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What kind of gas mileage do you get?
paigeoliver:
Wade, the sheer fact that you are discussing a monthly payment as is that was an important number shows me that you really don't have a handle on automotive costs. And for the record, ALL cars need maintenance.
I have been driving about 16 years, 12 of those years I drove sub $2000 clunkers. My TOTAL in repair bills from 1993 to 2007 is LESS than the $2400 you'd make in payments on that hybrid in one year, and that was if you somehow got a $22000 hybrid with $500 down for 5 years down to $200 a month, my loan calculator says that would be $428 a month. Since I am assuming that is impossible I will start talking about a new standard civic instead.
10,000 miles per year on a V8 getting 18 MPG at $3.50 a gallon costs a person $1944 a year.
10,000 miles a year on a standard 2008 Honda civic (29 mpg, which is really pitiful if you ask me) at $3.50 a gallon costs $1206 a year.
So in theory you save yourself $744 a year here, oh wait, how much extra is that full coverage insurance on that car you are financing? Better add in $500 extra a year for that. Now you are saving $244 a year. Ooh, what about property taxes on that brand new car, there goes an amount of money that is going to vary from $0 in some places up to about $900. We will assume your rates are on the lower end and merely eat up that $244.
Wow, now you have broken even.
Wait, there is more, there is about $1200 in sales tax to pay on that car. We will split that over 5 years to be nice. $240 cost per year.
Wait, there is more, to the tune of $600 a year in interest (averaged over 5 years and assuming you have good credit).
Wow, now we are $800 a year in the HOLE on operating expenses, and I haven't even TOUCHED the purchase prices of the vehicles.
Aside from that mercedes I just bought (knowing it needed a repair that would cost nearly a grand), my RECORD for repair costs in one year is only about $700 and those were ALL wear items (tires and exhaust).
I guess we could talk about the purchase prices of the vehicles, although I could line up all my cars from 1993 to 2007 with my purchase prices on the windshield and they would still add up to less than a new civic. Once I account for the money I got back from selling them (and for junking 2 of them) then I didn't spend a whole lot on purchase prices.
--- Quote from: Wade on April 24, 2008, 08:15:29 pm ---
--- Quote from: paigeoliver on April 22, 2008, 11:47:41 pm ---For that matter, the extra costs induced by new cars swallow any fuel economy savings as well.
--- End quote ---
Not true! You can buy a brand new economy car with little down or a junker for trade, for < $200/month for 5 years. That's very comparable to an old, used car's maintenance costs and higher gas costs (if a larger or inefficient vehicle). If you figure that car will likely need virtually no work or maintenance for the first 8-10 years, it's even cheaper to own. That doesn't even consider the opportunity cost of breaking down in an old car. If you make $25, $50, $100/hr, and miss an important meeting or take an unpaid day off of work, etc. then cost of breaking down is extremely significant.
Driving an older car is often a false economy. You seem to think that's never the case, but more often than not, it is.
Wade
--- End quote ---
Cakemeister:
--- Quote from: Wade on April 24, 2008, 08:15:29 pm ---If you figure that car will likely need virtually no work or maintenance for the first 8-10 years, it's even cheaper to own.
--- End quote ---
:laugh2:
Paige is absolutely right on this one. The total cost of ownership will be lowest for a junker, even a gas-guzzling junker.
That's not saying that buying the Civic, Prius or any other new car is bad or wrong. You just have to realize that you're trading off a higher total cost of ownership against the greater reliability, features, comfort, "smug", and chick-attractiveness factor of the new car.
shardian:
Newer cars can leave you stranded with about the same odds as a reliable beater - reliable being the key word.
Me personally, I am a freak and like driving beaters as my commuter. I couldn't imagine paying 10k for a car I simply drive to and from work every day. I also don't mind the occasional break down. It gets me out of work for at least a few hours. ;D
danny_galaga:
--- Quote from: Cakemeister on April 25, 2008, 09:11:32 am ---
--- Quote from: Wade on April 24, 2008, 08:15:29 pm ---If you figure that car will likely need virtually no work or maintenance for the first 8-10 years, it's even cheaper to own.
--- End quote ---
:laugh2:
Paige is absolutely right on this one. The total cost of ownership will be lowest for a junker, even a gas-guzzling junker.
That's not saying that buying the Civic, Prius or any other new car is bad or wrong. You just have to realize that you're trading off a higher total cost of ownership against the greater reliability, features, comfort, "smug", and chick-attractiveness factor of the new car.
--- End quote ---
and actually, chicks dig 'the master' more than if i had an uninteresting, but new car (",)
Jdurg:
Paige makes a lot of great points, but there are some flaws in the logic.
1. Gas doesn't cost $3.50 a gallon anymore. :P The price of gas isn't a constant rate. Unlike a car payment, the cost of gas will continuously rise so the gas cost of a gas guzzler will rise as time goes on. I don't think we'll ever see the price of gas drop over the long term ever. (My buddy has a Jeep Wrangler and he is considering not driving it anymore because he is going broke every week filling it up with gas).
2. Insurance depends on the model of your car, not the age. It costs the exact same amount of money to repair a new car as it does an old car. What matters most is the driver's gender, driving history, and model of car. (It will cost you a lot more to insure a Corvette if you're a 26 year old male than if you insured a Honda Civic as a 35 year old female).
3. With a new car, you're buying from a dealer and there will usually be a warranty period. With a used car, you're not neccessarily buying it from a dealer and there typically will be very limited to no warranty period. If your car breaks, you're forced to pay whatever cost the local auto repair shop is demanding.
4. In terms of downpayments, you'd be kind of crazy to not make a substantial downpayment on anything you buy. I bought my car back in 2003 after saving up to put a nearly 50% downpayment on the car. That made the monthly payments a complete joke in terms of cost, and I paid off my car in full a few years later. Now, the only 'costs' with the car are gas costs each week and standard maintance costs every few months. Costs due to deterioration from wear and tear shouldn't start coming into place until the car has been paid off if you made a proper downpayment. With a used car, that 'new parts and less wear and tear' factor won't be there so your maintenance costs may be rising while you're still paying off the car.
If you know a lot about cars then yeah, you can take care of many of these things on your own and not have to worry about it. Not everybody is an automechanic, however. We all don't have the time or ability to fix cars or know what to look for. You can teach me how to throw a curveball, but it doesn't mean I'll actually be able to do it. Some people are able to, and some people aren't.
Finally, car payments are a fixed cost that won't go up and won't go down. Each month, for the entire time you own the car, those payments will remain the same. The costs of gas and maintenance, however, are highly variable and can change drastically from month to month. If you have to suddenly drive quite a bit one month and the price of gas skyrockets like it has been lately, then suddenly your monthly "car costs" can exceed what you can afford. Also, if you aren't very adept at fixing cars on your own, if you get a car that's a 'clunker' that breaks down every few weeks that can cost you a fortune in terms of time missed from work, repair costs, and other costs associated with not having a car. I just don't buy the "a user car is just as likely to break down as a brand new car" line. With statistics, however, I can be swayed. If you can show me legitimate stats which show that new cars break down as often and as expensively as old cars when driven in the same manner, then I'll believe it.
I also assume that a "new car" won't need repairs done to it for a good 4, maybe 5, years unless you drive in such a manner that you're asking for your car to break.
Oh yeah. Depending on what I eat for dinner the night before, my gas can get some pretty good mileage on it. ;) :P ;D
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