissanzx1 wrote:
Wed Mar 20, 2019 7:07 am

Side note on Dave Ramsey: I’m a fan. When I first heard Dave, I had 3 car loans, 11 credit cards, and couldn’t rub two $100 bills together. 10 years later I have 5 Paid for vehicles, 3 paid for homes, retirement on track, no debt of any kind, significant cash emergency fund. His personal story somehow resonated with me, and impacted my life in a fantastic way. If you follow his steps and make at least $50-60K, you’ll likely become a millionaire...
I have a very similar story. It was truly rags to riches. A negative net worth to high six figures in about 10 years. I attribute it all to DR and this forum. Somehow paying cash for stuff just works - at least it worked for me.
Or in Ramsey parlance...

"Drive like no other" so that later you can "drive like no other".
"Everywhere is within walking distance if you have the time." ~ Steven Wright

H-Town
Posts: 1737
Joined: Sun Feb 26, 2017 2:08 pm

Re: Paying cash for a vehicle

Post by H-Town » Thu Jul 11, 2019 9:59 pm

whodidntante wrote:
Thu Jul 11, 2019 12:54 pm
SmallCityDave wrote:
Fri Mar 22, 2019 8:35 am
sunny_socal wrote:
Thu Mar 21, 2019 8:41 am
8foot7 wrote:
Tue Mar 19, 2019 11:45 am
Careful. Some people on this board apparently believe you’re driving around a tin can death trap with no safety features.
True. No backup camera? No lane departure sensing? You've living on borrowed time.

I'm with you OP. As long as you have seatbelts and an airbag you're GTG.
Half the people on this forum are so concerned about safety you'd think that they walk around the house wearing a helmet and holding a pillow.
For the longest time I didn't know what people meant when they said a new car was safer than e.g. a five year old car. After all, crash test results, restraints, vehicle weight, and height have not changed much in that time. But then I started seeing examples of what they mean. They want the steering wheel to buzz when they drift out of the lane, self braking, adaptive cruise, a little light that turns on when the adjacent lane is occupied, and whatnot. I would file those under driving nannies instead of safety features, but whatever.
^ Truth!

ltrmc02
Posts: 6
Joined: Fri Feb 01, 2019 7:25 pm

Re: Paying cash for a vehicle

Post by ltrmc02 » Fri Jul 12, 2019 2:31 am

JGoneRiding wrote:
Tue Mar 19, 2019 9:46 pm
ohboy! wrote:
Tue Mar 19, 2019 11:51 am
$10k for a car with 150k miles seems a crap deal.
My thought too! And I am all for driving till the wheels fall off!
I was just installing new ball joints yesterday to keep those wheels on a little longer :beer

MikeG62
Posts: 1813
Joined: Tue Nov 15, 2016 3:20 pm
Location: New Jersey

Re: Paying cash for a vehicle

Post by MikeG62 » Fri Jul 12, 2019 6:45 am

2beachcombers wrote:
Thu Jul 11, 2019 8:55 pm
MikeG62 wrote:
Mon Jul 08, 2019 3:14 pm
2beachcombers wrote:
Mon Jul 08, 2019 2:16 pm
MikeG62 wrote:
Wed Mar 20, 2019 7:34 am
rashad3000 wrote:
Tue Mar 19, 2019 11:38 am
Yesterday, I truly realized why Dave Ramsey says to pay cash for a vehicle. I was thinking about “upgrading” my 2003 Honda Pilot with 228,000 miles. Found a decked out 2011 Honda Pilot Touring for $10,990 with 149,000 miles. If I was focused on payments, it would have been easy to pull the trigger. However, placing the focus on paying cash, it made me think twice. Do I want to write a check for $11,000 when my current vehicle is getting me around just fine? Nope, I’ll just continue driving the 2003 until I can’t drive it anymore.
Counterpoint. For the last 20 years of my work career, I bought all of my/our cars for cash. They were all new cars, consisting of higher end brands (BMW, Mercedes, Audi, Land Rover, Lexus). Paying cash did not give me pause. It is what it is. I did not want to pay interest on a loan. One time I had my DW write out the check at the dealership just so that she appreciated how much the vehicle cost. Did not change the decision though, but did open her eyes a bit (had never written out a check that large before).

It's different strokes for different folks. No one size fits all. We lived well below our means, but far from frugally.

We have now sold all owned cars and we are leasing. Prefer the new car every three years thing, new technology, always under warranty, etc... We are now in our 4th year of retirement and are living up to the level of our means.
We also pay cash for cars. Mine is now 20yrs old(Lexus SC400) and purs(no plan on ever selling). Total repair cost to date-400$ for an alternator.

DW cars are also cash, last one was 10yrs old and gave to our son. Cash for the new one--love the new safety features. I also found going into the dealership on the last afternoon of the month(usually Jan), no trade in, cash negotiation yields 8-10% less than TrueCar min for our area.

Which brings me to a question for you. I have not looked into leasing, but the new safety features have me thinking about changing more frequently.
What additional items drove you to change to leasing? Is the cost significantly higher?
Read my posts below for more of my views on lease v. buy:

viewtopic.php?f=2&t=232795&p=3628638&hi ... e#p3628638

viewtopic.php?f=2&t=255483&p=4049045&hi ... e#p4049045

viewtopic.php?f=2&t=258929&p=4119215&hi ... e#p4119215

viewtopic.php?f=2&t=258929&p=4120019&hi ... e#p4120019

On the point about maintenance costs, we had an '09 Range Rover (bought new). In around 2016, the heat failed on the drivers side. Turned out it needed a new heater core. Dealer wanted $3,500 (plus tax) assuming no other issues identified during the repair. Found an independent LR mechanic who fixed for 1/3rd the cost, but required a lot of my time to find him and he was not all that close to where we live. On the same vehicle a few years earlier, tire pressure warning light went on. Ended up replacing all sensors and light still on. Required the TPMS main control module to be replaced. That cost something like $1,250. Wife was driving an Audi S4 (bought new in 2014). About a month before it rolled off warrant, developed an oil leak. Turned out to be a leaking engine mount. That was repaired under warranty, but would have cost $1,500 had it happened one month later.

Does all that help answer your question?
Finished all your recommended threads. Now you've go me thinking, leasing looks pretty interesting for us retired dudes.(less mileage, safer car, etc)
But my Boglehead/Bernstein mind wants to do some calculations.

I read the web site-http://www.realcartips.com/leasing/0439 ... .shtml--to educate myself and was excited by his easy way to calculate if you have a good lease deal(real monthly cost/MSRP).
The rule of thumb I use is if the monthly lease payment is close to 1.0% of the msrp then you've got a very good deal lease deal. Very similar to the threshold used in the article you reference.

Here are the numbers for the last 5 leases I negotiated: 0.96% ('19 Lexus ES350), 0.94% ('19 Jeep GC Limited), 0.87% ('19 Lexus NX200), 0.99% ('19 BMW X5) and 0.99% ('18 Audi SQ5).
2beachcombers wrote:
Thu Jul 11, 2019 8:55 pm

I am sure a lease is more expensive, but is it 20% or 5% ?
I think it depends how long you plan to keep the purchased car. If 6-9 years or more, I think buying will likely be considerably cheaper. If OTOH, you are comparing leasing for 3 years to purchasing and selling (or trading in) after 3 years and buying a new car, then I think leasing will not be more expensive (likely to be cheaper).

In this thread I detailed the finance rates on the last 4 leases I negotiated. In the most three recent cases (from Dec '18 - June '19), the interest rates imbedded in the leases ranged from 0.024% to 0.72%. That is 24/100th's of 1.0% to 79/100th's of 1.0%. Try and get rates like that on purchased new car financing.

viewtopic.php?f=2&t=284182&p=4610915&hi ... e#p4610915
2beachcombers wrote:
Thu Jul 11, 2019 8:55 pm
Some quick calculations show me that purchasing vs lease may not be so different?
For example--in either case--cars depreciate, taxes, fees etc are almost the same.
The total lease price should be compared to the Purchace Price - Depreciation and minus 3 yrs gain of the purchase price if invested. ?
I do see that by churning a car every 3 yrs also adds to the taxes every 3 years?
Incremental cost in leasing includes the bank fee (although not all finance companies charge one - Jeep did not for my daughter) and documentation fee. If you purchase you can avoid the bank fee (although you may more than make up for it with a higher financing rate) and only pay the doc fee once (if you purchase and hold for years). Also, when purchasing, unless you put a lot of money down (which is not with (opportunity) cost), your monthly payment is likely to be higher (a lot higher) than leasing.
Real Knowledge Comes Only From Experience

SQRT
Posts: 1110
Joined: Sat Feb 05, 2011 9:44 am

Re: Paying cash for a vehicle

Post by SQRT » Fri Jul 12, 2019 7:52 am

MikeG62 wrote:
Wed Mar 20, 2019 7:34 am
rashad3000 wrote:
Tue Mar 19, 2019 11:38 am
Yesterday, I truly realized why Dave Ramsey says to pay cash for a vehicle. I was thinking about “upgrading” my 2003 Honda Pilot with 228,000 miles. Found a decked out 2011 Honda Pilot Touring for $10,990 with 149,000 miles. If I was focused on payments, it would have been easy to pull the trigger. However, placing the focus on paying cash, it made me think twice. Do I want to write a check for $11,000 when my current vehicle is getting me around just fine? Nope, I’ll just continue driving the 2003 until I can’t drive it anymore.
Counterpoint. For the last 20 years of my work career, I bought all of my/our cars for cash. They were all new cars, consisting of higher end brands (BMW, Mercedes, Audi, Land Rover, Lexus). Paying cash did not give me pause. It is what it is. I did not want to pay interest on a loan. One time I had my DW write out the check at the dealership just so that she appreciated how much the vehicle cost. Did not change the decision though, but did open her eyes a bit (had never written out a check that large before).

It's different strokes for different folks. No one size fits all. We lived well below our means, but far from frugally.

We have now sold all owned cars and we are leasing. Prefer the new car every three years thing, new technology, always under warranty, etc... We are now in our 4th year of retirement and are living up to the level of our means.
Wow. Somebody who actually lives “At Their Means” in retirement. Unusual around here. Good for you. Money is only for spending (eventually). I like your statement “We lived well below our means but far from frugally”. Most people erroneously think one must be frugal to live below your means. Not true if your means are significant although you could make a case that frugality is relative, I suppose.

MikeG62
Posts: 1813
Joined: Tue Nov 15, 2016 3:20 pm
Location: New Jersey

Re: Paying cash for a vehicle

Post by MikeG62 » Fri Jul 12, 2019 8:05 am

SQRT wrote:
Fri Jul 12, 2019 7:52 am
MikeG62 wrote:
Wed Mar 20, 2019 7:34 am
rashad3000 wrote:
Tue Mar 19, 2019 11:38 am
Yesterday, I truly realized why Dave Ramsey says to pay cash for a vehicle. I was thinking about “upgrading” my 2003 Honda Pilot with 228,000 miles. Found a decked out 2011 Honda Pilot Touring for $10,990 with 149,000 miles. If I was focused on payments, it would have been easy to pull the trigger. However, placing the focus on paying cash, it made me think twice. Do I want to write a check for $11,000 when my current vehicle is getting me around just fine? Nope, I’ll just continue driving the 2003 until I can’t drive it anymore.
Counterpoint. For the last 20 years of my work career, I bought all of my/our cars for cash. They were all new cars, consisting of higher end brands (BMW, Mercedes, Audi, Land Rover, Lexus). Paying cash did not give me pause. It is what it is. I did not want to pay interest on a loan. One time I had my DW write out the check at the dealership just so that she appreciated how much the vehicle cost. Did not change the decision though, but did open her eyes a bit (had never written out a check that large before).

It's different strokes for different folks. No one size fits all. We lived well below our means, but far from frugally.

We have now sold all owned cars and we are leasing. Prefer the new car every three years thing, new technology, always under warranty, etc... We are now in our 4th year of retirement and are living up to the level of our means.
Wow. Somebody who actually lives “At Their Means” in retirement. Unusual around here. Good for you. Money is only for spending (eventually). I like your statement “We lived well below our means but far from frugally”. Most people erroneously think one must be frugal to live below your means. Not true if your means are significant although you could make a case that frugality is relative, I suppose.
:sharebeer

I wrote this several months ago in a different thread...

Many people on these boards wear their frugality like a badge of honor. I understand frugality. After all, I graduated from college with a negative net worth. Got married ~4 years after I began my career and for the first several years of our married life, DW and I earned just enough to make ends meet. Going out to dinner was take-out Chinese food (which would cover us for two dinners including reheat of leftovers). Dining in restaurants was out of the question. Vacations were few and far in between (and usually a place we could drive to). Worked really hard, got promoted, then promoted again (rinse and repeat a few more times). Made a move to a fairly large company and worked my way into senior management (got some lucky breaks along the way no doubt), where I remained for ~20 years (until retiring at 53). DW was a SAHM to our two daughters, who are now grown and working professionally. We lived our lives well below our means, but far from frugally (I was the financial voice of reason every time my DW was tempted to doing something silly when looking at the Joneses), as the goal was always to retire early. We are now in our 4th year of retirement and we are living up to the level of our means. We don't waste money, but do spend a lot on experiences. Collecting "things" not really important anymore. Would I want to go back to how we lived in the first few years after we got married? Not for one minute. Yes, money does not always buy happiness, but it sure helps A LOT.

SQRT, I’ve read many of your posts and I believe you feel the same way.
Real Knowledge Comes Only From Experience

2beachcombers
Posts: 615
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Location: Savannah

Re: Paying cash for a vehicle

Post by 2beachcombers » Fri Jul 12, 2019 8:58 am

MikeG62 wrote:
Fri Jul 12, 2019 6:45 am
2beachcombers wrote:
Thu Jul 11, 2019 8:55 pm
MikeG62 wrote:
Mon Jul 08, 2019 3:14 pm
2beachcombers wrote:
Mon Jul 08, 2019 2:16 pm
MikeG62 wrote:
Wed Mar 20, 2019 7:34 am


Counterpoint. For the last 20 years of my work career, I bought all of my/our cars for cash. They were all new cars, consisting of higher end brands (BMW, Mercedes, Audi, Land Rover, Lexus). Paying cash did not give me pause. It is what it is. I did not want to pay interest on a loan. One time I had my DW write out the check at the dealership just so that she appreciated how much the vehicle cost. Did not change the decision though, but did open her eyes a bit (had never written out a check that large before).

It's different strokes for different folks. No one size fits all. We lived well below our means, but far from frugally.

We have now sold all owned cars and we are leasing. Prefer the new car every three years thing, new technology, always under warranty, etc... We are now in our 4th year of retirement and are living up to the level of our means.
We also pay cash for cars. Mine is now 20yrs old(Lexus SC400) and purs(no plan on ever selling). Total repair cost to date-400$ for an alternator.

DW cars are also cash, last one was 10yrs old and gave to our son. Cash for the new one--love the new safety features. I also found going into the dealership on the last afternoon of the month(usually Jan), no trade in, cash negotiation yields 8-10% less than TrueCar min for our area.

Which brings me to a question for you. I have not looked into leasing, but the new safety features have me thinking about changing more frequently.
What additional items drove you to change to leasing? Is the cost significantly higher?
Read my posts below for more of my views on lease v. buy:

viewtopic.php?f=2&t=232795&p=3628638&hi ... e#p3628638

viewtopic.php?f=2&t=255483&p=4049045&hi ... e#p4049045

viewtopic.php?f=2&t=258929&p=4119215&hi ... e#p4119215

viewtopic.php?f=2&t=258929&p=4120019&hi ... e#p4120019

On the point about maintenance costs, we had an '09 Range Rover (bought new). In around 2016, the heat failed on the drivers side. Turned out it needed a new heater core. Dealer wanted $3,500 (plus tax) assuming no other issues identified during the repair. Found an independent LR mechanic who fixed for 1/3rd the cost, but required a lot of my time to find him and he was not all that close to where we live. On the same vehicle a few years earlier, tire pressure warning light went on. Ended up replacing all sensors and light still on. Required the TPMS main control module to be replaced. That cost something like $1,250. Wife was driving an Audi S4 (bought new in 2014). About a month before it rolled off warrant, developed an oil leak. Turned out to be a leaking engine mount. That was repaired under warranty, but would have cost $1,500 had it happened one month later.

Does all that help answer your question?
Finished all your recommended threads. Now you've go me thinking, leasing looks pretty interesting for us retired dudes.(less mileage, safer car, etc)
But my Boglehead/Bernstein mind wants to do some calculations.

I read the web site-http://www.realcartips.com/leasing/0439 ... .shtml--to educate myself and was excited by his easy way to calculate if you have a good lease deal(real monthly cost/MSRP).
The rule of thumb I use is if the monthly lease payment is close to 1.0% of the msrp then you've got a very good deal lease deal. Very similar to the threshold used in the article you reference.

Here are the numbers for the last 5 leases I negotiated: 0.96% ('19 Lexus ES350), 0.94% ('19 Jeep GC Limited), 0.87% ('19 Lexus NX200), 0.99% ('19 BMW X5) and 0.99% ('18 Audi SQ5).
2beachcombers wrote:
Thu Jul 11, 2019 8:55 pm

I am sure a lease is more expensive, but is it 20% or 5% ?
I think it depends how long you plan to keep the purchased car. If 6-9 years or more, I think buying will likely be considerably cheaper. If OTOH, you are comparing leasing for 3 years to purchasing and selling (or trading in) after 3 years and buying a new car, then I think leasing will not be more expensive (likely to be cheaper).

In this thread I detailed the finance rates on the last 4 leases I negotiated. In the most three recent cases (from Dec '18 - June '19), the interest rates imbedded in the leases ranged from 0.024% to 0.72%. That is 24/100th's of 1.0% to 79/100th's of 1.0%. Try and get rates like that on purchased new car financing.

viewtopic.php?f=2&t=284182&p=4610915&hi ... e#p4610915
2beachcombers wrote:
Thu Jul 11, 2019 8:55 pm
Some quick calculations show me that purchasing vs lease may not be so different?
For example--in either case--cars depreciate, taxes, fees etc are almost the same.
The total lease price should be compared to the Purchase Price - Depreciation and minus 3 yrs gain of the purchase price if invested. ?
I do see that by churning a car every 3 yrs also adds to the taxes every 3 years?
Incremental cost in leasing includes the bank fee (although not all finance companies charge one - Jeep did not for my daughter) and documentation fee. If you purchase you can avoid the bank fee (although you may more than make up for it with a higher financing rate) and only pay the doc fee once (if you purchase and hold for years). Also, when purchasing, unless you put a lot of money down (which is not with (opportunity) cost), your monthly payment is likely to be higher (a lot higher) than leasing.
1% rule of thumb. :idea: Even better than monthly/MSRP ratio. Were all your loans with 12K miles?
If I decide to keep the car after the lease--I see only a small difference in lease vs purchase?
Thanks for you experienced answers--looking for a surprise Christmas present for DW.

MikeG62
Posts: 1813
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Location: New Jersey

Re: Paying cash for a vehicle

Post by MikeG62 » Fri Jul 12, 2019 9:28 am

2beachcombers wrote:
Fri Jul 12, 2019 8:58 am

1% rule of thumb. :idea: Even better than monthly/MSRP ratio. Were all your loans with 12K miles?
If I decide to keep the car after the lease--I see only a small difference in lease vs purchase?
Thanks for you experienced answers--looking for a surprise Christmas present for DW.
No problem - hope my tips help you out.

The leases I negotiated ranged from 7,500 miles per year (ES350) to 15,000 per year (NX200 and Jeep) with the BMW and Audi being 10,000 miles per year.

In all cases I paid zero capital cost reduction.

I did use multiple security deposits for all leases other than the Jeep (who doesn’t take them) and the ES350 (as my Dad did not want to bother).
Real Knowledge Comes Only From Experience

lazydavid
Posts: 2332
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Re: Paying cash for a vehicle

Post by lazydavid » Fri Jul 12, 2019 10:29 am

whodidntante wrote:
Thu Jul 11, 2019 12:54 pm
For the longest time I didn't know what people meant when they said a new car was safer than e.g. a five year old car. After all, crash test results, restraints, vehicle weight, and height have not changed much in that time. But then I started seeing examples of what they mean. They want the steering wheel to buzz when they drift out of the lane, self braking, adaptive cruise, a little light that turns on when the adjacent lane is occupied, and whatnot. I would file those under driving nannies instead of safety features, but whatever.
I agree with you for the most part, though I do categorize the last two as safety features, but not for the reasons most people would.

Since having a car with adaptive cruise, I've found it much less tiring to drive distances when there is any traffic at all, vs. conventional cruise or just modulating throttle manually. Based on that, I'd estimate I could drive 1.5-2x the distance before fatigue sets in to the point where I really should stop. At any point during the drive, I will be less fatigued than without it, and therefore safer.

Blind-spot warning. Unlike some where the light is at the far outside of the mirror, ours is huge and on the side of the housing that faces the driver. I can therefore see them in my peripheral vision. So if someone is next to me (solid) or coming up fast (flashing), I know without turning my head that I can't change lanes. If the light is off, I check my mirror as usual. This results in my eyes spending more time on the road in front of me.

I like the blind-spot warning (at least the way Audi does it), but could certainly live without it and it would not factor at all in a buying decision. I will never, ever buy another vehicle without adaptive cruise.

SQRT
Posts: 1110
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Re: Paying cash for a vehicle

Post by SQRT » Fri Jul 12, 2019 12:02 pm

MikeG62 wrote:
Fri Jul 12, 2019 8:05 am
SQRT wrote:
Fri Jul 12, 2019 7:52 am

Wow. Somebody who actually lives “At Their Means” in retirement. Unusual around here. Good for you. Money is only for spending (eventually). I like your statement “We lived well below our means but far from frugally”. Most people erroneously think one must be frugal to live below your means. Not true if your means are significant although you could make a case that frugality is relative, I suppose.
:sharebeer

I wrote this several months ago in a different thread...

Many people on these boards wear their frugality like a badge of honor. I understand frugality. After all, I graduated from college with a negative net worth. Got married ~4 years after I began my career and for the first several years of our married life, DW and I earned just enough to make ends meet. Going out to dinner was take-out Chinese food (which would cover us for two dinners including reheat of leftovers). Dining in restaurants was out of the question. Vacations were few and far in between (and usually a place we could drive to). Worked really hard, got promoted, then promoted again (rinse and repeat a few more times). Made a move to a fairly large company and worked my way into senior management (got some lucky breaks along the way no doubt), where I remained for ~20 years (until retiring at 53). DW was a SAHM to our two daughters, who are now grown and working professionally. We lived our lives well below our means, but far from frugally (I was the financial voice of reason every time my DW was tempted to doing something silly when looking at the Joneses), as the goal was always to retire early. We are now in our 4th year of retirement and we are living up to the level of our means. We don't waste money, but do spend a lot on experiences. Collecting "things" not really important anymore. Would I want to go back to how we lived in the first few years after we got married? Not for one minute. Yes, money does not always buy happiness, but it sure helps A LOT.

SQRT, I’ve read many of your posts and I believe you feel the same way.
Yes I do. Similar story, similar attitude.

mhalley
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Re: Paying cash for a vehicle

Post by mhalley » Fri Jul 12, 2019 12:26 pm

Moderation in all things, including being a boglehead. I always buy new cars, plus we eat out a lot. And just carrying that pillow is not enough, you need to strap on some airbags to prevent fractures.

https://www.israel21c.org/hip-hope-cush ... n-elderly/

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TomatoTomahto
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Re: Paying cash for a vehicle

Post by TomatoTomahto » Fri Jul 12, 2019 12:48 pm

SQRT, MikeG, and others: I sometimes wish that this forum had a sub-forum the equivalent of an Amtrak Quiet Car for Consumer Issues. It, IMO, gets old to have the “more frugal than thou” dueling posts arrive the moment one discusses safety features, college and private school, housing, etc.

I don’t discuss dollar amounts of expenses or our AA any more on BH other than a mention of how much fixed income we consider sufficient. Cost of safety features? Imagine that invested in TSM for 30 years! All that money lost to make you a less attentive driver!

I can dream of a BH where everyone gets to discuss their situation without the frugality police or safety Luddites , right?
Okay, I get it; I won't be political or controversial. The Earth is flat.

SQRT
Posts: 1110
Joined: Sat Feb 05, 2011 9:44 am

Re: Paying cash for a vehicle

Post by SQRT » Fri Jul 12, 2019 1:34 pm

TomatoTomahto wrote:
Fri Jul 12, 2019 12:48 pm
SQRT, MikeG, and others: I sometimes wish that this forum had a sub-forum the equivalent of an Amtrak Quiet Car for Consumer Issues. It, IMO, gets old to have the “more frugal than thou” dueling posts arrive the moment one discusses safety features, college and private school, housing, etc.

I don’t discuss dollar amounts of expenses or our AA any more on BH other than a mention of how much fixed income we consider sufficient. Cost of safety features? Imagine that invested in TSM for 30 years! All that money lost to make you a less attentive driver!

I can dream of a BH where everyone gets to discuss their situation without the frugality police or safety Luddites , right?
That would be a good idea. I don’t disclose specific numbers, the cars I drive or how much our houses are worth. Would just invite criticism and resentment.

But I really dont understand people who live way below their means once retired? I sure don’t.

MikeG62
Posts: 1813
Joined: Tue Nov 15, 2016 3:20 pm
Location: New Jersey

Re: Paying cash for a vehicle

Post by MikeG62 » Fri Jul 12, 2019 3:01 pm

SQRT wrote:
Fri Jul 12, 2019 1:34 pm
TomatoTomahto wrote:
Fri Jul 12, 2019 12:48 pm
SQRT, MikeG, and others: I sometimes wish that this forum had a sub-forum the equivalent of an Amtrak Quiet Car for Consumer Issues. It, IMO, gets old to have the “more frugal than thou” dueling posts arrive the moment one discusses safety features, college and private school, housing, etc.

I don’t discuss dollar amounts of expenses or our AA any more on BH other than a mention of how much fixed income we consider sufficient. Cost of safety features? Imagine that invested in TSM for 30 years! All that money lost to make you a less attentive driver!

I can dream of a BH where everyone gets to discuss their situation without the frugality police or safety Luddites , right?
That would be a good idea. I don’t disclose specific numbers, the cars I drive or how much our houses are worth. Would just invite criticism and resentment.

But I really don't understand people who live way below their means once retired? I sure don’t.
I could not agree more.
Real Knowledge Comes Only From Experience

2beachcombers
Posts: 615
Joined: Sat Jul 31, 2010 5:10 pm
Location: Savannah

Re: Paying cash for a vehicle

Post by 2beachcombers » Fri Jul 12, 2019 5:01 pm

MikeG62 wrote:
Fri Jul 12, 2019 3:01 pm
SQRT wrote:
Fri Jul 12, 2019 1:34 pm
TomatoTomahto wrote:
Fri Jul 12, 2019 12:48 pm
SQRT, MikeG, and others: I sometimes wish that this forum had a sub-forum the equivalent of an Amtrak Quiet Car for Consumer Issues. It, IMO, gets old to have the “more frugal than thou” dueling posts arrive the moment one discusses safety features, college and private school, housing, etc.

I don’t discuss dollar amounts of expenses or our AA any more on BH other than a mention of how much fixed income we consider sufficient. Cost of safety features? Imagine that invested in TSM for 30 years! All that money lost to make you a less attentive driver!

I can dream of a BH where everyone gets to discuss their situation without the frugality police or safety Luddites , right?
That would be a good idea. I don’t disclose specific numbers, the cars I drive or how much our houses are worth. Would just invite criticism and resentment.

But I really don't understand people who live way below their means once retired? I sure don’t.
I could not agree more.
+1-----Have to force myself, but love the flat beds for international travel. Let's see give it to the kids, the gvmt,---i like charity and ourselves. :sharebeer

Not Law
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Re: Paying cash for a vehicle

Post by Not Law » Fri Jul 12, 2019 5:33 pm

Since about 1990, I have paid between $3k and $5k for a used Park Avenue/LeSabre (3800 engine) with between 100k and 150k miles. All have gotten beyond 200k miles, and have averaged far less than 10 cents per mile for acquisition cost. Normal maintenance costs typical of all vehicles. As a mass produced vehicle/engine, any repair parts needed were readily available at the junkyard (one place had an entire row of about 60 junkers, so one could match colors on a lighted sun visor for instance), though such repairs have been minimal. Buying one new at $30-35k would require over 300,000 miles to match the 10 cents per mile acquisition cost. Currently driving a 2003 model - paid $3500 four years ago with 120k miles - still have another 15k miles to get below the 10 cents, but fully anticipate this one dropping below 5 cents before I move on to its replacement (a 2002 model stored in my garage acquired for $3k with 120k miles)

mountain-lion
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Re: Paying cash for a vehicle

Post by mountain-lion » Fri Jul 12, 2019 5:55 pm

POLO wrote:
Tue Jul 09, 2019 12:14 pm
The thing that really gets me is that even here of all places you will find the argument to leverage your car note. To buy more stocks. Instead of just buying a cheaper car.

Incredible.
It's almost like people have different risk-tolerances, preferences in their consumption habits around cars, and means to withstand market downturns.

Indeed. I can't believe people are different!

KandT
Posts: 101
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Re: Paying cash for a vehicle

Post by KandT » Fri Jul 12, 2019 8:59 pm

PluckyDucky wrote:
Thu Mar 21, 2019 9:17 am
Some dealers these days offer lifetime powertrain warranties, which you can only get buying new.

And financing is not an issue. As another poster mentioned, sometimes you have to finance to get the best overall price. Then if your interest rate is low enough, you actually get paid to finance. Honda still has some vehicles at 0.9% financing and more with 1.9% now. Consumers Credit Union pays 5.09% APY on up to $10k. Many banks have accounts with 2.5% APY. So get paid to finance and chuckle to yourself at your net negative interest rate car loan.
They roll the negative net interest rate into the price. Usually you can get a better price than taking the interest rate. If not they are holding back and probably get a kicker to get you to finance.

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whodidntante
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Re: Paying cash for a vehicle

Post by whodidntante » Fri Jul 12, 2019 10:10 pm

KandT wrote:
Fri Jul 12, 2019 8:59 pm
They roll the negative net interest rate into the price. Usually you can get a better price than taking the interest rate. If not they are holding back and probably get a kicker to get you to finance.
If the low interest rate is subsidized by the manufacturer, and the equivalent money is not available as some sort of rebate, and you are going to buy the same car either way, then it is better to take the negative real rate even if you could have paid cash.

olliema
Posts: 17
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Re: Paying cash for a vehicle

Post by olliema » Fri Jul 12, 2019 11:07 pm

Reducing the original post to its essence, it seems this was a statement and not direct question, but three implied questions:

1. Do I need a new vehicle?
2. If I buy a new vehicle, can I afford it?
3. If I buy the new vehicle, should I finance it?

1 & 2 are up to the poster to decide. It seems like the poster concluded the answer to 1 was "NO" making point 2 moot.

For 3, the formula to solve the latter typically is - assuming cash or loan are equally viable options, will the opportunity cost of taking the money out of circulation (e.g. out of an interest bearing account) exceed the cost of the interest to finance it.
rashad3000 wrote:
Tue Mar 19, 2019 11:38 am
Found a _____ for $_____ with _____miles.
If I was focused on payments, it would have been easy to pull the trigger.
However, placing the focus on paying cash, it made me think twice.
Do I want to write a check for $_____ when my current vehicle is getting me around just fine?
Nope, I’ll just continue driving the (current vehicle) until I can’t drive it anymore.

j0nnyg1984
Posts: 557
Joined: Sun Apr 24, 2016 9:55 am

Re: Paying cash for a vehicle

Post by j0nnyg1984 » Sat Jul 13, 2019 9:20 am

SmallCityDave wrote:
Fri Mar 22, 2019 8:35 am
sunny_socal wrote:
Thu Mar 21, 2019 8:41 am
8foot7 wrote:
Tue Mar 19, 2019 11:45 am
Careful. Some people on this board apparently believe you’re driving around a tin can death trap with no safety features.
True. No backup camera? No lane departure sensing? You've living on borrowed time.

I'm with you OP. As long as you have seatbelts and an airbag you're GTG.
Half the people on this forum are so concerned about safety you'd think that they walk around the house wearing a helmet and holding a pillow.
😂😂😂

I’m glad other people see it as I do!

theplayer11
Posts: 765
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Re: Paying cash for a vehicle

Post by theplayer11 » Sat Jul 13, 2019 11:44 am

bullmoose85 wrote:
Wed Mar 20, 2019 12:48 pm
Reading the comments, it seems many people think all vehicles are created equal. Vehicles across makes and models vary widely in quality in reliability. $10k for a Toyota Highlander with 150k miles is an entirely different proposition than for a Chevy Equinox. Mileage by itself doesn't say much without the context of the vehicle's reputation for reliability and how well it's been maintained.

I don't really buy into the logic that you should finance a car because it allows you to put more cash into the market. Yes, the S&P is up 10% (or whatever it is) YTD. But what if it had dropped 10%, which it just as easily could have done? In that case, not only have you lost money on your investments, you're now carrying debt on a highly depreciating asset.

I agree with the previous comment that not everything in life is about chasing yield. Don't overthink things. A car is a tool to get you from point A to B, nothing more. I pay cash for cars, but I do my due diligence on what the most reliable used cars are in my price range. I take care of them, and they in turn take care of me. And the icing on the cake: no debt.
Do you feel the same about your home? Your house is just a shelter to keep out the elements.. So, it shouldn't matter how it looks..right?
Some people like to drive nice new cars, it makes them feel good. Some actually like to drive and want performance, not some slug that can barely get out of its shadow.
Some like to live in extravagant homes and drive crappy cars. Point being, if you can afford it, spend your money how you like.

ryanayd
Posts: 4
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Location: Arizona

Re: Paying cash for a vehicle

Post by ryanayd » Sat Jul 13, 2019 12:09 pm

I'm right there with you. I have two vehicles that are approaching 200K miles and I have replaced many of the larget parts. When you take into account how much a monthly payment or lump sum would be to purchase a newer vehicle, I still don't come anywhere close.

My only regret is not having an older vehicle because I have had to replace electronics/computers in my vehicles which was much more expensive than it should have been. Keep up the great work and motivation!

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