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The Real Cost of Owning a Car

startupceo.co.za

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Re: The Real Cost of Owning a Car

#61

Post by Periodic »

warp wrote: post #34
Goladus wrote: post #13

Yes cars are extremely expensive. But for many the ability to live within driving distance of work is worth it. I know people who don't have cars. They really miss them. I can drive 250 miles to see my family on a whim. It takes 4-5 hours. Taking public transit requires 7-8 hours, and only gets me within 25 miles of my parents' house (which is pretty good compared to much of the US). And something like reliability is…

I prefer 7-8 hours on a train with a laptop or a book compared to 4-5 hours of driving. Driving is either boring (freeway) or annoying (cities), whereas I can usually either be productive or relax on public transport.

I'm the opposite. I enjoy a nice 1:00 - 3:00 drive occasionally because it lets my mind wander and think while keeping my body and the lower parts of my brain occupied. In an odd way it is a lot like taking a hike, only without the fresh air but with climate controll.

Re: The Real Cost of Owning a Car

#62

Post by starkfist »

ahoyhere wrote: post #40
binarycheese wrote: post #18

Earlier quoted context omitted.

BMW's are twice as expensive in Europe? You lost me there. I currently on vacation in Europe, and you won't believe some of the deals (on both brand new and used) BMW's I've seen.

Where are you? In Austria, a Toyota Yaris (different name) costs 15,000 - 16,000 euros. That's around $19,000+ even with the weak euro right now. A BMW X3 SUV starts at 41,500 euros. That is $52,000 now but, before the colossal euro drop, it would have been more like $62,000. Last I checked, a Yaris costs $12k in the US and an X3 starts around $37,000. So you're right, it's not double, but it's close enough for me. E…

A yaris doesn't compare to an x3. What's the difference between a 1 series hatch and a yaris? Or an x3 and a Highlander?

Re: The Real Cost of Owning a Car

#63

Post by vaksel »

thesethings wrote: post #52

I really, really recommend reading The Millionaire Next Door (I have no affiliation with it. It's kinda old-school, but in no way out of date.). Almost the entire book is about how luxury goods are NOT consumed by rich people, but by semi-struggling middle class people. (BMW's, Rolex, premium liquor, etc.) (Or at least people who have to go in to debt to consume these things.) (It's also about how rich people DO live…

i think the big issue, is that there is rich and "rich"

real rich can afford to spend $100K on a car w/o really impacting their income too much. i.e. 100K = 5% of their yearly income($2mm/yr)

the "fake" rich, still make $300-400K a yr, but they think they are "rich" rich, so they also buy the $100K car. But for them that $100K is a much higher % of their income.

personally I feel like 5% of your income on cars, is more or less living within your means. If you keep your car for 4-5 years, that's only 1% of your yearly income going towards cars.

Granted if you are a car enthusiast and cars are your only hobby, it's ok to bump that number to 10-15%

Re: The Real Cost of Owning a Car

#64

Post by bradleyland »

philk wrote: post #43

Not a good article at all. a) Nobody has ever confused a car with an investment. b) "Assuming a modest 10% return". 10% after taxes and inflation is not a modest return by any stretch of the imagination and I'd be thrilled if I could achieve that consistently. If he hasn't factored inflation and taxes in then all his sums are wrong. c) "Here, look, my $4000 student car costs more than $4000 in running costs and depre…

The entire premise of his title is dead wrong. "Why Millionaires Don't Have Great Cars" is a failed assumption. The zip code across the river from me (on the southeast coast of Florida) has the highest concentration of ex-CEOs in the nation. By consequence, there are a disproportionately high number of millionaires driving around on the beach side of town. It is a rare occasion that I see one of these people driving a Toyota Yaris. Most of them drive some form of Lexus, BMW, or Mercedes, with lots of Porsches thrown in the mix, and the occasional Ferrari, Masseratti, or other exotic.

Millionaires drive what they want. If they don't "want" a nice car, they won't drive one.

Re: The Real Cost of Owning a Car

#65

Post by jonasvp »

LeChuck wrote: post #51
jonasvp wrote: post #26

It depends on where you live. In the States or outside a fair-sized town, there's (so far) no alternative to owning your own car out of sheer necessity. In the city, especially here in Europe, it's a different story. The usual rule of thumb is the cheapest car costs you _at least_ 300 €/month (taxes, depreciation, not counting gas money)! When my son was born this made it easy for me to decide to buy an Xtracycle ( h…

>The usual rule of thumb is the cheapest car costs you _at least_ 300 €/month (taxes, depreciation, not counting gas money)! These prices are hardly uniform across all of Europe. I live in a smallish city in the Netherlands and you can probably own a car for 60 - 100 €/month here.

They're not, that's true. Be sure to count all your car-related expenses, though. Even minor repairs quickly cost over 1.000 € and you'll be racking up a lot of those over the life of the typical car (if you have an older one). For a new car, depreciation runs even higher.

Re: The Real Cost of Owning a Car

#66

Post by ahoyhere »

Zak wrote: post #50
ahoyhere wrote: post #40

Earlier quoted context omitted.

Where are you? In Austria, a Toyota Yaris (different name) costs 15,000 - 16,000 euros. That's around $19,000+ even with the weak euro right now. A BMW X3 SUV starts at 41,500 euros. That is $52,000 now but, before the colossal euro drop, it would have been more like $62,000. Last I checked, a Yaris costs $12k in the US and an X3 starts around $37,000. So you're right, it's not double, but it's close enough for me. E…

I suspect a BMW 1-series hatchback, which is much more comparable to the Yaris is also much closer in price. Perhaps that would provide a good compromise for you. I suspect the utility your husband sees in the X3 has little to do with a car's supposed function of transporting people and property and much more with its value as a status symbol. Unfortunately for him, displays of wealth tend to hinder one's attempts to…

I wasn't comparing the two cars' price points with each other, but comparing their price points with their US price points. Neither of those cars, actually, were ones either of us wanted. I just had seen ads for them recently.

And trust me, it's not a status symbol to my husband. Nobody is impressed by BMWs in Austria. They're common as dirt. Even all the cabs are Mercedes sedans, or the occasional Prius.

I refuse to get a BMW because we'll drive, like I said, maybe 10-15 hours a month. It costs the same to buy a car as to rent one each time, if we get a cheaper but reliable VW. So how nice the car is to drive doesn't really matter.

Re: The Real Cost of Owning a Car

#67

Post by matwood »

dedward wrote: post #53
matwood wrote: post #41

Earlier quoted context omitted.

No, the worst thing is buying the car new . When you drive off the lot a car gets hit with immediate depreciation. The first year captures a lot more of that 30%. If you simply buy cars that are 1 year used you save a ton on the deprecation to the point where a 3-5 year loan at 6%ish never puts you underwater if you put a little money down.

Underwater? Viewed as an investment any car puts you underwater immediately - it's a net loss. If you borrowed money and are also paying interest on the vehicle, that's just MORE cost... I don't get the rationalization. Yes, a new-ish used car is a better value for money deal than a brand new car - but if you have to borrow money, you are probably better off convincing your ego to let you buy a cheaper model rather t…

The general definition I use for 'underwater' is if I were forced to sell my car today would I get enough money for it to pay off the bank? Nowhere did I mention viewing a car as an investment.

There is no rationalization. Of course it's more cost but there is also cost associated with reducing the amount of cash you have on hand. With that said, a car is the second biggest purchase most people make. It would be great if they all had the thousands of dollars to buy a reliable car with cash, but many don't.

Personally the last car I bought was used and I got a 6% 5 year loan. I typically make double payments on cars so the loan is almost over less than 3 years in. I did the math the other day and accounting for interest I've done much better by buying the car on credit and leaving the rest of the money in my various investments. Over 2-3 years 6% isn't much to begin with so it's pretty easy to beat with other various investments.

Re: The Real Cost of Owning a Car

#68

Post by matwood »

ahoyhere wrote: post #48
matwood wrote: post #42

Earlier quoted context omitted.

I don't know how it is in the EU, but in the US it makes very little sense to buy a new luxury car. Many people who like luxury cars also like owning the newest one. This means they lease and/or buy them and only keep them for 1-2 years. If you look in the used luxury car market you can find great deals. So great in fact that I'm amazed anyone buys one new, but that's what people like to spend their money on I guess.

I'm from the US. Here's why I previously bought a new car (the high-end trim level Matrix, not luxury though): I wanted a low mileage car because I had owned several high-mileage, but reliable, used cars, and calculated that I spent at least $200/mo over the year on routine repairs and maintenance. A low-mileage (sub-30K) late year model, otherwise identical used car cost only $2,500 less than the new car. The intere…

Where are you banking that your used car loan is 13%?! The one I have now is 6% and bank rate lists current used car loans for 48 months at 6.38%. You need to find a new bank :) I really hope you're not using dealer financing...ugh.

I agree that buying a used car does take a bit of leg work. The last one I bought took me almost 3 months of looking. At the time I bought my last car the dealership wanted $33k for the base trim new. I bought the 1 year old version with 12k miles and higher trim level for 24k. The car was a 4-Runner, not exactly luxury, but a nice reliable car. I'm looking at Range Rovers now and the price difference between new and 1-3 years old is amazing.

I also get a mechanic to check out any car before I buy it. Luckily I have multiple mechanics in my family.

Oddly enough I have bought 1 new car in my life and it was the car that gave me the most problems. I had it in the shop every other week because of some computer/vapor exhaust issue. When I finally sold it, the engine light had been on for about 3 of the years I owned it.

Re: The Real Cost of Owning a Car

#69

Post by laut »

ahoyhere wrote: post #40
binarycheese wrote: post #18

Earlier quoted context omitted.

BMW's are twice as expensive in Europe? You lost me there. I currently on vacation in Europe, and you won't believe some of the deals (on both brand new and used) BMW's I've seen.

Where are you? In Austria, a Toyota Yaris (different name) costs 15,000 - 16,000 euros. That's around $19,000+ even with the weak euro right now. A BMW X3 SUV starts at 41,500 euros. That is $52,000 now but, before the colossal euro drop, it would have been more like $62,000. Last I checked, a Yaris costs $12k in the US and an X3 starts around $37,000. So you're right, it's not double, but it's close enough for me. E…

Regarding the X3, I agree with Jeremy Clarkson that it's pointless: http://www.youtube.com/watch?v=u2LLMxlkT-Y It's not really good off road, and as a car it's worse than a normal car.

For an off roader can get a used Range Rover for about 20K EUR. It has a BMW engine http://suchen.mobile.de/fahrzeuge/showDetails.html?lang=en&#... If you want a car for the road with all wheel drive, a 5 series BMW like this works better as a car http://suchen.mobile.de/fahrzeuge/showDetails.html?id=129766... and has all wheel drive too.

Personally I'd rather have a used luxury car than a new Yaris. Instead of a Yaris for 16k you could get a used BMW 3 series for about half. For instance this http://suchen.mobile.de/fahrzeuge/showDetails.html?lang=en&#... Even though it's older than a new Yaris it's more comfortable.

Even a BMW 7 series for about 10k (in Austria). http://suchen.mobile.de/fahrzeuge/details.html?lang=en&i... A 7 series uses more fuel, but if you are not driving much, fuel costs aren't a big part of total costs. Insurance and service costs would be higher though.

Re: The Real Cost of Owning a Car

#70

Post by waivej »

Sometimes it's a good idea to own a "desirable" item rather than go with the masses with a commodity. When it's time to sell your old convertible, you'll find a buyer. The old sedan is basically scrap metal.
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