Author Topic: New cars, what to do.  (Read 8730 times)

jiggy-z

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New cars, what to do.
« on: May 29, 2013, 03:42:36 PM »
CAR1: I am the proud owner of a new 2013 Toyota Tacoma 4 X 4 that the company I own purchased for cash.  The business will get the deduction, and I use the vehicle to access construction sites, and I am also fond of taking my fishing vacations(cheap) to the beach where 4 X 4 is an absolute must(perhaps 4 times/year).  Insurance and fuel are also deductible, of course.  In heavy construction, a truck is a must, even if you are just an office guy like me.  Seems silly to trade for a used model and take a hit, or worse, get a wagon. 

CAR2: The wife's SAAB was on its last leg and we got a 2013 VW sportwagen, 0% for 3 years, but with a minimal down payment and about $600/month.  Kind of pricy for a mustachian vehicle, but it gets great mileage.

We are not within biking or walking distance of anything.  Seems like we are kind of in no mans land with a hit or two to take if we do anything soon.  Both are great vehicles that seem like we could just hold and wait for the mustachianism to come to us.  Not sure.  Your thoughts.

grantmeaname

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Re: New cars, what to do.
« Reply #1 on: May 29, 2013, 05:11:14 PM »
Both are great vehicles that seem like we could just hold and wait for the mustachianism to come to us.  Not sure.  Your thoughts.
1) Maybe you have us confused with the "buy lots of new things no-sacrifice personal finance forum", 2) You could save a hell of a lot of money and not even notice the lifestyle change after the first month by buying the least amount of car that fills your needs rather than the most you think you could get away with, and 3) beware the sunk cost fallacy -- if a 2005 car is a better idea going forward than a 2013 one, then it doesn't matter how recently you bought the 2013 one, it's still worse going forward and you should still switch to the 2005.

Jamesqf

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Re: New cars, what to do.
« Reply #2 on: May 29, 2013, 05:25:38 PM »
CAR1: I am the proud owner of a new 2013 Toyota Tacoma 4 X 4...

So...  Just looked up the MSRP of a 4x4 regular cab, about $30K.  My '88 Toyota cost $2800 (minus the $1100 I got for the older model that I couldn't get to pass smog).  What exactly will your 2013 pickup do that my 1988 won't?  And I don't worry about scratching the paint, buying a bed liner, etc, probably pay way less for insurance & registration...


napalminator

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Re: New cars, what to do.
« Reply #3 on: May 30, 2013, 09:30:27 AM »
What exactly will your 2013 pickup do that my 1988 won't?
inflate airbags on impact, for starters.

Self-employed-swami

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Re: New cars, what to do.
« Reply #4 on: May 30, 2013, 09:48:31 AM »
DUDE!

I work on the drilling drilling rigs, so 4x4 is requirement for me, 180 days a year! 

I just bought a 'new' work truck.  I got a 2005 Tundra TRD fully loaded for $11,000 cash (also paid for in cash, by the company I own).  Yes, it is a deduction, but the less you spend in your business, the more that is available to PAY YOURSELF!!


My truck is KICK ASS.  Not so good on gas, but again, that is being highly subsidized by my clients.  I'm willing to bet though, that you spend more on gas total, driving around in yours, even though it is slightly smaller.

FACE PUNCH
Sell both of those, immediately!

Self-employed-swami

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Re: New cars, what to do.
« Reply #5 on: May 30, 2013, 09:51:16 AM »
What exactly will your 2013 pickup do that my 1988 won't?
inflate airbags on impact, for starters.

I had to buy a new work truck, when I had an unfortunate foray into the ditch, upside down in February.

My old truck was a 2006, and it had all the fancy airbags that your 2013 does.  As will a 2005 Tundra, that is a US model (my new one doesn't have the side airbags, because it is a Canadian truck).

SELL SELL SELL. Safety features and usability are still available on older, but still kick-ass, trucks!

jp

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Re: New cars, what to do.
« Reply #6 on: May 30, 2013, 10:00:28 AM »
I hope this is a joke.

If your goal is to appear fancy, you have nailed it.  If your goal is FI, you have failed miserably. 

Jamesqf

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Re: New cars, what to do.
« Reply #7 on: May 30, 2013, 02:37:47 PM »
What exactly will your 2013 pickup do that my 1988 won't?
inflate airbags on impact, for starters.

Hummm...  I've got at least 15 driving years between this one and the previous '84 model, and haven't impacted anything yet.  I know, I've got a boring, uneventful life :-)

Self-employed-swami

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Re: New cars, what to do.
« Reply #8 on: May 30, 2013, 02:40:43 PM »
What exactly will your 2013 pickup do that my 1988 won't?
inflate airbags on impact, for starters.

Hummm...  I've got at least 15 driving years between this one and the previous '84 model, and haven't impacted anything yet.  I know, I've got a boring, uneventful life :-)

I also had an uneventful driving 'career' until February.  I'm glad I had the airbags (and the full insurance, because it paid me quite a lot, for the inconvenience, since I was 2 provinces away from home, at the time).

Spork

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Re: New cars, what to do.
« Reply #9 on: May 30, 2013, 02:59:08 PM »
What exactly will your 2013 pickup do that my 1988 won't?
inflate airbags on impact, for starters.

Hummm...  I've got at least 15 driving years between this one and the previous '84 model, and haven't impacted anything yet.  I know, I've got a boring, uneventful life :-)

I also had an uneventful driving 'career' until February.  I'm glad I had the airbags (and the full insurance, because it paid me quite a lot, for the inconvenience, since I was 2 provinces away from home, at the time).

antilock brakes and traction control are pretty awesome to have, too.... though only 50% of my fleet has the former and 0% has the latter.  (Yes, I have too many cars.)

Self-employed-swami

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Re: New cars, what to do.
« Reply #10 on: May 30, 2013, 03:08:26 PM »
antilock brakes and traction control are pretty awesome to have, too.... though only 50% of my fleet has the former and 0% has the latter.  (Yes, I have too many cars.)

My new truck lacks the side airbags (a 2005 Canadian model).  But my car, has only a seatbelt! No fancy smancy anythings in it, but I drive the work truck in a lot more questionable environments than the car.

napalminator

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Re: New cars, what to do.
« Reply #11 on: May 30, 2013, 04:31:36 PM »
What exactly will your 2013 pickup do that my 1988 won't?
inflate airbags on impact, for starters.

Hummm...  I've got at least 15 driving years between this one and the previous '84 model, and haven't impacted anything yet.  I know, I've got a boring, uneventful life :-)
i bet you don't wear seatbelts.  or back up data from your computer.  because, you know, since bad things never have happened, they never will, eh?

Jamesqf

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Re: New cars, what to do.
« Reply #12 on: May 31, 2013, 10:38:39 AM »
i bet you don't wear seatbelts.  or back up data from your computer...

Back up data, yes, but I use a $10 SD chip in my phone (besides having everything mirrored among the several machines I use) instead of paying $10K/year to have it archived in a hardened underground bunker somewhere in the Utah desert.  There's sensible precaution, and then there's insane paranoia.

As for traction control, I'd pay extra to have that removed.

daverobev

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Re: New cars, what to do.
« Reply #13 on: May 31, 2013, 03:18:02 PM »
http://www.youtube.com/watch?v=K3m24bjkfg0

Newer tech... some of it is good.

*Edit* although, it's true what they say - law of unintended consequences means that people will just drive faster, on the phone, drinking lattes, and so on. My SIL said we would want to get an automatic after we have our first child because you're more able to interact with the child when necessary that way... I just shook my head.
« Last Edit: May 31, 2013, 03:21:19 PM by daverobev »

napalminator

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Re: New cars, what to do.
« Reply #14 on: May 31, 2013, 06:18:39 PM »
i bet you don't wear seatbelts.  or back up data from your computer...

Back up data, yes, but I use a $10 SD chip in my phone (besides having everything mirrored among the several machines I use) instead of paying $10K/year to have it archived in a hardened underground bunker somewhere in the Utah desert.  There's sensible precaution, and then there's insane paranoia.

As for traction control, I'd pay extra to have that removed.
having one backup on your phone still puts you ahead of most of my clients!

Jamesqf

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Re: New cars, what to do.
« Reply #15 on: May 31, 2013, 10:50:01 PM »
Newer tech... some of it is good.

Sure, but $27K good?

Quote
My SIL said we would want to get an automatic after we have our first child because you're more able to interact with the child when necessary that way... I just shook my head.

Not a kid owner myself, but don't they make you strap the little darlings into a child seat, which must be placed in the rear seat of the car?  So any sort of interaction (other than repeating "No, dammit, we're not there yet!") would mean turning around while driving, no?  So I'm darned glad I live several states away from anywhere your SIL is likely to be driving.

daverobev

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Re: New cars, what to do.
« Reply #16 on: June 01, 2013, 08:52:48 AM »
Newer tech... some of it is good.

Sure, but $27K good?

Quote
My SIL said we would want to get an automatic after we have our first child because you're more able to interact with the child when necessary that way... I just shook my head.

Not a kid owner myself, but don't they make you strap the little darlings into a child seat, which must be placed in the rear seat of the car?  So any sort of interaction (other than repeating "No, dammit, we're not there yet!") would mean turning around while driving, no?  So I'm darned glad I live several states away from anywhere your SIL is likely to be driving.

$27k - nope. But you said you'd pay to have stuff taken out, and all I'm saying is... it's not bad stuff. I'd pay a few k for something in the 2000's.

I doubt it's just my SIL ;-)

jiggy-z

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Re: New cars, what to do.
« Reply #17 on: June 03, 2013, 02:04:02 PM »
Thanks for all of the replies, even though the discussion got sort of sidetracked.

A few things that I forgot to mention:

I am not the only shareholder in the company that bought the truck, so the expense(to me) is mitigated somewhat as long as all of the other shareholders don't do the same thing.

The purchased truck is actually a huge step down cost wise from what is expected as the typical truck is a 3/4 tn diesel, so I thought I was doing better for myself and the company in that respect.

The purchase of a fleet truck or equipment is in fact a different animal than a purchase for personal use for many reasons.  Reliability is at a premium, due to the fact that in the event of breakdown, it is not just your time that is wasting.  A large crew and additional pieces of equipment may be unnecessarily idle in one's absence. Image for clients.  Attention to detail-in my line of work-commercial concrete construction you don't want to put yourself in a position where you are rushing or are otherwise put off by an incident  of or ongoing vehicle reliability even if manpower wasting is not an issue-the issue could be a missed detail or a scheduling issue that would result in inefficiencies multiplied many times over.

However, there is no way to justify this purchase in light of what we know. I am going to run some numbers on it and see where I should end up.  My guess is that if I had it to do over again, I would not have gone full mustache on the purchase, but ended up with something about 5 years old.  Thing is those taco's don't go cheap even used. FYI, my old truck was converted over to the fleet.

On the 2013 Sportwagen, well that is just straight up foolish.  But the deal is done, and until I get my wife converted, I am stuck with it.  Perhaps if I trade my vehicle she will follow.

Self-employed-swami

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Re: New cars, what to do.
« Reply #18 on: June 03, 2013, 02:19:54 PM »
I am not the only shareholder in the company that bought the truck, so the expense(to me) is mitigated somewhat as long as all of the other shareholders don't do the same thing.

Ah, so as long as no one else wants a shiny new truck, it's all cool???

The purchase of a fleet truck or equipment is in fact a different animal than a purchase for personal use for many reasons.  Reliability is at a premium, due to the fact that in the event of breakdown, it is not just your time that is wasting.  A large crew and additional pieces of equipment may be unnecessarily idle in one's absence. Image for clients.  Attention to detail-in my line of work-commercial concrete construction you don't want to put yourself in a position where you are rushing or are otherwise put off by an incident  of or ongoing vehicle reliability even if manpower wasting is not an issue-the issue could be a missed detail or a scheduling issue that would result in inefficiencies multiplied many times over.


Again, I work as an independent consultant, and I need reliability for me, and my clients.  I've never been left stranded, with my 2006 or 2005 Tundras.

Jamesqf

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Re: New cars, what to do.
« Reply #19 on: June 03, 2013, 04:46:48 PM »
Again, I work as an independent consultant, and I need reliability for me, and my clients.  I've never been left stranded, with my 2006 or 2005 Tundras.

Hell, I've never been left stranded with my '88 pickup.  And I take it places where "stranded" means a ~20 mile hike or bike ride out.

Self-employed-swami

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Re: New cars, what to do.
« Reply #20 on: June 03, 2013, 06:16:24 PM »
Again, I work as an independent consultant, and I need reliability for me, and my clients.  I've never been left stranded, with my 2006 or 2005 Tundras.

Hell, I've never been left stranded with my '88 pickup.  And I take it places where "stranded" means a ~20 mile hike or bike ride out.

I've got a trucker radio in my truck, because I routinely have to use radio-controlled logging roads.  Getting stuck in there means no tow truck will come in for you.  It has never happened to me, but I've seen it happen to a lot of dodge drivers :(

mlipps

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Re: New cars, what to do.
« Reply #21 on: June 04, 2013, 08:16:49 AM »
My guess is that if I had it to do over again, I would not have gone full mustache on the purchase

Are you misunderstanding the use of the word "mustache" around here?? What you did was the exact opposite of going full mustache...

Self-employed-swami

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Re: New cars, what to do.
« Reply #22 on: June 04, 2013, 08:42:42 AM »
My guess is that if I had it to do over again, I would not have gone full mustache on the purchase

Are you misunderstanding the use of the word "mustache" around here?? What you did was the exact opposite of going full mustache...

Maybe he means he used his whole stash on that truck?

grantmeaname

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Re: New cars, what to do.
« Reply #23 on: June 04, 2013, 08:03:28 PM »
No, he's saying that even if he went back in time knowing all he does now, he would only have gotten a semi-reasonable choice rather than an exceptional (fully mustachian) one.

jiggy-z

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Re: New cars, what to do.
« Reply #24 on: June 05, 2013, 08:42:13 AM »
No, he's saying that even if he went back in time knowing all he does now, he would only have gotten a semi-reasonable choice rather than an exceptional (fully mustachian) one.

That is correct.  But as I have stated, fully mustache for a business purchase is not the same as fully mustache for a personal purchase.

Also, I wanted to clarify something about the business purchase of an auto.  My previous post may have read like I was making excuses and rationalizing the purchase I made, which I was sort of.

But I do intend to do something about that.  The real point of my post was to point out that there are differences between business purchases and personal purchases.

For autos, think of a medium sized business being somewhere between sole proprietor/individual and NASA.  NASA will have a zero tolerance policy of failure for its rockets etc (although that does not always turn out to be the case) because the costs of failure are so high.  Whereas an individual has a much higher tolerance because the costs of failure are low and there are other options-car won't start? ride a bike, take the bus-fix the car when you get the chance.

Many companies larger than mine have a policy of trading in equipment and vehicles once they are fully depreciated for tax purposes simply because they want to minimize the risk of downtime and maximize their tax write off.  Those are kind of extreme examples, but they illustrate the point.

It really comes down to the cost of convenience, which is one of the cornerstones of this blog.  And no, I did not spend my whole stache on a truck.

Self-employed-swami

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Re: New cars, what to do.
« Reply #25 on: June 05, 2013, 09:06:16 AM »
I recently had to replace my work truck (I own the company as well).  By your logic, I should have gone out and bought a brand new truck, because it provides a larger write-off and depreciation.  However, I chose the $11,000 vehicle, so I can pay myself more.

daverobev

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Re: New cars, what to do.
« Reply #26 on: June 07, 2013, 04:26:04 PM »
If your truck costs $50k and you are charged out at $1k per day... it's fine.

I think people are being a *touch* judgemental. It is possible to economise - there are lots of home-reno guys in older trucks. Once they start showing dings and rust, I suspect the business would lose more money through looking scruffy than they save on the older truck.

Compromose. No need to drag the OP over coals... they might've made a slightly bad choice, but it is clearly much less of a bad choice than buying such a vehicle just for personal use. Invest in things that make you money.. well, if the truck makes money, ok.

I am NOT disagreeing with the people saying a 3-4 year old truck would work. It would. It would save money, too. But I see the OP's point of view, too.