8 ms·

Most new cars still suck / Do not offer meaningful new features That really depends on how old your car is. I generally buy instead of lease, and run the car u

Most new cars still suck / Do not offer meaningful new features That really depends on how old your car is. I generally buy instead of lease, and run the car until it starts having regular problems. As a result, my car is 12 years old, and any new one from the last few years is a significant upgrade in terms of features. I don't really want a monthly car payment again, but I'm almost looking forward to when my current car starts having enough problems to make the upgrade worth it.

wizzwizz4 6y ago
If you don't want a monthly car payment, start your “monthly car payment” into a savings account now. You'll end up paying less for your next car if you can maximise the up-front payment.
- dwighttk 6y ago
  If you don’t want a monthly car payment pay a monthly car payment so later you can have a smaller monthly car payment?
  - jimbob45 6y ago
    I think the idea is that you accrue the interest yourself instead of paying it to someone else.
    - ironmagma 6y ago
      The amount of interest accrued in a savings account is pretty wimpy though.
    - unclebucknasty 6y ago
      Yeah, but a savings account? Interest rates for savings are abysmal, and auto-loans are themselves frequently near (or at) zero these days, so it's losing advice as-given. Better advice: put the money in the market or other higher-yielding investment, then take a low or no interest loan on the vehicle when the time comes so those investments can continue to grow at the much higher clip. Money's just too cheap to give away your own cash. Obviously, if the interest rate environment changes, this should be re-evaluated.
      - Larrikin 6y ago
        What percentage are you talking about as being abysmal. 0.1% offered at some shitty brick and mortar bank is terrible but nearly all the online first banks offer (or offered before covid) what I thought was a decent 1-3%
        X-Istence 6y ago
        Highest these days is like 0.5%. If you are really lucky you can find 0.8%
        unclebucknasty 6y ago
        I'm not seeing anything like that. Here's the latest roundup of "the best rates" over at Bankrate [0], which includes some online-only banks. Highest I see there is 0.57%, with most at 0.4% and 0.5%. You might be able to scrounge up a few basis points somewhere if you're really determined and/or willing to meet some requirements. Still, even with our low-inflation these days [1], you're actually losing money in these savings accounts. Main point though is that it's more of a relative game vs your ROI elsewhere. Even indexes and ETFs that are reasonably "low-risk" are routinely returning much more these days, and of course over the long haul equity markets still beat this handily, even when smoothed for downturns. [0] https://www.bankrate.com/banking/savings/rates/ https://www.bankrate.com/banking/savings/rates/ [1] https://www.statista.com/statistics/244983/projected-inflation-rate-in-the-united-states/ https://www.statista.com/statistics/244983/projected-inflati...
        Larrikin 6y ago
        TMobile Money is 4% for the first $3000 and 1% after that for customers and 1% flat for everyone else. Ally used to be pretty good but I've moved all my savings over for now
        unclebucknasty 6y ago
        Yeah, obviously not scalable, but cool for a risk-averse T-Mobile wireless customer who wants a guaranteed 4% on $3K. It is funny though that they give the example that at $5,000 saved your effective APY is around 2.79%. I mean, the bottom line is that as soon as you get above $3K, any additional savings drops to a lowly 1%, which doesn't keep pace with inflation (i.e. you're losing money). But they're presenting it like 2.79% is some kind of average that matters, thus implying it's a good idea to keep pouring money in. The reality is that the offer is not an average, but two discrete terms of 4% and 1%. And, on the latter, you're trading whatever other returns you could've made elsewhere for that miserly 1%. Much better to put it elsewhere, even for those who bite on the initial $3K for 4%.
    - syshum 6y ago
      Interest on savings accounts is far less than inflation, out side of an emergency fund there is little reason to save cash.
      - imtringued 6y ago
        Isn't the benefit of the car loan that you can have emergency funds? I mean, if you save up $5k and get a car loan for $25k you for years you effectively have a 2 year emergency buffer. If you pay off the car up front you may run into liquidity issues until you have restored your emergency fund.
        syshum 6y ago
        No one should consider using their emergency fund for anything other than emergency's, so I am not sure what your point it The comment I was responding too talked specifically about saving money in a savings account for the purposes of buying expensive things like a car. It should go with out saying one should not use their emergency fund for these purchases (unless they are an emergency) Once you have the 6mos to 1 year of expenses in your emergency fund you should divert any other cash to other accounts such as Debt Repayment (providing the debt is more than 5-7% interest or current inflation) and/or investments such as tax advantaged retirement accounts
    - ratsbane 6y ago
      You don't have to put it into a savings account. I do the same thing but into a stock fund.
- ineedasername 6y ago
  Yes, we save a healthy portion of our income, but increasing that now just shifts the timing, not the pain, of when have to start a new car payment.
  - thisCtx 6y ago
    The unbearable suffering of being a first worlder with material comfort kings of old could never imagine. What a narcissistic culture we’ve built if such a reality brings “pain”.
  - lostcolony 6y ago
    Depends on the interest rate of the loan, inflation rate of money between now and the time the loan is paid off, and any gains/losses you could make now investing that money.
- nradov 6y ago
  Current low interest rates on car loans make that approach a bit pointless.
  - mywittyname 6y ago
    They've been low for a while now too. As annoying as it is to have a $670 car payment each month, you really can't beat 0% interest on a $40k loan. Especially in a market where the average monthly return on $40k in stocks has been pretty substantial.
    - stefan_ 6y ago
      Except for the part where $0 down, 0% interest loan make people go for the 40k car they don't need instead of the 25k one.
      - mywittyname 6y ago
        That's really neither here nor there. The discussion was more about transforming, "save up and pay cash" to "save up and get a loan anyway because interest is so cheap." I picked $40k because that's roughly the median price of a new car. Whether your going for a $25k car, or a $125k car, the advice is the same: get a low-interest loan.
    - heisenbit 6y ago
      0% loan on the sticker price. The goal of coming in with cash is to get as far as possible below the sticker price.
      - dntrkv 6y ago
        Dealers don't care whether you pay cash or finance. Just call around dealers within a certain mile radius you are willing to drive and find the best deal. This has been, and will always be, the best way to get a deal.
      - giaour 6y ago
        Don’t dealerships make a good percentage of their profits from finance charges? The last time I bought a car, it took an hour of cajoling to get the cash price of a three year lease
- dahfizz 6y ago
  It would be better to take the car payment and invest that money. You can get a car loan for less that 3% interest, and you can easily make double that with low risk ETFs. Hell, you could invest your savings into a dividend fund and use that to pay your car payment directly.
- vlunkr 6y ago
  Or save up enough that you can pay cash. I would think for the HN crowd it should be feasible. I think when you're spending money that's already in your account you make better decisions. Like you'll be less inclined to pay thousands more for an upgraded model with a bunch of superficial nonsense added
- chrisseaton 6y ago
  A savings account is just a way to burn money at the moment. Not recommended.
o-__-o 6y ago
All modern cars have amazing new features. Air bags, reverse cameras, steering by wire, ABS, direct fuel injection, massively boosted turbocharged engines (on econoboxes!) and traction control as standard. My 7 year old car has all of the above and can park itself, has adaptive cruise control, and for $400 I added a 12” touch screen stereo. Compared to my last car, my current car outputs up to 20psi of boost compared to the 6psi of four generations ago. My current car has part time AWD that is just as efficient as my old mechanical always on AWD car of yesterday. I bought my car for under $20k. The car is worth under $10k right now. That is massive value available to everyone right now. Maybe you could upgrade your car now for much less than you think, or maybe you only want the latest shiny parts. Either way you need to be honest with yourself, cars have evolved and stayed modern over the past 2 decades compared to any time in automobile history
- whitepoplar 6y ago
  Which car do you have?
- pja 6y ago
  I bought a perfectly ordinary second hand vehicle for £3k in 2003 (it had been built in 1999) which had ABS, air bags everywhere, direct fuel injection, turbo-charged engine & traction control. Modern cars are pretty amazing things: a lot of these features have been standard for twenty years at this point! (The vehicle I bought was much favoured by UK taxi drivers at the time, which shows you how very boring & practical it was.)
  - o-__-o 6y ago
    Since 2003 that has only gotten better. My turbocharged engine gets 35mpg on the highway while putting out 240hp on demand. 2003 cars couldn’t do that. my 2000 A4 with mods put out 250hp and had some sort of vacuum leak every other week, meanwhile that’s normal for my 2014 car and adding meth injection puts me as 300hp with zero problems after 2 years of continuous use Remember when cars of the 90s were so much better than cars of the 80s? Going over 100k mi/km in most cars wasn’t a concern anymore. Now a large majority of cars are going 200-300k without a sweat
sokoloff 6y ago
I tend to buy around 4-6 years old and run them for 10-12 years as well, which is limited by New England tinworm from the road salt we use rather than mechanical issues. Beyond airbags and ABS (both now ubiquitous), I don’t need the new feature faff. I just need something that will start everyday and that I can do the basic maintenance on. Fortunately, that’s still easily available and cheap in the 5-ish year-old “those cars are too old to be reliable” mindset-driven market. I can’t believe that people are willing to borrow money to keep driving 0-4 year old cars forever, but I’m glad they do because it greatly subsidizes the cars I drive.
- Mavvie 6y ago
  I feel like each year cars get way safer. It started with blind spot detectors/cameras, and modern cars will even brake automatically and keep you in your lane (or at least warn you if you leave it). Maybe new features like self-driving aren't as interesting, but I would buy a new car instead of a used one just for the perceived improved safety. I don't know if there's any research showing that these features actually reduce accidents/fatalities though (plausibly if they malfunctioned it could be worse than nothing)
  - throwawayboise 6y ago
    Many of these features add minimal benefit if you do some common-sense stuff such as, don't drive when you're really tired (or drunk, or on drugs, etc.); don't play with your phone while you're driving; don't read, do your makeup, shave, etc. while you're driving. IOW put your focus on the task at hand and you don't really need blind spot detectors. Of course the reality is that people are pretty bad at these things.
    - wetpaws 6y ago
      I found them invaluable, especially BSM saved me from a lot of near-crash situations. When dealing with fast deadly chunks of metal every % of reduced chance of death is a good investment in my book.
MandieD 6y ago
We had a 2020 Corolla as a rental over Christmas/New Years 2019/20, and it was amazing. What we drive at home: a 2008 Ford Fiesta that my husband bought in 2013. My only worry is that something will go wrong enough with it in the next year or so that we’d be compelled to get another car in this rather tight market, but otherwise, knowing that your car's current resale (and repurchase) value is approximately the secondary wage earner’s monthly after-tax income is liberating.
- stjohnswarts 6y ago
  Next year will probably be better. The current shortage in materials and chips is a product of so many things (supply chains) getting mothballed, they'll be up to full production by next year.
- tome 6y ago
  > We had a 2020 Corolla as a rental over Christmas/New Years 2019/20 How does that work? Are models named for the year after they become available?
  - VVertigo 6y ago
    Yes, new models typically start being available around September: I always thought it was absurd too as a kid growing up, but it makes sense when you consider that competitive marketing pressures would drive manufacturers to release the new cars earlier and earlier. You can check the sticker somewhere around the driver's door to see when a vehicle was actually manufactured.
HumblyTossed 6y ago
My current car is a little older. I pay a monthly car payment to myself, so when this car gets too expensive to maintain, I'll find a new car that costs what I have in savings and start the cycle again.

wizzwizz4 6y ago

If you don't want a monthly car payment, start your “monthly car payment” into a savings account now. You'll end up paying less for your next car if you can maximise the up-front payment.

dwighttk 6y ago
If you don’t want a monthly car payment pay a monthly car payment so later you can have a smaller monthly car payment?
- jimbob45 6y ago
  I think the idea is that you accrue the interest yourself instead of paying it to someone else.
  - ironmagma 6y ago
    The amount of interest accrued in a savings account is pretty wimpy though.
  - unclebucknasty 6y ago
    Yeah, but a savings account? Interest rates for savings are abysmal, and auto-loans are themselves frequently near (or at) zero these days, so it's losing advice as-given. Better advice: put the money in the market or other higher-yielding investment, then take a low or no interest loan on the vehicle when the time comes so those investments can continue to grow at the much higher clip. Money's just too cheap to give away your own cash. Obviously, if the interest rate environment changes, this should be re-evaluated.
    - Larrikin 6y ago
      What percentage are you talking about as being abysmal. 0.1% offered at some shitty brick and mortar bank is terrible but nearly all the online first banks offer (or offered before covid) what I thought was a decent 1-3%
      - X-Istence 6y ago
        Highest these days is like 0.5%. If you are really lucky you can find 0.8%
      - unclebucknasty 6y ago
        I'm not seeing anything like that. Here's the latest roundup of "the best rates" over at Bankrate [0], which includes some online-only banks. Highest I see there is 0.57%, with most at 0.4% and 0.5%. You might be able to scrounge up a few basis points somewhere if you're really determined and/or willing to meet some requirements. Still, even with our low-inflation these days [1], you're actually losing money in these savings accounts. Main point though is that it's more of a relative game vs your ROI elsewhere. Even indexes and ETFs that are reasonably "low-risk" are routinely returning much more these days, and of course over the long haul equity markets still beat this handily, even when smoothed for downturns. [0] https://www.bankrate.com/banking/savings/rates/ https://www.bankrate.com/banking/savings/rates/ [1] https://www.statista.com/statistics/244983/projected-inflation-rate-in-the-united-states/ https://www.statista.com/statistics/244983/projected-inflati...
        Larrikin 6y ago
        TMobile Money is 4% for the first $3000 and 1% after that for customers and 1% flat for everyone else. Ally used to be pretty good but I've moved all my savings over for now
        unclebucknasty 6y ago
        Yeah, obviously not scalable, but cool for a risk-averse T-Mobile wireless customer who wants a guaranteed 4% on $3K. It is funny though that they give the example that at $5,000 saved your effective APY is around 2.79%. I mean, the bottom line is that as soon as you get above $3K, any additional savings drops to a lowly 1%, which doesn't keep pace with inflation (i.e. you're losing money). But they're presenting it like 2.79% is some kind of average that matters, thus implying it's a good idea to keep pouring money in. The reality is that the offer is not an average, but two discrete terms of 4% and 1%. And, on the latter, you're trading whatever other returns you could've made elsewhere for that miserly 1%. Much better to put it elsewhere, even for those who bite on the initial $3K for 4%.
  - syshum 6y ago
    Interest on savings accounts is far less than inflation, out side of an emergency fund there is little reason to save cash.
    - imtringued 6y ago
      Isn't the benefit of the car loan that you can have emergency funds? I mean, if you save up $5k and get a car loan for $25k you for years you effectively have a 2 year emergency buffer. If you pay off the car up front you may run into liquidity issues until you have restored your emergency fund.
      - syshum 6y ago
        No one should consider using their emergency fund for anything other than emergency's, so I am not sure what your point it The comment I was responding too talked specifically about saving money in a savings account for the purposes of buying expensive things like a car. It should go with out saying one should not use their emergency fund for these purchases (unless they are an emergency) Once you have the 6mos to 1 year of expenses in your emergency fund you should divert any other cash to other accounts such as Debt Repayment (providing the debt is more than 5-7% interest or current inflation) and/or investments such as tax advantaged retirement accounts
  - ratsbane 6y ago
    You don't have to put it into a savings account. I do the same thing but into a stock fund.
ineedasername 6y ago
Yes, we save a healthy portion of our income, but increasing that now just shifts the timing, not the pain, of when have to start a new car payment.
- thisCtx 6y ago
  The unbearable suffering of being a first worlder with material comfort kings of old could never imagine. What a narcissistic culture we’ve built if such a reality brings “pain”.
- lostcolony 6y ago
  Depends on the interest rate of the loan, inflation rate of money between now and the time the loan is paid off, and any gains/losses you could make now investing that money.
nradov 6y ago
Current low interest rates on car loans make that approach a bit pointless.
- mywittyname 6y ago
  They've been low for a while now too. As annoying as it is to have a $670 car payment each month, you really can't beat 0% interest on a $40k loan. Especially in a market where the average monthly return on $40k in stocks has been pretty substantial.
  - stefan_ 6y ago
    Except for the part where $0 down, 0% interest loan make people go for the 40k car they don't need instead of the 25k one.
    - mywittyname 6y ago
      That's really neither here nor there. The discussion was more about transforming, "save up and pay cash" to "save up and get a loan anyway because interest is so cheap." I picked $40k because that's roughly the median price of a new car. Whether your going for a $25k car, or a $125k car, the advice is the same: get a low-interest loan.
  - heisenbit 6y ago
    0% loan on the sticker price. The goal of coming in with cash is to get as far as possible below the sticker price.
    - dntrkv 6y ago
      Dealers don't care whether you pay cash or finance. Just call around dealers within a certain mile radius you are willing to drive and find the best deal. This has been, and will always be, the best way to get a deal.
    - giaour 6y ago
      Don’t dealerships make a good percentage of their profits from finance charges? The last time I bought a car, it took an hour of cajoling to get the cash price of a three year lease
dahfizz 6y ago
It would be better to take the car payment and invest that money. You can get a car loan for less that 3% interest, and you can easily make double that with low risk ETFs. Hell, you could invest your savings into a dividend fund and use that to pay your car payment directly.
vlunkr 6y ago
Or save up enough that you can pay cash. I would think for the HN crowd it should be feasible. I think when you're spending money that's already in your account you make better decisions. Like you'll be less inclined to pay thousands more for an upgraded model with a bunch of superficial nonsense added
chrisseaton 6y ago
A savings account is just a way to burn money at the moment. Not recommended.

o-__-o 6y ago

All modern cars have amazing new features. Air bags, reverse cameras, steering by wire, ABS, direct fuel injection, massively boosted turbocharged engines (on econoboxes!) and traction control as standard. My 7 year old car has all of the above and can park itself, has adaptive cruise control, and for $400 I added a 12” touch screen stereo. Compared to my last car, my current car outputs up to 20psi of boost compared to the 6psi of four generations ago. My current car has part time AWD that is just as efficient as my old mechanical always on AWD car of yesterday. I bought my car for under $20k. The car is worth under $10k right now. That is massive value available to everyone right now. Maybe you could upgrade your car now for much less than you think, or maybe you only want the latest shiny parts. Either way you need to be honest with yourself, cars have evolved and stayed modern over the past 2 decades compared to any time in automobile history

whitepoplar 6y ago
Which car do you have?
pja 6y ago
I bought a perfectly ordinary second hand vehicle for £3k in 2003 (it had been built in 1999) which had ABS, air bags everywhere, direct fuel injection, turbo-charged engine & traction control. Modern cars are pretty amazing things: a lot of these features have been standard for twenty years at this point! (The vehicle I bought was much favoured by UK taxi drivers at the time, which shows you how very boring & practical it was.)
- o-__-o 6y ago
  Since 2003 that has only gotten better. My turbocharged engine gets 35mpg on the highway while putting out 240hp on demand. 2003 cars couldn’t do that. my 2000 A4 with mods put out 250hp and had some sort of vacuum leak every other week, meanwhile that’s normal for my 2014 car and adding meth injection puts me as 300hp with zero problems after 2 years of continuous use Remember when cars of the 90s were so much better than cars of the 80s? Going over 100k mi/km in most cars wasn’t a concern anymore. Now a large majority of cars are going 200-300k without a sweat

sokoloff 6y ago

I tend to buy around 4-6 years old and run them for 10-12 years as well, which is limited by New England tinworm from the road salt we use rather than mechanical issues. Beyond airbags and ABS (both now ubiquitous), I don’t need the new feature faff. I just need something that will start everyday and that I can do the basic maintenance on. Fortunately, that’s still easily available and cheap in the 5-ish year-old “those cars are too old to be reliable” mindset-driven market. I can’t believe that people are willing to borrow money to keep driving 0-4 year old cars forever, but I’m glad they do because it greatly subsidizes the cars I drive.

Mavvie 6y ago
I feel like each year cars get way safer. It started with blind spot detectors/cameras, and modern cars will even brake automatically and keep you in your lane (or at least warn you if you leave it). Maybe new features like self-driving aren't as interesting, but I would buy a new car instead of a used one just for the perceived improved safety. I don't know if there's any research showing that these features actually reduce accidents/fatalities though (plausibly if they malfunctioned it could be worse than nothing)
- throwawayboise 6y ago
  Many of these features add minimal benefit if you do some common-sense stuff such as, don't drive when you're really tired (or drunk, or on drugs, etc.); don't play with your phone while you're driving; don't read, do your makeup, shave, etc. while you're driving. IOW put your focus on the task at hand and you don't really need blind spot detectors. Of course the reality is that people are pretty bad at these things.
  - wetpaws 6y ago
    I found them invaluable, especially BSM saved me from a lot of near-crash situations. When dealing with fast deadly chunks of metal every % of reduced chance of death is a good investment in my book.

MandieD 6y ago

We had a 2020 Corolla as a rental over Christmas/New Years 2019/20, and it was amazing. What we drive at home: a 2008 Ford Fiesta that my husband bought in 2013. My only worry is that something will go wrong enough with it in the next year or so that we’d be compelled to get another car in this rather tight market, but otherwise, knowing that your car's current resale (and repurchase) value is approximately the secondary wage earner’s monthly after-tax income is liberating.

stjohnswarts 6y ago
Next year will probably be better. The current shortage in materials and chips is a product of so many things (supply chains) getting mothballed, they'll be up to full production by next year.
tome 6y ago
> We had a 2020 Corolla as a rental over Christmas/New Years 2019/20 How does that work? Are models named for the year after they become available?
- VVertigo 6y ago
  Yes, new models typically start being available around September: I always thought it was absurd too as a kid growing up, but it makes sense when you consider that competitive marketing pressures would drive manufacturers to release the new cars earlier and earlier. You can check the sticker somewhere around the driver's door to see when a vehicle was actually manufactured.

HumblyTossed 6y ago

My current car is a little older. I pay a monthly car payment to myself, so when this car gets too expensive to maintain, I'll find a new car that costs what I have in savings and start the cycle again.