Author Topic: What car do I want, money is no issue here  (Read 6958 times)

Bearblastbeats

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What car do I want, money is no issue here
« on: April 17, 2013, 07:43:43 AM »
This year I will be in the market for a new automobile.

This is probably the last year my jeep will be able to stay on the road without doing major repairs to it (1996 Jeep Grand Cherokee Lerado)

I'm considering either:

Hyundai Elantra
Mazda 3
Subaru Impreza

I'm deciding whether or not to get a hatchback, but I don't know how dorky I would look in one. I typically travel alone or with my dog, I do have a drum set but I just recently bought a smaller kit so it'll fit anywhere.

I can budget up to about $500 a month and I don't want to deal with the whole maintenance thing of a older car so I'm looking at like a 2007?-2011?

RadicalPersonalFinance

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Re: What car do I want, money is no issue here
« Reply #1 on: April 17, 2013, 07:53:02 AM »
This year I will be in the market for a new automobile.

I can budget up to about $500 a month and I don't want to deal with the whole maintenance thing of a older car so I'm looking at like a 2007?-2011?

Are you rich and financially independent?

GreenGuava

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Re: What car do I want, money is no issue here
« Reply #2 on: April 17, 2013, 07:55:40 AM »
I have a Mazda 3, non-hatchback, and am very happy with it.

One tip:  don't think of this as a per-month payment, regardless of what you decide otherwise.  That's an invitation to over-spend on a car.

Another Reader

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Re: What car do I want, money is no issue here
« Reply #3 on: April 17, 2013, 07:57:57 AM »
Since you can budget $500 a month for a car, in your shoes I would start saving that money in a separate account.  Once it became clear the Jeep was on its deathbed, I would buy something for as close to what was in the savings account as I could.

Bearblastbeats

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Re: What car do I want, money is no issue here
« Reply #4 on: April 17, 2013, 08:05:17 AM »
Well, I am not rich nor FI. However, I'm in a certain situation where I can afford a little bit.

I wouldn't over spend. I did that a few years back when I bought a 2009 Ford Escape with 20k miles on it and wasn't in the best of situations.

I'm looking at this as a way to buy a newer car with no problems and hopefully keep it around for the better part of a decade.

Yes, I need transportation because I work 20 minutes away from home.
No, I am not moving closer to work (again). Why, because I am currently living rent free.
Public Transit does not go to where I need to and will actually double my commute time if I try.
Plus, I like driving a car, and my family lives an hour away from me who I go see every other weekend.

I do plan to drive the jeep as long as needed (It inspected till Feb 2014), we will see how long it lasts.

I'm just figuring out what I want now so when the time comes I have an idea in my head.

I did really enjoy my 2009 Elantra when I had it.

daverobev

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Re: What car do I want, money is no issue here
« Reply #5 on: April 17, 2013, 08:33:50 AM »
Civic/Corolla/Camry/Accord no good? Solid, pretty fuel efficient, etc. All sedans though.

Focus wagon?

Do you care about dorky, really? It's... a car.

If it's city driving, how about a Prius. Lots of room in them!

Hatchbacks are awesome, honestly. Coming from the UK where nearly all cars are hatchbacks (just "large" to-me family cars are saloon/sedans), I wail every time I open the boot/trunk of a car here and it drips water inside. WHY GOD WHY!

Mazdas (older ones) are VERY prone to rust.

Honda Fit - small on the outside, but tardis-like on the inside, so I hear. And VERY fuel efficient.

GreenGuava

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Re: What car do I want, money is no issue here
« Reply #6 on: April 17, 2013, 08:37:00 AM »
If your current car is projected to last another 10 months and you can afford $500/month as a car payment, why not set aside that $5000 over those 10 months and use that for the purchase?  You can get some very nice car for $5000.

If your existing one lasts longer, or you are able to get some trade-in for it, or you can scrounge together some more money for the car, you have more options.

Spork

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Re: What car do I want, money is no issue here
« Reply #7 on: April 17, 2013, 08:49:38 AM »

I am probably not nearly as ERE extreme as some folks here... but my own rules are:

1. the amount of money you spend on a car must be less than or equal to the amount of money you can pay in cash.  If you work out a smart money finance deal where you finance it for a lower rate than you're getting elsewhere, that still qualifies.  Personally I prefer to not finance a depreciating asset, but you can theoretically structure it in a way that makes sense.

2. You should also have enough cash reserves to buy the exact same car again in the event of a catastrophe.  (In other words: you should have the cash to self-insure it and not have to carry collision insurance.)

I'm enough of a "car guy" that if you can afford an Astin Martin DB9 using the above rules and that doesn't affect your FI... then go for it. 

"How much can I afford a month" is a trap.  It's not just a trap to spend more on a car, but it's the mechanism that car dealers use to sell.  If you go in with a "I can afford $X a month" then they've got you.  They can structure that any way they want and make it work.  If you go in there with "I will spend not a penny more than $X on a car (interest included!)" then you're on the right track.

We've always done the "car payments to ourselves" plan that GreenGuava suggests.  We have money set aside to buy a car and we know exactly the maximum amount that it can cost.

Villanelle

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Re: What car do I want, money is no issue here
« Reply #8 on: April 17, 2013, 09:20:44 AM »
You say you won't overspend, but if you are financing a car, then you *are* overspending.  You are spending more money than you have, and worse, from the sounds of it you are doing it 100% by choice since it seems you currently have a functioning vehicle.  Drive you car for an extra year, sock away that $500 in a savings account, and then buy yourself a car using that $6000 in cash plus what you get for a private sale of your current car.

Bearblastbeats

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Re: What car do I want, money is no issue here
« Reply #9 on: April 17, 2013, 09:36:02 AM »
To be honest, I wouldn't mind a civic or corolla.

I just like the feel of a mazda3, its sporty and sexy looking.

and of course I wouldn't go right out and just finance a car right away. I would save up enough to hopefully pay about 2/3rds cash. I would like to finance a little bit thought to build my credit up for the idea in hopefully in 1-2 years time I will be able to get a house.



Bearblastbeats

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Re: What car do I want, money is no issue here
« Reply #11 on: April 17, 2013, 10:41:12 AM »
hahaha. I've read nearly every blog post on here, including those ones.


gecko10x

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Re: What car do I want, money is no issue here
« Reply #12 on: April 17, 2013, 10:48:43 AM »
<thread hijack>

Mazdas (older ones) are VERY prone to rust.

Why do you say this? And, assuming it's true, why do you think this is the case?

I recently purchased a 2005 Mazda3 and it has far more rust than I would have expected.

Forcus

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Re: What car do I want, money is no issue here
« Reply #13 on: April 17, 2013, 10:54:04 AM »
OK well you probably aren't going to want to hear this, but it is MMM forum, not some other forum, and you posted here, so........

Key words in your post:

"money is no issue" If you aren't FI, then it is.
"want" Want vs. need.
"monthly payment" Monthly payment is the RESULT of the equation. Maximizing value is more important.
"I don't know how dorky I'll look" Listen... you sound younger and so I understand this thought (hey, I'm 31 and still a little vain). Just because someone drives an Escalade doesn't mean they have two nickels to rub together.
"Don't want to deal with the maintenance thing.." I get it, some people just don't have the mental fortitude to change oil, or their time is more valuable. And even mechanical-minded people don't want to deal with unexpected breakdowns. But by buying your way out of dealing with some issues, you are hurting yourself financially to some extent.
"20 minutes from home" Walk? Ride a bike? OK I am guilty of this one, but I would get roadkilled if I tried to ride a bike to work in my area. Don't know where you live so maybe this is true for you as well.

Point is, get your head right, first. I assume you are on MMM because you are interested at least in how to save money if not FIRE. So I'm not trying to be preachy, just trying to help..

All that being said, and assuming you really are interested in (1) reliability, (2) cost savings, (3) utility, and (4) to some extent, appearances, here is my list:

02-07 Focus ZX5 and Wagon (SVT and non-SVT)
Any year Mazda 3
Any year Honda Fit
Any year Suzuki SX4
Any year Toyota Yaris
Any year Ford Escape (why? I get about 28 MPG in our 2009 Escape with a 5 speed - a little bit better than my Focus ZX5).
Any year Mazda 6 wagon
Any year Toyota Matrix / Pontiac Vibe
Any year Scion xA / xB / xD
Any year Nissan Versa
Any year Mazda 2 (I have seen new ones for $12-13k)
Any year Chevy Cruze / Sonic / Spark (I have seen new / used ones around $12-14k)
Any year Fiat 500 (this is a stretch as they are small, but they are cheap)

The Subarus are ok but unless you need AWD (not just want), it's a waste. Nothing against Hyundais, just no experience with them. Not too many wagons in Honda, Hyundai, Toyota, Nissan form either. There are others, but you get the point.

So all that does is define your population. Gather prices, etc. That will give you price points on what you are looking at. Eliminate any that have a spotty reliability history or that have high parts prices (for the sake of simplicity I would say all of the above would be about the same cost / month reliability and parts prices). Gather MPG figures. Figure your average monthly mileage, and insurance costs for the above. Here is what I do for Total Cost of Ownership per month:

Monthly Fuel Cost for each option - determined by MPG, $ per gallon, miles per month
Effective Monthly Payment for each option - This is not simply the price divided by a set monthly timeline. To be more accurate it is the current value (assumed to be price paid) minus the value at the end of the timeline, divided by the amount of months in the timeline.
Monthly Insurance Cost for each option
Monthly Maintenance Cost for each option

The sum of each of these calculations is your TCO. I'll give you a sample:

My Volvo S40 MFC $142.42 + EMP $13.89 + MIC $60 + MMC $80 = $296
My Focus ZX5 MFC $136.34 + EMP $20.83 + MIC $30 + MMC $40 = $227
A 2012 Focus SE MFC $116.15 + EMP $55.56 + MIC $50 + MMC $20 = $242

So basically this tells me that my most economical option is the ZX5, BUT... for $15/mo I can have the safety and reliability of a newer car, as long as the depreciation is accurately portrayed and there are no other unaccounted for impacts. Of course, your results will vary based on assumptions. Mine:

Volvo S40: 27.75 MPG / Starting value $4500 / Ending value $4000 / Insurance $60 per mo. / Maint. $80 per mo.
Focus ZX5: 28.96 MPG / Starting value $3500 / Ending value $2750 / Insurance $30 per mo. / Maint. $40 per mo.
'12 Focus: 34.00 MPG / Starting value $15000 / Ending value $13000 / Insurance $50 per mo. / Maint. $20 per mo.

All:
Timeline of 36 months
1000 miles / month
Fuel cost of 3.949 / gallon

Questions, ask away.


« Last Edit: April 17, 2013, 10:56:58 AM by Forcus »

Russ

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Re: What car do I want, money is no issue here
« Reply #14 on: April 17, 2013, 11:03:12 AM »
"20 minutes from home" Walk? Ride a bike? OK I am guilty of this one, but I would get roadkilled if I tried to ride a bike to work in my area. Don't know where you live so maybe this is true for you as well.

I think he means 20 minutes driving. It's possible of course, but that's one hell of a bike ride to do every working day.

Bearblastbeats

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Re: What car do I want, money is no issue here
« Reply #15 on: April 17, 2013, 11:10:07 AM »
"20 minutes from home" Walk? Ride a bike? OK I am guilty of this one, but I would get roadkilled if I tried to ride a bike to work in my area. Don't know where you live so maybe this is true for you as well.

I think he means 20 minutes driving. It's possible of course, but that's one hell of a bike ride to do every working day.

There is no bike route to my work. The turnpike I take is literally a death trap and almost every morning is an accident.

If there were a bike route it'll be over 2 hours each way. I personally don't mind driving, it gives me time to wind down and I live in a city where when I am home biking is more feasible.

daverobev

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Re: What car do I want, money is no issue here
« Reply #16 on: April 17, 2013, 11:43:52 AM »
<thread hijack>

Mazdas (older ones) are VERY prone to rust.

Why do you say this? And, assuming it's true, why do you think this is the case?

I recently purchased a 2005 Mazda3 and it has far more rust than I would have expected.

Lots of reading on the RedFlagDeals automotive forum :) Everything prior to 2008 is supposed to go rusty, quickly. I should clarify; Mazda 3s, not all Mazdas (AFAIR).

However, this is Ontario (and most RFD people are Toronto), so in places with less salt on the road it might be less of an issue.

Caused by crappy paint, again AFAIR.