Author Topic: New car windfall  (Read 3120 times)

k290

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New car windfall
« on: July 12, 2015, 02:02:41 AM »
I am being given a new car for my 25th birthday. I would appreciate any comments or advice in making a mustachian move here.

Currently I do not pay for my car license or insurance. When I turn 25 I will be taking on the responsibility for my payments here, since I am now a working adult and such.

So, in choosing my new car I  have gone for something much more fuel efficient than my current vehicle. Trying to be mustachian as possible. However, the new car services cost 4x more than my current 13 year old car. Insurance would also be significantly more than if I  kept my old car.

I am extremely grateful for this, but I think it is a bit naive to just jump into this without fully understanding the increase or decrease in costs I will have compared to my older car.
Just looking for general thoughts on what I should be considering from experienced mustachians here.

Disclaimer: Bicycle crew no cycling comments please :p
« Last Edit: July 12, 2015, 02:12:41 AM by k290 »

AutoZealot

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Re: New car windfall
« Reply #1 on: July 12, 2015, 02:15:43 AM »
OK - clarify ...

how does "being given a new car" and " I will be taking on responsibility for my payments here" work?

Frankies Girl

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Re: New car windfall
« Reply #2 on: July 12, 2015, 02:43:16 AM »
Is there anything wrong with the 13 year old car? If not, I'd say thank generous person profusely and ask for whatever amount they were comfortable with giving you for a new car and invest it, and delay buying a car (not brand new, mind you) until such time that the 13 year old car starts having major issues.

If the older car is already at the point where you're repairing it constantly, then suggest you buy a 3-6 year old car in good working condition that gets great MPG. Insurance costs then would be similar to an older car, since you'd hopefully be able to afford car without financing it and avoiding having to carry full insurance on it, and since new cars depreciate the instant you drive it off the lot, slightly older models are usually in excellent condition and a better value, and maintenance costs should be similar to what you're already paying.

http://www.mrmoneymustache.com/2012/03/19/top-10-cars-for-smart-people/

Speaking of which...what sort of car are you looking at that requires expensive maintenance?? That's a big "hell no" at even considering if you think it needs more than average stuff like oil changes and tire rotating and  things like occasionally checking the fluids or wipers, which you should be doing yourself (I change my air filters, wiper blades, even batteries, but most auto parts stores will install most of that stuff for free if you buy it from them). You don't go to the dealership for anything other than recall repairs (in other words, stuff they have to fix because the car was screwed up by the manufacturer), so if you're looking at something like an Audi or other types of "performance" vehicles... take a giant step back and re-read the above link.

Just because it's a windfall (in the sense that you won't be paying the initial purchase) doesn't mean you go get a ridiculous vehicle that requires more of your money to maintain.




k290

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Re: New car windfall
« Reply #3 on: July 12, 2015, 03:01:58 AM »
OK - clarify ...

how does "being given a new car" and " I will be taking on responsibility for my payments here" work?

Insurance and license costs previously I didn't pay for since my current car isn't in my name. That is all. The car is a birthday present in its entirety.
« Last Edit: July 12, 2015, 03:11:18 AM by k290 »

Friar

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Re: New car windfall
« Reply #4 on: July 12, 2015, 03:05:32 AM »
OK - clarify ...

how does "being given a new car" and " I will be taking on responsibility for my payments here" work?

Insurance and license costs previously I didn't pay for since my current car isn't in my name. That is all.

You definitely had me thinking that you'd be making monthly car payments. I'm glad to see that won't be the case.

k290

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Re: New car windfall
« Reply #5 on: July 12, 2015, 03:29:21 AM »
Is there anything wrong with the 13 year old car? If not, I'd say thank generous person profusely and ask for whatever amount they were comfortable with giving you for a new car and invest it, and delay buying a car (not brand new, mind you) until such time that the 13 year old car starts having major issues.

If the older car is already at the point where you're repairing it constantly, then suggest you buy a 3-6 year old car in good working condition that gets great MPG. Insurance costs then would be similar to an older car, since you'd hopefully be able to afford car without financing it and avoiding having to carry full insurance on it, and since new cars depreciate the instant you drive it off the lot, slightly older models are usually in excellent condition and a better value, and maintenance costs should be similar to what you're already paying.

http://www.mrmoneymustache.com/2012/03/19/top-10-cars-for-smart-people/

Speaking of which...what sort of car are you looking at that requires expensive maintenance?? That's a big "hell no" at even considering if you think it needs more than average stuff like oil changes and tire rotating and  things like occasionally checking the fluids or wipers, which you should be doing yourself (I change my air filters, wiper blades, even batteries, but most auto parts stores will install most of that stuff for free if you buy it from them). You don't go to the dealership for anything other than recall repairs (in other words, stuff they have to fix because the car was screwed up by the manufacturer), so if you're looking at something like an Audi or other types of "performance" vehicles... take a giant step back and re-read the above link.

Just because it's a windfall (in the sense that you won't be paying the initial purchase) doesn't mean you go get a ridiculous vehicle that requires more of your money to maintain.

Is it really ok to do your own services? Isn't keeping a service history important? What about the big services like cam-belt change?

Compared to the cars in that article its not in that league of mustachian cars: 2014 1.2 L Renault Megane. Its not a performance car at all nor a gas guzzler. But Its highway mpg is worse than those in the article.

 EDIT: I have put strike throughs through my previous statement. I was doing conversions from metric system(litres/100k,) and it looks like I made a mistake ( US mpg is different to UK mpg. It does seem like it is in the same class as those cars, if not better)



« Last Edit: July 12, 2015, 03:37:25 AM by k290 »

Friar

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Re: New car windfall
« Reply #6 on: July 12, 2015, 03:51:54 AM »

Is it really ok to do your own services? Isn't keeping a service history important? What about the big services like cam-belt change?

Compared to the cars in that article its not in that league of mustachian cars: 2014 1.2 L Renault Megane. Its not a performance car at all nor a gas guzzler. But Its highway mpg is worse than those in the article.

 EDIT: I have put strike throughs through my previous statement. I was doing conversions from metric system(litres/100k,) and it looks like I made a mistake ( US mpg is different to UK mpg. It does seem like it is in the same class as those cars, if not better)

In my experience, service history only matters in two scenarios:

1) In order to stay under warranty the car has to be serviced by an authorised servicer at the recommended intervals and have the book stamped.

2) When selling the car on. To a used car buyer a full service history generally indicates that the vehicle has been taken care of. However, this is less important as even with a full history it might end up being a lemon. Besides, good maintenance can be indicated just by you making a note of when various services were performed, along with receipts of the parts you used for the jobs.


foggnm

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Re: New car windfall
« Reply #7 on: July 12, 2015, 07:31:22 AM »
Agree with Frankie's Girl. Don't get a new car, invest it, or have them buy you a used car. I will withhold my judgement as to why anyone would buy a 25 year old adult a car that already has one.

music lover

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Re: New car windfall
« Reply #8 on: July 12, 2015, 07:41:20 AM »
I will withhold my judgement as to why anyone would buy a 25 year old adult a car that already has one.

There is no need to judge. I'm guessing that it's probably the parents who are doing this. The OP has a car that is 13 years old, and perhaps their thought process is that a new vehicle will give their child peace of mind for the next 10 - 15 years without the worry of failure or an expensive repair.

That being said, if I was offered $$XX for a new car, I would ask if it was okay to buy a higher quality vehicle that is 3 or 4 years old for the same $$ instead.

foggnm

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Re: New car windfall
« Reply #9 on: July 12, 2015, 08:11:47 AM »
There is no need to judge. I'm guessing that it's probably the parents who are doing this. The OP has a car that is 13 years old, and perhaps their thought process is that a new vehicle will give their child peace of mind for the next 10 - 15 years without the worry of failure or an expensive repair.

Parents are nice like that. But 25 isn't a child, it is an adult that can make their way in the world. That being said, no reason to turn down such a generous gift on principle, but it would show your 'adultness' by asking for a slightly used car or for the money to be set aside until your current car is no longer functional. For example, what if you said "hey, my car works now. Can we put that money aside and use it at another time?" That would be a very mature thing to do.

Katsplaying

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Re: New car windfall
« Reply #10 on: July 12, 2015, 08:16:20 AM »
Opportunity for new car! Grats! Someone REALLY likes you!

I agree that brand new with higher maintenance costs looks like a bad move. Negotiate with your generous benefactor(s) for a gently used, high MGP/KPG model after explaining why used is smarter in the long run FOR YOU.

This is the kind of fantasy scenario I like to play with: I have won a new car (somehow) that is not at all MMM; how fast could I sell/trade it for a truly smart vehicle?

Cheers!