Thursday, February 23, 2006

New Car Concern #1

The Young Professionals have been having a lot of conversations lately about cars. The reason for these conversations is because one of us needs to get a new car since the "Purple People Eater" (purple Dodge Neon) is leaking gas and that just seems a little dangerous. In order to not get blown-up when pumping gas, LDB decided it was time for an upgrade. She is thinking about getting a new Pontiac G6 hard-top convertible that costs just under $30,000. Some of the Young Professionals think that it is a waste of money, others do not.

Buying a new car is a really tough topic for me to think about. I currently drive a 7-year old Honda Civic that I bought for $16,000-$17,000 back when I first started work and it has been a great car thus far (knock on wood). I just cannot imagine buying an expensive new car. They depreciate so quickly after you buy them...I cannot think of anything else that loses thousands of dollars as soon as you walk out of the store. It is just not something that I can get myself to "invest" in. There are so many better ways to invest that extra 10-grand you could save if you buy a cheaper car.

To top it all off, when I asked her how much the monthly payments on a $30k car would be, she said that it was about $420 a month. I didn't think that would be possible as the payments on my Civic we about $380 a month. So I called her on it and then she mentioned the reason it was so cheap...7-year financing. I wasn't even aware that was an option with a car, I believe my only options were 3, 4, or 5 and I took a 4-year loan on my car.

My overall thoughts on cars are that they are awful investments, but I do sort of understand people wanting to buy a nice new car. You may think, from my statements thus far, that I do not crave expensive new car, but you would be very wrong. I absolutely love the Nissan 350Z, the Mazda RX-8, and just about any form of BMW, but I force myself to control the urge to get one of these beauties because they are not worth it. Could I afford it, sure, but then I wouldn't be able to invest as much per month as I am now. This all comes back to a discussion I often have about whether we should live for the now and just get what we want or should we live below our means now and save everything for when we retire? Always a tough call because part of me says that I would rather have nice things now when I am young and can really enjoy them than when I am older and sitting on my couch being grumpy.

10 Comments:

Blogger Skyedyver said...

This was a hard one for me too. I ended up buying the car of my dreams, a Jaugar XKR, but the payment is crazy: $845/month! Ouch! I have no (other) debt, and max out retirement accounts, and I'm saving/investing close to 30% of my gross... but debt is debt! I enjoy the car, but sometimes do think "I could be saving even more!" It was the whole "balance" philosopy that allowed me to go ahead and do it... but I DO want to pay it off as soon as possible!

2/23/2006 2:36 PM  
Blogger pyroracing85 said...

ahh don't sweat it.. Why do you need to purchase new though? I just bought an '87 mustang for 3k and I LOVE IT... It gets good fuel mileage. Very fast =) heheh and the motor is really strong.

Just research your vehicles a little.

Also a lot of the older cars you could see as an investment. Like for instance. I bet I could see my car for 3k or maybe more. I would be happy with 3k. It is like I am driving it for free. But you DO need transportation.

2/23/2006 3:06 PM  
Blogger RS said...

Skye...wow, that payment is a lot. No way that I could afford that much per month (could if it wasn't for my house). It is a sweet car though.

Pyro...that sounds like a pretty good deal as long as it runs well (it is almost a 20 year old car now).

2/23/2006 3:32 PM  
Blogger pyroracing85 said...

rs,

You are absolutly right but back in high school I took auto mechanic and fortunately enough for me the mustang owners is a very close group. Some of them invited me to even hang out with them and I had one close call and the same night I was talking to them on the phone fixing it. Now try to find a mechanic that could do that OR better yet a dealer hahaha

-garrett

2/23/2006 9:47 PM  
Blogger pyroracing85 said...

By the way do you really want that c6? If I were to get a new vechile I would put myself in a volvo or something nice like that. You could get a volvo for the same price as that c6.

Just my opinion.

Better yet your bmw you can get free maintence, oil change and tires.

2/23/2006 9:49 PM  
Anonymous Hazzard said...

I have exactly the same feelings about cars. I love them, but they might as well hold a gun to me and demand all my money because the depreciation basically sucks a lot of your net worth over time. When people say don't sweat the small stuff, they are never referring to cars, that's for sure. Just imagine how many frivelous things you'd have to buy in a year to equal even $1000 in car depreciation.

I've posted a couple times on my blog about being tempted to buy a new car or truck. Luckily I've been talked "off the ledge" each time.

2/25/2006 1:16 AM  
Blogger RS said...

Agreed, you could probably get a nice size plasma screen TV with the depreciation the car takes just driving it home from the dealer.

I know that I am a weak, weak man. If it wasn't for my wife I probably would have wasted a lot of money on a Beamer by now (and I didn't even know about the free maintence, oil change and tires that pyro mentioned).

2/25/2006 1:23 AM  
Blogger pyroracing85 said...

Yea go check out that offer.

2/25/2006 10:07 PM  
Anonymous Anonymous said...

RS,
Don't do it!!! Stick with your long term goals. A new Beemer is what is called "instant gratification". You are much more savy than that. Go with a new Kia, Kia, Kia!!!! Cannot beat the warranty.
PRR

2/28/2006 8:38 AM  
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