4 ms·

> I would never spend hundreds of dollars a month in payments and insurance on something I don't use for months Neither would I. I paid €2600 for my car (2007

by Aaargh20318 6y ago

> I would never spend hundreds of dollars a month in payments and insurance on something I don't use for months Neither would I. I paid €2600 for my car (2007 Mitsubishi Colt), about 20 euros a month for insurance, and 26 a month in road tax.

H8crilA 6y ago
It's shocking to me how cheap used cars are (equivalently - how few people buy them). I am doing exactly the same thing as you. Bought a ~$3k old used car that is always there for me. I do use it more often, ever week or two, though. It is even more shocking to me that people would buy a car on credit (except when it has a business purpose, i.e. you can comfortably cover interest payments with the increase in revenue). You're not supposed to use credit for consumption!
- WrtCdEvrydy 6y ago
  $4,500 2005 Toyota Corolla here... I put 80,000 miles on it in 2 years... I think I got my money's worth.
- ghaff 6y ago
  Low mileage/late model used cars can be relatively expensive. "Clunkers" can be quite cheap but it's a bit of a crap shoot. Donated my old high mileage 2nd car (fortunately) before the pandemic hit. For some new tires and a brake job it would probably have kept going for a few more years but, especially if you want to take longer drives, old vehicles inspire less and less faith and take more and more time.
  - H8crilA 6y ago
    You just buy a second "clunker" should problems happen. You have about 10 attempts before a breakeven :) It's kind of like shorting the market with OTM options. The eventual payout can easily cover years of "failures".
    - ghaff 6y ago
      All of those failures consume time and energy, possibly wasted vacation, missed work, uncomfortable situations, etc. I've had used cars but at this point I'm willing to pay a considerable premium for maximizing reliable transportation.
- ed_balls 6y ago
  It's not shocking. New cars are more convenient and reliable. If you are going on a road trip and the car breaks down it's a major pain and expense. Secondly there is a huge difference in safety.
  - anm89 6y ago
    >Secondly there is a huge difference in safety On a three year old car? I really doubt it.
  - Aaargh20318 6y ago
    I actually looked up statistics from my country’s equivalent of the AAA of the road-side breakdowns they service before I bought it. The Mitsubishi Colt I own is one of the most reliable cars you can get. Japanese cars in general are very reliable.
  - asdff 6y ago
    The only reason to buy new is if you have some sort of aversion towards someones boogers on the wheel and fart dust in the seat. We bought a 2018 toyota for 9k out the door. Nearly 10k off msrp for 2 years used.
- elindbe2 6y ago
  Credit is fine if the interest rate is low and you aren't stretching yourself financially. I could've bought my car in cash if I wanted to but at a 2.5% interest rate I figured why bother, that's almost nothing after inflation. I might as well just keep the money invested in the market.
  - H8crilA 6y ago
    Why don't you just borrow money to buy stocks, without involving the car? You can get lower rate if you use your own stocks as collateral, i.e. if you use brokerage margin. Heck, these days margin lending is so crazy common that there are even ETFs that package leveraged equities for you to go anywhere between -300% via 0% to 300% long, just change the allocation with a few clicks (or taps on your phone).
    - smallnamespace 6y ago
      Leveraged ETFs returns diverge rapidly from the package of equity + margin loan since the former rebalance daily. Leveraged ETFs are almost never appropriate except to monetize a very short term view.
  - nicbou 6y ago
    The obligation is fixed, but the future is not. This is the real danger.
- xyzzyz 6y ago
  Old used cars are great most of the time, but they sometimes break for no reason, or require non-trivial work (e.g. replacing struts or wheel bearings, that sort of stuff). This is of course not a problem if you live in a single family house and have plenty of space to store the necessary tools and to work on it, but if you go all in into the lifestyle of living in a condo downtown that's recommended by the author of the article above, this can turn into huge and expensive hassle.
  - H8crilA 6y ago
    Use some of the money saved from not buying a new car. Or buy a second cheap car :)
    - intrasight 6y ago
      This has been my strategy for last 12 years. I own a 17 year old Volvo XC wagon and a 16 year old Toyota Camry. Volvo I bought 13 years ago from a 96 year old gent who's family had taken away the keys. Bought it sight-unseen on Craiglist for $9000. I'd put it up against any modern SUV for looks and functionality (except smartphone integration). The Toyota was $4500 and had 30K miles. The Volvo heads to the shop on Wednesday. I'm concerned that I'm in for an expensive bill from the mechanic (~$1000) for various ailments. Never an easy analysis on a car with a KBB value of like $2500. But on the other hand, I'm driving a $40K car. Another benefit of second used car is that if friends and family come to visit, they have a car to use.
      - Danieru 6y ago
        I did a similar move but ended up buying a lemon. Still, despite so far putting 150% of the "value" into repairs I realize it does not matter. Large Ratios of a small number are nothing compared to even small ratios of a large number. Once the repairs are done I get to know the state of those parts. Absolute worst case, and the engine needs replacement, we're still only talking about 1 year worth of depreciation on a new car. Will I need to replace the engine? Likely not. Would it have been slightly cheaper to spend 2x on a better used car? Sure, but maybe that one would have been a lemon too. The scary part of used cars is spending money on repairs. Yet even expensive repairs are cheap. They are only expensive relative to the market value, but the market value is based on that lemon market risk. The end result of having bought a far too cheap lemon: I've still spent less than a properly vetted vehicle and now I know some good mechanics down the street. The vehicle itself now has parts which are known quantities. I'd really love an excuse to buy a new car. I've got the cash for it, but nothing modern cars can provide justify paying an engine replacement of depreciation every year.
rocqua 6y ago
I'd do the same if parking here wasn't 100$ a month.
brailsafe 6y ago
In the city that the author is writing from, car insurance can cost between $100 and $300 for minimum coverage on most cars unless you've been driving for a substantial amount of time crash-free. Likewise, gas is about $1.3 to $1.6/L
Phrodo_00 6y ago
I'd pay about the same as your car for parking in my building for a year. Luckily rideshares are way more common around here, and I can often find one at walking distance (or else I can uber/ride my bike or a rideshare bike to one).

H8crilA 6y ago

It's shocking to me how cheap used cars are (equivalently - how few people buy them). I am doing exactly the same thing as you. Bought a ~$3k old used car that is always there for me. I do use it more often, ever week or two, though. It is even more shocking to me that people would buy a car on credit (except when it has a business purpose, i.e. you can comfortably cover interest payments with the increase in revenue). You're not supposed to use credit for consumption!

WrtCdEvrydy 6y ago
$4,500 2005 Toyota Corolla here... I put 80,000 miles on it in 2 years... I think I got my money's worth.
ghaff 6y ago
Low mileage/late model used cars can be relatively expensive. "Clunkers" can be quite cheap but it's a bit of a crap shoot. Donated my old high mileage 2nd car (fortunately) before the pandemic hit. For some new tires and a brake job it would probably have kept going for a few more years but, especially if you want to take longer drives, old vehicles inspire less and less faith and take more and more time.
- H8crilA 6y ago
  You just buy a second "clunker" should problems happen. You have about 10 attempts before a breakeven :) It's kind of like shorting the market with OTM options. The eventual payout can easily cover years of "failures".
  - ghaff 6y ago
    All of those failures consume time and energy, possibly wasted vacation, missed work, uncomfortable situations, etc. I've had used cars but at this point I'm willing to pay a considerable premium for maximizing reliable transportation.
ed_balls 6y ago
It's not shocking. New cars are more convenient and reliable. If you are going on a road trip and the car breaks down it's a major pain and expense. Secondly there is a huge difference in safety.
- anm89 6y ago
  >Secondly there is a huge difference in safety On a three year old car? I really doubt it.
- Aaargh20318 6y ago
  I actually looked up statistics from my country’s equivalent of the AAA of the road-side breakdowns they service before I bought it. The Mitsubishi Colt I own is one of the most reliable cars you can get. Japanese cars in general are very reliable.
- asdff 6y ago
  The only reason to buy new is if you have some sort of aversion towards someones boogers on the wheel and fart dust in the seat. We bought a 2018 toyota for 9k out the door. Nearly 10k off msrp for 2 years used.
elindbe2 6y ago
Credit is fine if the interest rate is low and you aren't stretching yourself financially. I could've bought my car in cash if I wanted to but at a 2.5% interest rate I figured why bother, that's almost nothing after inflation. I might as well just keep the money invested in the market.
- H8crilA 6y ago
  Why don't you just borrow money to buy stocks, without involving the car? You can get lower rate if you use your own stocks as collateral, i.e. if you use brokerage margin. Heck, these days margin lending is so crazy common that there are even ETFs that package leveraged equities for you to go anywhere between -300% via 0% to 300% long, just change the allocation with a few clicks (or taps on your phone).
  - smallnamespace 6y ago
    Leveraged ETFs returns diverge rapidly from the package of equity + margin loan since the former rebalance daily. Leveraged ETFs are almost never appropriate except to monetize a very short term view.
- nicbou 6y ago
  The obligation is fixed, but the future is not. This is the real danger.
xyzzyz 6y ago
Old used cars are great most of the time, but they sometimes break for no reason, or require non-trivial work (e.g. replacing struts or wheel bearings, that sort of stuff). This is of course not a problem if you live in a single family house and have plenty of space to store the necessary tools and to work on it, but if you go all in into the lifestyle of living in a condo downtown that's recommended by the author of the article above, this can turn into huge and expensive hassle.
- H8crilA 6y ago
  Use some of the money saved from not buying a new car. Or buy a second cheap car :)
  - intrasight 6y ago
    This has been my strategy for last 12 years. I own a 17 year old Volvo XC wagon and a 16 year old Toyota Camry. Volvo I bought 13 years ago from a 96 year old gent who's family had taken away the keys. Bought it sight-unseen on Craiglist for $9000. I'd put it up against any modern SUV for looks and functionality (except smartphone integration). The Toyota was $4500 and had 30K miles. The Volvo heads to the shop on Wednesday. I'm concerned that I'm in for an expensive bill from the mechanic (~$1000) for various ailments. Never an easy analysis on a car with a KBB value of like $2500. But on the other hand, I'm driving a $40K car. Another benefit of second used car is that if friends and family come to visit, they have a car to use.
    - Danieru 6y ago
      I did a similar move but ended up buying a lemon. Still, despite so far putting 150% of the "value" into repairs I realize it does not matter. Large Ratios of a small number are nothing compared to even small ratios of a large number. Once the repairs are done I get to know the state of those parts. Absolute worst case, and the engine needs replacement, we're still only talking about 1 year worth of depreciation on a new car. Will I need to replace the engine? Likely not. Would it have been slightly cheaper to spend 2x on a better used car? Sure, but maybe that one would have been a lemon too. The scary part of used cars is spending money on repairs. Yet even expensive repairs are cheap. They are only expensive relative to the market value, but the market value is based on that lemon market risk. The end result of having bought a far too cheap lemon: I've still spent less than a properly vetted vehicle and now I know some good mechanics down the street. The vehicle itself now has parts which are known quantities. I'd really love an excuse to buy a new car. I've got the cash for it, but nothing modern cars can provide justify paying an engine replacement of depreciation every year.

rocqua 6y ago

I'd do the same if parking here wasn't 100$ a month.

brailsafe 6y ago

In the city that the author is writing from, car insurance can cost between $100 and $300 for minimum coverage on most cars unless you've been driving for a substantial amount of time crash-free. Likewise, gas is about $1.3 to $1.6/L

Phrodo_00 6y ago

I'd pay about the same as your car for parking in my building for a year. Luckily rideshares are way more common around here, and I can often find one at walking distance (or else I can uber/ride my bike or a rideshare bike to one).