How much should I spend on my first car?

[PCMasterDebater]

12 hours ago, TopDollar said:

I think it's perfectly fine to finance a first car provided you do it responsibly. A $1200 car will most likely give you a lot more trouble than it's worth in the long run. I'd say you'd be much better off taking that $1200 and using it as a down payment instead. Having a couple thousand on hand for unexpected costs is a fantastic idea if you can afford to do so. In most places, when you step up to the $6000-$7000 range, the quality of car available is a lot higher; not to mention reliability is likely to be 10 fold.

Then you truly don't understand the need to spread your money wisely. With this, financing a $6-$7000  car will run you into a 4-5 year loan, payments $133-$167 a month, with the total loan payback being closer to $11000 dollars. Reliability is a sales pitch for guys like me trying to sell you a car. You want reliability? Money wont buy you that. Experience with cars, understanding what they really are, how they're made, and what materials are used. You don't want to be sold a car. Trust me.

 

Experience will tell you to buy a 2000 chevy impala with 150k miles for 1200 dollars. The 3.8l V6 is indestructible, the vehicle is was produced in mass, so the parts are readily as well as some of the cheapest and easiest parts to install. No need to bring it to the mechanic when you can fix the whole thing with a hammer and a socket set.

 

 

Quote

As far as financing is concerned, it is important to do it responsibly as it does have higher risk as you mentioned. Although if you have a reasonably stable job, financing $5500 or so of a car shouldn't be too hard. At a 6% interest rate, you're looking at $130 a month for 48 months. To be safe, I would even make double or triple payments if you can which gives you positive equity in the car and a buffer if you end up out of work or something along those lines. If shit really hits the fan, selling the car is always an option too.

Ya right kid, you're not getting a 6% interest rate without acquiescing that loan from a credit union with a co-signer. Most people don't that luxury.

 

And now you're talking about triple payments on a $130 a month loan? What about insurance for that $6000-7000 dollar car? What about the maintenance? You don't believe a car like that wont need any... Do you? You want to pay $390 a month on the loan. + $40 a week on gas, plus the $200 a month for insurance. What about rent? What about food? What if he has to go to the doctor? What about going on a date? Where would you find the money for that when you're already spending $710 dollars a month at this point on your very first $6-7000 dollar automobile.  How high are you?

 

Quote

Same advice goes to adults too. The above strategy is how I'm going to be able to pay off a $24,000 car in under 30 months.

 

Just cause you live with your parents and you were able to talk them into this, it sure doesn't mean it was the right idea for you either. Be honest with yourself. You didn't think this through and now you're here on the forums trying to talk other people into making the same mistake. Financing your first car is a nightmare at best. You can justify it anyway you wont but once you get older, you'll realize what that took away from you. You'll learn what you couldn't do because you wanted to act cool and show off you fancy new ride to your friends.

 

Ask me how I know.

 

Why now tell everyone how much that $24000 dollar car cost to register, insure, fuel up, how much the warranty ran you, how much interest you truly will be paying, plus the extra taxes that you had to pay. Come on. Show us how cool you really are  

 

 

[Jskn]

Try to find someone close and try to buy a reliable car from them. My uncle has a maybe 1970 jeep and 96 4runner with 220k miles. He works on then so they run like new and if youre nice, they lower the price for family. Not saying best, but possible

[Corrupt_Liberty]

I paid $155 for my first car.  A '82 Nissan Stanza.  It was a beautiful rust color.  Pretty sure I spent more then that on my Voodoo 2 around the same time...

[Aleks NE]

On 09/03/2017 at 6:58 AM, Chaicho said:

I have a few questions when it comes to this.

How much should I spend on my first car?

I dont know how to drive, so do I go and to my test and see if I pass and afterwards buy the car or do I buy the car and learn how to drive it.

 

 

 

Should i just give up and get a bike?

 

 

 

 

It depends where you live if you live in the uk i say max £2k max engine size 1.6 max HP100 and NO rotary engines unless you are ready to spend 30k a year on insurance.

Nice first cars under £2k:

Audi A3 1.6 (newer shape) £1k-2k]

Mazda3 1.4 or 1.6 £500-£1500

Golf MK4-mk5 £800-£2k

Honda Civic 1.4£300-£2k 

Renault Clio 1.2-1.4 £400-£1600,(French cars tend to lose value faster)

Renault Megane 1.4-1.5 £500-£1000 (French cars tend to lose value faster)

[NumLock21]

18 hours ago, LAwLz said:

It's a pain in the ass here in Sweden.

The theoretical exam is full of questions deliberately designed to confuse you, or just weird in general. It's things like "which sign do you always drive by on your left side" and then you have to pick one out of all the different signs. Or things like "how much liquor (40%) is 100cl of beer with an alcohol content of 3.5% equal to".

This is the sign by the way:

 

 

On the practical exam they rate you for things like how energy-efficient you are driving. Drive in too high gear, or break too hard when you could just let the car slowly roll to a halt? Then you might not pass the driving part of the exam.

Dafuq is that sign suppose to mean?

So every time I see that sign, I must stop, stare at my feet for 10 seconds before continuing?

[LAwLz]

Just now, NumLock21 said:

Dafuq is that sign suppose to mean?

So every time I see that sign, I must stop, stare at my feet for 10 seconds before continuing?

It means "oy! Drive on this side of the sign you dumbass".

You can see it in the background here:

 

It is very obvious when you are driving what it means. It just shows you on what side you should drive (which is usually obvious anyway). It can actually be pretty useful for clearly showing where you are suppose to drive. But when you just get the question "which sign do you always pass on your left side" and then have something like 150 signs to choose from, it's pretty damn difficult to remember this specific sign.

 

There is also a reverse one which you should always drive by so the sign is on your right side.

[dalekphalm]

5 minutes ago, LAwLz said:

It means "oy! Drive on this side of the sign you dumbass".

You can see it in the background here:

 

It is very obvious when you are driving what it means. It just shows you on what side you should drive (which is usually obvious anyway). It can actually be pretty useful for clearly showing where you are suppose to drive. But when you just get the question "which sign do you always pass on your left side" and then have something like 150 signs to choose from, it's pretty damn difficult to remember this specific sign.

 

There is also a reverse one which you should always drive by so the sign is on your right side.

Do you normally drive on the right side of the road in your country? If so, then that sign seems totally pointless to me.

 

If that sign was here in Canada, it would basically say "YO DUMBASS DON'T DRIVE ON THE WRONG SIDE OF THE ROAD" - which is... well.... no shit.

[WMGroomAK]

19 minutes ago, dalekphalm said:

Do you normally drive on the right side of the road in your country? If so, then that sign seems totally pointless to me.

 

If that sign was here in Canada, it would basically say "YO DUMBASS DON'T DRIVE ON THE WRONG SIDE OF THE ROAD" - which is... well.... no shit.

Or it could mean to aim for the pedestrian crossing here...  

[LAwLz]

1 hour ago, dalekphalm said:

Do you normally drive on the right side of the road in your country? If so, then that sign seems totally pointless to me.

 

If that sign was here in Canada, it would basically say "YO DUMBASS DON'T DRIVE ON THE WRONG SIDE OF THE ROAD" - which is... well.... no shit.

Yes we normally drive on the right side of the road. But like I said, it sometimes points the other way. It is basically just to make it as obvious as possible where you should drive. Like in this picture for example. It says "You are not allowed to drive anywhere but to the right here. Follow the arrow! Don't drive on the railway you moron!".

 

The description of the sign is:

"The sign indicates that vehicles may only be driven where the sign is pointing. If there are two arrows then you may drive where the arrows are pointing. The sign is adapted after the conditions where it's located".

 

It is actually more useful than you might think at first. I am kind of surprised that you don't have anything like it in Canada.

Here is a better example of a similar sign. If the sign was not there, you might have thought that you were allowed to turn left here. But you're not. It's two lanes going right (one for cyclists, and one for cars).

[dalekphalm]

27 minutes ago, LAwLz said:

Yes we normally drive on the right side of the road. But like I said, it sometimes points the other way. It is basically just to make it as obvious as possible where you should drive. Like in this picture for example. It says "You are not allowed to drive anywhere but to the right here. Follow the arrow! Don't drive on the railway you moron!".

-snip-

 

The description of the sign is:

"The sign indicates that vehicles may only be driven where the sign is pointing. If there are two arrows then you may drive where the arrows are pointing. The sign is adapted after the conditions where it's located".

-snip-

It is actually more useful than you might think at first. I am kind of surprised that you don't have anything like it in Canada.

Here is a better example of a similar sign. If the sign was not there, you might have thought that you were allowed to turn left here. But you're not. It's two lanes going right (one for cyclists, and one for cars).

 

We do have directional signs in Canada, but they're purpose specific. For example, in the lower picture, to indicate it was a right-way turn only (because of a one way street):

These appear with or without text - it varies regionally.

 

For the upper sign, we would likely just have a "DO NOT ENTER" sign, like one of the following:

 

This would tell you that you cannot go onto the tracks.

 

Coincidentally, these are the signs facing the WRONG WAY down a one-way street, so if you somehow happened to get onto one, you'd know you're a moron, and need to turn around

[79wjd]

58 minutes ago, dalekphalm said:

-signs-

The sign I really appreciate is the "no turn" sign on highway entrance ramps....like, no shit I can't make a u-turn and go the wrong way down a highway, or no shit I can't just drive perpendicularly across the lanes.

[yathis]

On 3/8/2017 at 11:58 PM, Chaicho said:

I have a few questions when it comes to this.

How much should I spend on my first car?

I dont know how to drive, so do I go and to my test and see if I pass and afterwards buy the car or do I buy the car and learn how to drive it.

 

 

 

Should i just give up and get a bike?

 

 

 

A bike as in a motorbike or a bicycle/scooter/moped?

 

I think you can easily find a great deal on a $500 car because of the way the economy is. Find a car that is easy to fix, so a domestic, and a car that has lots of parts available from the junk yard. Get a person who is really knowledgable in cars to help you pick one and buy one. Then learn to do your own oil changes, rad flushes and learn how to fix it. It will be invaluable for later in life.

 

I would suggest a Geo Metro, or a Sprint, or a Lebaron, Taurus, Escort, any of those that are good on gas, plus they are cheaper to insure, but they do put your own life at risk because most people drive trucks.

 

Buy older because they have less computers onboard. Buy older cars, like 1980's or 1990's, but nothing much past mid 1990's. Stay well away from imports because they cost too much in parts, and labor.

[Donut417]

On 3/9/2017 at 1:58 AM, Chaicho said:

I have a few questions when it comes to this.

How much should I spend on my first car?

I dont know how to drive, so do I go and to my test and see if I pass and afterwards buy the car or do I buy the car and learn how to drive it.

 

 

 

Should i just give up and get a bike?

 

 

 

I was lucky. I took Drivers Ed and got my license. The driving test isnt too hard to pass in Michigan. Which is why no one can fucking drive like a god damned human being. Sorry, my road raged flared up. My parents supplied me a car. Actually my sister who is 4 years older drove it first and then I drove it for a few years. Then my sister drove it a while and sold it for $500. Honestly I think we got a profit. It was the best car we ever owned. 

 

Last car I bought, which was my second vehicle I ever purchased, was $6,000 USD. You have to be careful with used cars. Because soo much can be wrong with them. I would say not to spend more than 5 or 6k. If you can find something for 2-3K that would probably work. The cheaper you go, the shittier your options and the older. Old cars tend to need a lot of work. 

 

As far as bikes go, if you live in a small community or you know your commute isnt far and the weather is relatively nice all year a bike might make a better choice. Here in Michgian winter can be nice and 40 degrees. Or -30 degrees and snow past your ass crack. You never know. 

 

Also if you have use of public transportation that might be an alternative in the Winter. In my case I live in the suburbs. No public transit out here. Now if I lived in NYC Id just use the Subway. My better on the sanity of wanted to strangle every fucker on the road, again I apologize, my road rage flared up. 

[yathis]

Road rage is normal, a fellow got pinched on attempted murder charge here in Edmonton, he broke both the ladies arm. Most likely he was drunk. That is scary, but I like to play along with the road ragers. I often slow down when they are tail gating me, then speed up when they try to pass, or I have had to slam on the brakes a few times for safety reasons lol

 

Some of the best vehicles I bought were $500, mostly from richie riches just getting rid of them. Other times I was able to buy vehicles for a ficticous $1.00.

[Snadzies]

I personally like to aim for about $5,000 for a used car with somewhere around 100k miles.

You'll likely have to do some minor maintenance to it (brakes, tires, a few other odds and ends) but at 100k miles most cars shouldn't be having major mechanical issues quite yet.

Once cars hit around 150k miles they'll likely start needing various gaskets, seals, timing belts/chains, water/oil pumps, and other pain in the ass jobs that can be rather expensive if you're not mechanically inclined.

 

What ever you get, get something that is popular in your country that way parts will be plentiful and cheap should it need repairs.

If you plan on working on the car yourself then get something with a large engine bay but a small engine.

[Qyoon]

In france driving liscence is so expensive you can say a titan X is cheap... 

This is why i am rocking a 3k € pc and still use my mbt to move. 

[Monte_Carlo]

Spend the least amount possible for the newest/lowest mileage possible.  I'd aim for something contemporary American or Japanese.  Avoid German cars at all costs if you value your wallet and reliability/durability.  A smaller car in manual ought to be your best bet, and if you must go high mileage, go for highway miles vs. stop and go stuff.  

 

Reliable cars: The Japanese tend to do quite well with reliablity in my opinion and experience.  Your best bet is manual where you can since they tend to have fewer issues, better fuel economy, and cheaper to repair. 

-Honda Civic- fun, cheap, good on gas, and easy to maintain.  Solid in automatic and manual.  Fairly cheap on the second hand market.  Early 2000s was a golden period.  Newer cars lost in build quality and fun.

-Toyota Corolla- boring as hell, but at least they're good on gas, reliable, and boring as hell. 

-Ford Focus - The basic platform/engine combo was in production from 1999 to 2011ish.  Surely Ford worked out any kinks over the full life of the car. The mid 2000s ST had a nicer engine from Mazda. 

 

Great runner ups: Still Japan rules, but America isn't too far behind.

-Honda Accord manual- Early 2000 Honda were notorious for dying transmissions.  Manual is your best bet.  Usually high mileage, but if you can find a lower mileage example with a stick shift, worth the price imo.

-Toyota Camry- Flagship of babyboomers who view cars as an appliance.  Boring, but at least they have service done at dealers.  You can't get safer than this for a first car.

-Ford Taurus- Questionable in everything, but solid engine choices, safe, and cheap to repair.  You can even pretend to be a door to door magazine salesman.  

 

Avoid:

-Anything German.  Just because you can buy a BMW for 3000 dollars doesn't mean you should.  The newer cars are harder to fix, and parts tend to be expensive.  If you can't DIY, hourly prices on repairs are horrific.  My friends tended to pay more over the years to upkeep German cars. (US ain't the autobahn, calm down, there is a reason that cool German car is so cheap.)

-Older American cars- Unreliable, poorly constructed, gas guzzlers.  You do have the amusing 70s aesthetic going on, and lower prices on car parts, and lots of room to work on the cars, but do you need a daily driver, or a project car? (More power to you if you get an IROC Camaro)

-Anything older- Less safe, worse on gas, and once again... do you want a project car, or a daily driver? (Then again, can't blame a man for wanting a 302 powered Pinto.)

 

 

There is no x amount to spend on a new car since it varies from person to person.  You haven't given us anything to go on, so my advice is going to be as unspecific as the information given.  Also prices vary region by region, country by country even.  Personally I'd go for something small, practical, and cheap.  My first car was a Ford Escort 1997... it was alright.  Not great, not bad, but it was.  

[dalekphalm]

9 hours ago, yathis said:

Road rage is normal, a fellow got pinched on attempted murder charge here in Edmonton, he broke both the ladies arm. Most likely he was drunk. That is scary, but I like to play along with the road ragers. I often slow down when they are tail gating me, then speed up when they try to pass, or I have had to slam on the brakes a few times for safety reasons lol

 

Some of the best vehicles I bought were $500, mostly from richie riches just getting rid of them. Other times I was able to buy vehicles for a ficticous $1.00.

You know that by doing so, you're likely aggravating the situation, and making it more likely that you will be attacked by someone in the midst of road rage?

 

If that ever happened and it went to court, you might be even held liable to some degree for the situation - the attacker would still be punished of course, but you might also be punished.

[Donut417]

2 hours ago, dalekphalm said:

You know that by doing so, you're likely aggravating the situation, and making it more likely that you will be attacked by someone in the midst of road rage?

 

If that ever happened and it went to court, you might be even held liable to some degree for the situation - the attacker would still be punished of course, but you might also be punished.

I do something similar. I slow down when people tail gate. Legally you can do as far as 10 MPH below the speed limit and its legal. I dont speed up however. People are less likely to attack in my area. Why? Its $160 for the class and the concealed pistol license. Then what ever a gun costs. People know better, you never know whos packing. You try to attack the wrong person, you wind up dead. 

[Zodiark1593]

2 hours ago, dalekphalm said:

You know that by doing so, you're likely aggravating the situation, and making it more likely that you will be attacked by someone in the midst of road rage?

 

If that ever happened and it went to court, you might be even held liable to some degree for the situation - the attacker would still be punished of course, but you might also be punished.

Agreed. Flat out ignoring such a person and not acknowledging their existence seems to be much more sadistic way to deal with them anyway. 

[yathis]

6 hours ago, dalekphalm said:

You know that by doing so, you're likely aggravating the situation, and making it more likely that you will be attacked by someone in the midst of road rage?

 

If that ever happened and it went to court, you might be even held liable to some degree for the situation - the attacker would still be punished of course, but you might also be punished.

Ya in this day in age with camera's and cell phone so prevalant in todays society, everything is caught on camera, but slowing down is for safety especially when someone is tailgating you, you never know what objects are on the road, or animals, or flying debri's, or just plain scared and panicked by a person out of control and or drunk. Perhaps there was an emergency who knows right. Just so ya know, a driver hitting another in the rear, its always 100% their fault. I can't think of any cases where it was the person who was aheads fault.

The only case I can think of is a lady in Quebec who got pinched for stopping on a highway looking at ducks. She blabbed though, her own words got her found guilty, which is always what the pigs try to do.

[TopDollar]

On 3/10/2017 at 7:21 AM, PCMasterDebater said:

Then you truly don't understand the need to spread your money wisely. With this, financing a $6-$7000  car will run you into a 4-5 year loan, payments $133-$167 a month, with the total loan payback being closer to $11000 dollars. Reliability is a sales pitch for guys like me trying to sell you a car. You want reliability? Money wont buy you that. Experience with cars, understanding what they really are, how they're made, and what materials are used. You don't want to be sold a car. Trust me.

 

Experience will tell you to buy a 2000 chevy impala with 150k miles for 1200 dollars. The 3.8l V6 is indestructible, the vehicle is was produced in mass, so the parts are readily as well as some of the cheapest and easiest parts to install. No need to bring it to the mechanic when you can fix the whole thing with a hammer and a socket set.

 

 

Ya right kid, you're not getting a 6% interest rate without acquiescing that loan from a credit union with a co-signer. Most people don't that luxury.

 

And now you're talking about triple payments on a $130 a month loan? What about insurance for that $6000-7000 dollar car? What about the maintenance? You don't believe a car like that wont need any... Do you? You want to pay $390 a month on the loan. + $40 a week on gas, plus the $200 a month for insurance. What about rent? What about food? What if he has to go to the doctor? What about going on a date? Where would you find the money for that when you're already spending $710 dollars a month at this point on your very first $6-7000 dollar automobile.  How high are you?

 

 

Just cause you live with your parents and you were able to talk them into this, it sure doesn't mean it was the right idea for you either. Be honest with yourself. You didn't think this through and now you're here on the forums trying to talk other people into making the same mistake. Financing your first car is a nightmare at best. You can justify it anyway you wont but once you get older, you'll realize what that took away from you. You'll learn what you couldn't do because you wanted to act cool and show off you fancy new ride to your friends.

 

Ask me how I know.

 

Why now tell everyone how much that $24000 dollar car cost to register, insure, fuel up, how much the warranty ran you, how much interest you truly will be paying, plus the extra taxes that you had to pay. Come on. Show us how cool you really are  

 

 

haha ok bud

 

Ignoring the ad hominem, my personal financial situation is irrelevant here as my advice is scalable to different budgets. I prefaced my advice by saying it's important to finance responsibly. If my example of a $7,000 car turns out to not be affordable as in the example you gave, then you shouldn't do it (although to be fair, I did account for maintenance by using the same example you did by putting a couple thousand dollars away for unexpected costs). Additionally, I recommended making double or triple payments when it was financially viable to do so. For example: I got a bonus at work this month, so I used the opportunity to put a few hundred extra dollars onto my auto loan. It's not a bad practice as it puts you in a much better situation should you need to get rid of the car for whatever reason. Selling a car at negative equity is never a good idea unless it's absolutly necessary.

 

Obviously each person has their own situation, and a blanket "you should do this" doesn't work. Everyone isn't a car person. The majority is looking for reliable transportation without too much hassle. My own experience with used cars in the $0-$3000 range is that they are generally more hassle than what they are worth. High milage cars often require higher levels of maitenance and higher probability of costlier repairs (e.g. transmission/clutch, suspension, wheel hubs/bearings, electronic failures, etc.). Financing a car provides a relativley low risk way to afford a much higher quality vehicle. Another plus is it also builds your credit score (assuming you make on time car payments).

 

Since you asked so nicely though, this is the third car I've owned; first new one:

MSRP: $24,000

I financed: $17,500 at 1.99% for 72 months (no co-signer; just me on the title)

Interest: $1080 total if loan was taken to term. I'll end up paying about $450ish.

Registration Renewal: $40/year

Maintenance: average ~$300-$500/year (based on an assumption of 3 oil changes, yearly inspection, & misc. expenses such as wiper blades/washer fluid, etc.)

Insurance: $300k bodily injury liability, $100k property damage liability, $10k medical expense payments, $250 deductible, $335 6 month premium

Fuel: ~$80 per month (car gets 20-30mpg for my daily commute)

Warranty: Factory warranty is 3 years, 36,000 miles. No need for anything on top of that.

Taxes: Sales tax in my area of Virginia is 6% (5% state, 1% local). $1440. Virginia also has personal property tax on vehicles. About $330 per year for that.

 

Yearly ownership cost: Roughly $5600 per year based on the above.

[PCMasterDebater]

Thanks for the response Top. Your math is wrong but we can go with it. $5600 x 6 = 33,600

 

335.6 per month

330 a year tax

40 registration renewal (what about the first year?)

$300-$500 maintenance

= $4697  - you must of forgot the monthly payments.

We'll go with $200 a month. - $2400 a year. (only amounts to $14400 so this can't be right)

Actual cost $7097+ a year x 6 years = $42582

 

Lets assume its somewhere in the middle of 33,600 and 42582 shall we?  = $38091

 

4x $1200 is $4800 for the purchase of the car. One and done. $33291 left over the life of 6 years. A $4800 car would cost less to register and insure but for the sake of the argument. We will go with the same numbers. $4697 a year. = $32,982

 

38091 - 32982 = This leaves us with a minimum savings of  $5109 over 6 years.

or

42582 - 32982 = $9600

 

But really. we know a 4800 car wont cost 4697 a year.

 

So lets do it one more time.

 

$175 a month insurance

$200 a year registration

$80 a month gas

$500 a year maintenance

= $3760 * 6 years = 22,560

 

38091 - 22560 - $15531 saved over 6 years.

or

42582 - 22560 = $20,022 saved over 6 years.

 

 

$15k-20k is a down payment on a house.

Or a second car.

Or the cost of a wedding

Or the cost of having kids.

 

If you still don't see it. Again, Your my favorite type of customer   ;p 

 

Since you were honest I will be too.

 

I make good money. I'm not here to brag so I wont say how much but I drive a car I paid $600 dollars for. I put $2400 rebuilding the car the first year I owned it. All new suspension, ignition, tires, paint, etc. That was 4 years ago. So I have $3000 into a car. Insurance $25 a month full coverage $100 deductible.  registration cost $167 dollars a year. = $467 a year. after 6 years = $5802 dollars over 6 years.

 

$38091 - $5802 = $32,289

or

$42582 - $5902 = $36680

 

 

So I have $32,289 - $36680 more then you at the end of 6 years and my car is arguably more reliable then yours. It essentially requires zero maintenance for 4-6 years.  

 

Do you see what I'm saying now?

Buying your first car cash straight up, is the best way to go.

 

[PCMasterDebater]

53 minutes ago, TopDollar said:

snip

I forgot to tag you so and I don't know how to add it after the fact.

[dalekphalm]

1 hour ago, PCMasterDebater said:

Thanks for the response Top. Your math is wrong but we can go with it. $5600 x 6 = 33,600

 

335.6 per month

330 a year tax

40 registration renewal (what about the first year?)

$300-$500 maintenance

= $4697  - you must of forgot the monthly payments.

We'll go with $200 a month. - $2400 a year.

Actual cost $7097+ a year x 6 years = $42582

 

Lets assume its somewhere in the middle of 33,600 and 42582 shall we?  = $38091

 

4x $1200 is $4800 for the purchase of the car. One and done. $33291 left over the life of 6 years. A $4800 car would cost less to register and insure but for the sake of the argument. We will go with the same numbers. $4697 a year. = $32,982

 

38091 - 32982 = This leaves us with a minimum savings of  $5109 over 6 years.

or

42582 - 32982 = $9600

 

But really. we know a 4800 car wont cost 4697 a year.

 

So lets do it one more time.

 

$175 a month insurance

$200 a year registration

$80 a month gas

$500 a year maintenance

= $3760 * 6 years = 22,560

 

38091 - 22560 - $15531 saved over 6 years.

or

42582 - 22560 = $20,022 saved over 6 years.

 

 

$15k-20k is a down payment on a house.

Or a second car.

Or the cost of a wedding

Or the cost of having kids.

 

If you still don't see it. Again, Your my favorite type of customer   ;p 

 

There are things you're not considering in your calculations:

 

1. A brand new car that's lasted 6 years, will last even longer.

2. A car that was 6 years old when you bought it, won't.

3. Resale value on the car after 6 years:

3a. If you're buying a $3000 or less car, you're basically not getting anything of worth after 6 years.

3b. If you're buying a brand new car, after 6 years you can potentially sell that car for $10,000 or more (depends on many variables)

 

So yes, buying cheap and old can indeed work out better, but buying new (or newer, at least), isn't always a straight wash. A new car will simply last longer than a comparable old used car. It will be worth more if you decide to sell it after 5-6 years.

 

I'm sure there's a sweet spot where you can calculate exactly how new a car should be to optimize resale value vs initial purchase price vs longevity, but there are too many variables to come up with a hard figure that works with every car.