Help me figure out a car deal (maybe anti-mustachian)

[Stache In Training]

Hello,
I sell cars right now, but I am most likely not going to be much longer (due to kid on the way, and S.O. making much more money).  The only real perk of working at a dealership anymore is getting a discount on cars. 

History:  We have one car (nothing wrong with it), that is currently being financed at 0% (Yes I know not to borrow money and on a new car, but this was before my mustachian ways, and at least it's 0%).  I currently owe about half of what I'd get for trade in.  So at least there's some good equity there.  One year left on the loan. 

So my thought is: since this is probably the only time in my life that I'll get this good of a discount (at cost) on a car, which will essentially give me a brand new car, without taking the immediate depreciation hit from driving it off the lot; Also, this will be at 0%, which would allow me to keep my money invested; and I'll be back under warranty, and my first 2 years of maintenance would be paid for; also, the new car would be better with a kid on the way:  Is it better to keep the old car that will probably need to be replaced right before FI, or take advantage of the only time I'll get this deal, and pay a bit more, but put off needing to replace a car till after FI?

Yes, if I didn't work at a dealership and get this discount, I wouldn't even be thinking of this, and continuing the mustachian path.  I kind of looked at this as, I'm getting a used car price on a new car.  Or am I miss-lead?

[ZugZug]

If ur getting a new car at a used car price and at 0% sounds good to me. A couple things to think about is how many miles does ur current car have? Also with a child on the way you'd obviously want something reliable. If u keep the current car how long do u expect it to last? With the info u gave I'd say go for it. Hopefully it's great on gas too so ur mustache doesn't get singed :)
Good luck!

[golfer44]

Well, consider my mustachian theory of relativity.... getting a car at cost is a good deal IF you're buying a new car anyway. It's only a good deal relative to the guy buying the same car for full price. For you, with an almost-paid-off-car, it's a horrible "deal"! It's X thousand dollars that you don't have to spend!

You (probably) worked your ass off to get equity in that car, you're so close to having it paid off, and you're going to pull a Sisyphus and do it all over again??

As for the free maintenance, warranty, blah blah - I gotta call BS. How much will you REALLY spend in maintenance and repair work? Don't use this as a clever way of convincing yourself you're making the right financial decision. You're a dealership guy, you should know that. If the car breaks that often, it was a mistake buying it.

Don't assume your car will die. Take great care of it (when it's paid off, you'll free up a ton of money for preventative maintenance, no excuse here) wait until it does, or almost does. Then buy a reasonable used car, in cash, and never have a car payment again. IMO.

[lackofstache]

getting a car at cost is a good deal IF you're buying a new car anyway. It's only a good deal relative to the guy buying the same car for full price.

Yep. Doesn't sound like you need a car & with a kid on the way I'd rather have no car payments than slightly lower car payments than others with the same car.

I wouldn't buy it if you don't need it. It doesn't sound like you need it. If you invest the money you'd spend on the car every month, you'll be way ahead when FI comes & will easily be able to make up the difference between your price and others' price.

[Thegoblinchief]

Keep your existing car!!

If you only have 1 year left on the loan, that means your car is at most 4 years old (since car loans aren't more than 5 years). That's 5 years newer than ANY car I've ever owned. Pay off that thing and enjoy the next 15 years of ownership!

[_JT]

Also, you have to be kidding me if you think a buyer can't get practically the same deal you're getting at any dealership, if they're not buying in a hurry.

[dadof4]

Without real numbers it's hard to tell. If you can, share what your current car is, and what your intended car and price is.

Generally, the advice you've gotten is sound. Even at dealer pricing, keeping your current car will usually be more economical. A new car depreciates faster than an older one even without the first year bump. In certain cases, ie IF the new car is sensible, AND IF you get close to private party value on your trade in AND IF you get a great price AND IF you get 0% financing, then the cost-to-own comes out close. In those cases, like most people, I'd rather drive a newer car.

One thing though. From what I have noticed of a few guys who worked at car dealerships - is that because they are getting such a good deal (and relatively speaking, they are), they tend to buy much more car then they need. Often the flagship model with the luxury trim. Hey it's below invoice price and 0% APR, so why not, right?

If that described you, then you might have something to gain by getting a new car but opting for a more economical one.

[This_Is_My_Username]

your current car is perfectly reliable.  There is no need for a new car. 

You are falling for the trap of buying something that is on "Sale".  Even though it is cheaper than normal, it is still an expensive rip-off luxury item.

[Stache In Training]

Thanks guys!  I don't have the numbers worked out yet.  I also don't want to put too much info out there, just in case.  But yes, I agree that there are a lot of "IF'S."  And yes, I would be getting a more economical, and safer car.  However, thanks for keeping me grounded.  I think I'm not going to do it, unless the numbers end up much better than I expect/magical.  Thank you for keeping me sane.

[DumpTruck]

The only way this is a good deal is if you can immedietly turn around and sell the brand new vehicle for a profit. Since you got it for such a good deal the market should pay for it. You keep your current vehicle and pocket the cash. Boom.

[Stache In Training]

haha, dump truck, I thought about that. but i think they'd hate me.

[abhe8]

um, who cares if they hate you? you are quitting right, and even if not, how are your financial decisions of any concern to them? i say buy the new car, sell it and enjoy the profit!

[Stache In Training]

This is true, but part of the great deal, is they would not only be giving me the new car at cost, but giving me a bit more for my current car than normally, which screws that idea...

but I like the way you guys are thinking

[ritchie70]

Keep your existing car!!

If you only have 1 year left on the loan, that means your car is at most 4 years old (since car loans aren't more than 5 years). That's 5 years newer than ANY car I've ever owned. Pay off that thing and enjoy the next 15 years of ownership!

Wow, I don't know where you're living. 6-year auto loans have been a thing for a while, and a quick Google reveals 7-year loans are pretty easily available.