Cars We Drive!

Discussion in 'Fine Living, Home, Design & Auto' started by Bert1568, Jul 18, 2006.

  1. Hampton

    Hampton Senior member

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    Yeah you are right.
     


  2. Arthur PE

    Arthur PE Senior member

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    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?
     


  3. GreenFrog

    GreenFrog Senior member

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    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.
     


  4. pronxs

    pronxs Senior member

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


  5. Arthur PE

    Arthur PE Senior member

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    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
     
    Last edited: Jul 13, 2012


  6. GreenFrog

    GreenFrog Senior member

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    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.
     
    Last edited: Jul 13, 2012


  7. VLSI

    VLSI Senior member

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    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.
     


  8. Shikar

    Shikar Senior member

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

    Regards.
     


  9. Arthur PE

    Arthur PE Senior member

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    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?
     


  10. Arthur PE

    Arthur PE Senior member

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


  11. GreenFrog

    GreenFrog Senior member

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    How do you know?
     


  12. VLSI

    VLSI Senior member

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    Definitely the way to go :nodding:

    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
     


  13. hoozah

    hoozah Senior member

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


  14. GreenFrog

    GreenFrog Senior member

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    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?
     


  15. Arthur PE

    Arthur PE Senior member

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    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
     


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