Cars We Drive!

[Arthur PE]

You can get one almost as new for that price and that year. On the other hand you will get that Audi brand new with alot cheaper service in the future. But if you buy a car for $70-100k you must have double in the bank account (otherwise you are a stupid man)

that is not practical, by your logic anyone buying a 50k car should have 100k liquid (excluding home, 401/retirement, and have no debt, other than a mortgage perhaps)
how many US households have 100k liquid in cash?

 

[GreenFrog]



that is not practical, by your logic anyone buying a 50k car should have 100k liquid (excluding home, 401/retirement, and have no debt, other than a mortgage perhaps)
how many US households have 100k liquid in cash?

Doesn't sound too ridiculous to me. We live in a nation of people with POOR financial habits and ridiculous debts.

I think it'd be prudent to have $100K in the bank if you wanted to drop $50k in cold hard cash for a rapidly depreciating asset. Honestly, anyone who's worked hard to have $100K liquid probably has smart financial sense and wouldn't spend half his/her savings on a car.

If I had $100K cash and wanted to buy a car worth $50K, I'd probably put a downpayment of $20K and finance the $30K. I'm sure I'd be able to generate returns greater than the car loan's interest rate. I'd also most likely end up selling the car before fully paying it off.

 

[pronxs]

thanks to SF's new homepage, found this thread.

 

[Arthur PE]

Doesn't sound too ridiculous to me. We live in a nation of people with POOR financial habits and ridiculous debts.
I think it'd be prudent to have $100K in the bank if you wanted to drop $50k in cold hard cash for a rapidly depreciating asset. Honestly, anyone who's worked hard to have $100K liquid probably has smart financial sense and wouldn't spend half his/her savings on a car.
If I had $100K cash and wanted to buy a car worth $50K, I'd probably put a downpayment of $20K and finance the $30K. I'm sure I'd be able to generate returns greater than the car loan's interest rate. I'd also most likely end up selling the car before fully paying it off.

the average US bank account is $3800
only 20% of the population could come up with 25k the same day
most would have to sell something or cash in 401/etc.

unlikely that you could generate returns higher than the loan rate with only 30k

a car is a consumable commodity, hardly an asset
the only way they make financial sense is to buy used, low mileage, let the other guy take the initial depreciation hit, put enough down, with short enough term, to never get upside down
maintain it well and drive it for a good bit after it's paid off, to bank the payments

I've made a little money, or paid $100/month 'lease' while driving M3's

 

[GreenFrog]



the average US bank account is $3800
only 20% of the population could come up with 25k the same day
most would have to sell something or cash in 401/etc.

unlikely that you could generate returns higher than the loan rate with only 30k

Okay, but the average US person is not going to spend $50K on a car.

If you're considering a $50K car, you're probably someone who makes more money than the average person, or someone with poor impulse control and debt up to your neck.

Also, it's very easy to generate returns greater than today's loan rates. I have excellent credit and have a loan on my car. It's at 2.99% and I have a large portion of my money invested in the stock market.

I could easily pay off my entire loan but my portfolio's rate of return since inception is 19.76%. Every month, I've been generating returns greater than my car's monthly payment. I think that's a major win-win scenario.

 

[VLSI]

Just buy cars that aren't still depreciating... it's not as ridiculous as it sounds. Only two of my vehicles are currently losing value.

 

[Shikar]



God help you with repair and maintenance on one of those.

Correct.....and you will need a damn good lawyer too....dont ask me how i know.

Regards.

 

[Arthur PE]

Okay, but the average US person is not going to spend $50K on a car.
If you're considering a $50K car, you're probably someone who makes more money than the average person, or someone with poor impulse control and debt up to your neck.
Also, it's very easy to generate returns greater than today's loan rates. I have excellent credit and have a loan on my car. It's at 2.99% and I have a large portion of my money invested in the stock market.
I could easily pay off my entire loan but my portfolio's rate of return since inception is 19.76%. Every month, I've been generating returns greater than my car's monthly payment. I think that's a major win-win scenario.

even 20k, means they need to have 40k cash
avg US car sold is 30k

A majority, or 64%, of Americans don't have enough cash on hand to handle a $1,000 emergency expense, according to a survey by the National Foundation for Credit Counseling, or NFCC, released on Wednesday.

tell me where you can get a guaranteed 3% on 10k, no risk

19.76% how? annual, last 10 years? inception?
I've been doing 4-5% APY and consider that good for the environment, and it is minimum 10k blocks and long term, 12 to 18 months

if it is so easy to make 3% why are retirement funds suffering?

 

[Arthur PE]

Just buy cars that aren't still depreciating... it's not as ridiculous as it sounds. Only two of my vehicles are currently losing value.

or ones that are at least leveling out
and drive it well after paid off

 

[GreenFrog]



Correct.....and you will need a damn good lawyer too....dont ask me how i know.
Regards.

How do you know?

 

[VLSI]



or ones that are at least leveling out
and drive it well after paid off

Definitely the way to go

And you don't have to drive a piece of junk either. Generally just meet the following criteria:

1. No longer in production
2. Strong enthusiast following
3. Keep it well maintained

 

[hoozah]

64% of americans don't have 1k backup? talk about a 3rd world country.less-developed country.

 

[GreenFrog]



even 20k, means they need to have 40k cash
avg US car sold is 30k

A majority, or 64%, of Americans don't have enough cash on hand to handle a $1,000 emergency expense, according to a survey by the National Foundation for Credit Counseling, or NFCC, released on Wednesday.

tell me where you can get a guaranteed 3% on 10k, no risk

19.76% how? annual, last 10 years?  inception?
I've been doing 4-5% APY and consider that good for the environment, and it is minimum 10k blocks and long term, 12 to 18 months

if it is so easy to make 3% why are retirement funds suffering?

Yes, but when it comes to 'buying' a new car, the VAST majority of Americans lease or finance it. Very few people actually pay $30K in cash to buy a loaded Honda Accord, for example. The only people I know who pay cash outright for a brand new, non-luxury car (~$30,000) are people who have above-average incomes and don't care for performance or status. I also know people with above-average incomes who only lease/finance new cars that are in the $60-90K price range and never actually pay cash to own a car outright.

Never did I say you can generate a guaranteed 3%. I'm just saying that it's not hard if you're willing to invest in some more risky vehicles. The only 'guaranteed' returns you speak of can be found in money market funds or high yield savings accounts that yield 7-8 BPs.


19.76% since August 2011 (when I first started working). You are correct -- 4-5% APY is good for this environment. I place riskier bets and most of them have paid off.. hence my higher returns.

As for retirement funds, are you referring to pension funds? 401(k)s? IRAs?

 

[Arthur PE]

Definitely the way to go

And you don't have to drive a piece of junk either. Generally just meet the following criteria:
1. No longer in production
2. Strong enthusiast following
3. Keep it well maintained

exactly

e36 M3 (if you can find a stock one, not one rided out)
e39 M5
some older AMG's
even some Audi S models

keep it looking new and with good maintenance records and you can drive a nice car for very little. perhaps even nothing, or make a few bucks

 

[Arthur PE]

Yes, but when it comes to 'buying' a new car, the VAST majority of Americans lease or finance it. Very few people actually pay $30K in cash to buy a loaded Honda Accord, for example. The only people I know who pay cash outright for a brand new, non-luxury car (~$30,000) are people who have above-average incomes and don't care for performance or status. I also know people with above-average incomes who only lease/finance new cars that are in the $60-90K price range and never actually pay cash to own a car outright.
Never did I say you can generate a guaranteed 3%. I'm just saying that it's not hard if you're willing to invest in some more risky vehicles. The only 'guaranteed' returns you speak of can be found in money market funds or high yield savings accounts that yield 7-8 BPs.
19.76% since August 2011 (when I first started working). You are correct -- 4-5% APY is good for this environment. I place riskier bets and most of them have paid off.. hence my higher returns.
As for retirement funds, are you referring to pension funds? 401(k)s? IRAs?

the comment was only stupid people buy cars without having twice its value in cash
hardly anyone can do that

I'm sorry, but I'm not buying 20% in less than 1 year with a 401
it is hard to make 3%, and easier to lose money in risky bets
I've been investing since the mid 80's

where can I find a MM , CD or savings accounts that guarantee 7-8 points or 0.07-0.08% (1 BP = 1/100th %) and why would I want it. lol
I can get 1 to 1.5% locally

large state retirement funds are having trouble yeilding 3%