Author Topic: Car Buying Question  (Read 1575 times)

felizcortez

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Car Buying Question
« on: February 08, 2015, 10:51:39 AM »
I'm in a sales position where work requires having a car that meets certain requirements (see below).

Current 5 model year car.  E.g in 2015 the oldest car you can have is a 2011
105 inch Wheel base and must have 4 doors - puts you in the Accord/Camry etc, level
You must declare the car in the use of business on your insurance so it is slightly more expensive.

If you meet the requirements you are provided a $7500 stipend per year to cover the car/insurance/maintenance etc.  You are also reimbursed for business mileage at a rate of 25 cents per mile.  Note the 7500 is taxed as regular income, but at the end of the year, you figure out how much the car was used for business purposes and get a chunk of that tax back potentially (you can declare depreciation or lease payments in this calculation as an expense).  (I drive about 15k miles per year with about 60% of those for business purposes).  If you don't use the entire stipend you get to pocket the difference.  My strategy has been to buy a pretty much a base model car.  The original purchase was a mazda 6 - 19k Out the door and a Camry 22k out the door.

I have bought two cars to meet the plan requirements and have always toyed with the idea of whether it was more efficient to buy a new car or a used one to meet car plan requirements.  The issue comes down the hassle of turning over a car every 5 years if you buy new or sooner if you buy used.  The two cars I have purchased have both been new and when my original car no longer met the requirements my wife started using that car when I bought a new one.  I will need to buy another car at the end of next year if I want to stay current on the plan and continue to receive the stipend. 

Just wondering what others would do in this situation - lease, buy new, buy used etc.?

GeneralJinjur

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Re: Car Buying Question
« Reply #1 on: February 08, 2015, 10:58:27 AM »
If someone else was paying for it (with the $7500 x 5 years stipend), I would pick up a new Accord Hybrid because I think they are awesome.  There, I admitted my most unMustachian desire.  On the internet!

lakemom

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Re: Car Buying Question
« Reply #2 on: February 08, 2015, 11:01:30 AM »
Have you tried keeping your car in immaculate condition inside and out and seeing how long you can go before someone calls you on it?  That would be my strategy...because a clapped out 3yo car looks a lot worse/older than an immaculate 9 year old car.  Especially to the majority of people who can't tell the year of a car by its shape, the headlights....eh whatever they changed to entice buyers to 'trade up.'  Or do you have to turn in some kind of paperwork every year with the model year of the car on it?

felizcortez

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Re: Car Buying Question
« Reply #3 on: February 08, 2015, 11:52:51 AM »
Have you tried keeping your car in immaculate condition inside and out and seeing how long you can go before someone calls you on it?  That would be my strategy...because a clapped out 3yo car looks a lot worse/older than an immaculate 9 year old car.  Especially to the majority of people who can't tell the year of a car by its shape, the headlights....eh whatever they changed to entice buyers to 'trade up.'  Or do you have to turn in some kind of paperwork every year with the model year of the car on it?

You have to turn in proof that the car meets the requirements along with updated insurance information.  There is a review every year to see which people no longer qualify and need to purchase a new car.  You used to be able to get a few months into the new model year as a grace period, but now if you don't get the new car before the end of the year you are ineligible and don't receive the stipend for a year.