Thinking About Buying a CPO Car

[enhartzh]

I've been monitoring the used car market in my local area lately, and I've got to say, it does not seem very appealing to me.  I think I'd rather buy a CPO used car and just be done with it.  I've been searching pretty persistently on Craigslist lately and every time a car that seems remotely appealing to me it gets snatched within a day or so by someone who presumably has very flexible work hours and is able to snatch the car during a weekday. 

I've been looking at priuses, civics, corollas, and mazda 3's.  My cash on hand is about 8k.  A lot of the cars at that price point have about 120k miles on them and are 2014 or older.

Where as for about 13k I could get a CPO Civic 2017 with about 50k miles on them.  I would need to finance about 5k, but I should be able to pay that off easily within 2 years.

It doesn't really seem to me that going private party would save me that much money, and it seems like a hassle to me.  I don't want to spend any more time on this.  I don't drive a lot (about 8k miles per year).

Do you guys have any advice for me on how to handle this?

[alsoknownasDean]

One is a 6 year old option (so 60% remaining useful life) with 120k miles (40%). The other is a 3 year old with 50k, so 80% & 75%.

Here's a thought, if you drove it for three years, it'll probably be worth 8k (less because private). Are you OK with that?

I think it's probably worth it if the supply of good cheaper used cars is slim.

Compared to buying a brand new SUV every three years and rolling over finance, it's reasonable.

I was looking around earlier and was about to spend up and get something nicer as well, COVID has affected the supply of new cars and people are avoiding public transport, so used car prices rise accordingly.

[researcher1]

I've been monitoring the used car market in my local area lately, and I've got to say, it does not seem very appealing to me. 

Where as for about 13k I could get a CPO Civic 2017 with about 50k miles on them.

Do you guys have any advice for me on how to handle this?

I would buy new if I were you.
As you've seen, the used market for these types of vehicles is extremely tight, with insanely high prices.

Do research on the model specific forums to see what people are paying for new models.
The Civic is being redesigned, so I bet dealers are clearing out the 2020 models, and selling well below MSRP.

I would not spend $13K on a CPO Civic with 50K miles, as it already has ~25% of its useful life already used up.
You can probably buy a brand new one with 0 miles for a few grand more.
The CPO Civic

[RWD]

My cash on hand is about 8k.

You should buy something for less than 8k.

I would need to finance about 5k, but I should be able to pay that off easily within 2 years.

5k in 2 years is extremely slow. I would never finance an amount on a car I couldn't pay off in a few months.

[enhartzh]

I would buy new if I were you.
As you've seen, the used market for these types of vehicles is extremely tight, with insanely high prices.

Do research on the model specific forums to see what people are paying for new models.
The Civic is being redesigned, so I bet dealers are clearing out the 2020 models, and selling well below MSRP.

I would not spend $13K on a CPO Civic with 50K miles, as it already has ~25% of its useful life already used up.
You can probably buy a brand new one with 0 miles for a few grand more.
The CPO Civic

Hm, I've gotten quotes for new 2020 models in my area, but they seem to be more around 18k. I've never seen a new car sell 14k.  So assuming the CPO car costs 14k then 14k x 1.25 =  17.5k, which means I'm getting about the same value.  And I don't drive that much, so I'm okay with buying a car with 25% of its useful life used up, it will still last me at least 10 years.

And I was being somewhat conservative with 2 years it taking me to pay off the financed portion. I could probably pay it off in 6 months if I'm aggressive, and probably within 1 year, 2 years if some unexpected costs come up.

[enhartzh]

And yeah, the Covid thing really seems to have screwed with prices. I was looking for a used car back in June, but abandoned it hoping that prices would eventually come back down.  However, here we are in December and it seems like car prices have actually gone up.  At this point my current 99' Camry V6 with 235k miles needs to be replaced.

[Tester]

Can't say what you should do, can say what I did.
Three years ago bought a 2009 Honda Odyssey for 9300 USD out of the door . It had 145k miles, now it has 190k.
Replaced timing belt, water pump and one engine mount initially, then during the last three years had to replace some electronic thing which cost 1200 usd, replaced the front brake rotors, replaced shocks, replaced some other suspension part.
In total I spent around 5k over the buy price
I am still fine with this if it holds well for 2 to 3 more years as I love to use a minivan.

Looked on Craigslist plus used cars lots initially with bad experiences, then my wife convinced me to look at used cars from new car dealers.
That was the winner. We got to the lot to look at two minivans around 13k usd, ended buying this one which cost 7k before taxes/other fees.

Take a look around, you might find good cars at a dealer.

Here is a link which might help

https://www.carfax.com/Used-Hatchbacks_bt4

I see a lot of ford focus, be careful regarding the powershit (written like this intentionally) as they have problems.

You might find something to suit your needs if you adjust to your zipcode

[Syonyk]

I've been looking at priuses, civics, corollas, and mazda 3's.  My cash on hand is about 8k.  A lot of the cars at that price point have about 120k miles on them and are 2014 or older.

... so?

At 8k miles/yr, avoid the Mazda 3s (they're fuel hungry before SkyActiv, and even the ones with the SkyActiv motor in the old chassis weren't amazing, though better than the old 2.5s).

Any of the others will be fine.  Priuses tend low maintenance beyond the battery pack (which isn't a big deal to have repaired/replaced), but with the lower annual miles, it won't make a huge difference in operating costs compared to the others.

Any of those cars should hit 200k miles, and most will go far beyond that.  That's 10+ years of driving for you, minimum.

Financing $5k on a CPO to have a car a year or two newer with a few less miles is dumb.

[Alternatepriorities]

If you're considering both priuses and civics, maybe consider a Honda Fit. DW bought an 08 new because it was significantly cheaper than a used prius and she is still driving it. It's pushing 250k miles now without any major maintenance issues, though I am about to replace a few hundred dollars worth of suspension parts. Based on my experience with this one and the four that friends have owned I'd have no hesitation buying a 2013 with 120k miles on it.

It's worth thinking about how long a decent car will last you at 8k miles a year. Any decent quality car should last beyond 200k miles with reasonable maintenance, that's 10 years and ICEs might be obsolete by then. What's the point of spending extra money now to have a car with fewer miles on it if no one wants to buy it when you're ready to upgrade to something that runs on angry pixies?

[researcher1]

Hm, I've gotten quotes for new 2020 models in my area, but they seem to be more around 18k.
So assuming the CPO car costs 14k then 14k x 1.25 =  17.5k, which means I'm getting about the same value.   
And I don't drive that much, so I'm okay with buying a car with 25% of its useful life used up, it will still last me at least 10 years.

You are never going to get the best price by "getting quotes" from dealerships.
If dealerships are offering up prices of $18K without any negotiation, then you'd be paying much less than that.
You need to do your research, but I'm guessing you'd end up paying around $16K.
Walk into a dealership on Christmas Eve or New Years Eve and I bet you'd be surprised at the deal you get.

And you are not getting the same value with the CPO.  Besides price, you would also give up...
- You'd lose out on the most "valuable" miles on a car.  0-50K are the best miles, with no wear (tires/brakes/ect) and virtually zero maintenance.
- You're getting a car with multiple owners, unknown driving history (if it was used/abused), unknown maintenance history, ect.
- You'll churn through vehicles more frequently (since you're starting out with 50K miles), which mean higher transaction costs (dealer fees, sales tax, ect)
- Resale value is lower on a 2-owner car with incomplete maintenance/care history.

[Syonyk]

Gosh, if 0-50k are the best miles, why, leasing sounds like a good deal!  New car every 3 years and it's someone else's problem after that!

(what forum are we on again?  You Need a New Car Buyer's Guide?)

[researcher1]

Gosh, if 0-50k are the best miles, why, leasing sounds like a good deal!  New car every 3 years and it's someone else's problem after that!

You're missing the point.

You previously suggested that spending $8000 for a vehicle with 120K miles, and driving it until 200K miles, made more sense then buying a new(er) car. 
Let's assume a driver drives 10K/yr for easy math...
Used Car:
80K usable miles / 10K miles per yr = 8 years of ownership
$8,000 purchase price / 8 years = $1000 per year

New Car:
200K usable miles / 10K miles per yr = 20 years of ownership
$17,000 purchase price / 20 years = $850 per year

So the new car actually costs LESS than the used car.
But you also benefit from the more valuable miles of the new car, as you're starting off with 0 miles and 100% life left on all of the components (plus a warranty) VS starting off at 120K miles and lots of wear.

[RWD]

Gosh, if 0-50k are the best miles, why, leasing sounds like a good deal!  New car every 3 years and it's someone else's problem after that!

You're missing the point.

You previously suggested that spending $8000 for a vehicle with 120K miles, and driving it until 200K miles, made more sense then buying a new(er) car. 
Let's assume a driver drives 10K/yr for easy math...
Used Car:
80K usable miles / 10K miles per yr = 8 years of ownership
$8,000 purchase price / 8 years = $1000 per year

New Car:
200K usable miles / 10K miles per yr = 20 years of ownership
$17,000 purchase price / 20 years = $850 per year

So the new car actually costs LESS than the used car.
But you also benefit from the more valuable miles of the new car, as you're starting off with 0 miles and 100% life left on all of the components (plus a warranty) VS starting off at 120K miles and lots of wear.

You're ignoring opportunity cost (and/or financing cost), registration/taxes, and insurance. It's also unreasonable to assume the vehicles will be worth $0 at 200k miles. If you assume you can sell them for even just $1k then the annual depreciation loss comes to $875 vs $800, half the difference you're stating. On the other hand there are additional repair/maintenance costs on the used vehicle but it's very unlikely for those to overcome the additional opportunity cost.

I know it wasn't your example (or mine) but for $8k you can get a vehicle with much less miles than 120k. I don't know where the OP is looking but when I do a quick search on Autotrader I see a ton of vehicles for sale with only ~60k miles for $8k that are less than 6 years old. Again assuming a 200k-mile 20-year old car is worth $1k that brings the annual average depreciation numbers to $500 versus $800 which now greatly favors the used car.

I would also like to remind you the OP of this thread has only $8k and less than $250/month of extra cash flow. Putting all of that towards a car seems ill-advised to me. I don't disagree that a new car that you keep for a couple decades can make a lot of sense but I don't think it is the answer for this particular person.

[Archipelago]

I don't have anything to add to the discussion portion of this topic, but I wanted to mention auto tempest as a resource. It's a fantastic search engine for cars.

https://www.autotempest.com/

[researcher1]

You're ignoring opportunity cost (and/or financing cost), registration/taxes, and insurance. It's also unreasonable to assume the vehicles will be worth $0 at 200k miles. If you assume you can sell them for even just $1k then the annual depreciation loss comes to $875 vs $800, half the difference you're stating. On the other hand there are additional repair/maintenance costs on the used vehicle but it's very unlikely for those to overcome the additional opportunity cost.

I would also like to remind you the OP of this thread has only $8k and less than $250/month of extra cash flow. Putting all of that towards a car seems ill-advised to me. I don't disagree that a new car that you keep for a couple decades can make a lot of sense but I don't think it is the answer for this particular person.

I'm not ignoring those costs.
Remember, the OP would have to buy 2.5 used cars vs. just 1 new car during this time period.
So they would incur 2.5x the registration/DMV fees, dealer fees, taxes, ect.  This makes the used vehicles even more expensive than the new vehicle.

I've not found insurance to be dramatically different on my old vs new vehicles. 
I'm currently paying $450 PER YEAR for full coverage on TWO nearly new vehicles.

By your own resale numbers, the used car still makes no sense, as it costs more per year than the new car.
You're paying MORE for the privilege of driving second-hand cars with 120K+ miles, no warranty, more maintenance/repair costs, and higher transaction costs.
Besides, a one-owner car with complete documentation/history, is going to have a higher resale value than than a multiple-owner car with unknown/incomplete maintenance/driving history.

I do agree with you that this approach generally only makes sense if you are financially stable and paying cash.
However, with ultra low 0%-1.9% new car financing rates, buying new can still save you money over used, even if you aren't paying cash.

I also don't buy the "opportunity cost" argument.
This assumes that every available penny someone has is invested in the stock market.  The additional $9K needed to buy the new car would simply come from the pool of funds I keep on hand to pay for life...if I need to replace my roof, an appliance goes out, kids need braces, to take vacations, buy a car, ect.

[Paper Chaser]

I do agree with you that this approach generally only makes sense if you are financially stable and paying cash.

The additional $9K needed to buy the new car would simply come from the pool of funds I keep on hand to pay for life...if I need to replace my roof, an appliance goes out, kids need braces, to take vacations, buy a car, ect.

OP can't pay cash for a brand new vehicle.
OP doesn't have a pool of available funds from which they can magically pull another $9k.

Any argument that ignores those points is just non-productive chest thumping and arguing for the sake of arguing rather than contributing to the discussion in a way that might help the OP.

[RWD]

I'm not ignoring those costs.
Remember, the OP would have to buy 2.5 used cars vs. just 1 new car during this time period.
So they would incur 2.5x the registration/DMV fees, dealer fees, taxes, ect.  This makes the used vehicles even more expensive than the new vehicle.

Registration fees are annual and in many states are based on the value of the car. Except for flat-fee states registration will be cheaper starting with a used car. Depending on the state you may pay sales tax multiple times but it will be on a smaller amount (some states don't charge sales tax for private party used cars). I still disagree that a $8k car will only have 8 years of lifespan left but even assuming that sales tax will be 1.18x as much, not 2.5x.

I've not found insurance to be dramatically different on my old vs new vehicles. 
I'm currently paying $450 PER YEAR for full coverage on TWO nearly new vehicles.

Yes, this will vary by the specific vehicle, person, and insurance company. Best to get your own quotes for accurate numbers.

By your own resale numbers, the used car still makes no sense, as it costs more per year than the new car.
You're paying MORE for the privilege of driving second-hand cars with 120K+ miles, no warranty, more maintenance/repair costs, and higher transaction costs.
Besides, a one-owner car with complete documentation/history, is going to have a higher resale value than than a multiple-owner car with unknown/incomplete maintenance/driving history.

I put some numbers in a spreadsheet and assuming 12% depreciation per year and buying an $8k car every 8 years and you got such a great deal on the new car it doesn't depreciate at all for the first two years you need to keep the new car for 25 years (250k miles) just to break even compared to the used car on depreciation cost. If you consider there are $8k cars with less than 80k miles that you could keep for 12 years instead the break-even point becomes 30 years (300k miles) at which point the used car option actual has less average miles (140k) on it than the new car (150k) over your ownership period.

Your new car will also be out of warranty for a very significant chunk of your ownership period and will also have normal used car maintenance/repair costs if you keep it for 20+ years.

A couple years ago we bought a used car (4 years old) with ~25k miles for 60% of MSRP (and this wasn't even a great deal as it was CPO from a dealer). I really don't think the 120k miles and 6+ year old age are realistic numbers for comparison purposes.

I do agree with you that this approach generally only makes sense if you are financially stable and paying cash.
However, with ultra low 0%-1.9% new car financing rates, buying new can still save you money over used, even if you aren't paying cash.

I got sub-1.9% financing on my last two used cars (no special promotion, just the regular rate from my local credit union). My last new car actually had a higher interest rate (2.9%) than my used cars.

I also don't buy the "opportunity cost" argument.
This assumes that every available penny someone has is invested in the stock market.  The additional $9K needed to buy the new car would simply come from the pool of funds I keep on hand to pay for life...if I need to replace my roof, an appliance goes out, kids need braces, to take vacations, but a car, ect.

Money is fungible. If you have dedicated less capital to a car purchase then either your emergency fund will be larger or you can invest it. Saved money doesn't just vaporize into smoke. With compounding this can be very significant.

[researcher1]

OP can't pay cash for a brand new vehicle.
OP doesn't have a pool of available funds from which they can magically pull another $9k.

Any argument that ignores those points is just non-productive chest thumping and arguing for the sake of arguing rather than contributing to the discussion in a way that might help the OP.

You disregarded my point that automakers are offering insanely low financing rates.
The OP is looking at Toyota, Honda and Mazda.
These automakers are currently offering 0.0%, 0.9% and 1.9% financing on new vehicles.

The OP also did not cite a timeframe for purchasing a vehicle.
They could keep their current car until they save up enough cash for a new one.

[RWD]

New Car:
200K usable miles / 10K miles per yr = 20 years of ownership

I'd also like to point out that it's a bit disingenuous to look at just the 20 year ownership point for comparison. At the 10 year point the used car is still thousands of dollars cheaper in depreciation and those early years are the ones that will matter the most for compounding opportunity cost. In addition, there are a lot of reasons why someone might not keep a new car for 20 years even if that was their original intention. It could be totaled in an accident or their needs could change. Approximately 10% of vehicles on the road are older than 20 years.

[Paper Chaser]

OP can't pay cash for a brand new vehicle.
OP doesn't have a pool of available funds from which they can magically pull another $9k.

Any argument that ignores those points is just non-productive chest thumping and arguing for the sake of arguing rather than contributing to the discussion in a way that might help the OP.

You disregarded my point that automakers are offering insanely low financing rates.
The OP is looking at Toyota, Honda and Mazda.
These automakers are currently offering 0.0%, 0.9% and 1.9% financing on new vehicles.

The OP also did not cite a timeframe for purchasing a vehicle.
They could keep their current car until they save up enough cash for a new one.

That still ignores what OP posted though. They've got $8k. They're considering purchases up to $13k. With  that amount of cash for a down payment, they can clearly finance more than $13k, which seems to indicate that OP is clearly not comfortable with a more expensive purchase. If it's going to take 2 years for OP to pay off a $5k loan, as they stated in their initial post, it's probably going to take them about 4 years to save up another $10k to buy an $18k new vehicle, and the new and used markets will likely change during that time, so shopping now would be a waste. Nobody shopping now is planning to purchase a new vehicle 4+ years from now.

It really seems like you just wanted a chance to argue about whether a new purchase or a used purchase makes more sense for a person in your situation, regardless of what the OP has indicated. You're not here to help OP, you're here to argue and try to prove others wrong so you may feel superior. It's a reoccurring trend with your posts, especially on this topic. Like clockwork, researcher1 comes into any discussion about vehicle costs or purchasing and suggests that it makes more sense to buy new than used, whether it actually makes sense for the OP's situation or not. I'm not saying that you're wrong about buying new vs used in some cases, and I don't always disagree with your posts, but I do think your motivations for posting are self centered and that leads to far too many of these silly, off topic pissing matches.

[researcher1]

Registration fees are annual and in many states are based on the value of the car.
Except for flat-fee states registration will be cheaper starting with a used car.

This is wrong.  I’ve cited the actual statistics in another thread…the vast majority of states have flat fee registrations.
The costs are the same for new & used, unless you happen to live in one of the few states with value-based fees.

What I was referring to are the one-time fees associated with purchasing a vehicle…titling fees, licensing fees, dealer fees, ect. 
Whatever these fees happen to be in your state/county, it would cost you 2.5x more when buying used vehicles, since the OP would have to buy 2.5 used cars for every 1 new vehicle.

you may pay sales tax multiple times but it will be on a smaller amount…even assuming that sales tax will be 1.18x as much, not 2.5x.

This is also wrong.  You need to account for the total taxes paid, across all vehicles purchase during the time period.
The OP would purchase 2.5 used cars for $8,000 each (for a total of $20,000) or 1 new car for $17,000.
So you are paying MORE in total taxes for the used vehicles than you are if buying new.

Money is fungible. If you have dedicated less capital to a car purchase then either your emergency fund will be larger or you can invest it. Saved money doesn't just vaporize into smoke. With compounding this can be very significant.

That is my point.
I have a pool of funds available in a liquid account (call it an emergency fund if you want) to pay for life events.
This money doesn’t get invested.  It is used to pay for the stuff I mentioned, and the account balance ebbs/flows, depending on what costs are incurred in a given year, (such as the $9K being discussed for the new car).

If you are someone who invests every last available penny, then you could just take out the 0.0% loan.
Under either approach, there is NO opportunity cost for purchasing the new car instead of the used model.

[RWD]

Registration fees are annual and in many states are based on the value of the car.
Except for flat-fee states registration will be cheaper starting with a used car.

This is wrong.  I’ve cited the actual statistics in another thread…the vast majority of states have flat fee registrations.
The costs are the same for new & used, unless you happen to live in one of the few states with value-based fees.

What I was referring to are the one-time fees associated with purchasing a vehicle…titling fees, licensing fees, dealer fees, ect. 
Whatever these fees happen to be in your state/county, it would cost you 2.5x more when buying used vehicles, since the OP would have to buy 2.5 used cars for every 1 new vehicle.

OP hasn't stated their location so I have nothing further to argue. Having lived in one state that assessed value-based vehicle tax every year though I am acutely aware of how much that adds up with a newer car.

you may pay sales tax multiple times but it will be on a smaller amount…even assuming that sales tax will be 1.18x as much, not 2.5x.

This is also wrong.  You need to account for the total taxes paid, across all vehicles purchase during the time period.
The OP would purchase 2.5 used cars for $8,000 each (for a total of $20,000) or 1 new car for $17,000.
So you are paying MORE in total taxes for the used vehicles than you are if buying new.

20000/17000 = 1.18. Which is what I stated. Not sure what you're arguing against here.

Money is fungible. If you have dedicated less capital to a car purchase then either your emergency fund will be larger or you can invest it. Saved money doesn't just vaporize into smoke. With compounding this can be very significant.

That is my point.
I have a pool of funds available in a liquid account (call it an emergency fund if you want) to pay for life events.
This money doesn’t get invested.  It is used to pay for the stuff I mentioned, and the account balance ebbs/flows, depending on what costs are incurred in a given year, (such as the $9K being discussed for the new car).

If you are someone who invests every last available penny, then you could just take out the 0.0% loan.
Under either approach, there is NO opportunity cost for purchasing the new car instead of the used model.

So you're saying that if you've already built up a sufficient emergency fund and you make a decision that saves you $500/month that will not affect the amount you can invest? Not sure what to tell you then.

[researcher1]

That still ignores what OP posted though. They've got $8k. They're considering purchases up to $13k. With  that amount of cash for a down payment, they can clearly finance more than $13k, which seems to indicate that OP is clearly not comfortable with a more expensive purchase.

The OP said they've solicited quotes from dealers on new models, which clearly indicates they have not ruled out buying new.
They also said they could pay off the $5K loan IN 6 MONTHS if they were aggressive.

Additionally, the new car would last the OP MANY YEARS LONGER than the CPO (with 50K more miles).
So while the used car is cheaper initially, it is more expensive in the long-term.
I was simply pointing this out, as it is an important fact to consider when making a decision.  Wouldn't you agree?

It really seems like you just wanted a chance to argue about whether a new purchase or a used purchase makes more sense for a person in your situation, regardless of what the OP has indicated.
I'm not saying that you're wrong about buying new vs used in some cases, and I don't always disagree with your posts, but I do think your motivations for posting are self centered and that leads to far too many of these silly, off topic pissing matches.

The OP provided 3 scenarios...
- Used car with 120K miles for $8,000
- CPO car with 50K miles for $13,000
- New car with 0 miles for $17,000

I pointed out, using simple math, that the new car was the better long-term financial decision.
How is this self-centered?  How is this off-topic?

[Alternatepriorities]

The OP provided 3 scenarios...
- Used car with 120K miles for $8,000
- CPO car with 50K miles for $13,000
- New car with 0 miles for $17,000

I pointed out, using simple math, that the new car was the better long-term financial decision.
How is this self-centered?  How is this off-topic?

That simple math intentionally left out the fungibility of money and therefor the opportunity cost of investing it. As this is the MMM forum and not the "life should be easy and comfortable forum" it's reasonable to get some push back on that.

I seriously doubt there are many people on this forum that would consider an 8k purchase significant AND have 17k sitting in an interest free savings account. A MMM approach to this question would assume something like a 10% opportunity cost on any money spent.

Spending $8k for a car costs $800 a year in forgone capital gains.
Spending $17k for a car costs $1700 a year.

OP expects to drive 8000 miles a year. The opportunity cost of the new car is 21.25 cents per mile before accounting for depreciation, fuel, and maintenance. With the used car it's 10 cents per mile.

If we can't agree to the fungibility of money we're obviously not going to get the same result and I've had enough conversations with people to know it's not universally self evident.

[Optimiser]

The OP provided 3 scenarios...
- Used car with 120K miles for $8,000
- CPO car with 50K miles for $13,000
- New car with 0 miles for $17,000

I pointed out, using simple math, that the new car was the better long-term financial decision.
How is this self-centered?  How is this off-topic?

That simple math intentionally left out the fungibility of money and therefor the opportunity cost of investing it. As this is the MMM forum and not the "life should be easy and comfortable forum" it's reasonable to get some push back on that.

I seriously doubt there are many people on this forum that would consider an 8k purchase significant AND have 17k sitting in an interest free savings account. A MMM approach to this question would assume something like a 10% opportunity cost on any money spent.

MMM actually talks about the opportunity cost of buying a new car and what he calls automotive inventory in this blog post: https://www.mrmoneymustache.com/2011/11/28/new-cars-and-auto-financing-stupid-or-sensible/

It may sound nice to have a car that is still in nearly-new condition after 20 years, but it is actually very inefficient, because of a concept I like to call automotive inventory.

Businesses figured out long ago that carrying excessive inventory is bad for their financial health. Products go stale or become obsolete on the shelves, and money is tied up in something that does them no good until it is sold to a customer. If the business carries any debt, the inventory also shows up as part of this outstanding debt and sucks out money in the form of interest costs too. So the ideal amount of inventory is just enough to meet their customers’ needs and no more.

Similarly, owning a big automotive inventory is bad for your financial health. Your new car slowly degrades over time (especially if you store it outside exposed to the weather), and every mile of inventory that you haven’t used yet costs you money in the form of foregone investment returns you could have gotten instead of buying such a new car, as well as higher insurance premiums and ownership taxes.

[Syonyk]

You're missing the point.

You're right, I forgot to see the username I was responding to, because we've had this same go-around in multiple threads, involving cars, and you always pull out your bullshit "simplified to the point of absurdity" math to "prove" how good a deal buying a brand new car is, if you linearly depreciate a car to $0 at 200k (believe me, I wish they were free at 200k), ignore the time value of money, assume registering/insuring a new car is the same cost as an older one (not true anywhere I've lived), and so on.

If you're not a new car salesman in real life, you should be one, because you excel at the sort of math that convinces people that it's in their own interests to spend an awful lot more money, at first glance.  You're far better at it than an awful lot of car salesman who've tried on me, certainly.

And I will continue to suggest used cars, not going into debt for a car, etc, on the MMM forum.

[researcher1]

That simple math intentionally left out the fungibility of money and therefor the opportunity cost of investing it. As this is the MMM forum and not the "life should be easy and comfortable forum" it's reasonable to get some push back on that.

I seriously doubt there are many people on this forum that would consider an 8k purchase significant AND have 17k sitting in an interest free savings account. A MMM approach to this question would assume something like a 10% opportunity cost on any money spent.

Spending $8k for a car costs $800 a year in forgone capital gains.
Spending $17k for a car costs $1700 a year.

First off, you're forgetting that the new cars the OP is considering are offering 0% interest rates.
So your opportunity costs are wrong...the new car would cost virtually nothing a year on forgone capital gains with these rates.
In fact, if you put down $1000 and finance the rest at 0%, the costs are much HIGHER for the $8000 used car.

Secondly, your comparison of the $8K vs. $17K is incorrect.
The $17K new car will last 20 years, compared to only 8 years for the $8K car (driving 10K/yr and getting rid of the car at 200K).
So over the same time period, you'll actually spend $20,000 in used cars vs. $17,000 on the new car.

Thirdly, you claim that people don't have an extra $9K above the price of the used car in a MM/savings account?
That isn't much money to have available, especially for the average person who has a wife & kids, house, cars, ect.
Do you have to sell stocks off when you need to put a new roof on your house, get your kid braces, go on a vacation, pay property/income taxes, unexpected medical bill, ect?

[Syonyk]

The $17K new car will last 20 years, compared to only 8 years for the $8K car (driving 10K/yr and getting rid of the car at 200K).

You've never owned an old vehicle in your life, have you?  Say, over 100k miles?

Cars are not "dead, zero value, to the scrapyard" at 200k.  Modern cars, not by far.

pay property/income taxes

Holy shit!  A once a year, regularly scheduled, recurring expense?  Who could have foreseen THAT????  PANIC!  EMERGENCY!

Seriously, knock it off.

[Alternatepriorities]

First off, you're forgetting that the new cars the OP is considering are offering 0% interest rates.
So your opportunity costs are wrong...the new car would cost virtually nothing a year on forgone capital gains with these rates.
In fact, if you put down $1000 and finance the rest at 0%, the costs are much HIGHER for the $8000 used car.

Secondly, your comparison of the $8K vs. $17K is incorrect.
The $17K new car will last 20 years, compared to only 8 years for the $8K car (driving 10K/yr and getting rid of the car at 200K).
So over the same time period, you'll actually spend $20,000 in used cars vs. $17,000 on the new car.

Thirdly, you claim that people don't have an extra $9K above the price of the used car in a MM/savings account?
That isn't much money to have available, especially for the average person who has a wife & kids, house, cars, ect.
Do you have to sell stocks off when you need to put a new roof on your house, get your kid braces, go on a vacation, pay property/income taxes, unexpected medical bill, ect?

1) The oddities on 0% do skew the numbers, but it's not comparing apples to apples anymore once you start financing. Maybe I'm a skeptic, but I can't quite believe companies that exist to make a profit are really making loans for "free". Add up all the cost of closing fees and see what the effective interest rate is. When I bought a vehicle this summer it cost $50 to transfer the title and $ !00 to register it for two years.

2) My numbers are right, we're not discussing depreciation only opportunity cost which you clearly understood in point 1 but lost track of in point 2. The opportunity cost is the the cost of allocating the money to anything other than an investment or paying down debt which have capital returns.

3) A roof I would probably do my self and it would cost less that 5k in materials, but that's really besides the point. I did sell stock to buy my first vehicle, which meant I only traded hours of my life for about 2/3rds of the price. Whatever, amount you "need" in a stable low yield account to feel comfortable it will go down by the amount of the new vehicle and you will have to save that much back up again before feeling comfortable with investing the surplus.

The thought of having an "extra" 9000 little green employees lounging about the savings account would bother me far more than any risk of having them invested. Given that my first 9,000 employees are now about 45,000 it's working for me.

[Alternatepriorities]

You've never owned an old vehicle in your life, have you?  Say, over 100k miles?

Cars are not "dead, zero value, to the scrapyard" at 200k.  Modern cars, not by far.

Yeah, I've never owned a car with less than 100K miles on it. I've also never stopped driving or sold one before 200k miles. By the looks of things we'll be in the two comma club before that happens if it ever does. In 26 years of driving used vehicles I've never had one stand me. I have been stranded in nearly new rental cars before though.

[Syonyk]

Yeah, I've never owned a car with less than 100K miles on it. I've also never stopped driving or sold one before 200k miles. By the looks of things we'll be in the two comma club before that happens if it ever does. In 26 years of driving used vehicles I've never had one stand me. I have been stranded in nearly new rental cars before though.

I've owned a few sub-100k miles, more if you count motorcycles (which, despite being hellishly expensive to run, did break me nicely from my "oooh, faster car!" path I was on - after commuting for a couple years in my mid-20s on a sport touring bike and spending my weekends in the mountains at some multiple of the speed limit, there's no such thing as a fast car).  One of which was a dumbshit decision I will absolutely own up to (a new Mazda 3, fine car, but pretty suboptimal when we traded it after a couple years for a used Volt, which is far cheaper to run).  I just didn't like the Mazda 2 my wife had, and with a kid on the way, the Mazda 2 wasn't going to fit a car seat and any sort of sane stroller.  We tried.  I absolutely admit these were suboptimal decisions, though, fortunately, had fairly minimal impact on our trajectory through life.

For over a decade of my life, I drove shitboxes.  There's no other term.  And, with a bit of maintenance, they were all remarkably reliable.  Amazingly enough, my 3-figure cars were more reliable than my 4-figure cars.  I've been stranded by a vehicle a few times that I can recall, and had to do a side-of-road repair or two, but... given the stuff I drove, I'm fairly happy with the results.  It doesn't mean I haven't spent evenings repairing a car so I had something to get to work the next day, but... I mean, I literally pulled stuff out of junkyards, or intercepted it on the way to the junkyard, so I can't complain too hard.

None of which is terribly relevant to an $8k used car, which should be a totally sane, reliable, nice vehicle, and still come in far cheaper over the lifetime than a new car, if you actually do not-car-salesman-math.

[Paper Chaser]

That still ignores what OP posted though. They've got $8k. They're considering purchases up to $13k. With  that amount of cash for a down payment, they can clearly finance more than $13k, which seems to indicate that OP is clearly not comfortable with a more expensive purchase.

The OP said they've solicited quotes from dealers on new models, which clearly indicates they have not ruled out buying new.
They also said they could pay off the $5K loan IN 6 MONTHS if they were aggressive.

Additionally, the new car would last the OP MANY YEARS LONGER than the CPO (with 50K more miles).
So while the used car is cheaper initially, it is more expensive in the long-term.
I was simply pointing this out, as it is an important fact to consider when making a decision.  Wouldn't you agree?

It really seems like you just wanted a chance to argue about whether a new purchase or a used purchase makes more sense for a person in your situation, regardless of what the OP has indicated.
I'm not saying that you're wrong about buying new vs used in some cases, and I don't always disagree with your posts, but I do think your motivations for posting are self centered and that leads to far too many of these silly, off topic pissing matches.

The OP provided 3 scenarios...
- Used car with 120K miles for $8,000
- CPO car with 50K miles for $13,000
- New car with 0 miles for $17,000

I pointed out, using simple math, that the new car was the better long-term financial decision.
How is this self-centered?  How is this off-topic?

You didn't point out that the new car was the better long-term decision, you pointed out that the new car may be the better choice, if you're able to negotiate the original price down, and you're not going to pay more every year to register/insure it than an older used car, and you're going to keep it for 20 years/200k and then dispose of it, etc. Is it possible? Sure it can be done, but a whole lot of very specific things have to be in place for it to work out. I think a large reason you get into these back-and-forths so frequently is that you speak in certainties and don't allow for any other possibility besides your own situation/experience. You speak like you've definitively proven something and it is somehow constant for every case and situation but that's obviously not true. Life isn't a basic equation with only a single correct response. The variables change with every person and situation, and that impacts the correct solution.

[researcher1]

1) The oddities on 0% do skew the numbers, but it's not comparing apples to apples anymore once you start financing. Maybe I'm a skeptic, but I can't quite believe companies that exist to make a profit are really making loans for "free". Add up all the cost of closing fees and see what the effective interest rate is.

It is not an "oddity". 
Manufacturers have been offering these types of rates for many years.
And it doesn't just "skew the numbers", it completely flips your "opportunity cost" argument, in favor of the new car.

These "companies" are just financing arms owned by the manufacturers, who offer these rates to sell cars. 
There are no "closing fees" or any other fees associated with these manufacturer-backed interest rates.

[researcher1]

I think a large reason you get into these back-and-forths so frequently is that you speak in certainties and don't allow for any other possibility besides your own situation/experience. You speak like you've definitively proven something and it is somehow constant for every case and situation but that's obviously not true. Life isn't a basic equation with only a single correct response. The variables change with every person and situation, and that impacts the correct solution.

I'm just counteracting the incorrect assumption that new cars are always the worse financial decision, which is so prevalent here.

However, I absolutely don't think it's "proven" or "constant for every situation" that new cars are better.
People just need to run their own numbers for both options to determine which is better.
But people here don't do this, because they immediately assume new cars are evil.

I created a spreadsheet for this new vs. used analysis, so it's easy to plug in various numbers/assumptions.
Obviously, used cars can be a better value. But there are many cases where new cars are better in the long term.

[Paper Chaser]

I think a large reason you get into these back-and-forths so frequently is that you speak in certainties and don't allow for any other possibility besides your own situation/experience. You speak like you've definitively proven something and it is somehow constant for every case and situation but that's obviously not true. Life isn't a basic equation with only a single correct response. The variables change with every person and situation, and that impacts the correct solution.

I'm just counteracting the incorrect assumption that new cars are always the worse financial decision, which is so prevalent here.

However, I absolutely don't think it's "proven" or "constant for every situation" that new cars are better.
People just need to run their own numbers for both options to determine which is better.
But people here don't do this, because they immediately assume new cars are evil.

I created a spreadsheet for this new vs. used analysis, so it's easy to plug in various numbers/assumptions.
Obviously, used cars can be a better value. But there are many cases where new cars are better in the long term.

I think if you lead with that, or tweaked your language to be less absolute, you'd be involved in fewer lengthy somewhat heated debates on this topic.

[researcher1]

I think if you lead with that, or tweaked your language to be less absolute, you'd be involved in fewer lengthy somewhat heated debates on this topic.

Unfortunately, it doesn't help.
Even when I use the OP's own numbers, people still can't grasp the fact that new cars can be a better long-term value.

No matter what the numbers show, they will claim they aren't valid, grasping at whatever straws they can...
- "opportunity costs of a new car"...even though the brands the OP is considering are offering rates at/near 0%.
- "value based vehicle registration"...even though 43 of the 50 states don't use this method.
- "the used car is good for at least 300K miles"...even though 99.99% of people never keep a vehicle that long.

[Paper Chaser]

No matter what the numbers show, they will claim they aren't valid, grasping at whatever straws they can...
- "opportunity costs of a new car"...even though the brands the OP is considering are offering rates at/near 0%.
- "value based vehicle registration"...even though 43 of the 50 states don't use this method.
- "the used car is good for at least 300K miles"...even though 99.99% of people never keep a vehicle that long.

I'm not sure that costs related to the value/age of a vehicle are as rare as you think. Lots of states have a base registration fee, but then add additional fees/taxes that take vehicle age into account. I'm seeing some sort of age or value based fee/tax for operating a vehicle in AZ, CA, CO, ID, IN, IA, LA, MN, MT, NV, NJ, NM, ND, OK, and UT. There are also parts of AK that do it, and GA has a one time fee based on MSRP as well.
 
https://www.ncsl.org/research/transportation/registration-and-title-fees-by-state.aspx 

(You'll have to open the pdf by clicking on the map of the US to get a breakdown of additional fees by state)

Lets look at the map in that link for some examples. Right away we see 7 states that have value based registration fees as you mentioned. We also see MT, ID and OK have age based fees. That puts us at 10 states where vehicle age impacts annual cost to drive. But we can dig deeper than that by clicking on the map and reading the pdf. NV for example. On the map in the link, it's shown as a flat fee state, but if we open the pdf and look at details for annual costs in Nevada, it will show a $35 flat fee, and then under "additional notes", it says: "The state charges an additional governmental service tax based on the value of the vehicle." That's not uncommon for a lot of states that aren't categorized as "value based" registration.

So if I'm counting right, there are 15 states where a person pays more each year to drive a newer vehicle. Now how much more varies by location, and whether that changes the math significantly or not I can't really say. But I know that my state is considered a "flat fee" state on the map in that link with a registration fee around $35, and my 4 year old Ford Fusion costs me well over $200/yr to register.

[Alternatepriorities]

Reseacher1,

Would you be willing to post your calculations detailing exactly what it costs you per mile to drive a new car? Maybe exclude the cost of fuel since that would cost double for the same car in CA vs TX and has more to do with type of car than age.

[researcher1]

Would you be willing to post your calculations detailing exactly what it costs you per mile to drive a new car? Maybe exclude the cost of fuel since that would cost double for the same car in CA vs TX and has more to do with type of car than age.

My spreadsheet doesn't calculate what it costs per mile to drive a new car.
It calculates the cost of purchasing a new vs. used vehicle, based on the number of years of usage.
It includes items such as purchase price, taxes, interest, transaction costs, and resale value at the end of the ownership period.

It does NOT include the ongoing operating costs such as fuel, maintenance/repairs, insurance, ect.
I only do the new vs. used comparisons for the same type of car and operating costs aren't a big variable...
- Fuel economy will be roughly the same
- Registration is the same, as I'm not in a state with annual value-based registration.
- Insurance isn't different, for me.  In fact, I'm paying less now with a new vehicle, only $225/year for full coverage.
- Maintenance/repairs will be lower for the new car, which I subjectively account for.

[KarefulKactus15]

There's alot going on so I'll just post my thoughts after purchasing more used vehicles then I can remember.

I read somwhere that that the sweet value spot is 3-5 years.

My last car was a Toyota with all dealer service records purchased at 175k miles from private owner.  The transmission blew up at 177k with no symptoms at all. That is the last time I pay the "toyota tax" on a used car or purchase that far down its life expectancy.

My new target point is about 120k miles.  Under 100k for non Import.  (Interesting note, in my area you can buy an 80k mile domestic sedan for what a 140k mile japanese goes for.  This is the "toyota tax".). I'm now convinced saving the money on the domestic purchase might be better.   I'll try that next time.

[Tester]

For the OP, I am looking from time to time at Ford Cmax prices and I am surprised that they seemed low compared with other similar cars. I know they don't have the powershift gear box so they should be fine from that point of view.
They are a kind of a wagon, they are taller then the average hatchback.
Take a look and you might find something to your liking.

https://www.carfax.com/Used-Ford-C-Max_w229

6-7 year old cars at 90k-100k miles around 8k USD.

[Syonyk]

My last car was a Toyota with all dealer service records purchased at 175k miles from private owner.  The transmission blew up at 177k with no symptoms at all. That is the last time I pay the "toyota tax" on a used car or purchase that far down its life expectancy.

Yeah, Honda and Toyota both seem to have higher used prices based on their perceived reliability (which is certainly good, but not, IMO, good enough to justify the price delta).  You can get a "2nd tier" Japanese car for less (Nissan, Mazda, etc), and save enough to cover a decent repair, still coming out ahead.

[Alternatepriorities]

My last car was a Toyota with all dealer service records purchased at 175k miles from private owner.  The transmission blew up at 177k with no symptoms at all. That is the last time I pay the "toyota tax" on a used car or purchase that far down its life expectancy.

Yeah, Honda and Toyota both seem to have higher used prices based on their perceived reliability (which is certainly good, but not, IMO, good enough to justify the price delta).  You can get a "2nd tier" Japanese car for less (Nissan, Mazda, etc), and save enough to cover a decent repair, still coming out ahead.

I bought my first Tacoma (a 2000) for 10.5k in '06 with 140k miles on it. Sold it in 2016 1ith 290k miles for 6.5k it would have been $1500 to ship it back to the road system. Bought an '04 with 170k miles on it later that year for 10k and sold it this year with 235k miles for 7.5k because we wanted something with a bigger back seat. Neither of them required anything but the routine maintenance you'd expect to do over that many years/miles. Still I went with a domestic vehicle this time around, mostly because DW has wanted one since high school, but also because of the "Toyota tax". I also took a chance and bought a rebuilt truck from a local friend of a friend... Upsides are I saved about 6k on it, three vehicles that were scrap are now two on the road, and a young man made some good money in the middle of the pandemic... With a 125k miles for 11.5k it's the lowest mileage and most expensive vehicle I've ever purchased while representing the smallest portion of our net worth. It's also very much a luxury racing recliner and I shake my head to dodge the face punch every time I get in it. 

[Alternatepriorities]

Would you be willing to post your calculations detailing exactly what it costs you per mile to drive a new car? Maybe exclude the cost of fuel since that would cost double for the same car in CA vs TX and has more to do with type of car than age.

My spreadsheet doesn't calculate what it costs per mile to drive a new car.
It calculates the cost of purchasing a new vs. used vehicle, based on the number of years of usage.
It includes items such as purchase price, taxes, interest, transaction costs, and resale value at the end of the ownership period.

It does NOT include the ongoing operating costs such as fuel, maintenance/repairs, insurance, ect.
I only do the new vs. used comparisons for the same type of car and operating costs aren't a big variable...
- Fuel economy will be roughly the same
- Registration is the same, as I'm not in a state with annual value-based registration.
- Insurance isn't different, for me.  In fact, I'm paying less now with a new vehicle, only $225/year for full coverage.
- Maintenance/repairs will be lower for the new car, which I subjectively account for.

I've owned 3 cars through their life cycle now. Here's your numbers on them

1) Toyota Camry: I bartered for it, estimated value of $500. No tax aside from registration and no interest. I drove it for 4 years and 80k miles with maintenance limited to 1 CV joint, brakes, wipers, and adding oil every time I filled the gas. It was a Junker, but my cost was less than $25/month and $0.02/mile excluding tires, gas, and insurance.

2) 2000 Tacoma: See above. I don't recall paying tax on it, but it seems likely and would not have been more than 800 dollars. Including that the cost to own was 4.8k over 10 years and 150k miles. I did approximately 2.4k in maintenance so my cost was about $60/month and $0.05/mile excluding tires, gas, and insurance. I would argue the opportunity cost was an additional $90/month and $0.075/mile which current me would advise past me against.

3) 2004 Tacoma: See above. I did not pay tax on it (Thank you Washington for allowing Alaskans to not pay sales tax on purchases they are leaving the state with). Cost to own it was 2.8k over 4 years and 65k miles. I spent less than $800 on maintenance so my cost was about $75/month and $0.073/mile excluding tires, gas, and insurance. The opportunity cost was the same as the first Tacoma, but I understood that going in and it was a much smaller portion of my opportunities in 2016.

In all honesty, breaking down the real cost of driving took some of the fun out of it for me. I still enjoy a long road trip down a lonely highway, but not as much as I did before running the numbers.

[KarefulKactus15]

It's atrocious the cost of driving.

Even a 5,000 car, with insurance and maintenance is more than alot of people should spend monthly.

Not to mention the people who spend, idk... 40-60 of their paycheck on car or car related cost. (Depreciation doesn't register to them)

My simple rule that I adopted : I don't spend a higher % of $ than I spend in the car.

So if I make 100k and only spend 2% of my time in the car (365*24hrs) - my yearly vehicle total cost with depreciation, tax, insurance and repair etc etc... Total cost - needs to I be less than $2,000.

[RWD]

It's atrocious the cost of driving.

Even a 5,000 car, with insurance and maintenance is more than alot of people should spend monthly.

Not to mention the people who spend, idk... 40-60 of their paycheck on car or car related cost. (Depreciation doesn't register to them)

My simple rule that I adopted : I don't spend a higher % of $ than I spend in the car.

So if I make 100k and only spend 2% of my time in the car (365*24hrs) - my yearly vehicle total cost with depreciation, tax, insurance and repair etc etc... Total cost - needs to I be less than $2,000.

I like the idea of your rule but I don't think it scales very well. Someone making $10/hour is going to have a hard time keeping a car for a few hundred or so dollars a year. Heck, insurance alone will often exceed that. And then there are people like me that have a higher income but work from home so the driving percentage is really low (probably spent 1% of my time in a car at the cost of ~$8k in 2020).

Maybe the rule of thumb formula would work better with some sort of floor for cost? Though once you get down to the cheapest of vehicles the costs are also less predictable. Easy to get "surprise" $XXX repair bills.

On average I think it is very hard to drive any vehicle for less than $2k/year. In my last 9 years of tracking vehicle expenses we've averaged $3,800/car/year. The decade before that was probably still between $2k and $3k per car per year though I don't have enough data to be sure (seems to be a decent estimate based on some old spreadsheets from 2007/2008).

[ebeard2242]

I believe that private party car purchases are definitely not for everyone.  If you live in a very competitive market, such as a large city then it can be very difficult to find a good deal, because chances are there is going to be someone who has more time than you who will beat you to the punch.  CPO is usually the least hassle and most cost effective way to get a car.  New cars at end of year are doable, but can sometimes be a hassle.

[KarefulKactus15]

Hmm - I probably fudged the math somewhere.

But for you, perhaps you don't need a car?  That's about 90 hours of car time?   You could Uber 90 hours for like 6800.
Assuming the bicycle wasn't feasible.

To the 10$ person.  That just sucks, idk how anyone makes it on that.   My bare ones living expenses (and I've got pretty hard) - are 65$ / day.   It cost me that much just to stay alive in this world with food and shelter.   

But the 10$ person honestly probably can't afford the car if we're being honest. 


All that to see is my little handy rule is kinda extreme and maybe doesn't scale wiell but I like it as a target.

[ebeard2242]

Also add 2015+ Hyundai Elantras and Kia Fortes to your list of vehicles you are in the market for.  You can get these cars with about 2-3 years newer with about 20-30k fewer miles than a Toyota and they're still fairly reliable consider your use.

Edit: Its probably not worth it to get a hyundai or kia with high mileage as they can potentially have issues.  Juice not worth the squeeze imo.

[RWD]

Hmm - I probably fudged the math somewhere.

But for you, perhaps you don't need a car?  That's about 90 hours of car time?   You could Uber 90 hours for like 6800.
Assuming the bicycle wasn't feasible.

To the 10$ person.  That just sucks, idk how anyone makes it on that.   My bare ones living expenses (and I've got pretty hard) - are 65$ / day.   It cost me that much just to stay alive in this world with food and shelter.   

But the 10$ person honestly probably can't afford the car if we're being honest.

I doubt my small town is particularly well served by Uber/Lyft and in any case I really wouldn't want to use it every week just to get groceries and for my wife's commute (on days when she doesn't commute by bike). The first obvious step to reduce our car expenses would be to go down to one car instead of two. That would probably be cheaper than Uber-everywhere and no car. Also if one of our cars wasn't a Porsche that would help as well, haha.

But for a hypothetical person that was single, works from home, could bike/Uber for most things, and didn't like cars then going carless can make a lot of sense.

I agree, it's rough for the $10/hour person in general. If they can in any way go carless they should. But if they can't then they'll have to accept a higher percentage of their income going towards the vehicle. Maybe 15%, give or take? Should be doable as long as other expenses are in line as well.

All that to see is my little handy rule is kinda extreme and maybe doesn't scale wiell but I like it as a target.

That's fair. Definitely worth pushing the boundaries and aiming for more difficult goals when possible. And as I said before, I really like the idea of the expenses being proportional to the amount of use.