The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Ders on March 28, 2017, 11:39:05 AM
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Hello, long time lurker rare time poster!
Little background: Graduated last spring with a good job right out of school and received a 2005 Infiniti G35x as a graduation gift. When I first got it I wanted to drive it until it had 200k on it (currently has 159k), but after having it for almost a year my mind has been looking to get a new one sooner as repairs can be a little more expensive on a foreign, luxury car. I haven't really been saving up for a car because I have been aggressively paying down my student loans (over half way paid off in 10 months!). I recently had a scare with it that I would have to be looking for a new rather quickly, but that didn't happen. Anyways I was looking at the new Honda Civic-EX. I'm thinking I can get a 10K down payment (with either trading in or selling the G35x as well savings) which would be about 50% of a new civic by the time I buy in a year. I would also take advantage of Honda's new graduate program of $500 for buying new (free money!).
I know buying new is not very mustachian, but the civic holds it's value very well that it is not as a far stretch to buy new than used. I'm planning on taking very good care of it and keeping it for as long as I can. For whatever reason almost the only thing I get anxiety with is my car on the non-financial aspect of buying it. Currently my commute is roughly ~44 miles round trip while I live at home (those dang millenials!!), but see myself moving closer that I could bike to work here in the next year or so.
Talk me out of it or into it!
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are the unknown upcoming repairs on the G35 over $10,000? i'd pass on buying a new car when there's nothing wrong with your current one. If all you're worried about is impending repairs, why not just get them done and keep driving it? besides, if you keep your current car you can pay off your student loans faster.
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What is the insurance on your current car? Do you have collision? Do you need it? Early on, you might not have the cash buffer to self insure a ~$6k car, but then again, if it really was totaled, you could replace it for something less expensive. Given that's mostly unlikely, you probably don't need collision on your car.
If you borrow to buy the Civic, you will absolutely need collision, as the lender will require it. Get a quote for the insurance, compare the two, and multiply out 5 years so you get a better comparison of overall costs.
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Lots of rationalization here. Unless you have a job that requires you to be at a certain place at a certain time (like in court in front of a judge at 9 AM or lose the case) and the car is unreliable, I would keep the car at least until your student loans are paid off. How would you manage the loans and a car payment if you lost your relatively new job?
Out here, the local dealer discounts Civics substantially. If you move forward, don't pay sticker or anywhere near that. I'm not sure why you would pay extra for an EX. Are you planning to buy the coupe as well? "Sporty" cars are pricey, and the more basic LX sedan will last as long and cost less.
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I'm saving a ton on insurance right now because my dad gave it to me for graduation and I'm currently just paying him. I didn't look much into what it actually covers because it is so cheap, but knowing my dad it has collision. He wants me to get my own, but I turn 24 in August when rates I guess go down quite a bit so I'm going to convince him to allow me to stay on which would take me to Feb. 2018. I should say that I would want to get a 3 or 4 year loan if available and pay it off as quickly as possible.
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Lots of rationalization here. Unless you have a job that requires you to be at a certain place at a certain time (like in court in front of a judge at 9 AM or lose the case) and the car is unreliable, I would keep the car at least until your student loans are paid off. How would you manage the loans and a car payment if you lost your relatively new job?
Out here, the local dealer discounts Civics substantially. If you move forward, don't pay sticker or anywhere near that. I'm not sure why you would pay extra for an EX. Are you planning to buy the coupe as well? "Sporty" cars are pricey, and the more basic LX sedan will last as long and cost less.
I'm not too worried about my job security, and if I did I don't think it would put me into a bind. I'm looking at spring 2018 to purchase, but really I guess I'm asking if I should start saving more for a car and cut back my student loan payments?
I would just buy the 4D sedan. I drove the LX and was not impressed and think the slightly higher price is totally worth the extra features and would help resale value tremendously.
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... I drove the LX and was not impressed and think the slightly higher price is totally worth the extra features and would help resale value tremendously.
Absolutely rationalizations. What are your long-term goals? What's really important to you? Why is resale coming into your car buying decision-making? You plan on selling it soon enough after buying it that "features" will make a big difference in the resale?
When you sell a 15 year old car with 200k on it... the EX and the LX aren't going to be particularly far apart in value, are they?
Want to know how to save more money than "better resale?" Buy a less expensive car! There are 10 year old Civics out there (even the higher trim levels) for a lot less money that are still wildly reliable. Cross shop those instead.
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I have been buying Hondas since 1984 and my experience is that the two versions after 10 years sell for about the same amount of money. At 10 years and over 100k miles, buyers are looking for a reliable car, not a lot of extra features. Look up 10 year old Civic LX's and EX's and see if the difference is significant enough to justify the extra price new.
In your shoes, I would pay off those student loans ASAP and then decide where to put the extra money. Verify the insurance change, don't guess. My recollection is 25 or 26. Why not call your agent and find out exactly how much your insurance would be on this proposed new car?
You haven't mentioned your 401(k) or your IRA. How much are you putting into those savings "vehicles?" Those are much better uses of extra money than a car.
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My opinion?
Sell the Infiniti and get the 10-11k you estimate...
Then turn around and buy a 2009-2010 Honda Civic with 50-80k miles for around 6k ...
Use your 4k you have left and put in your loans! WIN
You say there is no much difference between buying new civic or used because they hold value... I dont agree. A new civic goes for almost 20k ... you can have a 5 year civic with 50k miles for less than 8k dollars. Thats 12,000 dollars you save right there!
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My opinion?
Sell the Infiniti and get the 10-11k you estimate...
Then turn around and buy a 2009-2010 Honda Civic with 50-80k miles for around 6k ...
Use your 4k you have left and put in your loans! WIN
You say there is no much difference between buying new civic or used because they hold value... I dont agree. A new civic goes for almost 20k ... you can have a 5 year civic with 50k miles for less than 8k dollars. Thats 12,000 dollars you save right there!
This is exactly what you should do if you want to sell the infinity.
Also, get off the parents tit and figure out your own insurance situation. You should know what coverage you have when you are driving any vehicle.
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I'm with the posters above me - sell the G35x and buy a used civic (or fit, or ... really anything that's affordable and will last a long time). Your rationalizations for buying new make no sense.
Let me give you some perspective: I was the idiot 22 year old that bought a brand new Civic Si out of college (this was back in 2007). Knowing what I know now, I wish I had just gotten a used car. There are a lot of choices that you will ultimately have to own up to and learn from along the way. We can't stop you if your mind's made up (and it sounds like you're working yourself towards that).
I mean really, you could figure this out years in the future in retrospect by making the bad choices and being forced to learn from them, BUT you're here on MMM, so I'd say you're at least willing to hear what we have to say around here and be/are conscious of your long-term goals. What will your future self tell you about buying this car?
Who I am today would try to convince my younger self to be more conscious and not buy a new car that will soon enough also become a high-mileage used car.
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New car: Fagetaboudit!
Keep the existing car or sell it and buy used with the cash. Be savy!!
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I'm with the posters above me - sell the G35x and buy a used civic (or fit, or ... really anything that's affordable and will last a long time). Your rationalizations for buying new make no sense.
Let me give you some perspective: I was the idiot 22 year old that bought a brand new Civic Si out of college (this was back in 2007). Knowing what I know now, I wish I had just gotten a used car. There are a lot of choices that you will ultimately have to own up to and learn from along the way. We can't stop you if your mind's made up (and it sounds like you're working yourself towards that).
I mean really, you could figure this out years in the future in retrospect by making the bad choices and being forced to learn from them, BUT you're here on MMM, so I'd say you're at least willing to hear what we have to say around here and be/are conscious of your long-term goals. What will your future self tell you about buying this car?
Who I am today would try to convince my younger self to be more conscious and not buy a new car that will soon enough also become a high-mileage used car.
I needed a good face punch and this post definitely did it for me.
As for the previous posters the Infiniti is only worth probably ~$2500. Also @Joel it's a smart decision not sucking my dad's tit. Would it be smart to be on your individual cell plan or a family plan where you pay your fair share?
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Would it be smart to be on your individual cell plan or a family plan where you pay your fair share?
This has to be calculated. My wife was on a Verizon family plan... so she only payed $45/month. But... we went to an AT&T MVNO and got her on her very own plan this is only $35/month. Group buying discounts can be good, but...
... as for your insurance, whether you stick with your family's plan or not, figure out the REAL impact of a car purchase, whether it's you or your parent paying for it. It's a very real part of the decision-making process.
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I'm with the posters above me - sell the G35x and buy a used civic (or fit, or ... really anything that's affordable and will last a long time). Your rationalizations for buying new make no sense.
Let me give you some perspective: I was the idiot 22 year old that bought a brand new Civic Si out of college (this was back in 2007). Knowing what I know now, I wish I had just gotten a used car. There are a lot of choices that you will ultimately have to own up to and learn from along the way. We can't stop you if your mind's made up (and it sounds like you're working yourself towards that).
I mean really, you could figure this out years in the future in retrospect by making the bad choices and being forced to learn from them, BUT you're here on MMM, so I'd say you're at least willing to hear what we have to say around here and be/are conscious of your long-term goals. What will your future self tell you about buying this car?
Who I am today would try to convince my younger self to be more conscious and not buy a new car that will soon enough also become a high-mileage used car.
I needed a good face punch and this post definitely did it for me.
As for the previous posters the Infiniti is only worth probably ~$2500. Also @Joel it's a smart decision not sucking my dad's tit. Would it be smart to be on your individual cell plan or a family plan where you pay your fair share?
2500 isn't much. Unless its already in bad need of repair I'd just keep driving it untill something major happens. Might last longer than you think. The main downside is the gas milage but should still be a more enjoyable drive overall. If you really want to be frugal, then you should be looking at a used Prius.
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Cars depreciate by how much as soon as you drive them off the lot? Why not let someone else pay for that first mile and buy a very slightly used car for a huge discount? Especially considering the fact that you're not in a desperate situation, you can take your time and wait for a good deal to come along. Buying new is going to cost you thousands upon thousands of dollars for very little gain.
I bought a slightly used 2001 Corolla in 2005. It's 2017 and my car hasn't needed more than its scheduled oil changes.
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I'm with the posters above me - sell the G35x and buy a used civic (or fit, or ... really anything that's affordable and will last a long time). Your rationalizations for buying new make no sense.
Let me give you some perspective: I was the idiot 22 year old that bought a brand new Civic Si out of college (this was back in 2007). Knowing what I know now, I wish I had just gotten a used car. There are a lot of choices that you will ultimately have to own up to and learn from along the way. We can't stop you if your mind's made up (and it sounds like you're working yourself towards that).
I mean really, you could figure this out years in the future in retrospect by making the bad choices and being forced to learn from them, BUT you're here on MMM, so I'd say you're at least willing to hear what we have to say around here and be/are conscious of your long-term goals. What will your future self tell you about buying this car?
Who I am today would try to convince my younger self to be more conscious and not buy a new car that will soon enough also become a high-mileage used car.
I needed a good face punch and this post definitely did it for me.
As for the previous posters the Infiniti is only worth probably ~$2500. Also @Joel it's a smart decision not sucking my dad's tit. Would it be smart to be on your individual cell plan or a family plan where you pay your fair share?
We've all been there. It is awesome that you found this site as early on as you did and are willing to take the facepunches. I went down the path I was on until I was 29 so you're already half a decade ahead compared to me!
Keep in mind there is so much wealth of knowledge and options available on the internet to help you make informed decisions about every purchase.
With the car, you have many options on how to approach it. You could do some repairs yourself and sell it for what you can get and buy something more reliable and cheaper to maintain. Or, you could just sell it as-is for a lower price. Or, you could drive it into the ground, etc, etc. Really it's up to you how you want to approach it. There are also countless resources to compare options, teach you how to diy.
As for phone plans, there are so many options available nowadays. You don't have to be beholden to a typical big carrier contract plan anymore. You could try one of the prepaid MVNO's, just keep an eye out for what phone you currently have and what networks it'll work with, etc. IP Daley has a communications thread here with more details: https://forum.mrmoneymustache.com/share-your-badassity/communications-tech-son-of-the-superguide!/ (https://forum.mrmoneymustache.com/share-your-badassity/communications-tech-son-of-the-superguide!/).
Definitely tons of options; you just have to find and learn what they are and go for 'em.
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Just got my insurance check for taking the collision off of my 2007 Civic with 150k miles because the car is worth about the same as the deductible.
Car still runs great and the best part is that there is virtually zero depreciation at this point. It's like free money every day.
Took the Honda in for a recall repair at the dealer a few days ago, and I had the pleasure of overhearing people "negotiate" for the purchase of new vehicles while waiting and looking around at some new vehicles. I almost shuddered. Some people literally owed more than the value of their trade in (usually a few years old) and were actually rolling over their debt on their old car into the loan for their new car! This is considered "normal" I guess.
I say keep the car or sell it to by a used Honda with less miles at a lower price. Win/win either way. DO NOT buy a new car with payments.
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You own a super fun car free and clear and you want to take out a loan to buy a less fun car that is more expensive? It doesn't compute to me. I'd keep the G35 and keep nursing it until it makes no economic sense to keep repairing it.
My husband bought a used G35 back in our young and relatively spendy days. I adored driving that thing and still miss it. That is part of the reason I just replaced my Golf TDI with a GTI. :)
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My opinion?
Sell the Infiniti and get the 10-11k you estimate...
Then turn around and buy a 2009-2010 Honda Civic with 50-80k miles for around 6k ...
Use your 4k you have left and put in your loans! WIN
You say there is no much difference between buying new civic or used because they hold value... I dont agree. A new civic goes for almost 20k ... you can have a 5 year civic with 50k miles for less than 8k dollars. Thats 12,000 dollars you save right there!
Im with Sal.
Sell your current car & Buy used Civic if you really wanted something without so many miles.
Buying new only favors the dealer. You get hosed in your trade plus smoked & mirrored in numbers game or 4 squares. They make it sound so damn good & easy. Well it is for them.
In 6 months after that "new" purchase it's gonna be "not new". Depreciation, higher insurance, taxes at purchase are costs not to mention door dings.
I say this from many years of experience.
Focus on your existing school debt. Learn the value of money. If you had bought that Infinity with your own hard earned cash possibly you would still value it's usefulness. It's just a method of getting to point A to Point B unless your delivering pizza or using to make you money. It's a transportation tool.
Sorry I don't mean to sound harsh but it's reality.
Personally if it was me I would keep the free car
Sent from my XT1650 using Tapatalk
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oh i wasnt aware the car wasnt worth the 10k ... thought when you mentioned 10k was about the value of Infiniti.
2500 seems too low... from what i can gather on cargurus a 150k Infiniti should yield about 5-6k (probably regional dependent).
In that case i would just keep driving it to the ground and once it doesnt make economical sense buy a used Civic for 4k-5k in the used market (try to get it from private market instead of used dealerships - usually you can save 30-50% on an equivalent car).
You save $$$ from having a less recent car that works just fine and also on insurance. My insurance on my car is 200$ per year without collision and comprehensive... if i had to make a loan, the lender would obligate me to get a full insurance that would probably run close to 800-1200 dollars/year ... thats another cost right there
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The humble civic is an underrated car. I bought my LX new in 2009 (because of the $4500 cash for clunkers credit) and there is something to be said for new cars. However, since then, I have put just over 100K on it, during which time, I've had it hailed out twice, hit various animals (most notably an elk), backed it into a concrete wall when I was upset over a personal problem, and have most of the paint peeling off (the 2009 civics apparently have this proclivity). I much prefer my car now, with all of its varied scars, because:
1) it has more personality
2) I don't care about new scratches or dents
3) cheaper car insurance (no reason for collision or comprehensive coverage)
4) people give me more room since they assume I'm a crazy driver and various parts of the car look like they are about to fall off
New cars have nothing on that.
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2 things:
1. If you live in an even remotely crime prone area, civics are a target for theft, both the whole car and wheels.
2. The new Civic is super pretty but got terrible reliability reviews from consumer reports.
Given that you are a young male (I think you said you were?) No way would I buy a $$$ car because insurance will be insane.
I own a 2003 civic, purchased new, btw. I've had it 14 years.
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I've been thinking about this thread for a while. Like so many others, I advise you to keep the car you've got, repair it, and drive it into the ground. Get rid of those student loans as soon as you can. And even when you are debt-free, do not ever make car payments--always pay cash for a car. Why make payments on something that is a deteriorating asset? After years of experience and having owned quite a few cars...in the beginning, until I wised up, I made car payments like so many other consumer suckers--one of my financial commandments is "Thou Shalt Not Make Car Payments and Thou Shalt Only Pay Cash for Thy Vehicles."
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Don't do it! Keep your "free" car and drive it into the ground. Even if it costs around $1k/year for the next 3-4 years in maintenance, that's still way less than the payments you'd be making. Not to mention: high registration costs, high insurance, etc. In my state, registration on a 10yo car is $70 bucks, as opposed to $500 for a new car...
I did the new car thing once. Here's the thing: it's new for about a month and then it just becomes a car. Get yourself out of debt, independent, and then go after a more expensive car if you think it'll add value to your life at that point.
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Reb posted about this article, which, I think is relevant here. And probably to every post on the forums...
http://thehappyphilosopher.com/how-understanding-the-marginal-utility-of-money-will-make-you-happier/
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Dude, infinity G35x's are some of the sickest coolest most reliable cars out there. Furthermore, they are one of the cheapest "luxury" brands to get fixed. Try taking it to a garage not run by a big name company.
I guarantee you that if you buy the parts you need to fix it online and then take them to a mom and pop type repair shop, they will fix your g35 super cheap.