Author Topic: Car Purchase Optimization  (Read 1760 times)

felizcortez

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Car Purchase Optimization
« on: February 28, 2017, 04:51:43 PM »
I am required by work to purchase a new car every 5 years.  I receive a stipend of $625 per month in order to cover the cost of the car, but this ends up getting taxed as income.  At the end of the year, depending on business usage level you can get some of those taxes back.  I am due to purchase a car before the end of this year because mine is falling off the acceptable model years.  You can own a current 5 model year car.  So in 2017, the oldest car you can have is a 2012.  There are some requirements on car size, but it typically puts you in the mid size sedan, or suv range (e.g. Accord, Camry, and even a civic meets the requirements). 

I drive a lot for work (typically about 15k miles per year).

I am a little under 2 years away from leaving the job today, but will be about 14 months away in December 2017 when I'll need to make the actual purchase.  I'm debating on buying a 2 or 3 year used car to not get hit hugely on depreciation since I don't plan on working in that job forever.  Just wanted to see what other people think about the idea of whether I should buy a used one or just buck up and purchase it new. 

ShortStuff

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Re: Car Purchase Optimization
« Reply #1 on: February 28, 2017, 10:16:58 PM »
I suggest buying used, especially since you will only be there 14 months after you purchase the car.  It might be a different story if you were going to continue working there and hit that 5 year mark shortly into your ownership of a 2-3 year old car, but that's not the case for you.

Interesting article I read recently on new car depreciation, Food for thought:
http://millennialmoneyman.com/what-if-everything-depreciated-like-new-cars/

Dave1442397

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Re: Car Purchase Optimization
« Reply #2 on: March 01, 2017, 05:54:47 AM »
I would buy a 2014 model, probably an Accord Sport, and use the fourteen months worth of money to pay it off.

NoStacheOhio

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Re: Car Purchase Optimization
« Reply #3 on: March 01, 2017, 06:17:36 AM »
If you can find something off a lease, that may be a good way to go. Do you get a flat $625 for auto expenses, and you figure out the details? If you came in lower, would you be able to pocket the difference?

pbkmaine

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Re: Car Purchase Optimization
« Reply #4 on: March 01, 2017, 06:26:54 AM »
Where are you located? We had a great experience with Off Lease Only, in Florida.

felizcortez

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Re: Car Purchase Optimization
« Reply #5 on: March 01, 2017, 02:52:13 PM »
If you can find something off a lease, that may be a good way to go. Do you get a flat $625 for auto expenses, and you figure out the details? If you came in lower, would you be able to pocket the difference?

Yes.  You get to keep whatever you don't spend.  I have been doing this for a number of years with more reasonable auto purchases.  Camry type cars.  Some people go crazy and get a range rover.

My plan is to pay cash for whatever car we get. 

Where are you located? We had a great experience with Off Lease Only, in Florida.

Located in California.


NoStacheOhio

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Re: Car Purchase Optimization
« Reply #6 on: March 02, 2017, 05:38:53 AM »

Yes.  You get to keep whatever you don't spend.  I have been doing this for a number of years with more reasonable auto purchases.  Camry type cars.  Some people go crazy and get a range rover.

My plan is to pay cash for whatever car we get. 


Then yeah, your plan to buy one more car that won't age off before you separate is probably optimal.

neo von retorch

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Re: Car Purchase Optimization
« Reply #7 on: March 03, 2017, 10:35:02 AM »
What do you plan to do after you leave this job? Will you sell the car or continue driving it for a long time? Do you drive enough that gas mileage is a consideration?

Since you used the word "optimization", I would imagine you would buy the least expensive, lowest cost to insure, most fuel-efficient 3.5 year old that meets the requirements of the program. Is there a "mileage" requirement, as well, or can you buy a late model high mileage vehicle that costs less?