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Post by Hulkamaniac on Apr 5, 2013 22:44:08 GMT -5
Is it 1/4 of the price cheaper? Normally it is. Just for example, I picked a Honda Civic since they're known for keeping their value. I looked on Honda's web site and a brand new Civic sells for ~$25k. I then went on ebay and pulled up sold cars 'cuz any fool can ask any price they want. I found an '06 w/70k that sold for $9k. I found a 2010 that sold for $15k. It had 3k miles on it and had already lost nearly half of it's value. From a purely statistical perspective a new car loses 40% of it's value in the first 3-4 years. So by the time you end up with 50k miles you're close to that 40% mark if you're not already there. 25k for a Civic? Where'd you get that from? On the Honda site the hybrid model starts at 25k. Most other models start below 20 And ebay? If you want to take the ultimate risk have at it. Any car your're getting for that cheap with that few miles has probably been totaled. That's a giant red flag that I wouldn't dare commit to. Here's what I saw on autotrader. All Civis listed under 10,000 had over 100,000 miles. That's about half the price for half the car. The best deal I saw was a 2005 Civic listed 11,990 at 60.3k miles. That's crazy low miles for a car that old. I would do a bunch of research before buying that one. Fear of it being totaled being one. Usually if there's a deal that looks like it's too good to be true...it's because it IS too good to be true. Others I saw were about 13.5 with the mileage about 50k. That's a 1/4 deduction for the 1/4 of life used. It seems kinda comparable. I picked the high end Civic, not the mid-tier ones. To be fair some of the ones I looked at might have been lower tier as well so I can't say it was a strict apples to apples comparison. Depreciation varies by model of course, but it's 37% on average over the first 5 years. So you'll lose half the value of your car more or less in the first 5 yrs and 10% the second you drive off the lot. www.edmunds.com/car-buying/how-fast-does-my-new-car-lose-value-infographic.htmlAs for the ebay car thing I completely and totally disagree. The car I have now I bought on ebay. I got a good deal on it and three years later KBB says the private party value is the same as I paid for it back then. You can get some very good deals on ebay same as you can any other used car if you know what you're looking for.
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Post by Hulkamaniac on Apr 5, 2013 23:12:53 GMT -5
It's not hard to scrape up $1-2k. Let's be honest here. If you were going to die next week unless you could come up with $1k and you couldn't borrow it, you could probably find it somewhere. You are telling me that people can afford a $300-400 car payment but can't afford to save up? That's ridiculous. Could I? Sure. I have a pretty good amount of money put away. But I'm also not 16 years old, looking to buy my first car. When I was 16, there's no way I could've saved up thousands of dollars. I was getting 20 hours/week at Best Buy at $8/hr. That came out to like $5000/yr. after taxes. So, on that kind of money you can afford a $300-400 lease payment? That's ridiculous. We all start off with beater cars. I did. I'm sure you did. I'm sure every kid does. Nothing wrong with that. Sort of true. The market did drop nearly in half, but if you had the $2 mil or equivalent of it in 1960s dollars, you'd then have half a mil. You still have way more than if you had saved nothing at all. Compound interest mein freund. Compound interest. Even if $2 mil isn't worth much in 40 years (and I agree with you that it'll be worth a lot less than it is now) that is still $2 mil you have vs having $0. Sure, but you're missing the value of having things that you want at a young age. If you want to enjoy the best days of life when you're in your 70's and 80's, then investing every dime is the way to go... If you want to still be able to enjoy your life when you're older but ALSO have a good time when you're young and can actually enjoy it, then you've got to indulge from time to time. Well, not you. But most people need to.[/quote][/quote] There's nothing wrong with indulging. Nothing at all. I think we would all agree that there's no harm in going out to eat every once in a while. Going out to eat at a fancy restaurant where they charge $200 a plate while you're working minimum wage would be a bit out of line because you can't afford it. There's nothing wrong with indulging, but indulging in things you can't afford is problematic. Can you afford the $2 mil it'll cost you? Maybe you can. Good for you. Personally, I can't.
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Post by Kliquid on Apr 5, 2013 23:21:06 GMT -5
How often does the stock market go up by 10%? Yearly? Every 5 years? 10 years?
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Post by Quanthor on Apr 6, 2013 1:53:42 GMT -5
25k for a Civic? Where'd you get that from? On the Honda site the hybrid model starts at 25k. Most other models start below 20 And ebay? If you want to take the ultimate risk have at it. Any car your're getting for that cheap with that few miles has probably been totaled. That's a giant red flag that I wouldn't dare commit to. Here's what I saw on autotrader. All Civis listed under 10,000 had over 100,000 miles. That's about half the price for half the car. The best deal I saw was a 2005 Civic listed 11,990 at 60.3k miles. That's crazy low miles for a car that old. I would do a bunch of research before buying that one. Fear of it being totaled being one. Usually if there's a deal that looks like it's too good to be true...it's because it IS too good to be true. Others I saw were about 13.5 with the mileage about 50k. That's a 1/4 deduction for the 1/4 of life used. It seems kinda comparable. I picked the high end Civic, not the mid-tier ones. To be fair some of the ones I looked at might have been lower tier as well so I can't say it was a strict apples to apples comparison. Depreciation varies by model of course, but it's 37% on average over the first 5 years. So you'll lose half the value of your car more or less in the first 5 yrs and 10% the second you drive off the lot. www.edmunds.com/car-buying/how-fast-does-my-new-car-lose-value-infographic.htmlAs for the ebay car thing I completely and totally disagree. The car I have now I bought on ebay. I got a good deal on it and three years later KBB says the private party value is the same as I paid for it back then. You can get some very good deals on ebay same as you can any other used car if you know what you're looking for. 37% isn't half the value. Anyways, that link supports what I said about buying new. New is a great option if you plan on keeping the car until it's demise. If you don't it's better to go used or lease. That's what I do. You'll have gone through a couple(maybe more) used before that new car I bought is done. Not to mention more money spent towards repairs. We bought our car new 10 years ago for about 10k. It's currently a little over 100,000 miles. It could feasibly last us another ten years. That's 10 grand for a car that will last us 20 years. The other thing that link doesn't mention is that miles has a huge impact on the overall value of the car. That's a big part of the depreciation. The car is a lot cheaper, but it's also lost a great deal of it's life(the best years of it's life). It really does add up.
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Post by Hulkamaniac on Apr 6, 2013 8:29:06 GMT -5
How often does the stock market go up by 10%? Yearly? Every 5 years? 10 years? The market averages 10% a year long term. Some years it's more, some years it's less. But it averages out to 10% annually.
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Post by Hulkamaniac on Apr 6, 2013 8:53:06 GMT -5
I picked the high end Civic, not the mid-tier ones. To be fair some of the ones I looked at might have been lower tier as well so I can't say it was a strict apples to apples comparison. Depreciation varies by model of course, but it's 37% on average over the first 5 years. So you'll lose half the value of your car more or less in the first 5 yrs and 10% the second you drive off the lot. www.edmunds.com/car-buying/how-fast-does-my-new-car-lose-value-infographic.htmlAs for the ebay car thing I completely and totally disagree. The car I have now I bought on ebay. I got a good deal on it and three years later KBB says the private party value is the same as I paid for it back then. You can get some very good deals on ebay same as you can any other used car if you know what you're looking for. 37% isn't half the value. Anyways, that link supports what I said about buying new. New is a great option if you plan on keeping the car until it's demise. If you don't it's better to go used or lease. That's what I do. You'll have gone through a couple(maybe more) used before that new car I bought is done. Not to mention more money spent towards repairs. We bought our car new 10 years ago for about 10k. It's currently a little over 100,000 miles. It could feasibly last us another ten years. That's 10 grand for a car that will last us 20 years. The other thing that link doesn't mention is that miles has a huge impact on the overall value of the car. That's a big part of the depreciation. The car is a lot cheaper, but it's also lost a great deal of it's life(the best years of it's life). It really does add up. Fair enough. I should've said nearly half. If you can afford to lose nearly half of your money in 5 years that's fine. I applaud you for your financial success. Personally. I can't afford it. While I may buy several cars over the course of you owning the one, I will actually end up operating my cars for less money because I'm not taking the butt kicking on depreciation. At some point the maintenance on any used car (which you now own having driven yours for 5-10 yrs down the road) is going to even out. You forget that when I sell my used car and buy another used one I don't get absolutely nothing out of the car. My car could die today and the next used car I get could cost me only $1-2k out of pocket after selling the car I have. So costs are much lower. When you factor in the huge amount of depreciation you take with a new car, it is much, much cheaper to own/operate a used car.
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