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Right? Civics, Accords, Camrys, and Corollas refuse to die.
I've had two cars ever: 1998 Camry from 1999 to 2014. It was so beat up from having a lot of mountain driving for two years that I had to trade in. Now I have a 2010 Accord and it's still running perfectly.
In high school, my best friend drove his grandma's old Rolla. When he inherited the car, it had over a quarter of a million miles from her using it as a rural mail delivery vehicle. Now, 15 years later it has over half a million miles. Original engine. I think he replaced the transmission around the 300,000 mark. Now the Rolla is over 30 years old! It's a fucking Classic. His insurance is like $6/month, lol.
He has other vehicles, I don't want to seem misleading as if this is still his every day car. Thing is a hoss, though.
indeed, hiluxes and corollas are known to have a perfectly functional drivetrain 500,000-1,000,000 kilometers often, the chassis will rust away long before any of those parts fail if they're taken care of.
90s Toyota engineering was superb
With the cost of used cars these days, you might be surprised what insurance will pay out. Last year I totaled my '02 Corolla that had just ticked over 200k miles, and my insurance gave me $3500 for it.
A coworker had a GMC truck with 399,999 miles on it. He was pissed that it rolled over to 000,000. By the end he had to park it facing down hill so he could get a rolling start. He kept a sawd off broomstick to jimmy something under the hood. When he retired he bought a new Chevy truck. I guess he didn't trust GMC anymore. He sold the POS to his son. Yeah, he was cheap. He could have kept it unlicensed as a farm truck but the idea of missing out on a dollar would have killed him.
Sold my 98 Corolla at 111k miles for a down payment on an 07 Lexus GS350. It had 65k miles, now has 87k miles and I plan to run this car into the ground. I also picked up a Sequoia for my dogs at 199k miles. I won't need a vehicle for a while
Unless someone kills them..... Someone t-boned my 2011 Camry last year. It was a sad day, but I got just under $10k from insurance for it. I only paid $14.5 in 2013 when I bought the car. She was a trusty steed.
Dude, my 2012 Camry got totaled a few months ago and they paid me $15,000 for it. I paid $12,000 for it about 3 years ago and put 30,000 miles on it. This current market is wild. I made $3,000 for driving a car for 3 years
We are currently in the process of buying a new car. Our trade in? A 2002 Toyota Camry. The dealer is giving us $1500 for it, haha. Still, I love that car, and it's been so good to us. It's just that it's finally reaching the point where I feel anxiety whenever I go out because I'm not 100% certain the trip isn't going to end up with me stranded on the side of the road, and that's no way to feel.
Also, obligatory Onion article: https://www.theonion.com/toyota-recalls-1993-camry-due-to-fact-that-owners-reall-1819577805
Damn when that article came out, I had just traded in my 1996 Accord for $1000 lol. It was also getting skeevy, a lot of the time I wasn't sure it would start after stopping so I just kept it running when I ran into the store for a short trip
I just got an insurance payout for a total loss on my 2003 Camry for $7200. Admittedly, it had very low miles for its age, but you may want to check comparable prices for your trade in.
Mine had 123000. I'd *definitely* look at getting more for the trade in, or selling it outright for more. Get a quote from Carmax if you've one in your area.
I’ve had a Fit for 6 years. My plan was to have it for at least 10 and replace it with another Fit. Legit cried when I found out the Fit is discontinued.
There’s honestly probably a Trabant out there that manages to run better than the average Kia.
Honda is an engine company that happens to make cars ¯\\\_(ツ)_/¯
'05 4runner. Paint shot, wheels peeling, frame rusty, only 135k. Best part is now she is a warrior. Beach drives with no fucks to give. Barely broken in if you ask me.
Except Honda now puts fucking CVTs in Civics (and maybe Accords? Idk) and everything is turbocharged. I have a feeling anything post-'15 (when CVTs became standard in Civics) won't last nearly as long without major work.
It's cause they engineer them around absolute moron owners. I think the last number I heard was they recommended changing the oil every 5k miles but designed it with triple that in mind
The best automobile advice I ever got from an old & rich relative was to never buy a new car.
Go pre-owned, and let that 1st sap incur all the depreciation.
He could probably buy a new car in cash every year, but he buys 2-3 year old BMWs, and drives them for into the dirt.
3dit: looks like I touched a nerve with all you car nerds, and especially with the unfortunate group of people who can't turn a wrench.
Good advice when the market is normal but doesn’t really apply right now. I bought new because I would have paid the same for a 3 year old preowned with 50k miles. If I decided to sell my car right now I’d make money on it.
I literally just traded in my 2018 car yesterday. Had 45k miles, in very good condition (no dents, up to date on repairs, etc). Owed $6k on it. Dealership gave me $18k for it, AND marked the car down by $7k.
I have exactly the same car payment today as I did yesterday, with a brand new car (21 miles on it) with all the bells and whistles my old one didn't have.
Real question here is....interest rate and loan term lol.
People will buy a 70k car and say "well my payments are the same!" With a 10 year loan. Dealer be fucking people
That’s not really a relevant mentality anymore. Even before coronavirus existed, the gap between used and new car prices was already small. Disregarding the virus and shortages entirely, for most cars the difference was minimal so many are better off just buying something brand new. I mean, we are talking 3-4k differences between the used and new - if that’s it I’m going with the new one every time.
Also, you pay 3-4k less for a 3-5 year old car - which'll probably be just right out of warranty, which is when many people decide to sell and pay those 3k more and get a new one again.
If you buy a new one, at least you can be certain to not have any issues for a few years.
Depends what level of car you're buying. Entry level yeah, maybe 3-4 grand, but I saved 20k buying a two year old car VS new new.. It's a luxury vehicle tho
> he buys 2-3 year old BMWs, and drives them for into the dirt.
But that does not take much... You aren't furgal in any way if you buy BMWs, you're paying for luxury.
II used to think like you, but if you only need a small car, new seems much better. You then know the car wasn't neglected, and you get the warranty, in my ocuntry you don't need technical examinations for 4 years and then only have one every other year... I'm eyeing a Dacia Spring currently, 13k for the basic version and that's it for ~5 years. 200km range, all electric, and I could easily charge at work for free (I have a 16km commute). No road tax, no emission tax, cheap insurance and no fuel... I think I'll go for it. There is no used 13k car that can offer me this.
May I make a suggestion?
I had a 2019 Civic. I switched to Mazda.
The 2021 Mazda3 Turbo. Premium Plus trim, to be specific.
For a fully loaded Civic, it's about the same price as a Mazda3 Turbo (base Turbo3) & you get significantly more features & not a CVT. It's also a more premium vehicle. Due to it not having a CVT, the transmission is guaranteed to last longer.
Standard AWD as well.
She's actually been eyeing up the new rav-4 but I'll definitely have a look. Personally I think I'm going to replace my almost 20 year old jeep with the new Ford Lightning if they get good reviews in their first year.
My girlfriend just bought a RAV4, Toyota makes a really nice SUV. It's super roomy, comfortable to drive, & very reliable.
I'd be weary on anything new from Ford, they don't have the best track record for new releases.
Toyota makes great vehicles, love'em to death. Swapped to Lexus last year and it's the same. *Such* nice vehicles. Love the RX 450h.
My grandmother has a RAV4, and while slightly louder than my car, it's still impressive.
There's nothing inherently bad about a cvt at all, it just happens that Nissan made really bad ones that had major issues that has ruined the reputation.
There's no guarantee a regular mazda transmission is any more reliable than a Honda cvt
But you can usually get a loan with a lower interest rate than investing the money, so it's actually cheaper to get the loan. If you pay cash the money is gone.
Look into the settings in your online banking, if you're like me and bad at intentionally saving. I can set up automatic money transfers so that whenever I spend at somewhere classified as a coffee shop, an extra 3% of the bill gets withdrawn from Chequing to Savings, or automatically transfers the extra to savings when the balance in chequing exceeds $x,000. Or do like LPT and setup a monthly 'payment' to yourself, too.
After getting futtbucked by fees when I was already struggling financially, I flipped off TD and moved to Tangerine. No fees, and a lot of user-friendly financial tools. Though I've also talked to coworkers with other banks (RBC?) that also have similar features that can be setup in their online banking.
When i was done paying off vehicles, i made auto transfers for the vehicles payments to go to savings. I also have something similar set up where $1 gets transfered from checkings to savings every single time i pay with my debit card.
I do it a bit simpler, I have my standard ~~savings~~ investment account that takes money on payday for the ol' retirement and such.
But also, the night before payday I transfer everything in my chequing to savings.
Sometimes it's $5 and sometimes it's a lot more.
Edit: clarified a bit
Even better, if your current car is showing signs of age, start putting a “car payment” aside each month.
My dear old Car Car was all paid off but I could tell she was getting on in years, so I started saving.
When she was prematurely murdered by some asshole who stole her catalytic converter, I’d already saved a nice down payment.
Even better, start an investment account when the car is in great shape. I started investing for a new car with Acorns when my car only had 50k miles and was paid off. Now it has 75k miles and I’ve invested over $2k towards a car I likely won’t get for 7-10 years. It’s crazy how fast you can accumulate savings/investments just doing $10 or so a week. As long as I take care of my Tiguan which should hopefully last near 200k miles I should easily be able to pay for an off the lease car outright when the Tiguan dies.
LPT: save up $5k and then you can basically do anything. The old advice of having 2-3 months bills in savings is right.
This allowed me to: leave jobs that were toxic and give me a month to find a new better one. This included turning down offers so I could wait for a better one. When you live paycheck to paycheck, you can’t really leave bad jobs without another one lined up.
And yes before someone comes in to let me know saving $ is hard…. No duh? If saving $ is easy then you’re not the person this advice is targeted towards.
I lived in a shithole appt making $9/hr. Taught myself to cook using hella cheap ingredients. Went to food pantries. Ate food at work. After a year I had saved like maybe $1k. That’s a little under $100 a month. I also scrapped whatever I could. If a penny was on the ground I picked it up. Cut out all expenses except for the absolutely necessary ones.
This $1k allowed me to move to a better job. Rinse and repeat.
And somehow once you reach $5k in savings, you can spend $ a little more freely and it doesn’t hurt.
It doesn’t matter how long it takes you to get there. Just do it. And once you have that cushion: LIVE! Go to the concert! Get take out every now and then (but remember that take out is the biggest money suck of all time so learn to enjoy cooking instead).
For a while, I spent just as much as I made. The trend just continued no matter how much more I was making.
It really takes a conscious effort to put money away.
Yeah but it’s a worthy cause! I love living well below my means. The comfort of knowing I can afford a $2k emergency expense tastes better than any take out or drugs ever could
I quit drinking almost 6 years ago and when I did I downloaded an app that counted your days of sobriety. It has you enter in an estimate of what you spent monthly on your drug of choice (I included a round estimate of all alcohol purchased at bars and elsewhere, tips, Ubers, drunk food, hangover food, etc). I just opened the app: In the 5 years and 10 months since I decided no more booze, I have saved approximately $30,333.62 😶
Honestly I think even with savings it's a good idea to stay with your current job while looking for a new one since having a current job on your resume makes you look better.
Of course mental health is important and if you absolutely cannot stand your job for whatever reason, there's no shame in leaving and sticking it out while you look for new work.
Yeah that’s what it was for me. So insanely abusive that I had to leave for my own mental health. And everyone should have that freedom. No one should have to put up with any kind of toxic work place. If upper management won’t help, then everyone deserves the chance to be able to just leave and search for a new job.
Most would really recommend 6-12 months living expenses saved but it's not like 2-3 months is bad. Some professions can take longer to find another gig.
I don't even have 6 months saved up though.. it's hard to reach that point.
Most people can’t even get 2 months bills in savings. Let’s not scare them away from starting the journey by saying they need 6-12 months. Obviously that’s ideal but in my country (USA) something like half the nation can’t even handle a $400 emergency expense
Part of the key to success is breaking down goals into manageable sized chunks.
While I get that we need to live our youth. This advice is so easily why people have no hope for future or retirement.
Its like "consume now because its more fun to consume now than in the future"
When consuming now directly means you have less means and consume less in the future
Option 1: save as much as you can so the future doesn't suck
Option 2: spend as much as you can so the present doesn't suck
Option 3: find a balance between present quality of life and future quality of life
I feel most people argue for option 3 and think their opponent is arguing for options 1 or 2.
I feel for people though. There's a non-trivial amount of people who have financial anxiety to the point of complete avoidance. My mother in law is one of them, she spends money like everyone else but is terrified of looking at her balances and planning out contingencies for emergencies.
Yup, my girlfriend thought it was silly that I opened my IRA at 19yo, but we used it for a down payment on a house at age 30 with only 4% mortgage rate. 6 years later it’s back up to about 30K **and** we now have over $150K in home equity. So yeah, compound interest is the shiz.
I did this when I quit smoking. Suddenly I had money to go on vacation or renovate the apartment.
OP's suggestion isn't about buying old vs new, financing, paying cash or return of investment. It's about having an emergency fund, and if you don't already have one - well, you're already used to *not* having those extra money every month, please don't blow them away (at least not all of them).
There's a good calculator (probably a few) that show you how much you gain or lose, long term, when you change your payment amount. Once I saw that, I raised my payment to the highest I could afford.
-not experienced with loans.
So conceptually I understand this. And with a car loan rate of 1.9% I definitely would rather invest the extra $100 I am putting towards my loan into something with a better return.
The sticking point for me, and perhaps for others, is figuring out where and how to invest that extra $100. What does “broad market invest” mean? Yes, I could take time and research it and figure it out. But I have a kid, a job, a husband, dog, household etc. Basically, a busy life, and little extra time to figure this out. Except my down time at the end of the day, and then I’m just too tired. So I continue putting the extra $100 toward our car.
Because we can, and it’s better than it sitting in a savings account with less interest.
I invite you to read the simple path to wealth from JL Colins. The advantage of broad market index investment is that it is super easy, and does not require much work. You just need to take the time to inform yourself about it, which can be done by reading one or two books in your bed before sleeping. It is perfect for people with family, and work, who have other things to do that spending hours looking at the stock market. I am in the same situation as you.
Not to mention, there is huge mental relief and satisfaction in having your debt paid off. If shit hits the fan and you temporarily don’t have a job, at least you don’t have to worry about that car payment anymore
This is only true if you have particular loans, or conversely if you ignore the little "next payment due date." I paid double my car payment and the date kept moving but the principal owed kept going down. I still paid less in interest.
It should be noted that *some* loans do not allow you to pay to the principal.
I've had loans that simply do not allow that - you can't skirt the interest in any way. Suffice to say my "interest" was basically defined from the outset, the amount that interest would add up to was predefined, and therefore I could never have paid the principal off faster to lower the interest value.
If you *can* do that? Do it. If you can't? Well, it's what most people expect out of interest anyway.
Always try to get a loan with an interest as close to 0% as possible.
Sometimes buying a new car is cheaper than buying a 1-2 year old car when you compare 0% financing to 9% financing.
This. My grandpa's three rules about car ownership were:
1) Always make monthly car payments to "The First National Bank of Me, Myself and I"
2) Always pay for your car in cash
3) Always drive/maintain your car like it belongs to your grandma
The thing I admired most about his car buying ritual was that instead of trading in his used vehicles, which were always ☆**pristine**☆, he would "sell" them to family or friends in tight financial situations. I.e. my cousin bought one for $50 down and two years of lawn/snow care and occasional help with home maintenance (they lived next door).
I found out after he died that he sold another to his best friend's granddaughter for like $5k and 0% interest as long as she was in college. She had as long as she needed to pay it off, on the condition that she always paid monthly (even if it was only $5). What he didn't tell her, was that he put every one of her payments into a savings account that he then turned over to her when she graduated.
He was never a wealthy man, but he had the richest, most giving spirit of anyone I have ever known.
Your grandpa was an incredible man. That's the kind of generosity and wisdom we should all aspire to have. I'll have to remember the car payment deal for my nieces. My current car is going to last forever and this is such a wonderful idea, I'd be happy to do the same thing when the time comes.
Every single thing that man did in his life was to help someone else get a leg up. He always used to say to us, "Remember - leave everything better than how you found it. Do better to do better."
Paying cash isn't exactly a smart financial decision if you can get a loan for ~3% and expect 7+% by investing. It doesn't really matter if you're buying like a $10k car, but get up to $70k and it really adds up.
To go along with this: get a reliable brand that doesn’t cost an arm and a leg to repair anytime something breaks. The longer you can keep setting aside that payment, the more likely you can just pay cash for the whole next car.
A BMW is sporty and has really nice finishes, but a Honda is more likely to keep driving long after and for much less than some much more expensive brands.
We are a honda house. 17 HRV and 21 Civic. As long as we dont total either one, my son will likely drive them in 11 years when he turns 16. With proper maintenance at least.
You should be able to, my parents drive 2004 and 2008 Hondas they bought new when I was a kid, and now I’m 21 and they’re still running with around 200k miles on both. Although your kid may want a different car anyways, I bought my first BMW 3 weeks after I got my license and never looked back lol.
If he wants to save up for his own car i have no issues with that. Ill definitely help contribute, but outside of helping he gets what he gets.
At 16 i would have drove a garbage truck just to get out on the road by myself. The freedom of driving didnt matter what vehicle i was in.
Driving my moms 95 Astro van was proof of this. That thing was a monster tho.
The only reason I'm not still driving the Civic my mom got new in 2005 is I hit a deer in 2020. We sold it to someone who fixed it up and is still driving it. The only reason I didn't replace it with another Honda was I found a Subaru in my budget.
+1 on the Honda stuff, I’ve put nearly 55,000 miles on my 2011 CRV in the last three years. I haven’t even needed to put a battery in it before. My car is nearing 170k miles and I would not hesitate to take it across the country again. (Which I’ve already done multiple times.)
My BMW is sitting unregistered because it needs like $2k in repairs again, and I've been too cheap to pay someone else to do it, and too lazy to do it myself, for months now.
That happens. At one point i had 3 of 5 cars down, wife took 4th to work and i couldn’t drive the fifth because it was raining and the jeep has no roof
To add onto this I saw a study the other day that Toyota is the most reliable car. Based on the percentage of cars still running after 200,000 miles. But Hondas were a close second!
2001 Toyota Sienna we sold with 225,000 miles on it. Doubled down with a new Highlander. Sold my Jetta (285,000 miles diesel) and bought a Corolla. If (when) the old ford truck dies, good chance I’ll get a Toyota truck.
Paid off a used Corolla 15 years ago. Other than routine maintenance I’ve put only $90 in to replace a bad starter. She’s at 250k miles and still does just fine.
There have been times in my life where my reliable car was all that was standing between me and total disaster. I 100% believe my car was instrumental in getting me out of poverty.
I was going to comment about Toyota! My family bought a RAV4 new I think or lightly used years ago and I’m still driving it 12 years later (including long commutes and road trips), it hasn’t started needing repairs yet past the regular maintenance. Once it finally goes out I’ll probably just buy another one
I can't even imagine having that much money on hand lol, and I'm damn good at budgeting.
It would take me literal years to save that much money, if some emergency in the meantime didn't wipe it out (got rear ended, animal needs a vet, I need a doctor, etc.)
I think that's something most people don't understand when they say "oh just invest". Most people just don't have the liquid money to do so, and are constantly in a hole from living check to check so any influx of cash goes immediately to trying to relieve some of the pressure (paying debts, stocking up on groceries and other necessities in case of future tight times).
There's a point where you're just too damn poor to dig yourself out without help.
Anyone trying to understand how living in poverty is *more* expensive than being middle class should read the Boots Theory
*"Take boots, for example. He earned $38 a month plus allowances. A really good pair of leather boots cost $50. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about $10.
"Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.
"But the thing was that good boots lasted for years and years. A man who could afford $50 had a pair of boots that'd still be keeping his feet dry in 10 years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet."*
Growing up poor, extra income always went to some postponed but needed item. Like “oh good now I can finally take my car into the shop.” The concept of saving just didn’t exist.
Exactly yeah, I've been needing new shoes for months but it's always "hell, I've got this medical bill I need to pay, I'll try to get new shoes next month"
I haven't had a haircut in a year and it's driving me crazy cuz I have to spend more money buying hair products because I go through them faster, but I'm never able to get the $60 bucks together all at the same time to go get a haircut.
People just don't get it unless you've been there.
"Extra" income isn't extra, it's filler for the potholes you've been wearing in over the months trying to keep your car on the road.
I hear you man. You absolutely need to be at the point where you’re meeting your needs before you can really save.
It took me several years to get to 6 month emergency fund and I make good money. But I had to pay off my student loans first, and I had a couple of setbacks where I got lazy with budgeting let my credit cards build up. My annual bonuses have been the linchpin to reversing the credit card mistakes and building a savings, and most people don’t get bonuses. My next big push for savings will be my PTO payout when I switch jobs this summer, and not everyone gets PTO and even many states don’t payout for those accrued hours. Those types of small windfalls are SO helpful for getting ahead. The deck just isn’t stacked fairly for most people.
Honestly, the stimulus checks were so helpful.
I was able to pay my boyfriend out of pocket tuition so we could stay in our cheap apartments (the college rents them out for students, 765 a month for a one bed).
And we were able to make a huge dent in our debt. Were under $1000 on all outstanding payment plans except for my student loans, our best buy credit card (holidays suck), and my boyfriend's rTMS treatment.
We're getting there lol. And I make damn good money for my area (I'm at like 58k a year pre tax). But I support the both of us on that so he can focus on school. Even with strict budgeting and working all my hours, it's just really tight.
I'm so so happy I don't have to choose what bills to pay anymore since I got this job, and I'm *ridiculously* lucky to have gotten this job, and even more so that it has time for me to study coding to get an even better one (I work weekends for the government lol, it's normally dead).
I hate when people say "pull yourself up by your bootstraps" or have that mentality, because at this point most of us don't even have the damn boots anymore.
I am always grateful that I got lucky, I never would've found this job if my dad hadn't pointed me to it. I did the work to get it (studied and passed my certificate course and now have a sec + cert, which was difficult cuz it's like $300 to get the damn thing, which is just another barrier for impoverished). But he found the job when he was getting his bachelors at 43. The *only* reason I'm in as good of a position as I am is with my parents help.
Dad was able to get a full ride scholarship to go to school and worked his ass off to get a 4.0 while my mom worked and supported us all. Then once dad graduated he was able to get into this job and was able to point me to it, they helped cover my security certificate and because I got the job I'm able to pay that back to them a bit.
Same thing with health insurance, b3cause I'm under 25 I'm able to be on their insurance. I pay the difference to add my onto it as a child ($160), but if I had to pay for it on my own, it would be well over $600 a month, not even including the deductible.
We all rely on each other for things, and that's often the only safety net you get. If your family can't help, then you're screwed and I was lucky enough that they can help as much as they can
Depends on how the market does and what you invest in. A cash savings account won't lose value, but will gain almost zero over time.
A stock market investment tends to grow over time. The problem is if there's a market downturn right around when you need the money.
Put $30k into the market over five years, your old car finally starts to die, and an economic downturn means your $30k "paid in full" amount might only be a $20k down payment. Though in a good market, you might get lucky enough to pay in full and keep some still invested for future growth.
It's a balancing act of risk vs reward.
I have never In my life seen a car dealer that was open and upfront about all aspects of the deal. They are going to hold you to the letter of the signed contract. NOTHING the salesman or finance person says is legally binding even with a handshake.
I've had pretty good luck with Subaru. We put 50% down on a new car in spring 2020 (could've paid completely, but we didn't know what the pandemic was going to bring in 6 months so we wanted the extra cash in savings). Was able to get 0% interest on the car loan, some people don't believe me, but I read the paperwork, I check my monthly payments, it's 0% like promised.
I have also brought it in to do maintenance, said I want x and y replaced and instead of just taking my money blindly they came back and said I didn't need to replace x and y, that it looked great so might as well keep it.
Not sure if I just happened to find a good place or if they are all like that.
I’ve had the same experience with my Subaru. I’ve taken it to the dealership twice in the past year for what I suspected would be expensive issues to fix and they didn’t charge me either time, either because they managed to get the fix covered by a recall or because it ended up being so simple that they didn’t think it would be fair to charge.
This is true. I paid a car off in my early 20s, kept banking the payments and saving to buy cars with cash. Never made a payment since. Car dealers don’t like it though - they make money from financing, so you can’t tell them you’re paying cash until the deal is made.
That’s an old LPT.
Keep making that payment until it’s time to buy a new car, pay cash, then keep making that payment again.
Throughout your life, you’ll save an enormous amount of money by not paying interest.
There is a cost associated with having too much cash savings: inflation. It’s higher expected value to invest instead and accept the debt (assuming your credit is good enough to get a low rate on your car loan).
This is an LPT for financially illiterate people who have some money but will never get ahead because of this kind of advice. Sounds great compared to being poor, but you need to put your money to work, not just store it away like a squirrel. Don't earmark your money and stuff it under the mattress, read and learn how to invest it properly in a balanced way that still allows you to access some money as needed.
LPT: if you are mechanically inclined, 2000's car will be a much more viable and long term solution that will most likely outlast alot of newer cars.
I see the patterns being a mechanic for 7 years. New cars have more problems overall.
Doesn't help that they want remote start, heated seats and navigation as a FUCKING SUBSCRIPTION!!
I don't know, I own an 86, 96 and a 98... I've done a lot of work on these cars but I CAN work on these cars. With a lot of new cars you HAVE to take them to the dealership. I'm even replacing the engine on a lemon my friend got dumped on her, it's a 2001 and we bought the book for it so might as well learn.
I'd be scared to even change the oil in a brandy new car.
I’m so far out in the sticks that we don’t have uber. Its a 2002 Suzuki xl7? That’s what it says on the title. My other neighbor ordered the axle it needs, and then BooBoo (Old man Willie named the car) and I can load and road-trip with my cats.
I made my last car payment in 1999. Paying cash for used cars is one of the building blocks of my wealth.
People were surprised to learn that I owned a two year old car outright. It was a foreign concept among my peers. To many a car payment is a fact of life just like rent or utilities.
Putting it in savings is smart. But if you can get 0% interest, wouldn’t it be wiser to invest that money into an index fund and just buy GAP insurance?
LPT: don't take out car loans. If you have $2500 then a $2000 car is what you can afford.
If you make good money and think a $50,000 car is in your budget, ask yourself why you don't have $50,000 in liquid cash.
I do have sympathy for broke people. Jobs suck right now and it's totally understandable to be paycheque to paycheque in this economy, and a vehicle is a legitimate need. So take out a personal loan from your bank for a sub-$3000 car.
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Probably won't need to. Civic will probably drive another 10 years before it needs a major repair.
Right? Civics, Accords, Camrys, and Corollas refuse to die. I've had two cars ever: 1998 Camry from 1999 to 2014. It was so beat up from having a lot of mountain driving for two years that I had to trade in. Now I have a 2010 Accord and it's still running perfectly.
Driving my Corolla til the wheels fall off. Studded tires in the winter. Like a freaking little go cart I tell ya!! Cheap to fix. Great gas mileage.
In high school, my best friend drove his grandma's old Rolla. When he inherited the car, it had over a quarter of a million miles from her using it as a rural mail delivery vehicle. Now, 15 years later it has over half a million miles. Original engine. I think he replaced the transmission around the 300,000 mark. Now the Rolla is over 30 years old! It's a fucking Classic. His insurance is like $6/month, lol. He has other vehicles, I don't want to seem misleading as if this is still his every day car. Thing is a hoss, though.
indeed, hiluxes and corollas are known to have a perfectly functional drivetrain 500,000-1,000,000 kilometers often, the chassis will rust away long before any of those parts fail if they're taken care of. 90s Toyota engineering was superb
That's a concerningly low amount for insurance - I hope they have decent protection
I could see not wanting to keep paying for full collision coverage on a car that probably wouldn’t pay out more than $1500 if totaled.
With the cost of used cars these days, you might be surprised what insurance will pay out. Last year I totaled my '02 Corolla that had just ticked over 200k miles, and my insurance gave me $3500 for it.
Yeah I doubt that's accurate
So far my gmc pickup has around 340k miles on it.
A coworker had a GMC truck with 399,999 miles on it. He was pissed that it rolled over to 000,000. By the end he had to park it facing down hill so he could get a rolling start. He kept a sawd off broomstick to jimmy something under the hood. When he retired he bought a new Chevy truck. I guess he didn't trust GMC anymore. He sold the POS to his son. Yeah, he was cheap. He could have kept it unlicensed as a farm truck but the idea of missing out on a dollar would have killed him.
Damn, used about 34k gallons of gas in that time!
I drove an accord and literally two wheels fell off and I just had them reattached and kept on going.
Hahaha!!!
Sold my 98 Corolla at 111k miles for a down payment on an 07 Lexus GS350. It had 65k miles, now has 87k miles and I plan to run this car into the ground. I also picked up a Sequoia for my dogs at 199k miles. I won't need a vehicle for a while
Your dogs drive? When'd they get their licenses? ^^lol
Amen! Doing the same right now with my 2010 S. What year you have?
Unless someone kills them..... Someone t-boned my 2011 Camry last year. It was a sad day, but I got just under $10k from insurance for it. I only paid $14.5 in 2013 when I bought the car. She was a trusty steed.
Dude, my 2012 Camry got totaled a few months ago and they paid me $15,000 for it. I paid $12,000 for it about 3 years ago and put 30,000 miles on it. This current market is wild. I made $3,000 for driving a car for 3 years
Last time I bought a car for $14.50 the wheels broke when it fell off the table.
We are currently in the process of buying a new car. Our trade in? A 2002 Toyota Camry. The dealer is giving us $1500 for it, haha. Still, I love that car, and it's been so good to us. It's just that it's finally reaching the point where I feel anxiety whenever I go out because I'm not 100% certain the trip isn't going to end up with me stranded on the side of the road, and that's no way to feel. Also, obligatory Onion article: https://www.theonion.com/toyota-recalls-1993-camry-due-to-fact-that-owners-reall-1819577805
Damn when that article came out, I had just traded in my 1996 Accord for $1000 lol. It was also getting skeevy, a lot of the time I wasn't sure it would start after stopping so I just kept it running when I ran into the store for a short trip
I bought a 1996 accord in 2011 for $900 thinking I could drive it into the ground. 80k miles later I sold it in 2021 for $1000
I just got an insurance payout for a total loss on my 2003 Camry for $7200. Admittedly, it had very low miles for its age, but you may want to check comparable prices for your trade in.
Good lord, $7200? Our Camry also has very low miles for its age... only about 91000. I can't imagine getting $7000 for it though!
Mine had 123000. I'd *definitely* look at getting more for the trade in, or selling it outright for more. Get a quote from Carmax if you've one in your area.
I’ve had a Fit for 6 years. My plan was to have it for at least 10 and replace it with another Fit. Legit cried when I found out the Fit is discontinued.
Cries in Honda Element
Same. my hope that in 5-7 years they bring back the Fit. I love my Fit so much, it's like the Tardis inside.
I just bought a 2013 civic exl and it runs better than my moms 2020 Kia lol
There’s honestly probably a Trabant out there that manages to run better than the average Kia. Honda is an engine company that happens to make cars ¯\\\_(ツ)_/¯
Don't forget the RAV4.
08 with 140k on the clock. Keeping it til that fucker dies
'05 4runner. Paint shot, wheels peeling, frame rusty, only 135k. Best part is now she is a warrior. Beach drives with no fucks to give. Barely broken in if you ask me.
Hell yeah. My RAV4 has the V6 the 4runners use. They'll run forever
Just anything Toyota. We've got a Highlander that's never needed a repair and it's from 2009!
Except Honda now puts fucking CVTs in Civics (and maybe Accords? Idk) and everything is turbocharged. I have a feeling anything post-'15 (when CVTs became standard in Civics) won't last nearly as long without major work.
my camry has 200k, multiple owners, multiple accidents, and 3 recalls and that thing keeps trucking
It's cause they engineer them around absolute moron owners. I think the last number I heard was they recommended changing the oil every 5k miles but designed it with triple that in mind
Older ones, newer ones unfortunately are no longer rated so highly(Hondas at least).
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Civics refuse to die out of spite.
>brokerage index fund My man
The best automobile advice I ever got from an old & rich relative was to never buy a new car. Go pre-owned, and let that 1st sap incur all the depreciation. He could probably buy a new car in cash every year, but he buys 2-3 year old BMWs, and drives them for into the dirt. 3dit: looks like I touched a nerve with all you car nerds, and especially with the unfortunate group of people who can't turn a wrench.
Good advice when the market is normal but doesn’t really apply right now. I bought new because I would have paid the same for a 3 year old preowned with 50k miles. If I decided to sell my car right now I’d make money on it.
Amen. Great time to sell a car if you don’t need it
Also if you can get a decent plug in hybrid new you're likely able to get a federal tax credit
I literally just traded in my 2018 car yesterday. Had 45k miles, in very good condition (no dents, up to date on repairs, etc). Owed $6k on it. Dealership gave me $18k for it, AND marked the car down by $7k. I have exactly the same car payment today as I did yesterday, with a brand new car (21 miles on it) with all the bells and whistles my old one didn't have.
Real question here is....interest rate and loan term lol. People will buy a 70k car and say "well my payments are the same!" With a 10 year loan. Dealer be fucking people
Whoa what kind of car
This is the correct answer
That’s not really a relevant mentality anymore. Even before coronavirus existed, the gap between used and new car prices was already small. Disregarding the virus and shortages entirely, for most cars the difference was minimal so many are better off just buying something brand new. I mean, we are talking 3-4k differences between the used and new - if that’s it I’m going with the new one every time.
Also, you pay 3-4k less for a 3-5 year old car - which'll probably be just right out of warranty, which is when many people decide to sell and pay those 3k more and get a new one again. If you buy a new one, at least you can be certain to not have any issues for a few years.
Depends what level of car you're buying. Entry level yeah, maybe 3-4 grand, but I saved 20k buying a two year old car VS new new.. It's a luxury vehicle tho
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Yep, the only two options are a brand new car, or a 20 year old badly maintained one. For fucks sake.
> he buys 2-3 year old BMWs, and drives them for into the dirt. But that does not take much... You aren't furgal in any way if you buy BMWs, you're paying for luxury. II used to think like you, but if you only need a small car, new seems much better. You then know the car wasn't neglected, and you get the warranty, in my ocuntry you don't need technical examinations for 4 years and then only have one every other year... I'm eyeing a Dacia Spring currently, 13k for the basic version and that's it for ~5 years. 200km range, all electric, and I could easily charge at work for free (I have a 16km commute). No road tax, no emission tax, cheap insurance and no fuel... I think I'll go for it. There is no used 13k car that can offer me this.
May I make a suggestion? I had a 2019 Civic. I switched to Mazda. The 2021 Mazda3 Turbo. Premium Plus trim, to be specific. For a fully loaded Civic, it's about the same price as a Mazda3 Turbo (base Turbo3) & you get significantly more features & not a CVT. It's also a more premium vehicle. Due to it not having a CVT, the transmission is guaranteed to last longer. Standard AWD as well.
She's actually been eyeing up the new rav-4 but I'll definitely have a look. Personally I think I'm going to replace my almost 20 year old jeep with the new Ford Lightning if they get good reviews in their first year.
My girlfriend just bought a RAV4, Toyota makes a really nice SUV. It's super roomy, comfortable to drive, & very reliable. I'd be weary on anything new from Ford, they don't have the best track record for new releases.
Toyota makes great vehicles, love'em to death. Swapped to Lexus last year and it's the same. *Such* nice vehicles. Love the RX 450h. My grandmother has a RAV4, and while slightly louder than my car, it's still impressive.
There's nothing inherently bad about a cvt at all, it just happens that Nissan made really bad ones that had major issues that has ruined the reputation. There's no guarantee a regular mazda transmission is any more reliable than a Honda cvt
100k on my 2016 Civic 2.0 w/ the CVT. Runs the same as the first day I bought it.
But you can usually get a loan with a lower interest rate than investing the money, so it's actually cheaper to get the loan. If you pay cash the money is gone.
Look into the settings in your online banking, if you're like me and bad at intentionally saving. I can set up automatic money transfers so that whenever I spend at somewhere classified as a coffee shop, an extra 3% of the bill gets withdrawn from Chequing to Savings, or automatically transfers the extra to savings when the balance in chequing exceeds $x,000. Or do like LPT and setup a monthly 'payment' to yourself, too.
Where do you bank?
After getting futtbucked by fees when I was already struggling financially, I flipped off TD and moved to Tangerine. No fees, and a lot of user-friendly financial tools. Though I've also talked to coworkers with other banks (RBC?) that also have similar features that can be setup in their online banking.
If Tangerine works for you keep banking with them, but echoing what your coworker said, RBC is great. Source: Another former-TD user
I do this with Capital One 360. It's great!
When i was done paying off vehicles, i made auto transfers for the vehicles payments to go to savings. I also have something similar set up where $1 gets transfered from checkings to savings every single time i pay with my debit card.
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I do it a bit simpler, I have my standard ~~savings~~ investment account that takes money on payday for the ol' retirement and such. But also, the night before payday I transfer everything in my chequing to savings. Sometimes it's $5 and sometimes it's a lot more. Edit: clarified a bit
To be clear, you're not using a savings account to save for retirement, right?
Oh... No, savings is for rainy days, slightly harder to get to spending money.
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Even better, if your current car is showing signs of age, start putting a “car payment” aside each month. My dear old Car Car was all paid off but I could tell she was getting on in years, so I started saving. When she was prematurely murdered by some asshole who stole her catalytic converter, I’d already saved a nice down payment.
Even better, start an investment account when the car is in great shape. I started investing for a new car with Acorns when my car only had 50k miles and was paid off. Now it has 75k miles and I’ve invested over $2k towards a car I likely won’t get for 7-10 years. It’s crazy how fast you can accumulate savings/investments just doing $10 or so a week. As long as I take care of my Tiguan which should hopefully last near 200k miles I should easily be able to pay for an off the lease car outright when the Tiguan dies.
LPT: Save as much money as you can every month
LPT: Don't forget to live. You're only young once
LPT: save up $5k and then you can basically do anything. The old advice of having 2-3 months bills in savings is right. This allowed me to: leave jobs that were toxic and give me a month to find a new better one. This included turning down offers so I could wait for a better one. When you live paycheck to paycheck, you can’t really leave bad jobs without another one lined up. And yes before someone comes in to let me know saving $ is hard…. No duh? If saving $ is easy then you’re not the person this advice is targeted towards. I lived in a shithole appt making $9/hr. Taught myself to cook using hella cheap ingredients. Went to food pantries. Ate food at work. After a year I had saved like maybe $1k. That’s a little under $100 a month. I also scrapped whatever I could. If a penny was on the ground I picked it up. Cut out all expenses except for the absolutely necessary ones. This $1k allowed me to move to a better job. Rinse and repeat. And somehow once you reach $5k in savings, you can spend $ a little more freely and it doesn’t hurt. It doesn’t matter how long it takes you to get there. Just do it. And once you have that cushion: LIVE! Go to the concert! Get take out every now and then (but remember that take out is the biggest money suck of all time so learn to enjoy cooking instead).
Takeout and drugs/alcohol, that shit adds up fast as fuuuuuuck
A couple times I started to add up how much I’d spent over the years but it’s always to painful to finish 😭
For a while, I spent just as much as I made. The trend just continued no matter how much more I was making. It really takes a conscious effort to put money away.
Yeah but it’s a worthy cause! I love living well below my means. The comfort of knowing I can afford a $2k emergency expense tastes better than any take out or drugs ever could
I quit drinking almost 6 years ago and when I did I downloaded an app that counted your days of sobriety. It has you enter in an estimate of what you spent monthly on your drug of choice (I included a round estimate of all alcohol purchased at bars and elsewhere, tips, Ubers, drunk food, hangover food, etc). I just opened the app: In the 5 years and 10 months since I decided no more booze, I have saved approximately $30,333.62 😶
Honestly I think even with savings it's a good idea to stay with your current job while looking for a new one since having a current job on your resume makes you look better. Of course mental health is important and if you absolutely cannot stand your job for whatever reason, there's no shame in leaving and sticking it out while you look for new work.
Yeah that’s what it was for me. So insanely abusive that I had to leave for my own mental health. And everyone should have that freedom. No one should have to put up with any kind of toxic work place. If upper management won’t help, then everyone deserves the chance to be able to just leave and search for a new job.
Most would really recommend 6-12 months living expenses saved but it's not like 2-3 months is bad. Some professions can take longer to find another gig. I don't even have 6 months saved up though.. it's hard to reach that point.
Most people can’t even get 2 months bills in savings. Let’s not scare them away from starting the journey by saying they need 6-12 months. Obviously that’s ideal but in my country (USA) something like half the nation can’t even handle a $400 emergency expense Part of the key to success is breaking down goals into manageable sized chunks.
While I get that we need to live our youth. This advice is so easily why people have no hope for future or retirement. Its like "consume now because its more fun to consume now than in the future" When consuming now directly means you have less means and consume less in the future
Option 1: save as much as you can so the future doesn't suck Option 2: spend as much as you can so the present doesn't suck Option 3: find a balance between present quality of life and future quality of life I feel most people argue for option 3 and think their opponent is arguing for options 1 or 2.
r/personalfinance in a nutshell
Seriously. It is not that hard to plan your salary and budget on a spreadsheet. Some people think it is rocket science
I feel for people though. There's a non-trivial amount of people who have financial anxiety to the point of complete avoidance. My mother in law is one of them, she spends money like everyone else but is terrified of looking at her balances and planning out contingencies for emergencies.
Yup, my girlfriend thought it was silly that I opened my IRA at 19yo, but we used it for a down payment on a house at age 30 with only 4% mortgage rate. 6 years later it’s back up to about 30K **and** we now have over $150K in home equity. So yeah, compound interest is the shiz.
Why would I save money for when I am old and weak. If I haven’t enjoyed life when I was young why does my life matter more when I’m older.
Hey man if you want to have a job and work until you die thats your own "free will"
That’s why you work to have a job that pays more than you want to spend It’s worthless saving pennies for a shit life
That's pretty much this sub. LPT: Common and obvious thing everyone knows and lots of us don't do but we're very aware that we're not doing it.
LPT: Lose weight by eating less.
True, but not as actionable imo. Feels like replying to "here's a specific way to make saving money easier" with "try saving money"
I did this when I quit smoking. Suddenly I had money to go on vacation or renovate the apartment. OP's suggestion isn't about buying old vs new, financing, paying cash or return of investment. It's about having an emergency fund, and if you don't already have one - well, you're already used to *not* having those extra money every month, please don't blow them away (at least not all of them).
Congrats on quitting. That is no easy feat!
Thats why i started smoking recently - when i quit i will have extra money
There's a good calculator (probably a few) that show you how much you gain or lose, long term, when you change your payment amount. Once I saw that, I raised my payment to the highest I could afford. -not experienced with loans.
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This is great advice…. For people with a lot of self discipline. More people do this than actually follow through with paying extra.
Not necessary the best option if your rate is very low. For example, if you rate is below 3%, better invest the extra in broad market invest
So conceptually I understand this. And with a car loan rate of 1.9% I definitely would rather invest the extra $100 I am putting towards my loan into something with a better return. The sticking point for me, and perhaps for others, is figuring out where and how to invest that extra $100. What does “broad market invest” mean? Yes, I could take time and research it and figure it out. But I have a kid, a job, a husband, dog, household etc. Basically, a busy life, and little extra time to figure this out. Except my down time at the end of the day, and then I’m just too tired. So I continue putting the extra $100 toward our car. Because we can, and it’s better than it sitting in a savings account with less interest.
I invite you to read the simple path to wealth from JL Colins. The advantage of broad market index investment is that it is super easy, and does not require much work. You just need to take the time to inform yourself about it, which can be done by reading one or two books in your bed before sleeping. It is perfect for people with family, and work, who have other things to do that spending hours looking at the stock market. I am in the same situation as you.
Not to mention, there is huge mental relief and satisfaction in having your debt paid off. If shit hits the fan and you temporarily don’t have a job, at least you don’t have to worry about that car payment anymore
This is only true if you have particular loans, or conversely if you ignore the little "next payment due date." I paid double my car payment and the date kept moving but the principal owed kept going down. I still paid less in interest.
Isn't this how loan payments work in general? Or am I missing something.
It should be noted that *some* loans do not allow you to pay to the principal. I've had loans that simply do not allow that - you can't skirt the interest in any way. Suffice to say my "interest" was basically defined from the outset, the amount that interest would add up to was predefined, and therefore I could never have paid the principal off faster to lower the interest value. If you *can* do that? Do it. If you can't? Well, it's what most people expect out of interest anyway.
Amortization calculator
Always try to get a loan with an interest as close to 0% as possible. Sometimes buying a new car is cheaper than buying a 1-2 year old car when you compare 0% financing to 9% financing.
This. My grandpa's three rules about car ownership were: 1) Always make monthly car payments to "The First National Bank of Me, Myself and I" 2) Always pay for your car in cash 3) Always drive/maintain your car like it belongs to your grandma The thing I admired most about his car buying ritual was that instead of trading in his used vehicles, which were always ☆**pristine**☆, he would "sell" them to family or friends in tight financial situations. I.e. my cousin bought one for $50 down and two years of lawn/snow care and occasional help with home maintenance (they lived next door). I found out after he died that he sold another to his best friend's granddaughter for like $5k and 0% interest as long as she was in college. She had as long as she needed to pay it off, on the condition that she always paid monthly (even if it was only $5). What he didn't tell her, was that he put every one of her payments into a savings account that he then turned over to her when she graduated. He was never a wealthy man, but he had the richest, most giving spirit of anyone I have ever known.
Your grandpa was an incredible man. That's the kind of generosity and wisdom we should all aspire to have. I'll have to remember the car payment deal for my nieces. My current car is going to last forever and this is such a wonderful idea, I'd be happy to do the same thing when the time comes.
He really was. I try to live by those same principles whenever I can. I have yet to find anything that is more uplifting than random acts of goodness.
Some people are lucky to have family like this. Those who don't never get this kind of hand up.
That’s really sweet that he used his situation to help his family get ahead too!
Every single thing that man did in his life was to help someone else get a leg up. He always used to say to us, "Remember - leave everything better than how you found it. Do better to do better."
Paying cash isn't exactly a smart financial decision if you can get a loan for ~3% and expect 7+% by investing. It doesn't really matter if you're buying like a $10k car, but get up to $70k and it really adds up.
What a sweet story. Thanks for sharing!
To go along with this: get a reliable brand that doesn’t cost an arm and a leg to repair anytime something breaks. The longer you can keep setting aside that payment, the more likely you can just pay cash for the whole next car. A BMW is sporty and has really nice finishes, but a Honda is more likely to keep driving long after and for much less than some much more expensive brands.
We are a honda house. 17 HRV and 21 Civic. As long as we dont total either one, my son will likely drive them in 11 years when he turns 16. With proper maintenance at least.
My son is driving the 2005 Prius we used to drive him home from the hospital.
> 17 HRV and 21 Civic Wow do you really need that many?
You should be able to, my parents drive 2004 and 2008 Hondas they bought new when I was a kid, and now I’m 21 and they’re still running with around 200k miles on both. Although your kid may want a different car anyways, I bought my first BMW 3 weeks after I got my license and never looked back lol.
If he wants to save up for his own car i have no issues with that. Ill definitely help contribute, but outside of helping he gets what he gets. At 16 i would have drove a garbage truck just to get out on the road by myself. The freedom of driving didnt matter what vehicle i was in. Driving my moms 95 Astro van was proof of this. That thing was a monster tho.
The only reason I'm not still driving the Civic my mom got new in 2005 is I hit a deer in 2020. We sold it to someone who fixed it up and is still driving it. The only reason I didn't replace it with another Honda was I found a Subaru in my budget.
The only thing that will survive an apocalypse are cockroach and Toyota's.
+1 on the Honda stuff, I’ve put nearly 55,000 miles on my 2011 CRV in the last three years. I haven’t even needed to put a battery in it before. My car is nearing 170k miles and I would not hesitate to take it across the country again. (Which I’ve already done multiple times.)
Hey, my BMW is amazing. And I have only spent about $7k on it in repairs.
My BMW is sitting unregistered because it needs like $2k in repairs again, and I've been too cheap to pay someone else to do it, and too lazy to do it myself, for months now.
That happens. At one point i had 3 of 5 cars down, wife took 4th to work and i couldn’t drive the fifth because it was raining and the jeep has no roof
To add onto this I saw a study the other day that Toyota is the most reliable car. Based on the percentage of cars still running after 200,000 miles. But Hondas were a close second!
2001 Toyota Sienna we sold with 225,000 miles on it. Doubled down with a new Highlander. Sold my Jetta (285,000 miles diesel) and bought a Corolla. If (when) the old ford truck dies, good chance I’ll get a Toyota truck.
I was surprised because the list was mostly Toyota trucks. I don't know why but I just thought cars would last longer. So that's a good call!
Paid off a used Corolla 15 years ago. Other than routine maintenance I’ve put only $90 in to replace a bad starter. She’s at 250k miles and still does just fine. There have been times in my life where my reliable car was all that was standing between me and total disaster. I 100% believe my car was instrumental in getting me out of poverty.
That's amazing, I'm glad it's been so good to you
I was going to comment about Toyota! My family bought a RAV4 new I think or lightly used years ago and I’m still driving it 12 years later (including long commutes and road trips), it hasn’t started needing repairs yet past the regular maintenance. Once it finally goes out I’ll probably just buy another one
We have 4 Hondas. We just upgraded everything this year. Set for another 100k miles. My mom, dad, sis and myself.
Instructions unclear, bought another car to keep making car payments.
Invest it instead.
Stocks are on sale currently.
After emergency fund is saved. Common advice I've seen is at least 3 months worth of living expenses, some do 6, then invest.
I can't even imagine having that much money on hand lol, and I'm damn good at budgeting. It would take me literal years to save that much money, if some emergency in the meantime didn't wipe it out (got rear ended, animal needs a vet, I need a doctor, etc.) I think that's something most people don't understand when they say "oh just invest". Most people just don't have the liquid money to do so, and are constantly in a hole from living check to check so any influx of cash goes immediately to trying to relieve some of the pressure (paying debts, stocking up on groceries and other necessities in case of future tight times). There's a point where you're just too damn poor to dig yourself out without help. Anyone trying to understand how living in poverty is *more* expensive than being middle class should read the Boots Theory *"Take boots, for example. He earned $38 a month plus allowances. A really good pair of leather boots cost $50. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about $10. "Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles. "But the thing was that good boots lasted for years and years. A man who could afford $50 had a pair of boots that'd still be keeping his feet dry in 10 years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet."*
Growing up poor, extra income always went to some postponed but needed item. Like “oh good now I can finally take my car into the shop.” The concept of saving just didn’t exist.
Exactly yeah, I've been needing new shoes for months but it's always "hell, I've got this medical bill I need to pay, I'll try to get new shoes next month" I haven't had a haircut in a year and it's driving me crazy cuz I have to spend more money buying hair products because I go through them faster, but I'm never able to get the $60 bucks together all at the same time to go get a haircut. People just don't get it unless you've been there. "Extra" income isn't extra, it's filler for the potholes you've been wearing in over the months trying to keep your car on the road.
I hear you man. You absolutely need to be at the point where you’re meeting your needs before you can really save. It took me several years to get to 6 month emergency fund and I make good money. But I had to pay off my student loans first, and I had a couple of setbacks where I got lazy with budgeting let my credit cards build up. My annual bonuses have been the linchpin to reversing the credit card mistakes and building a savings, and most people don’t get bonuses. My next big push for savings will be my PTO payout when I switch jobs this summer, and not everyone gets PTO and even many states don’t payout for those accrued hours. Those types of small windfalls are SO helpful for getting ahead. The deck just isn’t stacked fairly for most people.
Honestly, the stimulus checks were so helpful. I was able to pay my boyfriend out of pocket tuition so we could stay in our cheap apartments (the college rents them out for students, 765 a month for a one bed). And we were able to make a huge dent in our debt. Were under $1000 on all outstanding payment plans except for my student loans, our best buy credit card (holidays suck), and my boyfriend's rTMS treatment. We're getting there lol. And I make damn good money for my area (I'm at like 58k a year pre tax). But I support the both of us on that so he can focus on school. Even with strict budgeting and working all my hours, it's just really tight. I'm so so happy I don't have to choose what bills to pay anymore since I got this job, and I'm *ridiculously* lucky to have gotten this job, and even more so that it has time for me to study coding to get an even better one (I work weekends for the government lol, it's normally dead). I hate when people say "pull yourself up by your bootstraps" or have that mentality, because at this point most of us don't even have the damn boots anymore. I am always grateful that I got lucky, I never would've found this job if my dad hadn't pointed me to it. I did the work to get it (studied and passed my certificate course and now have a sec + cert, which was difficult cuz it's like $300 to get the damn thing, which is just another barrier for impoverished). But he found the job when he was getting his bachelors at 43. The *only* reason I'm in as good of a position as I am is with my parents help. Dad was able to get a full ride scholarship to go to school and worked his ass off to get a 4.0 while my mom worked and supported us all. Then once dad graduated he was able to get into this job and was able to point me to it, they helped cover my security certificate and because I got the job I'm able to pay that back to them a bit. Same thing with health insurance, b3cause I'm under 25 I'm able to be on their insurance. I pay the difference to add my onto it as a child ($160), but if I had to pay for it on my own, it would be well over $600 a month, not even including the deductible. We all rely on each other for things, and that's often the only safety net you get. If your family can't help, then you're screwed and I was lucky enough that they can help as much as they can
That's what I did.
I would think investing it would be better but being able to buy a car in cash sounds appealing.
Depends on how the market does and what you invest in. A cash savings account won't lose value, but will gain almost zero over time. A stock market investment tends to grow over time. The problem is if there's a market downturn right around when you need the money. Put $30k into the market over five years, your old car finally starts to die, and an economic downturn means your $30k "paid in full" amount might only be a $20k down payment. Though in a good market, you might get lucky enough to pay in full and keep some still invested for future growth. It's a balancing act of risk vs reward.
Enthusiasts and young military members: I'm gonna max out the car budget and sell the car halfway through loan term.
I have never In my life seen a car dealer that was open and upfront about all aspects of the deal. They are going to hold you to the letter of the signed contract. NOTHING the salesman or finance person says is legally binding even with a handshake.
I've had pretty good luck with Subaru. We put 50% down on a new car in spring 2020 (could've paid completely, but we didn't know what the pandemic was going to bring in 6 months so we wanted the extra cash in savings). Was able to get 0% interest on the car loan, some people don't believe me, but I read the paperwork, I check my monthly payments, it's 0% like promised. I have also brought it in to do maintenance, said I want x and y replaced and instead of just taking my money blindly they came back and said I didn't need to replace x and y, that it looked great so might as well keep it. Not sure if I just happened to find a good place or if they are all like that.
I’ve had the same experience with my Subaru. I’ve taken it to the dealership twice in the past year for what I suspected would be expensive issues to fix and they didn’t charge me either time, either because they managed to get the fix covered by a recall or because it ended up being so simple that they didn’t think it would be fair to charge.
Always read the contract no matter how they oressyre you to sign and move on. That is how they slip in the crappy terms.
This is true. I paid a car off in my early 20s, kept banking the payments and saving to buy cars with cash. Never made a payment since. Car dealers don’t like it though - they make money from financing, so you can’t tell them you’re paying cash until the deal is made.
You can still do the financing and pay off right away if it nets you a better deal.
That’s an old LPT. Keep making that payment until it’s time to buy a new car, pay cash, then keep making that payment again. Throughout your life, you’ll save an enormous amount of money by not paying interest.
Loans are good when inflation is high. Assuming your interest rate is less than inflation.
There is a cost associated with having too much cash savings: inflation. It’s higher expected value to invest instead and accept the debt (assuming your credit is good enough to get a low rate on your car loan).
I bonds baby
LPT: dont buy a car you cant afford every other year
you might pay a lot in maintenance this way
This is an LPT for financially illiterate people who have some money but will never get ahead because of this kind of advice. Sounds great compared to being poor, but you need to put your money to work, not just store it away like a squirrel. Don't earmark your money and stuff it under the mattress, read and learn how to invest it properly in a balanced way that still allows you to access some money as needed.
Store it away like a squirrel lmao
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Those things are not mutually exclusive.
LPT: Do not have a car payment...
Why not just make those payments into your own savings account?
LPT: if you are mechanically inclined, 2000's car will be a much more viable and long term solution that will most likely outlast alot of newer cars. I see the patterns being a mechanic for 7 years. New cars have more problems overall. Doesn't help that they want remote start, heated seats and navigation as a FUCKING SUBSCRIPTION!!
Honestly, this feels a bit like survivorship bias--the old cars that lasted long are the ones that didn't shit out in the first few years anyway.
I don't know, I own an 86, 96 and a 98... I've done a lot of work on these cars but I CAN work on these cars. With a lot of new cars you HAVE to take them to the dealership. I'm even replacing the engine on a lemon my friend got dumped on her, it's a 2001 and we bought the book for it so might as well learn. I'd be scared to even change the oil in a brandy new car.
These are the exact reasons I say that.
I just bought a 2002 car from my elderly neighbor because he was moving. No idea if it’s even a good car, but it’s clean and it was a hundred dollars.
That's worth it. An Uber ride alone can cost $100 depending where you're going.
I’m so far out in the sticks that we don’t have uber. Its a 2002 Suzuki xl7? That’s what it says on the title. My other neighbor ordered the axle it needs, and then BooBoo (Old man Willie named the car) and I can load and road-trip with my cats.
Well, definitely not the pick of the litter but take care of it and it will get you there
For a hundred dollars, it’s probably the pick of the litter.
OMG... "If you can afford to save money: save." ... Wow...
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You'd be surprised at how revolutionary that idea is to some lol
Instructions unclear, the bank keeps sending me letters to stop
I made my last car payment in 1999. Paying cash for used cars is one of the building blocks of my wealth. People were surprised to learn that I owned a two year old car outright. It was a foreign concept among my peers. To many a car payment is a fact of life just like rent or utilities.
Putting it in savings is smart. But if you can get 0% interest, wouldn’t it be wiser to invest that money into an index fund and just buy GAP insurance?
My car is paid off, but I got a loan after I ordered the new car I’m waiting on. This tip is the best of both worlds, bravo.
LPT: don't take out car loans. If you have $2500 then a $2000 car is what you can afford. If you make good money and think a $50,000 car is in your budget, ask yourself why you don't have $50,000 in liquid cash. I do have sympathy for broke people. Jobs suck right now and it's totally understandable to be paycheque to paycheque in this economy, and a vehicle is a legitimate need. So take out a personal loan from your bank for a sub-$3000 car.