Author Topic: Are you afraid your new car's value will be ruined by the driverless car?  (Read 24215 times)

GuitarStv

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #150 on: October 12, 2018, 07:01:19 AM »
Incidentally, I was speaking to someone today who had a startup in 2007 focused on location-specific search, because at that point searching for "bike shop in Longmont" didn't produce useful results.

There is no way that era of search was superior to what we have now.

I remember a time in the early 90s where I was looking for a bike shop . . . so I performed a location-specific search using "Yellow Pages" technology and was able to immediately find what I was looking for.  The internet is great and all, and has made some things more convenient . . . but many forget that an awful lot of the stuff you can do on the internet was already a solved problem ages ago.  :P

BuildingFrugalHabits

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #151 on: October 12, 2018, 02:52:00 PM »
But it doesn’t have to be “superior “ - it just has to be “good enough”.

The question is - will self driving cars be so vastly superior to today’s system that no one will want a “regular” car? And my answer is - not in the next 5 years, they won’t. A lot of the scenarios offered here seem like arguments *against* self driving fleets of cars. Who wants to ride around in a car designed to be impervious to other passengers making a mess of it? Who wants to call a vehicle and wait 10 minutes every time?

That system saves you time if you live in a dense city center where driving is slow and inconvenient, but it becomes far less appealing as soon as you get even to the suburbs. And don’t discount the issues of transporting children around - it’s not so easy to get an uber with a car seat much less make the multiple trips/day parents often make.

I think it’s going to be a slower process. I’ve been waiting a long time for flying cars, too.

These are good points.  There are already car sharing services in cities that are cheaper than owning a car for occasional use.  Honestly though, I wish these existing services were priced more competitively and more widely available.  We don't need self-driving tech to disrupt the existing ownership model which has these large-expensive machines sitting there idle 90+% of the time. 

I do think that eventually, a competitively priced car sharing self-driving cars would make it much easier to go 1 car per household or go car-less even in cities and even suburbs and especially if one is willing to bike at least some of the time.   

I do think that a lot of the features that are a prerequisite for self driving will become standard in most models over the next five or so years i.e. emergency braking, adaptive cruise, lane departure controls.  And if these feature make a vehicle safer and less costly to insure then yeah, it will be like airbags and ABS and you'll be hard pressed to find a car that doesn't have it. 

scottish

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #152 on: October 12, 2018, 04:12:43 PM »
Incidentally, I was speaking to someone today who had a startup in 2007 focused on location-specific search, because at that point searching for "bike shop in Longmont" didn't produce useful results.

There is no way that era of search was superior to what we have now.

I remember a time in the early 90s where I was looking for a bike shop . . . so I performed a location-specific search using "Yellow Pages" technology and was able to immediately find what I was looking for.  The internet is great and all, and has made some things more convenient . . . but many forget that an awful lot of the stuff you can do on the internet was already a solved problem ages ago.  :P


But but but think of all the internet advertising revenue that was foregone.

HBFIRE

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #153 on: October 12, 2018, 04:17:48 PM »


I remember a time in the early 90s where I was looking for a bike shop . . . so I performed a location-specific search using "Yellow Pages" technology and was able to immediately find what I was looking for.  The internet is great and all, and has made some things more convenient . . . but many forget that an awful lot of the stuff you can do on the internet was already a solved problem ages ago.  :P

I'm admittedly old enough to remember that.  God I hated having to use the phone book.  Google is so much better in every way compared to using that atrocity.

scottish

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #154 on: October 12, 2018, 04:27:25 PM »
Indeed, Google is much more efficient at harvesting personal information and selling it to companies.

HBFIRE

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #155 on: October 12, 2018, 04:36:34 PM »
Indeed, Google is much more efficient at harvesting personal information and selling it to companies.

Yep.  I don't mind.  I'm okay with the arrangement.

Syonyk

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #156 on: October 12, 2018, 06:33:37 PM »
We don't need self-driving tech to disrupt the existing ownership model which has these large-expensive machines sitting there idle 90+% of the time.

Other than parking, I don't see how putting 300k miles on a car in a year and it requiring replacement will somehow be radically cheaper than putting the same number of miles on more cars over more years.  Relatively few things in a car fail from age - far more mileage/engine hours related.

Also, currently, cars rarely drive deadhead miles.  Self driving/ride sharing/etc involves a lot of deadhead miles - which uses more energy and will wear cars out faster for the same number of "payload miles."

BuildingFrugalHabits

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #157 on: October 12, 2018, 08:16:24 PM »
Well the parking thing is huge. Idle cars take up a lot space. For example, it would free up more space for bikes in my garage 😁 Also, less trucks and SUVs since they are typically purchased for capabilities which are rarely needed.

Purple Economist

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #158 on: October 12, 2018, 08:51:47 PM »
There will always be folks who opt for car ownership and maybe even stick with gas power but they will probably end up paying a significant premium in fuel, parking and insurance to do so.

Can you explain why there will be a "significant premium" for all of these things?

If lots of people are traveling in electric cars, why won't gasoline be cheap?

If not very many people need a parking spot, why will parking be expensive?

If everyone else is driving a super-safe autonomous vehicle, why will insurance premiums be high for a driver with an impeccable driving record?  Additionally, why would insurance premiums not be substantially lower than they are now, even for someone insuring a car that is not autonomous?

Assuming an environment in which 95% of journeys are via extremely safe on-call electric vehicles (which I acknowledge is not a given):

-Gas stations pretty much cease to exist. Many will turn into convenience stores, or storage and charging sites for electric vehicles, but virtually none will continue to maintain gasoline tanks and pumps - it'll be far too high a cost for far too small a market. Some will survive, but they'll be few and far between - and their operating costs will be far higher as the distribution network they currently depend on withers away. You'll be left with substantial distances between stations, and so the few that remain will charge a high price.

-Parking will be expensive for the same reason: it won't be available. With virtually nobody owning a car, there's no reason to factor in parking spaces. Again, a few spots will remain, but most of it (especially in urban areas) will rapidly be repurposed, and the handful of spots that remain in good locations will, again, command a premium. Not as much as the gas stations (those guys will be able to really gouge drivers, as a lot of them simply won't have the fuel to get to an alternative station).

-Insurance will be expensive, as 99.9% of crashes will involve the 5% of cars that are manually driven. The accident rate will fall heavily, but as it falls alongside the manually driven share of the market, the population of people needing insurance and the population of people who crash will come closer and closer together. Let's imagine that the shift to electric cars eliminates 90% of road fatalities, and that the 99.9% figure I gave turns out to be accurate. The average manually driven car is now twice as likely to be involved in a fatal crash - the only way insurance doesn't rise is if accident rates fall far faster than the manually driven share of the market - and even if that happens, governments may opt for punitive measures against manual-driving holdouts. If every twenty manual cars off the road means one less death a year, governments would be out of their minds not to.

In this scenario, only the wealthiest members of society can afford to keep driving manual. At that point, we enter a world of pure premium pricing: everything to do with driving your own car might as well double in price, because nobody who drives their own car will be able to hide the fact that they're rich as all hell. On top of that, driving then becomes even more of an engine for conspicuous consumption.

I in no way think gas stations are going to cease to exist anytime soon.  Maybe in 50-60 years at the earliest.

As fewer and fewer people use gasoline, it will become cheaper.  Only the oil with the lowest marginal cost will need to be extracted and this will help lower the cost.  Even if some gas stations do close down, there will still be gas stations that serve fewer people.  Since demand has shifted left, they aren't going to have some great market power to charge high prices for gasoline.  Also, even if 95% of trips are electric, that is still a lot of driving that is not electric.  There will still be a need for gas stations and the distribution network isn't going to go away.

If there aren't that many people needing a parking spot, parking spots won't be able to charge a premium.  If there is a corresponding decrease in demand, price could stay the same or even go down.  There is nothing to suggest parking will cost a premium except your conjecture (and seeming hope).

In terms of insurance, as you stated, if the accident rate goes way down, insurance is going to be much cheaper than it is today.  Manually driven cars may cost more to insure than autonomous vehicles, but they will cost much less to insure than cars today.  It's kind of like how vaccination protects everyone through herd immunity.  Moreover, if manually driven cars have safety features to reduce accidents, that will further lower insurance rates relative to today.

I highly doubt governments are going to enact some punitive measures against people that drive their own cars.  That seems more like something you want to happen than something that will actually happen.

Overall, driving your own car is not going to cost you more than today and will not involve premium pricing meaning it is not likely that only the wealthy will be able to do so.

BuildingFrugalHabits

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #159 on: October 12, 2018, 10:20:33 PM »
Gas: It is already much cheaper to fuel a car with electricity vs gas and I assume (and hope) there will soon be a surcharge (and dividend?) on carbon emissions in places where there isn't already. It's our best shot at fighting global warming.

Parking: My thought was that reduced demand would result in many of the privately owned lots being developed into something more profitable but I could be wrong.  I also assumed that some of the street parking would be repurposed into protected bike lanes, sidewalks and green space which people are already advocating for. 

Insurance: I think we agree here.

Only time will tell I guess...

Syonyk

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #160 on: October 12, 2018, 10:23:20 PM »
I highly doubt governments are going to enact some punitive measures against people that drive their own cars.  That seems more like something you want to happen than something that will actually happen.

Right, but... it's a way to say, "You know, poor people suck and we'd rather them not get anywhere outside their little corners we've allocated!" without having to say that!

You can drive a car incredibly cheaply, if you're willing to work on it yourself.  Which, if you're driving cheap cars, is basically required.  The only way I got home to visit family for a long period of my life was because I was willing to find cheap cars ($100-$300), work on them myself (because, you know, a shop bill totals the car), stack coupons (4 new tires for $120 installed because the cashier couldn't come up with any reason I couldn't stack all this stuff?  Yes, please!), and generally run very, very cheaply.

I wasn't going to be affording a self driving car going 350 miles.  I drove a variety of tin cans that got 30-45mpg highway ($150 is a lot cheaper than a Prius).  But, hey, if you can't afford the Sharing Ecosystem, well... you know, die off under a bridge, please.

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Overall, driving your own car is not going to cost you more than today and will not involve premium pricing meaning it is not likely that only the wealthy will be able to do so.

Correct.  And those who still wish to do so won't be sharing roads with people who absolutely do not wish to do so.  If someone just can't get their nose out of Facebook long enough to watch the road, great.  They can order a self driving car.  And the rest of us won't have to worry about that person blowing stop signs.

GuitarStv

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #161 on: October 14, 2018, 10:20:32 AM »


I remember a time in the early 90s where I was looking for a bike shop . . . so I performed a location-specific search using "Yellow Pages" technology and was able to immediately find what I was looking for.  The internet is great and all, and has made some things more convenient . . . but many forget that an awful lot of the stuff you can do on the internet was already a solved problem ages ago.  :P

I'm admittedly old enough to remember that.  God I hated having to use the phone book.  Google is so much better in every way compared to using that atrocity.

I don't understand how short people see over the steering wheel any more in this day and age.  At one point the phone book solved all those problems.  :P

HBFIRE

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #162 on: October 14, 2018, 11:31:37 AM »


I don't understand how short people see over the steering wheel any more in this day and age.  At one point the phone book solved all those problems.  :P

I'm 5'6".  We drive small people cars :).

BuildingFrugalHabits

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #163 on: October 14, 2018, 04:01:14 PM »
I changed my mind.  I now think we will all be riding around on dockless e-scooters in 5 months. 

https://www.nbcnews.com/tech/tech-news/driverless-car-hype-gives-way-e-scooter-mania-among-technorati-n919706

scottish

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #164 on: October 14, 2018, 04:35:17 PM »
Hah, those won't work up here in the winter either!

PiobStache

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #165 on: October 15, 2018, 01:01:24 PM »
I have zero worries to the OP's question as I lease.

HBFIRE

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #166 on: October 15, 2018, 01:04:47 PM »
I have zero worries to the OP's question as I lease.

Hopefully under a business, otherwise yikes

PiobStache

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #167 on: October 15, 2018, 01:12:18 PM »
I have zero worries to the OP's question as I lease.

Hopefully under a business, otherwise yikes

People either get the math on leasing or they don't.  Those that do realize it's the best way to utilize the portion of the useful life span of that depreciating asset you want and not be burdened by the cost or risk of taking on the entire useful lifespan.  I don't want more than the first three or four years of that lifespan so leasing makes the most sense.  If I wanted to drive an old car buying would make sense.

HBFIRE

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #168 on: October 15, 2018, 01:26:49 PM »


People either get the math on leasing or they don't.

Oh I think we get the math.  It works out just as well (and usually worse) as buying a brand new car.  Which is to say, its a horrible financial choice to make.  Absolutely terrible.  It's just bleeding money in huge amounts.  You're essentially wasting a ton of money on a very expensive luxury.  If you're already FI, and don't care about the expense, it's fine.  Otherwise, it deserves massive face punches.

Now under a business, it can sometimes make sense as a tax deduction.
« Last Edit: October 15, 2018, 01:29:34 PM by dustinst22 »

Syonyk

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #169 on: October 15, 2018, 01:45:56 PM »
People either get the math on leasing or they don't.

I know!  It's awesome!  Some other sucker pays out of pocket for the early lifespan depreciation on a car, and gets all sorts of restrictions on what they can do, how far they can drive, etc, and then you get to buy a few-year old off-lease car for a bargain!

... sorry, what site are we on again?  Leasing a new car?

John Galt incarnate!

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #170 on: October 15, 2018, 03:42:03 PM »
I was reading/watching this, and it got me interested:

https://www.bloomberg.com/news/articles/2018-10-03/gm-s-cruise-draws-2-75-billion-from-honda-in-self-driving-pact

I'd be very worried that my new car would become obsolete in a few years.  I'm going to do the Moustachian thing and keep driving my 2003, 165K mileage VW.



The last vehicle I bought was brand new but  I don't worry about it depreciating because  I plan to keep it 30 years.

I keep it in mechanically excellent condition but don't care about washing or polishing it or that it has a cracked windshield.

The only thing I care about is its reliability.

I only drive about ~ 3000 miles per year.


genesismachine

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #171 on: October 15, 2018, 05:42:03 PM »
We don't need self-driving tech to disrupt the existing ownership model which has these large-expensive machines sitting there idle 90+% of the time.

Other than parking, I don't see how putting 300k miles on a car in a year and it requiring replacement will somehow be radically cheaper than putting the same number of miles on more cars over more years.  Relatively few things in a car fail from age - far more mileage/engine hours related.

People are saying electric cars will be good for 1,000,000 miles with minimal maintenance. If that is indeed the case, that is a game change with maintenance. If you drive a typical 10k miles/year, the car will be a pile of rust in 100 years. With 300k miles per year, that car would be depleted in a few years.

It also enables much faster design iterations and improvements. That benefit is hard to quantify exactly, but imagine if for gas cars the government mandated 50mpg cars and within a few years almost all cars would be getting 50mpg rather than being stuck with those 20mpg old cars for the next 30 years. This goes for all reliability/efficiency improvements such as self driving tech improvements, safety equipment, build quality/interior, etc.... It could lead to an explosion in innovation because the replacement cycle is so quick. Think smartphones vs airplanes for innovation speed.

Kyle Schuant

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #172 on: October 15, 2018, 06:51:09 PM »
I'd be very worried that my new car would become obsolete in a few years.
I don't care about the dollar value of my car since I'm driving it, not selling it.

I don't think driverless cars will become a serious thing because of the safety issue. Recently in the US a woman got a driverless Uber and it struck and killed a pedestrian while she was messing about on her mobile phone. She's been charged - she should, the prosecutor says, have been paying attention and intervened. Which makes us wonder WTF she was paying for? The driverless cars do have safety systems to stop but they produce a lot of false positives, jolting the passengers around, so the company turns them off and tells the passengers to be ready to intervene.

People will pay for extra features and service, they won't pay extra for nothing. If I have to be paying constant attention while the car is driving, then I may as well just drive the damn thing myself.

The safety thing will always be an issue because we trust human judgement but not machine judgement. If to avoid a pedestrian I swerve my car into another car, people say "oh well, he had to do it." If a machine does that then everyone gets upset.

Machines are dumb. I can't even type out a whole post on this site without my browser freezing up on my laptop, I'm not putting the thing in charge of 1,000kg of steel and plastic going at 100km/hr. Yes, many humans are dumber than machines, but again - we accept that. Plus humans are free, we have to pay for machines, so we expect better.

shuffler

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #173 on: October 15, 2018, 08:35:36 PM »
Recently in the US a woman got a driverless Uber and it struck and killed a pedestrian while she was messing about on her mobile phone. She's been charged - she should, the prosecutor says, have been paying attention and intervened. Which makes us wonder WTF she was paying for?
Not quite.
She was the safety-driver.  Not a passenger.
It was her job to be alert and intervene.

(Though there's much to be said about the near impossibility of being alert and doing nothing for thousands of miles on end, and then having to intervene in a fraction of a second.  ...  As well as much to be said about Uber's corner-cutting safety practices.)

Syonyk

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #174 on: October 15, 2018, 08:54:40 PM »
People are saying electric cars will be good for 1,000,000 miles with minimal maintenance. If that is indeed the case, that is a game change with maintenance. If you drive a typical 10k miles/year, the car will be a pile of rust in 100 years. With 300k miles per year, that car would be depleted in a few years.

No, the claims are usually about the drivetrain.  Not the rest of the car.  I don't know if you've owned many high mileage cars, but it's quite common for the drivetrain to be perfectly functional at 250k miles, while the rest of the car is falling apart around it.  That's just wear and tear from use, people getting in and out (of, in this case, likely "not their car"), road miles, etc.  There's a lot more than a motor to a car, trust me.  I've repaired most of it in my era of cheap cars that other people were getting rid of (and I figured I could get another 20k miles out of).

Quote
Think smartphones vs airplanes for innovation speed.

I like the slow pace of aircraft innovation, because it tends to prevent the sort of "Oh, yeah, sorry, that phone was totally faulty and will die in a year and a half, well, just go buy a new one... besides, you're no longer getting updates..." nonsense of the smartphone world.

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #175 on: October 15, 2018, 09:28:51 PM »
My primary car is a 2003 Jeep Liberty - value- not much

project car Suzuki LJ81 pickup truck - value - 5-10k'

I look forward to the day when the majority of cars are autonomous.  I can drive as I please and they will move out of the way to avoid DANGER.

Linea_Norway

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #176 on: October 16, 2018, 01:03:25 AM »
The last vehicle I bought was brand new but  I don't worry about it depreciating because  I plan to keep it 30 years.

I keep it in mechanically excellent condition but don't care about washing or polishing it or that it has a cracked windshield.

The only thing I care about is its reliability.

I only drive about ~ 3000 miles per year.

You might want to brake hard from time to time, so that your brakes won't get rusty.

Edit: corrected wrong formatting.
« Last Edit: October 16, 2018, 05:31:20 AM by Linda_Norway »

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #177 on: October 16, 2018, 03:47:24 AM »
We don't need self-driving tech to disrupt the existing ownership model which has these large-expensive machines sitting there idle 90+% of the time.

Other than parking, I don't see how putting 300k miles on a car in a year and it requiring replacement will somehow be radically cheaper than putting the same number of miles on more cars over more years.  Relatively few things in a car fail from age - far more mileage/engine hours related.

Also, currently, cars rarely drive deadhead miles.  Self driving/ride sharing/etc involves a lot of deadhead miles - which uses more energy and will wear cars out faster for the same number of "payload miles."

If you put huge amounts of mileage on one car, but the rest of the car is still in good shape, then it's worthwhile to only replace the drive train/parts. People care about how cars look like modern features and stuff. But if those parts are still good and up to date; just replace the drive train and not the entire car is certainly a better option. With car sharing you are more likely to wear out the drive train then the car getting outdated.

PiobStache

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #178 on: October 16, 2018, 07:45:42 AM »


People either get the math on leasing or they don't.

Oh I think we get the math.  It works out just as well (and usually worse) as buying a brand new car.  Which is to say, its a horrible financial choice to make.  Absolutely terrible.  It's just bleeding money in huge amounts.  You're essentially wasting a ton of money on a very expensive luxury.  If you're already FI, and don't care about the expense, it's fine.  Otherwise, it deserves massive face punches.

Now under a business, it can sometimes make sense as a tax deduction.

So this thread is about risk in the used car market.  I face zero risk due to my lease...which is of course, one of the benefits of leasing.  I'm always in warranty, no unexpected costs, included roadside assistance, all the latest safety features to keep my family safe...it's pretty nice. 

PiobStache

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #179 on: October 16, 2018, 07:49:32 AM »
People either get the math on leasing or they don't.

I know!  It's awesome!  Some other sucker pays out of pocket for the early lifespan depreciation on a car, and gets all sorts of restrictions on what they can do, how far they can drive, etc, and then you get to buy a few-year old off-lease car for a bargain!

... sorry, what site are we on again?  Leasing a new car?

Yes, I'm a sucker.  It must feel nice to be so superior.  You have no idea my net worth, income, etc. but just jump to this conclusion. 

GuitarStv

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #180 on: October 16, 2018, 07:59:50 AM »
People either get the math on leasing or they don't.

I know!  It's awesome!  Some other sucker pays out of pocket for the early lifespan depreciation on a car, and gets all sorts of restrictions on what they can do, how far they can drive, etc, and then you get to buy a few-year old off-lease car for a bargain!

... sorry, what site are we on again?  Leasing a new car?

Yes, I'm a sucker.  It must feel nice to be so superior.  You have no idea my net worth, income, etc. but just jump to this conclusion.

If you dig a pit in your back yard, shovel some hundred dollar bills, then light them on fire . . . it doesn't matter if you make 20k a year or 20 million.  What you're doing (while it may be fun) is not an efficient use of money.  Net worth and income shouldn't really come into play when considering sound financial decisions . . . a bad decision for a poor person is still a bad decision for a rich person (you can just get away with making more bad decisions if you're rich).

PiobStache

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #181 on: October 16, 2018, 08:16:23 AM »

If you dig a pit in your back yard, shovel some hundred dollar bills, then light them on fire . . . it doesn't matter if you make 20k a year or 20 million.  What you're doing (while it may be fun) is not an efficient use of money.  Net worth and income shouldn't really come into play when considering sound financial decisions . . . a bad decision for a poor person is still a bad decision for a rich person (you can just get away with making more bad decisions if you're rich).

Again, this depreciating asset has a useful lifespan.  I only want to access the first 3-4 years of this lifespan and the math and other factors indicate leasing is the most cost efficient way to do this.  Again, as I said above when I started getting personally attacked, if you want to drive the same car for a long time, buying makes sense.  My decision is financially sound given the premise I don't want my wife and myself to drive old cars for various reasons including safety, reliability, service experience, and I can 100% quantify my auto expenses which makes budgeting easy and accurate.

I don't expect many folks here to back my choice, as leasing is a HUGE kneejerk response here, but neither do I expect to get called names or told I'm of substandard intelligence. 

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #182 on: October 16, 2018, 08:57:02 AM »

If you dig a pit in your back yard, shovel some hundred dollar bills, then light them on fire . . . it doesn't matter if you make 20k a year or 20 million.  What you're doing (while it may be fun) is not an efficient use of money.  Net worth and income shouldn't really come into play when considering sound financial decisions . . . a bad decision for a poor person is still a bad decision for a rich person (you can just get away with making more bad decisions if you're rich).

Again, this depreciating asset has a useful lifespan.  I only want to access the first 3-4 years of this lifespan and the math and other factors indicate leasing is the most cost efficient way to do this.  Again, as I said above when I started getting personally attacked, if you want to drive the same car for a long time, buying makes sense.  My decision is financially sound given the premise I don't want my wife and myself to drive old cars for various reasons including safety, reliability, service experience, and I can 100% quantify my auto expenses which makes budgeting easy and accurate.

I don't expect many folks here to back my choice, as leasing is a HUGE kneejerk response here, but neither do I expect to get called names or told I'm of substandard intelligence.

What safety, reliability, and service experience problems are you expecting with a 4 - 8 year old vehicle?  It's possible that invalid initial assumptions are leading you to draw an erroneous conclusion.

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #183 on: October 16, 2018, 09:07:52 AM »
What safety, reliability, and service experience problems are you expecting with a 4 - 8 year old vehicle?  It's possible that invalid initial assumptions are leading you to draw an erroneous conclusion.

Safety:  new features are constantly coming out.  Do many eight year old cars have adaptable cruise control?  Accident avoidance, lane correction, self-driving features?  Can you put a price on the safety of your spouse or children?  I know I can't.

Reliability:  it's just reality that as a car ages it becomes less reliable than it was previously.  Wear and tear is a real thing.  With reliability again comes safety as breaking down on the highway is not the most safe experience to be had.

Service:  that's a bit more nebulous but they come to my office and pick up my car, service and wash it, then park it in my spot and give the keys to my secretary; similar for my wife's vehicle.  All of this is done with no additional charge.  If either of our vehicles needed to be in the shop more than the day a complimentary service loaner, of a new and comparable vehicle, is given to us with no charge.  The SA we've had for the last 12 years or so delivers our new vehicles to the house if we want.  He knows I know how to work leases and our deals are very transparent, and these days, done via text.  No stress and I know the exact residual, MF, and cap cost going in.


JLee

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #184 on: October 16, 2018, 09:12:40 AM »
What safety, reliability, and service experience problems are you expecting with a 4 - 8 year old vehicle?  It's possible that invalid initial assumptions are leading you to draw an erroneous conclusion.

Safety:  new features are constantly coming out.  Do many eight year old cars have adaptable cruise control?  Accident avoidance, lane correction, self-driving features?  Can you put a price on the safety of your spouse or children?  I know I can't.

Reliability:  it's just reality that as a car ages it becomes less reliable than it was previously.  Wear and tear is a real thing.  With reliability again comes safety as breaking down on the highway is not the most safe experience to be had.

Service:  that's a bit more nebulous but they come to my office and pick up my car, service and wash it, then park it in my spot and give the keys to my secretary; similar for my wife's vehicle.  All of this is done with no additional charge.  If either of our vehicles needed to be in the shop more than the day a complimentary service loaner, of a new and comparable vehicle, is given to us with no charge.  The SA we've had for the last 12 years or so delivers our new vehicles to the house if we want.  He knows I know how to work leases and our deals are very transparent, and these days, done via text.  No stress and I know the exact residual, MF, and cap cost going in.

Relevant MMM post: http://www.mrmoneymustache.com/2012/06/07/safety-is-an-expensive-illusion/

I have a friend who had a new car lemon law'd due to engine problems. I have another friend who had his CPO / warrantied vehicle towed at least once, if not more. Meanwhile, my 200k mile Lexus has yet to leave me stranded.  I also got a loaner when I went in for a recall / warranty enhancement service because Lexus is awesome, but that's another story :)

New cars are nice - I get it. I really do. However, you pay for it. A lot.

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #185 on: October 16, 2018, 09:17:49 AM »


Relevant MMM post: http://www.mrmoneymustache.com/2012/06/07/safety-is-an-expensive-illusion/

I have a friend who had a new car lemon law'd due to engine problems. I have another friend who had his CPO / warrantied vehicle towed at least once, if not more. Meanwhile, my 200k mile Lexus has yet to leave me stranded.  I also got a loaner when I went in for a recall / warranty enhancement service because Lexus is awesome, but that's another story :)

New cars are nice - I get it. I really do. However, you pay for it. A lot.

That post does not address my points above but rather the fatality rate per class of vehicle.  With the features I mentioned above every class of vehicle that has them becomes safer.  Also I think it's a pretty tortuous argument to say, as the link does, having to pay for a full size SUV runs the very real risk of ruining my health and thus my retirement.  From what I can discern MMM drives low miles and mainly in a suburban setting.  Make it more miles per year, to include highway and/or high speed surface roads like my driving, and the margin of safety only increases for me.

Again, and people keep ignoring it, I 100% agree buying a used car and driving it into the ground is the cheapest way to obtain transportation.  I have worked my butt off to be in the position where I don't always have to make the cheapest choice and it's really, really nice to be in this position.  I could have FI'ed years ago if I wanted to live an overly frugal life.  I don't but it doesn't mean certain FI principles are not to be adopted and/or lauded.  Not all of us are going to follow the MMM bible to the verse.
« Last Edit: October 16, 2018, 09:20:33 AM by PiobStache »

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #186 on: October 16, 2018, 09:19:25 AM »
If you go on the assumption that you will either buy a car every 3 years, or you will lease -- does the lease still come out ahead, all other things being equal?

Probably depends on the make, model, trim level, lease amenities, etc.

If you buy a $20k car, after 3 years, you can probably sell it for $14k. Maybe more. The same car might lease for $250/month or $9000. So unless initial start-up costs are more than $3k, the lease is more expensive. Those are completely made-up numbers. What are the real numbers for your year, make and model?

PiobStache

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #187 on: October 16, 2018, 09:22:51 AM »
If you go on the assumption that you will either buy a car every 3 years, or you will lease -- does the lease still come out ahead, all other things being equal?

Probably depends on the make, model, trim level, lease amenities, etc.

If you buy a $20k car, after 3 years, you can probably sell it for $14k. Maybe more. The same car might lease for $250/month or $9000. So unless initial start-up costs are more than $3k, the lease is more expensive. Those are completely made-up numbers. What are the real numbers for your year, make and model?

Yeah, I'm not getting into details, but I'll say for what we drive the auto producer likes to subsidize leases by giving outrageous residuals (often 60% or a bit more) and basically free credit, i.e. MFs equal to under 1% interest.

Which is a thing.  Don't believe any salesperson that says leases don't use interest rates.  Multiply the MF by 2400 and you've got the interest rate.

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #188 on: October 16, 2018, 09:41:26 AM »
If you go on the assumption that you will either buy a car every 3 years, or you will lease -- does the lease still come out ahead, all other things being equal?

Probably depends on the make, model, trim level, lease amenities, etc.

If you buy a $20k car, after 3 years, you can probably sell it for $14k. Maybe more. The same car might lease for $250/month or $9000. So unless initial start-up costs are more than $3k, the lease is more expensive. Those are completely made-up numbers. What are the real numbers for your year, make and model?

Yeah, I'm not getting into details, but I'll say for what we drive the auto producer likes to subsidize leases by giving outrageous residuals (often 60% or a bit more) and basically free credit, i.e. MFs equal to under 1% interest.

Which is a thing.  Don't believe any salesperson that says leases don't use interest rates.  Multiply the MF by 2400 and you've got the interest rate.
It sounds like you've got your leasing plans as optimized as they can be, given your desire to always drive the latest/greatest.

I do think it's a bit disingenuous to say things like "Can you put a price on the safety of your spouse or children?  I know I can't."  Why do you get 3 year leases instead of 1 year?  Would you pay 30 million dollars to have access to 2019 safety features a year early in 2018?

My boss is a high-net-worth individual.  "I'm meeting some friends in Gibraltar for the weekend" level.  He just a few months ago replaced his 2008 Mercedes with a brand new ~100k Mercedes.  He's not frugal by any means but I don't think he had any major issues with even a German car over only 10 years of life.  10 year old cars may have been significantly less reliable 20-30 years ago, but these days the only <10 year old car I've had issues with had over 200k miles on it.

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #189 on: October 16, 2018, 09:46:03 AM »
It sounds like you've got your leasing plans as optimized as they can be, given your desire to always drive the latest/greatest.

Thank you for stating this.

Why do you get 3 year leases instead of 1 year? 

Math.  The automakers create a sweet spot for leases in the 36-39 month area through, as stated above, subsidized residuals and interest.

My boss is a high-net-worth individual.  "I'm meeting some friends in Gibraltar for the weekend" level.  He just a few months ago replaced his 2008 Mercedes with a brand new ~100k Mercedes.  He's not frugal by any means but I don't think he had any major issues with even a German car over only 10 years of life.  10 year old cars may have been significantly less reliable 20-30 years ago, but these days the only <10 year old car I've had issues with had over 200k miles on it.

Again, math.  Well, more data.  I don't make decisions based on anecdotes but rather on aggregated data when I can.  I know vehicles with the latest safety features, unsurprisingly, are the safest vehicles.

So anyway, the OP question was do I worry about losing value in my vehicle due to driverless tech?  Again, nope.  ;)

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #190 on: October 16, 2018, 09:55:18 AM »
What safety, reliability, and service experience problems are you expecting with a 4 - 8 year old vehicle?  It's possible that invalid initial assumptions are leading you to draw an erroneous conclusion.

Safety:  new features are constantly coming out.  Do many eight year old cars have adaptable cruise control?  Accident avoidance, lane correction, self-driving features?  Can you put a price on the safety of your spouse or children?  I know I can't.

What evidence do you have that these features actually make cars safer?  I'm not trying to be a dick here, but am seriously curious.  My wife purchased a newer model Toyota Corolla with lane correction that makes driving in the winter significantly more dangerous (we ended up turning it off).


Reliability:  it's just reality that as a car ages it becomes less reliable than it was previously.  Wear and tear is a real thing.  With reliability again comes safety as breaking down on the highway is not the most safe experience to be had.

I agree that cars age and become less reliable.  Where I think we have a differing opinion is the age at which this becomes a problem.  Most 4 - 8 year old cars from reputable manufacturers (Toyota, Honda) are very reliable.  As a matter of fact, reliability of models of cars is better known when they're a few years old as time has allowed for more collection of data.  Only driving a < 4 year old car is not necessary to ensure reliability.

Service:  that's a bit more nebulous but they come to my office and pick up my car, service and wash it, then park it in my spot and give the keys to my secretary; similar for my wife's vehicle.  All of this is done with no additional charge.  If either of our vehicles needed to be in the shop more than the day a complimentary service loaner, of a new and comparable vehicle, is given to us with no charge.  The SA we've had for the last 12 years or so delivers our new vehicles to the house if we want.  He knows I know how to work leases and our deals are very transparent, and these days, done via text.  No stress and I know the exact residual, MF, and cap cost going in.

Why aren't you able to wash your own car?

You mentioned that you were never using a car older than 4 years because you wanted the utmost reliability.  Why do you need your vehicle to be in the shop so often?  (As a side note, when I bring my 12 year old Corolla in to get it serviced they'll give me a ride to and from work to pick up my car as part of the service.)

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #191 on: October 16, 2018, 10:02:20 AM »
With car sharing you are more likely to wear out the drive train then the car getting outdated.

It's not "outdated" so much as "the interior is falling apart."  Have you driven many higher milage cars, or (in a moment of misguided charity) let people borrow them for extended periods of time?

You run into things like the power windows (luxury!) not working right, or the manual windows sticking because the guide track is worn, the seats being beat up/ripped from use, general stains, the steering box being sloppy, etc.  It's not (usually) drivetrain issues - even on really high mileage cars.  There's certainly a survivor bias there, and you won't find many high mile Taruses of the "has a weak transmission" era, but the whole car wears out, and putting a million mile drivetrain in a car doesn't magically change that, by 300k miles, it's pretty beat up.  Ride "sharing" services will be even worse, because you'll have people who truly don't care about the car, because it's someone else's car.  I don't think we really see this with Uber/Lyft right now because the car owner is in there keeping it neat, but if it's self driving?  Some percentage of people will be really rough on the car, and that's going to be a problem.

Can you put a price on the safety of your spouse or children?  I know I can't.

I can and do.  We don't drive a German luxury car, even though, if I were to abandon all long term financial goals, I could "afford" one on a cash flow basis.  We drive something less expensive, optimized for our driving needs (currently a 2012 Chevy Volt, because my wife and kids do quite a few 20-30 mile days, which they can do mostly on electric).  It's reasonably safe, but it's not the "safest" car on the road, nor does it have a lot of advanced features.  They're of fairly limited use out in the rural area we live in, and aren't, to us, worth the money it would cost to get them.

Quote
Reliability:  it's just reality that as a car ages it becomes less reliable than it was previously.  Wear and tear is a real thing.  With reliability again comes safety as breaking down on the highway is not the most safe experience to be had.

I've driven some genuine shitboxes in my years of driving.  In order from least expensive, I've purchased cars for $100, $150, $200, and $350.  Then, you know, a genuinely luxurious $2000 car!

In many, many years of doing that, I've been stuck on the side of the highway twice.  Only one needed a tow - I was able to fix the other one (a freak failure of a nearly-new distributor cap) because I kept the old parts around.  It's simply not that common, and I assume your definition of an "older car" is still quite a bit newer than either "I saved it from the scrapyard" or "I literally bought it from the junkyard."

Quote
Service:  that's a bit more nebulous but they come to my office and pick up my car, service and wash it, then park it in my spot and give the keys to my secretary; similar for my wife's vehicle.  All of this is done with no additional charge.  If either of our vehicles needed to be in the shop more than the day a complimentary service loaner, of a new and comparable vehicle, is given to us with no charge.  The SA we've had for the last 12 years or so delivers our new vehicles to the house if we want.  He knows I know how to work leases and our deals are very transparent, and these days, done via text.  No stress and I know the exact residual, MF, and cap cost going in.

Hey, I've got on-site service of all my vehicles too!  I service them myself, on our property! :p  Saves me an awful lot of hassle, and I bought a house instead of a car that comes with complementary service (a fully loaded Tesla is slightly less than we paid for our whole house).

If you've been suckered into believing that a fully loaded luxury car is a requirement for... whatever reasons, sure.  Leasing them is a decent way to efficiently spend obscene amounts of money on a car.  But you're still spending obscene amounts of money on a car that, fundamentally, accomplishes the same things my $100 beaters did: Get me around.


I know vehicles with the latest safety features, unsurprisingly, are the safest vehicles.

How much of that is correlated to the age of drivers?  In general, "the latest safety features" tend to show up on luxury cars, which tend to be driven by people who can afford them.  That generally means older owners (40s-60s), with decades of driving experience to rely on.  They're generally safer drivers, regardless of the features in the car.

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #192 on: October 16, 2018, 10:19:19 AM »
Again, math.  Well, more data.  I don't make decisions based on anecdotes but rather on aggregated data when I can.  I know vehicles with the latest safety features, unsurprisingly, are the safest vehicles.
OK, data it is. 

The state in the US with the highest fatality rate per 100 million miles driven is South Carolina at 1.88.  Source  The average US male puts 16,550 miles per year on their car. Source  So, if you live in South Carolina and drive an average amount of miles yearly, your chance of automotive fatality is 0.031%.

According to NHTSA data (source) the percentage of occupants killed is indeed inversely correlated with the age of the vehicle.  26% for a brand new car, up to 30% for a five year old car, and up to 35% for an eleven year old car.  This data is from 2005-2011 so current data would probably be slightly lower across the board.

So, if a brand new car vs an eleven year old car makes you 9% less likely to die in a car crash *once you've already crashed*.  That would be reducing a 0.031% annual chance of automotive fatality by 0.003% to 0.028%.

I would argue that there are plenty of more cost-effective ways than driving a 2018 car instead of a 2007 to reduce one's annual chance of death by 0.003%.

PiobStache

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #193 on: October 16, 2018, 11:07:03 AM »
So again, back to the OP's question:  I have zero concern driverless cars will ruin the value of my vehicle because I lease.

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #194 on: October 16, 2018, 11:12:52 AM »
Hey, I've got on-site service of all my vehicles too!  I service them myself, on our property! :p  Saves me an awful lot of hassle, and I bought a house instead of a car that comes with complementary service (a fully loaded Tesla is slightly less than we paid for our whole house).

I bought a house. In fact, I paid for a house.  A big clown house and I love living in it.  I'm glad your house is paid for too and I applaud your efforts.

Doing my own service?  So there's individual preferences and how much we value our leisure time.  Due to my income giving up an hour of leisure time needs to come with a huge premium.  Servicing my own vehicle doesn't match that premium.  It matches yours, and that's cool, and I support your choice 100% in that.  Why don't people support mine here?  (That was rhetorical.)

This is a good study in group dynamics.  I am willing to stipulate a whole bunch of agreement but my one area of differentiation has the "in group" quite upset with me...even though they have no idea my personal situation and the amount of FI I participate in.

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #195 on: October 16, 2018, 11:43:59 AM »
Doing my own service?  So there's individual preferences and how much we value our leisure time.  Due to my income giving up an hour of leisure time needs to come with a huge premium.  Servicing my own vehicle doesn't match that premium.  It matches yours, and that's cool, and I support your choice 100% in that.  Why don't people support mine here?  (That was rhetorical.)

I know it was rhetorical, but let me take a stab at it.  Your choice would seem to go generally against the advice of the person who started this blog and forum.  He advocated minimizing your reliance upon others to do tasks that can easily be learned and accomplished on your own, calling it 'badassity'.  It's therefore not surprising that you'll find dissenting opinions here.

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #196 on: October 16, 2018, 11:55:31 AM »
Hey, I've got on-site service of all my vehicles too!  I service them myself, on our property! :p  Saves me an awful lot of hassle, and I bought a house instead of a car that comes with complementary service (a fully loaded Tesla is slightly less than we paid for our whole house).

I bought a house. In fact, I paid for a house.  A big clown house and I love living in it.  I'm glad your house is paid for too and I applaud your efforts.

Doing my own service?  So there's individual preferences and how much we value our leisure time.  Due to my income giving up an hour of leisure time needs to come with a huge premium.  Servicing my own vehicle doesn't match that premium.  It matches yours, and that's cool, and I support your choice 100% in that.  Why don't people support mine here?  (That was rhetorical.)

This is a good study in group dynamics.  I am willing to stipulate a whole bunch of agreement but my one area of differentiation has the "in group" quite upset with me...even though they have no idea my personal situation and the amount of FI I participate in.

One?

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A big clown house and I love living in it.
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I could have FI'ed years ago
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I don't want more than the first three or four years of that lifespan

You do you. I don't really care. That said, you espousing the "I'm rich so I do what I want" attitude is akin to me going to a vegan forum and saying how much I love cheese and it's ok because I have my own cow.  There are many flavors of FI.  Driving new luxury cars (my assumption is BMW due to heavy lease subsidization they offer, though of course I could be wrong), living in a big clown house, while still working and earnings tons of money to the point where you don't even bother to wash your own cars?  That does not fit this forum, which is why you're getting this backlash.
« Last Edit: October 16, 2018, 11:57:09 AM by JLee »

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #197 on: October 16, 2018, 11:57:13 AM »
Doing my own service?  So there's individual preferences and how much we value our leisure time.  Due to my income giving up an hour of leisure time needs to come with a huge premium.  Servicing my own vehicle doesn't match that premium.  It matches yours, and that's cool, and I support your choice 100% in that.  Why don't people support mine here?  (That was rhetorical.)

Because you're on the Mr. Money Mustache forum, which is not Boggleheads or other "I make a million a year, how do I optimize airline miles so I can get free first class upgrades for my nanny when she travels overseas with us?" type forums.

"I live in a giant house I deserve, drive brand new luxury cars because only the best for me and mine, lease them, and don't like doing things myself because I value my leisure time so much!" is very much at odds with the whole MMM ethos and methods - I'm not actually sure why you're on this particular forum with that approach to life and finances.  It's not really the right forum for it.  Presumably talking about how I change my own oil on a forum devoted to people earning lots of money would get a similar response, but I don't go about doing that.  Quite a few people on this forum have learned to work on their own vehicles and do maintenance themselves because it's both money savings and useful skill building.

Quote
This is a good study in group dynamics.  I am willing to stipulate a whole bunch of agreement but my one area of differentiation has the "in group" quite upset with me...even though they have no idea my personal situation and the amount of FI I participate in.

"One area of differentiation"?  You're at odds with the founder of this site in pretty much every area that's come up recently!

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #198 on: October 16, 2018, 12:03:21 PM »


I know it was rhetorical, but let me take a stab at it.  Your choice would seem to go generally against the advice of the person who started this blog and forum.  He advocated minimizing your reliance upon others to do tasks that can easily be learned and accomplished on your own, calling it 'badassity'.  It's therefore not surprising that you'll find dissenting opinions here.

Steve, how many guitars, amps, and effect pedals do you own?

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Re: Are you afraid your new car's value will be ruined by the driverless car?
« Reply #199 on: October 16, 2018, 12:06:16 PM »
...because I value my leisure time so much!" is very much at odds with the whole MMM ethos.

Really?  I thought a major part of the ethos was enjoying leisure time?  Did I get that wrong?  Is RE not basically in the pursuit of leisure time?  Why then would I use up part of my leisure time when putting that same amount into my working life would be far more economically beneficial? 

Either a big part of the ethos is optimizing non-working time or it's not.  Seems to me it is.

I live in a giant house...

That was said in reply to the part of the post that implied I had decided to lease a vehicle and therefore did not have a home, or at the very least, had not paid my home off.  Again, I thought removal of personal debt was a big part of the ethos?  Or are you telling me being leveraged to the hilt and FIRE'ing is where it's at?

I have not attacked anyone here personally but the personal attacks on me are numerous.  Nice work.
« Last Edit: October 16, 2018, 12:09:55 PM by PiobStache »