Does it ever make sense to buy a new car?
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Does it ever make sense to buy a new car?
Bogleheads,
I’m approaching the end of my Camry lease in July. After making some moronic decisions with my past 2 car purchases I want to make the best possible decision this time. I recognize that a car is not an investment as it just depreciates but I want to be conscious of the total cost of ownership as well as safety features with this purchase. I’ve saved up 17k ontop of my emergency fund which I can either use to buy out my 2015 Camry lease residual, buy a different used vehicle, or put a large down payment on a new car, preferably a 2018 Camry.
If I buyout my lease I’ve eliminated car payments and have a low mileage 2015 Camry with a residual that should be just under market value. The issues are I didn’t exactly baby the car in the past 3 years as I wasn’t anticipating buying it out. Also, the car is lacking many of the safety features I wanted to upgrade to as I anticipate my wife and I having kids in the next couple years.
In my head, perhaps because my father told me “never buy new” I feel like a sucker buying new as I would be the one taking the depreciation hit and would be committing to more monthly payments. On the upside I make over 200k and could easily pay it off quickly, I’d be getting every safety/convenience feature I want, and would get the benefit of the new warranty.
Lastly, I’ve ruled out buying a heavily used car as I had my fair share of those in my life and am not mechanically inclined enough to identify a good/bad deal or handle repairs myself.
If you were in my position what would you do? Does it ever make sense to buy new over used with a car like a Camry?
I’m approaching the end of my Camry lease in July. After making some moronic decisions with my past 2 car purchases I want to make the best possible decision this time. I recognize that a car is not an investment as it just depreciates but I want to be conscious of the total cost of ownership as well as safety features with this purchase. I’ve saved up 17k ontop of my emergency fund which I can either use to buy out my 2015 Camry lease residual, buy a different used vehicle, or put a large down payment on a new car, preferably a 2018 Camry.
If I buyout my lease I’ve eliminated car payments and have a low mileage 2015 Camry with a residual that should be just under market value. The issues are I didn’t exactly baby the car in the past 3 years as I wasn’t anticipating buying it out. Also, the car is lacking many of the safety features I wanted to upgrade to as I anticipate my wife and I having kids in the next couple years.
In my head, perhaps because my father told me “never buy new” I feel like a sucker buying new as I would be the one taking the depreciation hit and would be committing to more monthly payments. On the upside I make over 200k and could easily pay it off quickly, I’d be getting every safety/convenience feature I want, and would get the benefit of the new warranty.
Lastly, I’ve ruled out buying a heavily used car as I had my fair share of those in my life and am not mechanically inclined enough to identify a good/bad deal or handle repairs myself.
If you were in my position what would you do? Does it ever make sense to buy new over used with a car like a Camry?
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Re: Does it ever make sense to buy a new car?
Buy out the 2015 Camry, then save for a couple of years and buy your wife a new car with cash.
Re: Does it ever make sense to buy a new car?
There have been lots of threads on this cars that depreciate slowly like Hondas and Toyotas buying a new car instead of a late model car usually makes sense.
I just bought a new Corolla in a large part to get the new safety features so I understand why that appeals to you.
Here is my post about my car buying experience which you might find interesting.
viewtopic.php?f=11&t=239526&p=3750099&h ... a#p3750099
One of the problems with the Camrys, and most other cars, is that it is easy to get a lot of upgrades which can make the car a LOT more expensive so watch out for that.
I just bought a new Corolla in a large part to get the new safety features so I understand why that appeals to you.
Here is my post about my car buying experience which you might find interesting.
viewtopic.php?f=11&t=239526&p=3750099&h ... a#p3750099
One of the problems with the Camrys, and most other cars, is that it is easy to get a lot of upgrades which can make the car a LOT more expensive so watch out for that.
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Re: Does it ever make sense to buy a new car?
Another "help me justify buying a new car thread". If you want a new car and can afford one, buy one. Have safety features drastically changed since 2015? When you do have kids, won't they have changed again then?
- MikeWillRetire
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Re: Does it ever make sense to buy a new car?
Of course! Buy it and keep it until it dies. The difference between new and used cost is negligible when spread over 10 to 20 years.
Re: Does it ever make sense to buy a new car?
New can work out if you are planning to hold for a long time, 10 years or so. Over a long time frame it all evens out.
Re: Does it ever make sense to buy a new car?
Yes safety has changed a ton since 2015. AEB, blind spot monitoring, lane keeping and son have all moved from basically unavailable to expected safety gear over the last 3 years.michaeljc70 wrote: Sat Feb 10, 2018 9:14 pm Another "help me justify buying a new car thread". If you want a new car and can afford one, buy one. Have safety features drastically changed since 2015? When you do have kids, won't they have changed again then?
If you want to pay for the added safety is up to you.
Re: Does it ever make sense to buy a new car?
no not really it is 3/4 of what you payed for it when you drive it off the lot
“While money can’t buy happiness, it certainly lets you choose your own form of misery.” Groucho Marx
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Re: Does it ever make sense to buy a new car?
Those all existed in 2015. It is true they are becoming available and as standard on more and more models.randomguy wrote: Sat Feb 10, 2018 9:21 pmYes safety has changed a ton since 2015. AEB, blind spot monitoring, lane keeping and son have all moved from basically unavailable to expected safety gear over the last 3 years.michaeljc70 wrote: Sat Feb 10, 2018 9:14 pm Another "help me justify buying a new car thread". If you want a new car and can afford one, buy one. Have safety features drastically changed since 2015? When you do have kids, won't they have changed again then?
If you want to pay for the added safety is up to you.
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Re: Does it ever make sense to buy a new car?
I worked part time for a dealership for a few years. The general manager once told me that the "worse" customers were the "seniors" that bought a new car and drove it forever.
j
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Re: Does it ever make sense to buy a new car?
Thanks for the advice. Coincidentally her car will need to be replaced in 18 mo so I’ve built a savings plan that involved paying cash for the Camry and then saving up for her vehicle instead of having a car payment. Ultimately new safety features will benefit her more especially if we have kids.JimInIllinois wrote: Sat Feb 10, 2018 8:37 pm Buy out the 2015 Camry, then save for a couple of years and buy your wife a new car with cash.
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Re: Does it ever make sense to buy a new car?
Agreed. The 2015 has only 1 of the safety features (BSM) that are now standard on the 2018. To someone else’s point my wife’s vehicle will benefit from these safety features more so I’ll likely buyout my lease and work to pay cash for a newer car for her in 18 mos.randomguy wrote: Sat Feb 10, 2018 9:21 pmYes safety has changed a ton since 2015. AEB, blind spot monitoring, lane keeping and son have all moved from basically unavailable to expected safety gear over the last 3 years.michaeljc70 wrote: Sat Feb 10, 2018 9:14 pm Another "help me justify buying a new car thread". If you want a new car and can afford one, buy one. Have safety features drastically changed since 2015? When you do have kids, won't they have changed again then?
If you want to pay for the added safety is up to you.
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Re: Does it ever make sense to buy a new car?
Thanks for the info. I too was intrigued by the 0% which made the 2018 particularly attractive. Interesting that it costs the dealers $1500. Sounds like you did well on the Corolla purchase. I like the part about leveraging remote dealers for quotes to have leverage with the local dealers.Watty wrote: Sat Feb 10, 2018 9:09 pm There have been lots of threads on this cars that depreciate slowly like Hondas and Toyotas buying a new car instead of a late model car usually makes sense.
I just bought a new Corolla in a large part to get the new safety features so I understand why that appeals to you.
Here is my post about my car buying experience which you might find interesting.
viewtopic.php?f=11&t=239526&p=3750099&h ... a#p3750099
One of the problems with the Camrys, and most other cars, is that it is easy to get a lot of upgrades which can make the car a LOT more expensive so watch out for that.
Re: Does it ever make sense to buy a new car?
I typically buy low mileage used but on some occasions have bought new. At times I have found that a new model was only marginally more than a low mileage used. Typically that is when there are a lot of those new cars on the lot and manufacturer incentives are available.
Having said all that if you want to pay a few thousand more for a new car, and it is within your budget and that is where you want to spend your discretionary spending, and you drive it for many years that is fine.
Having said all that if you want to pay a few thousand more for a new car, and it is within your budget and that is where you want to spend your discretionary spending, and you drive it for many years that is fine.
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Re: Does it ever make sense to buy a new car?
Lowest cost way to own cars over a lifetime is to buy a very reliable, low mile, well maintained 3 year old car at approx 60% of new cost and drive it 10 years and then sell it privately. Rinse and repeat.
Buying new is way easier and more convenient but never less expensive.
And leasing is just straight up financially foolish.
Having said that the current period is a time of massive change in technology for cars in terms of hybrid cars and advanced safety and autonomous driving features. This massive technology content will affect how long cars will be reliable, how much they cost to maintain, and how they depreciate as well as how safe and efficient they are. I personally would avoid buying a new car over the next 5 years if possible allowing time for a much technology to settle in and settle out of cars coming to market. Within 5 years I am hoping to buy a relatively affordable plug in gas/electric hybrid that is largely capable of safely and reliably driving itself (with me behind the wheel closely monitoring) in good weather on good roads. I know some cars claim to have this capability today but I am not satisfied that the technology is trustworthy, robust and fully reliable at this point.
Buying new is way easier and more convenient but never less expensive.
And leasing is just straight up financially foolish.
Having said that the current period is a time of massive change in technology for cars in terms of hybrid cars and advanced safety and autonomous driving features. This massive technology content will affect how long cars will be reliable, how much they cost to maintain, and how they depreciate as well as how safe and efficient they are. I personally would avoid buying a new car over the next 5 years if possible allowing time for a much technology to settle in and settle out of cars coming to market. Within 5 years I am hoping to buy a relatively affordable plug in gas/electric hybrid that is largely capable of safely and reliably driving itself (with me behind the wheel closely monitoring) in good weather on good roads. I know some cars claim to have this capability today but I am not satisfied that the technology is trustworthy, robust and fully reliable at this point.
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Re: Does it ever make sense to buy a new car?
I thought the same thing until I went to buy 3 months back. The used car pool has shrunk and compressed across the industry (less rip offs, but also less deals in large part due to TrueCar et al. bringing more transparency). The depreciation ($/miles projecting a 150k mile lifespan) on the models I was interested in was linear. In other words, I was not being compensated for buying used. So I bought a new car.In my head, perhaps because my father told me “never buy new” I feel like a sucker buying new
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In your shoes, I would purchase the 2015 Camry (assuming you don't hate it). But it's a personal call how much you value those safety features. Personally, I'm holding out for full automatic driving plus two years to work out the bugs (projected 2022).
Re: Does it ever make sense to buy a new car?
Since my first new car that I bought for cash a year after getting out of college I've always bought new cars. I've kept each of them 10 - 20 years with no regrets.
The closest helping hand is at the end of your own arm.
Re: Does it ever make sense to buy a new car?
You make $200k p.a. Let me assume it's after tax. Board and lodging costs, say, $70k, saving and investing another $60k (30%). What toys do you splurge on with the remaining $70k? YOLO! You like cars? Go ahead and acquire a couple of new cars for self and spouse (as long as the total stays below $100k, 6 months' income). Couldn't give a toss about cars? Get a nice, little, pleb car and quit worrying. You do not have to penny pinch like we all did in our pauper days. At a certain income level you ought to recognize that the Force has blessed youASpenderInRecovery wrote: Sat Feb 10, 2018 8:31 pm On the upside I make over 200k and could easily pay it off quickly, I’d be getting every safety/convenience feature I want, and would get the benefit of the new warranty.

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Re: Does it ever make sense to buy a new car?
The used market might surprise you. Drove my last truck for 9 years. Went to buy a replacement and priced 2014/5 Silverados. The used trucks were the same price as a new 2017 with incentives. I shopped Carmax, various dealers, online quotes and private purchase. Cheapest I could find was a 2015 with 38k miles for 39.9. Bought a new 2017 for 40.7. The 800 extra was worth going new as it had full warranty, safety features, new tires, brakes, etc. The $800 difference would not buy the warranty or new tires.
Just like my last truck I will own it 8-10 years unless it gets totaled. After 9 years of ownership (bought new) I sold it for 12k. IIRC we paid 36k for it new. Had a 100k warranty on it. Put 150k+ miles on it. Was my first new car. Hopefully this one works out as well or better. Sometimes buying new is ok but I agree you have to be of the mindset to keep it for 8-10 years minimum and the price difference between new and 2-3 years old isnt large.
Just like my last truck I will own it 8-10 years unless it gets totaled. After 9 years of ownership (bought new) I sold it for 12k. IIRC we paid 36k for it new. Had a 100k warranty on it. Put 150k+ miles on it. Was my first new car. Hopefully this one works out as well or better. Sometimes buying new is ok but I agree you have to be of the mindset to keep it for 8-10 years minimum and the price difference between new and 2-3 years old isnt large.
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Re: Does it ever make sense to buy a new car?
ASpenderInRecovery wrote: Sat Feb 10, 2018 8:31 pm Bogleheads,
I’m approaching the end of my Camry lease in July. After making some moronic decisions with my past 2 car purchases I want to make the best possible decision this time. I recognize that a car is not an investment as it just depreciates but I want to be conscious of the total cost of ownership as well as safety features with this purchase. I’ve saved up 17k ontop of my emergency fund which I can either use to buy out my 2015 Camry lease residual, buy a different used vehicle, or put a large down payment on a new car, preferably a 2018 Camry.
If I buyout my lease I’ve eliminated car payments and have a low mileage 2015 Camry with a residual that should be just under market value. The issues are I didn’t exactly baby the car in the past 3 years as I wasn’t anticipating buying it out. Also, the car is lacking many of the safety features I wanted to upgrade to as I anticipate my wife and I having kids in the next couple years.
In my head, perhaps because my father told me “never buy new” I feel like a sucker buying new as I would be the one taking the depreciation hit and would be committing to more monthly payments. On the upside I make over 200k and could easily pay it off quickly, I’d be getting every safety/convenience feature I want, and would get the benefit of the new warranty.
Lastly, I’ve ruled out buying a heavily used car as I had my fair share of those in my life and am not mechanically inclined enough to identify a good/bad deal or handle repairs myself.
If you were in my position what would you do? Does it ever make sense to buy new over used with a car like a Camry?
If it has features that no other car in the world has.. maybe it’s worth it... only if you pay cash.
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Re: Does it ever make sense to buy a new car?
When I went to buy my current car, I found the same thing: used car prices for some reason have spiked so high that it didn’t make sense to get a low mileage vehicle that was just a few years old.bovineplane wrote: Sun Feb 11, 2018 12:53 am The used market might surprise you. Drove my last truck for 9 years. Went to buy a replacement and priced 2014/5 Silverados. The used trucks were the same price as a new 2017 with incentives. I shopped Carmax, various dealers, online quotes and private purchase. Cheapest I could find was a 2015 with 38k miles for 39.9. Bought a new 2017 for 40.7. The 800 extra was worth going new as it had full warranty, safety features, new tires, brakes, etc. The $800 difference would not buy the warranty or new tires.
Just like my last truck I will own it 8-10 years unless it gets totaled. After 9 years of ownership (bought new) I sold it for 12k. IIRC we paid 36k for it new. Had a 100k warranty on it. Put 150k+ miles on it. Was my first new car. Hopefully this one works out as well or better. Sometimes buying new is ok but I agree you have to be of the mindset to keep it for 8-10 years minimum and the price difference between new and 2-3 years old isnt large.
I negotiated aggressively and got near a quarter off msrp and ended up with a new vehicle that was actually priced less than the asking price for a used version of the same model on Carmax.
Re: Does it ever make sense to buy a new car?
I quit crunching the numbers in my head when I got to the point in your post where you said you make 200k and already have 17k saved up.
Buy the new Camry. It’s not like you’re trying to justify purchasing a Maserati.
Buy the new Camry. It’s not like you’re trying to justify purchasing a Maserati.
Re: Does it ever make sense to buy a new car?
As you probably know, Camrys are pretty dependable and will take a lot of abuse. I have a 2012 SE that I bought used that I absolutely thrash at times, and it has been absolutely dead stone reliable. So I'd not worry about the lease buyout, unless you don't trust the previous owner.ASpenderInRecovery wrote: Sat Feb 10, 2018 8:31 pm
If I buyout my lease I’ve eliminated car payments and have a low mileage 2015 Camry with a residual that should be just under market value. The issues are I didn’t exactly baby the car in the past 3 years as I wasn’t anticipating buying it out. Also, the car is lacking many of the safety features I wanted to upgrade to as I anticipate my wife and I having kids in the next couple years.

But If you don't end up buying your current car, I would go new. The used market is no longer the bargain it was a few years back.
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Re: Does it ever make sense to buy a new car?
Totally agree that leasing is financially foolish. It was the 2nd moronic car purchase I alluded to. After first buying a CPO BMW that cost an arm and a leg to maintain I was fed up and turned it in for the Camry lease as a quick exit to a reliable, comfotable, and lower cost maintenance vehicle. Granted it’s a Camry but leasing is just not a good deal.jabberwockOG wrote: Sat Feb 10, 2018 10:49 pm Lowest cost way to own cars over a lifetime is to buy a very reliable, low mile, well maintained 3 year old car at approx 60% of new cost and drive it 10 years and then sell it privately. Rinse and repeat.
Buying new is way easier and more convenient but never less expensive.
And leasing is just straight up financially foolish.
Having said that the current period is a time of massive change in technology for cars in terms of hybrid cars and advanced safety and autonomous driving features. This massive technology content will affect how long cars will be reliable, how much they cost to maintain, and how they depreciate as well as how safe and efficient they are. I personally would avoid buying a new car over the next 5 years if possible allowing time for a much technology to settle in and settle out of cars coming to market. Within 5 years I am hoping to buy a relatively affordable plug in gas/electric hybrid that is largely capable of safely and reliably driving itself (with me behind the wheel closely monitoring) in good weather on good roads. I know some cars claim to have this capability today but I am not satisfied that the technology is trustworthy, robust and fully reliable at this point.
Now that I’ve got my finances in order I’m trying to be more strategic about the purchase so I won’t experience buyers remorse for the 3rd time. Also, so I get a good deal and can get my money’s worth by driving the car for 10+ years.
You bring up a good point in that the technology in cars is undergoing a massive upgrade which is what had me thinking new. Advanced safety features, better gas mileage, more convenience features/driver aids like front and rear radar. I’ll be honest the 2018 looks a great deal better as well. Ideally I’d get that all packaged into a hybrid as that is undeniably the future and will save me in the long run on fuel costs. Plus a potential tax credit. If I got a nicely packaged hybrid I’d feel somwhat future-proofed.
Perhaps the best answer is buyout the 2015 lease, keep saving for my wife’s vehicle, and if I find a great deal on a hybrid in the next couple years just sell my current vehicle to help pay cash for it.
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Re: Does it ever make sense to buy a new car?
Thanks for the advice. Ironically my father bought his first new vehicle this past year as there was only a marginal difference in lightly used truck versus a new one with all the incentives in place at the time of purchase. However his years of repeating the importance of buying used always makes me question a new purchase.DVMResident wrote: Sat Feb 10, 2018 11:09 pmI thought the same thing until I went to buy 3 months back. The used car pool has shrunk and compressed across the industry (less rip offs, but also less deals in large part due to TrueCar et al. bringing more transparency). The depreciation ($/miles projecting a 150k mile lifespan) on the models I was interested in was linear. In other words, I was not being compensated for buying used. So I bought a new car.In my head, perhaps because my father told me “never buy new” I feel like a sucker buying new
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In your shoes, I would purchase the 2015 Camry (assuming you don't hate it). But it's a personal call how much you value those safety features. Personally, I'm holding out for full automatic driving plus two years to work out the bugs (projected 2022).
I agree that perhaps buying out the 2015 makes sense as it eliminates payments and allows me to save & invest more so I can buy something more technologically advanced in a couple years once automated features are more baked.
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Re: Does it ever make sense to buy a new car?
I appreciate the advice. It’s 200k pre tax and I live in a HCOL area so part of my analysis was let’s reduce monthly expenses to increase my savings rate.msk wrote: Sun Feb 11, 2018 12:26 amYou make $200k p.a. Let me assume it's after tax. Board and lodging costs, say, $70k, saving and investing another $60k (30%). What toys do you splurge on with the remaining $70k? YOLO! You like cars? Go ahead and acquire a couple of new cars for self and spouse (as long as the total stays below $100k, 6 months' income). Couldn't give a toss about cars? Get a nice, little, pleb car and quit worrying. You do not have to penny pinch like we all did in our pauper days. At a certain income level you ought to recognize that the Force has blessed youASpenderInRecovery wrote: Sat Feb 10, 2018 8:31 pm On the upside I make over 200k and could easily pay it off quickly, I’d be getting every safety/convenience feature I want, and would get the benefit of the new warranty.![]()
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Re: Does it ever make sense to buy a new car?
My strategy: buy new, buy cheap, buy reliable, keep it until it dies. Any lower trim Honda or Toyota should fit those requirements.
If one gets into the mindset that says a 2015 Camry is outdated due to safety/technology improvements in 3 years, what is the plan for 2-3 years down the road? At the rate of technological improvements we are experiencing, we start to treat our cars like 20-somethings treat their $1000 smartphones. That is, expensive, disposable items to be leased. So in that case, a lease makes the only sense and you’re just committed to spending a lot more money and being at the mercy of the consumerist hamster wheel.
I won’t play that game. Can’t afford it, not interested. I kept my 1991 Honda Accord for 24 years and gave it way—since it was still running (not worth the repairs it needed any longer). My next car was a Honda Fit—the cheapest Honda I could find. It’s a 2010 and I plan to keep it 15 years or more. In a LCOL area, a 15-20 year old Honda is pretty commonplace. IMO, it doesn’t make sense to buy 2-3 year old Honda civics and Toyota Corollas. There’s just not enough savings to potentially inherit someone else’s problems.
I never give the latest safety technology a second thought. I realize this isn’t for everyone but it is for me. Maybe if you have kids or are more concerned, make a reasonable timeline of say, keeping a car 7 years or so. A well maintained Honda or Toyota should have reasonable resale value at that age. Me, I figure what I do as a driver has way more impact on safety than bells and whistles. Plus, poorer people don’t have the luxury of the extra safety features. Ymmv.
If one gets into the mindset that says a 2015 Camry is outdated due to safety/technology improvements in 3 years, what is the plan for 2-3 years down the road? At the rate of technological improvements we are experiencing, we start to treat our cars like 20-somethings treat their $1000 smartphones. That is, expensive, disposable items to be leased. So in that case, a lease makes the only sense and you’re just committed to spending a lot more money and being at the mercy of the consumerist hamster wheel.
I won’t play that game. Can’t afford it, not interested. I kept my 1991 Honda Accord for 24 years and gave it way—since it was still running (not worth the repairs it needed any longer). My next car was a Honda Fit—the cheapest Honda I could find. It’s a 2010 and I plan to keep it 15 years or more. In a LCOL area, a 15-20 year old Honda is pretty commonplace. IMO, it doesn’t make sense to buy 2-3 year old Honda civics and Toyota Corollas. There’s just not enough savings to potentially inherit someone else’s problems.
I never give the latest safety technology a second thought. I realize this isn’t for everyone but it is for me. Maybe if you have kids or are more concerned, make a reasonable timeline of say, keeping a car 7 years or so. A well maintained Honda or Toyota should have reasonable resale value at that age. Me, I figure what I do as a driver has way more impact on safety than bells and whistles. Plus, poorer people don’t have the luxury of the extra safety features. Ymmv.
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Re: Does it ever make sense to buy a new car?
The problem with this statement is the fact that you can not actually buy a car for 3/4 the price that has just been driven off the lot - nobody sells a car that has just been driven off the lot. So you have to look for a 2 - 4 year old car and with the residual values of Toyota being what they are it is oftentimes better to just buy new if you look at the 10 year cost. If there is enough inventory in your area on new Camrys you can also get a pretty good deal (perhaps even below invoice price).badbreath wrote: Sat Feb 10, 2018 9:22 pm no not really it is 3/4 of what you payed for it when you drive it off the lot
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Re: Does it ever make sense to buy a new car?
Dude....
You make $200k and you're freaked out about buying a Camry?
You say you drove your car hard. What does that mean? I've run plenty of my cars on racetracks around the northeast back when I was a showroom stock guy and those cars were all fine when I sold them. If you didn't do oil changes, then sure, dump it. Otherwise, I doubt you drove the car at all hard.
Financially, if you're below the miles on the lease, just buy out the 15 if you like it. Otherwise, negotiate with the dealer. I've never leased but have a friend who always leases an he always negotiates at turn in and always has walked away with money because the value is higher than the residual.
If you said you're going to buy yourself an Audi S4 and then next year buy your wife a BMW 3 series, I'd say that you can easily afford that.
You make $200k and you're freaked out about buying a Camry?
You say you drove your car hard. What does that mean? I've run plenty of my cars on racetracks around the northeast back when I was a showroom stock guy and those cars were all fine when I sold them. If you didn't do oil changes, then sure, dump it. Otherwise, I doubt you drove the car at all hard.
Financially, if you're below the miles on the lease, just buy out the 15 if you like it. Otherwise, negotiate with the dealer. I've never leased but have a friend who always leases an he always negotiates at turn in and always has walked away with money because the value is higher than the residual.
If you said you're going to buy yourself an Audi S4 and then next year buy your wife a BMW 3 series, I'd say that you can easily afford that.
Bogle: Smart Beta is stupid
Re: Does it ever make sense to buy a new car?
Cars are a very expensive recurring cost and take a lot of time to maintain, even if you are just taking them to the dealer for repairs / maintenance. My total all-inclusive transportation costs went from $5k per year to $1k per year when I switched to bike commuting.... And no more belt replacements, oil changes, etc.
Most people spend $10k/yr or more on their vehicle. Assumming 6% real returns, A 21 year couple old maxing out 401ks and roths every year would be able to retire at 48 with 5M with no car vs 53 w/ two $10k/yr cars. Add on a 400k+ mortgage and you're officially an "underaccumulator of wealth."
Most people spend $10k/yr or more on their vehicle. Assumming 6% real returns, A 21 year couple old maxing out 401ks and roths every year would be able to retire at 48 with 5M with no car vs 53 w/ two $10k/yr cars. Add on a 400k+ mortgage and you're officially an "underaccumulator of wealth."
Last edited by Cycle on Sun Feb 11, 2018 7:33 am, edited 1 time in total.
Never look back unless you are planning to go that way
Re: Does it ever make sense to buy a new car?
I can recall keeping cars 10-15 years
We are retired Now
The clock is ticking
I stopped rationalizing every financial move,
and crunching every number.
We purchased a 2017 Honda Civic 6 months ago.
4 days ago I was looking at the 2018 Touring Sport Civic Hatchback online.
I found one.
Sent an email inquiring.
Got a price.
Drove 92 miles to the dealership.
Did not test drive the car.
Looked the dealer in the eye told them what I would like to pay.
They met my offer.
Signed the title over,wrote a small check.
Nice drive home,,We both smiled as we enjoyed the new vehicle "options"
The clock is ticking

We are retired Now
The clock is ticking
I stopped rationalizing every financial move,
and crunching every number.
We purchased a 2017 Honda Civic 6 months ago.
4 days ago I was looking at the 2018 Touring Sport Civic Hatchback online.
I found one.
Sent an email inquiring.
Got a price.
Drove 92 miles to the dealership.
Did not test drive the car.
Looked the dealer in the eye told them what I would like to pay.
They met my offer.
Signed the title over,wrote a small check.
Nice drive home,,We both smiled as we enjoyed the new vehicle "options"
The clock is ticking


"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
Re: Does it ever make sense to buy a new car?
I recall keeping a Toyota MR2 for so long I either had to adopt it or start a college find for it.Toons wrote: Sun Feb 11, 2018 7:27 am I can recall keeping cars 10-15 years
We are retired Now
The clock is ticking
I stopped rationalizing every financial move,
and crunching every number.
We purchased a 2017 Honda Civic 6 months ago.
4 days ago I was looking at the 2018 Touring Sport Civic Hatchback online.
I found one.
Sent an email inquiring.
Got a price.
Drove 92 miles to the dealership.
Did not test drive the car.
Looked the dealer in the eye told them what I would like to pay.
They met my offer.
Signed the title over,wrote a small check.
Nice drive home,,We both smiled as we enjoyed the new vehicle "options"
The clock is ticking![]()
![]()
We are retired Now
The clock is ticking
I stopped rationalizing every financial move,
and crunching every number.
5 years ago bought a C350 Benz, best car I ever had.
Decided to take something off the bucket list and asked for prices on the net. Local dealers would not discount.
150 miles away met my demands, ordered car due early next month.
Will Sign the title over,write too large a check.
Nice drive home,,I know I will be smiling, don't think she cares much".
New safety options will be great.
The clock is ticking


Re: Does it ever make sense to buy a new car?
midareff wrote: Sun Feb 11, 2018 7:45 amI recall keeping a Toyota MR2 for so long I either had to adopt it or start a college find for it.Toons wrote: Sun Feb 11, 2018 7:27 am I can recall keeping cars 10-15 years
We are retired Now
The clock is ticking
I stopped rationalizing every financial move,
and crunching every number.
We purchased a 2017 Honda Civic 6 months ago.
4 days ago I was looking at the 2018 Touring Sport Civic Hatchback online.
I found one.
Sent an email inquiring.
Got a price.
Drove 92 miles to the dealership.
Did not test drive the car.
Looked the dealer in the eye told them what I would like to pay.
They met my offer.
Signed the title over,wrote a small check.
Nice drive home,,We both smiled as we enjoyed the new vehicle "options"
The clock is ticking![]()
![]()
We are retired Now
The clock is ticking
I stopped rationalizing every financial move,
and crunching every number.
5 years ago bought a C350 Benz, best car I ever had.
Decided to take something off the bucket list and asked for prices on the net. Local dealers would not discount.
150 miles away met my demands, ordered car due early next month.
Will Sign the title over,write too large a check.
Nice drive home,,I know I will be smiling, don't think she cares much".
New safety options will be great.
The clock is ticking![]()
![]()
Outstanding

"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
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Re: Does it ever make sense to buy a new car?
I'm a "satisficer," not an "optimizer." I try not to fuss about "the best possible decision" and settle for "not making moronic decisions." Let's make that "not making too many moronic decisions."ASpenderInRecovery wrote: Sat Feb 10, 2018 8:31 pm...I’m approaching the end of my Camry lease in July. After making some moronic decisions with my past 2 car purchases I want to make the best possible decision this time...
It's entirely a tradeoff based on the value to you of a brand new car versus one that's a few years old. There are things about a brand-new car that are worth something to some people. We bought a brand new car in 2016 because they had just introduced a pack of high-tech safety stuff we wanted. And we bought the top of the trim line because they were only offering that stuff on the most expensive models.
A few years ago I bought a year-old car, a Geo Prizm, for $12,000 when a new one would have cost $18,000. It was fine. No real problems. And, yeah, lower excise tax, lower insurance, all that.
And I've bought new cars, too.
Buying a new car is simply a luxury. Yes, it's a luxury. No, not necessarily a huge luxury or a crazy luxury. If you can afford it and it's worth more to you than what you could buy with the savings on a low-mileage used car, then it makes sense to buy one.
Nowadays the quality on cars is so good that there isn't usually the issue of a new car being a "lemon," and, yes, so far, the times I have bought a new car I have gotten a glorious problem-free year or two. For me, I do tend to identify just a little with our car... when it needs a repair, I psychologically feel like I have a cold, and for the first year or so, when everything is just the way the manufacturer meant it to be, I do have a sense of personal well-being. Stupid, but I do.
Rationally, a new car is going to last a year longer than a year-old car, and, rationally, all the borderline nuisance stuff that starts to show up after five or six years... the headlights developing haze, or the hatch door lifters no longer being quite able to hold the hatch open in winter if there's a bit of ice on it and you get klonked on the head, or a seatbelt retractor that won't retract unless you jiggle it right--will all happen a year later.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
Re: Does it ever make sense to buy a new car?
+1thewizzer wrote: Sun Feb 11, 2018 4:34 am I quit crunching the numbers in my head when I got to the point in your post where you said you make 200k and already have 17k saved up.
Buy the new Camry. It’s not like you’re trying to justify purchasing a Maserati.
I missed the part about your income when I first read the post.
Unless there is still something else big still going on with your finances then you could easily have enough to pay cash by the time your current lease ends in July. One of the advantages of having a high income is being able to afford more safety features.
I would not get a Camry Hybrid though because it is a relatively low production car. I would be concerned about the resale value since most people that would want a 7 year old Camry would want a gas version of it. If you want a Hybrid then I would take a hard look at the Prius and I would only get that if you drive a lot of miles each year.
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Re: Does it ever make sense to buy a new car?
One thing to consider is how to stage this transaction and the next one for your wife. Don’t know the details on just what and when she needs to get a replacement, but one consideration is this transaction can help you setup a pattern of every 5 to 6 years you you get a replacement so both cars are on a 10 to 12 year rotation.
I was able to keep that model going for a long time until I started giving 6 year old accords to my college age sons and we ended up with 4 cars in the driveway.
Your savings plan for cars is pretty level then over time. You make a car payment every month for life to your savings account and you have plenty of time to plan, and hopefully if something bad happens (in my area that usually means deer suicide) you have cash to make your car whole as well or pay for some part of replacement costs.
I was able to keep that model going for a long time until I started giving 6 year old accords to my college age sons and we ended up with 4 cars in the driveway.

Your savings plan for cars is pretty level then over time. You make a car payment every month for life to your savings account and you have plenty of time to plan, and hopefully if something bad happens (in my area that usually means deer suicide) you have cash to make your car whole as well or pay for some part of replacement costs.
Re: Does it ever make sense to buy a new car?
^This. I leased a Mazda 3 and it was used gently but also just did least maintenance as I did not think would keep it. At end of lease, I knew the history of the car (me) bought it and still have it and it is fine. The wife's car was bought new. No car payments on either. Keeping both at least 10 years. I will never lease again and buy new and hold.JimInIllinois wrote: Sat Feb 10, 2018 8:37 pm Buy out the 2015 Camry, then save for a couple of years and buy your wife a new car with cash.
Last edited by ETadvisor on Sun Feb 11, 2018 9:24 am, edited 2 times in total.
Re: Does it ever make sense to buy a new car?
That was our experience. We usually look for cars that are 2-3 years old with low miles. When we were looking at Subarus, we literally couldn't find a used Subaru near us that was a few years old. People snatch up used Outbacks, and used ones we found a few hours away were near new pricing.Watty wrote: Sat Feb 10, 2018 9:09 pm There have been lots of threads on this cars that depreciate slowly like Hondas and Toyotas buying a new car instead of a late model car usually makes sense...
Re: Does it ever make sense to buy a new car?
ASpenderInRecovery wrote: Sat Feb 10, 2018 8:31 pm If I buyout my lease I’ve eliminated car payments and have a low mileage 2015 Camry with a residual that should be just under market value.
If I'm not mistaken, nobody has actually asked what the RV on your '15 Camry is right now. To me, that would be a huge factor in whether to keep the car moving forward.
BHs are not exactly known for their car advice (mechanical or purchasing/leasing), because a lot here are trained to "buy it and then drive it until the wheels fall off". There have been members who have told me that their original, OEM shocks are "fine" after 200K+ miles because their state safety inspector checked them out for the annual inspection (true story).
To me, the most basic question is.... what is the buy-out value in your contract?
Thank God for Wall Street Bets.
Re: Does it ever make sense to buy a new car?
I can certainly understand you wanting the new 2018 Camry. It is a really attractive car, especially the interior. However, if you decide to buy new, you might want to buy the 2018 Honda Accord instead. The reason is because the Accord typically will have a good bit higher residual value when you go to sell it. Toyota does a ton of Camry fleet sales (to rental car companies, etc.) and those cars get dumped on the market every couple of years which really pushes the prices of used Camrys down. Honda refuses to do fleet sales because of that reason. Also, based on owning a 2012 new Camry and 2015 new Accord, the Accord has been much more reliable and had a much better safety rating. I finally threw in the towel and sold the Camry after just 2 and a half years (I have never kept a car for such a short period) because of the reliability and safety issues.ASpenderInRecovery wrote: Sat Feb 10, 2018 8:31 pm Bogleheads,
I’m approaching the end of my Camry lease in July. After making some moronic decisions with my past 2 car purchases I want to make the best possible decision this time. I recognize that a car is not an investment as it just depreciates but I want to be conscious of the total cost of ownership as well as safety features with this purchase. I’ve saved up 17k ontop of my emergency fund which I can either use to buy out my 2015 Camry lease residual, buy a different used vehicle, or put a large down payment on a new car, preferably a 2018 Camry.
If I buyout my lease I’ve eliminated car payments and have a low mileage 2015 Camry with a residual that should be just under market value. The issues are I didn’t exactly baby the car in the past 3 years as I wasn’t anticipating buying it out. Also, the car is lacking many of the safety features I wanted to upgrade to as I anticipate my wife and I having kids in the next couple years.
In my head, perhaps because my father told me “never buy new” I feel like a sucker buying new as I would be the one taking the depreciation hit and would be committing to more monthly payments. On the upside I make over 200k and could easily pay it off quickly, I’d be getting every safety/convenience feature I want, and would get the benefit of the new warranty.
Lastly, I’ve ruled out buying a heavily used car as I had my fair share of those in my life and am not mechanically inclined enough to identify a good/bad deal or handle repairs myself.
If you were in my position what would you do? Does it ever make sense to buy new over used with a car like a Camry?
If you decide to go the used car route, I would check out Carvana.com and Cargurus.com. You will find much better deals there than at Carmax, etc. Hope this helps.
Re: Does it ever make sense to buy a new car?
1. In your case, buy the 2015 Camry. It was a new car when you got it.ASpenderInRecovery wrote: Sat Feb 10, 2018 8:31 pm Bogleheads,
I’m approaching the end of my Camry lease in July. After making some moronic decisions with my past 2 car purchases I want to make the best possible decision this time. I recognize that a car is not an investment as it just depreciates but I want to be conscious of the total cost of ownership as well as safety features with this purchase. I’ve saved up 17k ontop of my emergency fund which I can either use to buy out my 2015 Camry lease residual, buy a different used vehicle, or put a large down payment on a new car, preferably a 2018 Camry.
If I buyout my lease I’ve eliminated car payments and have a low mileage 2015 Camry with a residual that should be just under market value. The issues are I didn’t exactly baby the car in the past 3 years as I wasn’t anticipating buying it out. Also, the car is lacking many of the safety features I wanted to upgrade to as I anticipate my wife and I having kids in the next couple years.
In my head, perhaps because my father told me “never buy new” I feel like a sucker buying new as I would be the one taking the depreciation hit and would be committing to more monthly payments. On the upside I make over 200k and could easily pay it off quickly, I’d be getting every safety/convenience feature I want, and would get the benefit of the new warranty.
Lastly, I’ve ruled out buying a heavily used car as I had my fair share of those in my life and am not mechanically inclined enough to identify a good/bad deal or handle repairs myself.
If you were in my position what would you do? Does it ever make sense to buy new over used with a car like a Camry?
2. Yes, I believe it can make sense to buy a new car.
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Re: Does it ever make sense to buy a new car?
Good question, it’s a 2015 Camry XLE currently 20k miles and the residual is 16.9k maturing in July. According to my research it’s right below market value assuming you bought a similar car from a dealer and I return it with around 23-24k miles based on how my mileage is tracking.Helo80 wrote: Sun Feb 11, 2018 8:40 amASpenderInRecovery wrote: Sat Feb 10, 2018 8:31 pm If I buyout my lease I’ve eliminated car payments and have a low mileage 2015 Camry with a residual that should be just under market value.
If I'm not mistaken, nobody has actually asked what the RV on your '15 Camry is right now. To me, that would be a huge factor in whether to keep the car moving forward.
BHs are not exactly known for their car advice (mechanical or purchasing/leasing), because a lot here are trained to "buy it and then drive it until the wheels fall off". There have been members who have told me that their original, OEM shocks are "fine" after 200K+ miles because their state safety inspector checked them out for the annual inspection (true story).
To me, the most basic question is.... what is the buy-out value in your contract?
Last edited by ASpenderInRecovery on Sun Feb 11, 2018 9:34 am, edited 1 time in total.
Re: Does it ever make sense to buy a new car?
The new Honda Accords look head-turningly good. I say that as someone who doesn't like the look of sedans as a general rule.
Re: Does it ever make sense to buy a new car?
I did quick KBB search and saw $15.9k but did not include dealer fee/filing fee. The vehicle history is big factor to me and you know it best.ASpenderInRecovery wrote: Sun Feb 11, 2018 8:59 amGood question, it’s a 2015 Camry XLE currently 20k miles and the residual is 16.9k maturing in July. According to my research it’s right below market value assuming you bought a similar car from a dealer and I return it with around 23-24k miles based on how my mileage is tracking.Helo80 wrote: Sun Feb 11, 2018 8:40 amASpenderInRecovery wrote: Sat Feb 10, 2018 8:31 pm If I buyout my lease I’ve eliminated car payments and have a low mileage 2015 Camry with a residual that should be just under market value.
If I'm not mistaken, nobody has actually asked what the RV on your '15 Camry is right now. To me, that would be a huge factor in whether to keep the car moving forward.
BHs are not exactly known for their car advice (mechanical or purchasing/leasing), because a lot here are trained to "buy it and then drive it until the wheels fall off". There have been members who have told me that their original, OEM shocks are "fine" after 200K+ miles because their state safety inspector checked them out for the annual inspection (true story).
To me, the most basic question is.... what is the buy-out value in your contract?
Re: Does it ever make sense to buy a new car?
This didn't play out in my case. I know this is the standard advice, but in my case, I was able to get the a 2013-2016 model year Civic ( last generation's) when the 2017 redesign came out. A new LX, the cheapest model, was going for around $18,000. I got a low mileage model off of a 3-year lease for $10,750. Sure, I negotiated that down, but I figured I would negotiate the same discount on a new one, too. That was quite a savings over a new one. My spouse and I are very happy we went with this one as opposed to a new one. Additionally, in my state, property tax is taken on cars. The property tax on the new Civic was several hundred higher than my uses one.AntsOnTheMarch wrote: Sun Feb 11, 2018 5:51 am MO, it doesn’t make sense to buy 2-3 year old Honda civics and Toyota Corollas. There’s just not enough savings to potentially inherit someone else’s problems.
Caveat with the "don't buy 2-3 year old Civic/Corolla" advice: If you are buying a previous generation, it might be worth it.
Re: Does it ever make sense to buy a new car?
As cars get more and more safety and self driving features as well as cars switching from ICE to hybrid to electric, there are going to be many more threads like this. Unlike the last century of cars, I think cars are going to be changing and adding more features much more quickly than has been in the past. If I'd have to buy a car right now I would strongly consider leasing since I think there is going to be a lot of changes in the next 5-10 years.
Re: Does it ever make sense to buy a new car?
I'd love to know where everybody finds these "low miles 3 year old" cars at 60% of original sticker. I don't know if the used market is really inflated here, but most cars I've noticed don't hit this 60% level until around five years in. I have rarely found the "lightly used" market to provide much of a value over new, especially in the boring Japanese-brand "appliance" cars people love here.jabberwockOG wrote: Sat Feb 10, 2018 10:49 pm Lowest cost way to own cars over a lifetime is to buy a very reliable, low mile, well maintained 3 year old car at approx 60% of new cost and drive it 10 years and then sell it privately
Re: Does it ever make sense to buy a new car?
Of course there are all sorts of good reasons to buy a new car but the discussion is also trumped by the advice to never buy a car you have to borrow to pay for.
Re: Does it ever make sense to buy a new car?
ASpenderInRecovery wrote: Sun Feb 11, 2018 8:59 am
Good question, it’s a 2015 Camry XLE currently 20k miles and the residual is 16.9k maturing in July. According to my research it’s right below market value assuming you bought a similar car from a dealer and I return it with around 23-24k miles based on how my mileage is tracking.
Ok, thanks for the extra info on trim and your current/proejcted mileage as those were going to be my next questions that I did not ask.
To me, the question you have to ask yourself and only you can answer "Is the 2018 Camry XLE worth $10,000 more to me (appearance, safety features, new parts compared to wear/tear on the '15, etc.)"
At $16900, it's a wash. You're not leaving equity on the table, nor are you getting rid of a financial lemon. Toyota Financial Services was very spot on with the lease calculator IMHO.
At 23-24k miles, there is still plenty of life left in the engine and car --- even if you were a bit hard on it. Rental cars are sold from the major carriers all the time and people are generally very rough on rentals, yet there is not a huge "rental stigma" nor price dip. Yeah, you can save a bit of money, but not thousands or tens of thousands of dollars. I've even seen some of the renters asking around or $500 more for apples to apples compared to my local Toyota dealership used lot...
It does not sound like you're grossly unhappy with Toyota, Camry, or your current car.
At your income, you ought to be able to pay off $10k within a year. Heck, you put away an extra $2k per month and you'll have that by July.
Again, the big question: "Is the 2018 Camry XLE worth $10,000 more to me (appearance, safety features, new parts compared to wear/tear on the '15, etc.)" Of course, you can always take a loan out for $10k that is over 12, 24, 36 mos with minimal interest.
Thank God for Wall Street Bets.
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Re: Does it ever make sense to buy a new car?
To give you a better picture of my financial situation: I'm 30 live in a HCOL area, make 200k and only have 150k in retirement/taxable accounts, 30k in EF, and 17k in the car fund. I've also got roughly 80k equity in my home if that matters. Lastly my debt consists of my mortgage payment and 4 remaining lease payments. With that said I feel like most here would consider me an underaccumulator currently. I don't find it productive to beat myself up so I joined this site last year and was able to get my finances in order and am now on track to max my 401k by march (great market timing...Watty wrote: Sun Feb 11, 2018 8:13 am+1thewizzer wrote: Sun Feb 11, 2018 4:34 am I quit crunching the numbers in my head when I got to the point in your post where you said you make 200k and already have 17k saved up.
Buy the new Camry. It’s not like you’re trying to justify purchasing a Maserati.
I missed the part about your income when I first read the post.
Unless there is still something else big still going on with your finances then you could easily have enough to pay cash by the time your current lease ends in July. One of the advantages of having a high income is being able to afford more safety features.
I would not get a Camry Hybrid though because it is a relatively low production car. I would be concerned about the resale value since most people that would want a 7 year old Camry would want a gas version of it. If you want a Hybrid then I would take a hard look at the Prius and I would only get that if you drive a lot of miles each year.

Also, do hybrids not hold their resale value well? For whatever reason the Camry Hybrids I've looked at in my area look like they are holding their value just as well as the gas counterparts. I have stupidly always viewed them as a better decision but I tend to drive only 8-9k miles a year.
Last edited by ASpenderInRecovery on Sun Feb 11, 2018 10:23 am, edited 3 times in total.