Save Old Dad from Awful Car Purchase

[FlyJ]

My 69 year old dad purchased a lightly used 2013 TDI Passat in 2013 for $30k. In addition to the Passat, he kept his old Acura MDX to tow a small boat, and to have an AWD vehicle when needed in the winter months. It was dumb to keep the old car, as there isn't a day in the year that the Passat couldn't get him to work, albeit more slowly, and my mom's Acura RDX could have towed the boat, not to mention all the additional repair/insurance costs the MDX brought during this time. Now, with the boat, AWD and his preference for SUVs in mind, my dad wants to get rid of the Passat and buy a used Toyota Highlander (probably for about $30k). He thinks the Passat was a mistake.

My parents are 65 and 69, and aren't retired. Mom is in real estate and my dad is an attorney. I'm not sure they're even able to retire, which makes me all the more worried about a car purchase (and my mom wants a car too!). In my dad's defense, he's always purchased almost new, used cars and drives them for 10 - 11 years - not ultra mustachian but not awful. If he does this, he's going to take a double hit of depreciation over a short time and damage his chances of ever retiring (I think he'll probably work until he dies).

What are some things I can tell him to help him realize what a dumb financial move he's making?

[former player]

Your parents sound as though they have been sensible with their money by most lights (always buying used cars and keeping them for a decade).  They've successfully raised at least one child (you).  They sound as though they are still mentally and physically competent, as they are both still working in professional roles.  They are presumably both eligible for social security if they wanted to retire (and your father is increasing his entitlement by not claiming it).  Unless you think they are seriously unhappy and under financial strain, I would thank my lucky stars to have parents in such a good position: healthy and gainfully occupied in their late sixties.  They obviously have good genes and a good lifestyle to pass on to you.  I bet that if they wanted to retire they could, they just don't want to.

If your father does go ahead with the car purchase, he'll presumably be selling the Passat, which he thinks was a mistake, and the Acura, which is costing him in repairs and insurance.  So he will be going down from two cars to one, which is an improvement, and is getting rid of an unreliable car, which he does not need at his age.  And frankly, if spending $30k is enough to make the difference between retiring and not retiring he isn't in a position to retire anyway (and if things are that bad, he should be selling the boat, which you don't suggest).

I'd probably try one "are you sure, Dad?" and leave it at that.

[FlyJ]

Your parents sound as though they have been sensible with their money by most lights (always buying used cars and keeping them for a decade).  They've successfully raised at least one child (you).  They sound as though they are still mentally and physically competent, as they are both still working in professional roles.  They are presumably both eligible for social security if they wanted to retire (and your father is increasing his entitlement by not claiming it).  Unless you think they are seriously unhappy and under financial strain, I would thank my lucky stars to have parents in such a good position: healthy and gainfully occupied in their late sixties.  They obviously have good genes and a good lifestyle to pass on to you.  I bet that if they wanted to retire they could, they just don't want to.

If your father does go ahead with the car purchase, he'll presumably be selling the Passat, which he thinks was a mistake, and the Acura, which is costing him in repairs and insurance.  So he will be going down from two cars to one, which is an improvement, and is getting rid of an unreliable car, which he does not need at his age.  And frankly, if spending $30k is enough to make the difference between retiring and not retiring he isn't in a position to retire anyway (and if things are that bad, he should be selling the boat, which you don't suggest).

I'd probably try one "are you sure, Dad?" and leave it at that.

Good advice. Maybe I'm applying my own less advantaged financial situation to him. In my case, swapping cars would be a massive expense. I don't know his situation, so it could be just fine.

[marty998]

I agree with former player - at their age with dual incomes still rolling in and few kid expenses if any, $30k is not going to be the difference between retiring and not.

10-11 years is a decent effort for most cars that have moderate usage.

Now if it was a 30 year old with 2 kids and a mortgage looking to FIRE in 10 years... advice would be different.

[tobitonic]

I concur with the previous posters that your parents already sound more frugal than many Americans and seem to be fine financially, so I'm going to approach things from a different, more holistic angle.

As an aside, have you considered the possibility that your parents might not be interested in retiring, or at least not in doing so soon? It's not frequently talked about here since the focus is FI with many additionally interested in the RE part, but there are lots of people who work far beyond they need to because they enjoy what they do, because they like their coworkers, because they find a sense of purpose in it or feel like they're making a difference, etc. I don't know your parents, but I do know that the idea of working until you die (which could also be rephrased as being healthy enough to continue to contribute to society until the very end of life) isn't nearly as scary to a lot of people out there as it is to most folks on here.

[FlyJ]

I concur with the previous posters that your parents already sound more frugal than many Americans and seem to be fine financially, so I'm going to approach things from a different, more holistic angle.

As an aside, have you considered the possibility that your parents might not be interested in retiring, or at least not in doing so soon? It's not frequently talked about here since the focus is FI with many additionally interested in the RE part, but there are lots of people who work far beyond they need to because they enjoy what they do, because they like their coworkers, because they find a sense of purpose in it or feel like they're making a difference, etc. I don't know your parents, but I do know that the idea of working until you die (which could also be rephrased as being healthy enough to continue to contribute to society until the very end of life) isn't nearly as scary to a lot of people out there as it is to most folks on here.

They're very lucky to be healthy and working, but they often speak as though retirement is out of reach. Lots of "must be nice" when discussing retired friends who are traveling or able to afford a Florida/Arizona move. I just want them to be happy, and $30k would go a long way toward the experiences they (mostly my mom) talk longingly about.

But yeah, house is paid for, money is saved and they're still working, so even if not a luxurious retirement, I think they'll be fine.

[NoStacheOhio]

With selling two cars, their out-of-pocket expenses may be minimal on the Highlander anyway. Even if the VW lost $10k in the time he's had it, the Acura has to be worth at least $5k, probably more, you aren't looking at a huge expense for the new car.