Car Discussion/Advice

[Greenday]

I've saved up a fair chunk of change ($75,000). I have no debt. I live at my parents house for the moment so I have no rent to pay. I just pay for my cell phone, gas, and car insurance. I decided I want to get a new car. My current car is a 2000 Chevy Cavalier and it has nearly 110k miles. Every year, something goes wrong with it and it costs money to replace it.

I decided on the 2013 Mustang. I found a dealer that is going to give it to me for a fair price. Now my mom is all of a sudden really trying to convince me not to get it. It costs $26,200. I plan on paying for a year of insurance in one go for a discounted price ($2800). Was going to put $10,000 down and pay the rest off in payments to work on my credit.(With no job, no chance of financing it) But my mom keeps saying I might need the money for other stuff, what if something happens (like what?), I don't have a job, etc. etc.

So now I don't know what to do. Is this just a product of my mom never having had spare money so she's biased because spending like this if you DON'T have spare money is reckless? I don't know what to do anymore.

[Andara Bledin]

Some people are uncomfortable with large expenditures of any sort.

I do have to wonder, though, what could possibly happen that the $38k would really be useful for that the remaining $37k couldn't fix.

The plan to pay part up front, and the do the rest in payments is an outstanding way to build a good credit profile, and something that will be vital in the future for when (and if) you choose to purchase a home of your own.

^-.-^

[csquared]

My first question to you is how much money have you put away for retirement? That should be your first priority. Start early. Compounded interest is your friend.

You have money. It is burning a hole in your pocket. It would also be a good idea to upgrade your car. Mustangs are nice. I would love to have one (I REALLY want the 2014. 662 HP, 200 MPH. Can't afford the lawyer that I would have to keep on retainer ).

I don't want to tell you not to have fun, don't take risks. That is what life is all about.

However, as you are unemployed, I would recommend finding something less expensive. Upgrade when you land a good paying job.

[Imprl59]

As a car nut I would say yeah yeah yeah Go get it!

As an official old person I would say that buying a new car is about the worst thing you could possibly do with the money. If you just have to have another car (and no, it breaks once a year doesn't equate need) get one a couple of years old and let someone else take that huge depreciation hit. Paying cash in this economy you can find a heck of deal out there with someone who really needs to move their car.

Knowing what I know now I would say invest that money somewhere where it isn't so easy to get to so you can't blow through it. Perhaps a cheap rental house.. invest it in a retirement account... Get some CD's from the bank.. Talk to a financial advisor and get some pro advice.. You never know what tomorrow will bring but you do know there will be a 2014 Mustang and a 2015 Mustang and on and on and on.

[Greenday]

I'm not going to want a new car every year. I just want to get a new car that's going to last me a long time and isn't going to cost me a couple thousand bucks every year to repair.

[Imprl59]

I'm not going to want a new car every year. I just want to get a new car that's going to last me a long time and isn't going to cost me a couple thousand bucks every year to repair.

Perhaps I wasn't clear there. The point I was trying to make is that you don't know what can happen tomorrow that you are going to need that money for but you do know that there will be another new mustang next year and the year after that and the year after that. It isn't like you can never have one if you don't buy it today.

If you are trying to save money here then just keep your car. Using your own numbers your car is going to cost you 6k to maintain for three more years (totally unrealistic but I'll go with it since that's what you quoted). That new mustang is going to depreciate 6k dollars the minute it rolls past the dealership sidewalk and an easy 10k in three years. Plus the additional insurance money.. that's what? another 1500 a year?

It's your money. You worked hard for it doing a job few of us would even consider. If you want a new car go get yourself a new car, just don't try to justify it to yourself as somehow saving money because no matter how you look at it new cars don't make financial sense.

My real point here is that if you take that 30k dollars and invest it in something sensible for five years you still have your 30k plus whatever it earned. If you take that 30k and invest it in a car in five years you have an old car that's worth a couple thousand bucs. That money invested at your age could enable you to retire a couple of years earlier. That money invested today could pay for your future kids college education. That money invested today could make a down payment on you and your future lovely brides first home.

[yeahwhatev]

If the idea is to have a reliable car, save money and enjoy yourself.. you MIGHT want to rethink the style of car. A sportscar is for people who have no money worries. You say you have no job, but have accumulated 75K. that's more than most people make in a year, and more than most will have in the bank until WAY later in life (if ever.) This says to me, that you inherited it, saved it from gifts over several years, or lucked into it. Correct me if I'm wrong.

The car you want is a V8, it's not designed to save gas, and get you places. It's designed to look good, go fast and cost you money. It's got a GREAT review and reliability. You already know it costs more to insure. The simple fact is, premium cars have premium problems. Unless you have a way to regenerate that 75K, this car will eat you out of house and home. You say that you live at home, have no bills other than the phone, insurance ect... Just buying this car will eat into your savings. Maintaining it will slowly (and not so slowly) eat away at what you have built.

This type of car is a present for yourself when you've made it. Get something a little fun, because you are going to abuse it. You are young. A car like that is an investment or an extravagance. Why saddle yourself with preserving an investment car, while in your twenties? Why waste 1/3 to 1/2 of your savings on one thing? You could take a trip around the WORLD for that amount of cash!

Buying a car like that.. is a bit like getting married.. You can do it at a young age.. there have been plenty of people who have done it successfully... Most fuck it up and regret it. Try an upgrade to a decent used car. There are plenty of dealer available fantastic buys, that won't saddle you with debt or high maintenance fees. Every car needs care. Buying anything used is always taking someone else's problems if you don't do your homework. I don't know you, or your maturity level. This sounds like more than I'd want to take on. good luck.

[protege]

GD, if it was me, I'd take a smaller amount of cash, and get something that's reliable, but not as expensive. Something like a Civic, Accord, or a Corolla. They're reliable, cost very little to run and maintain, and they can be insured for peanuts. Sure, Mustangs are nice, but they can be costly--around here, insurance runs into multiple times the 3 cars I previously mentioned. Too many idiots wrap 'Stangs around telephone poles and trees. Plus, a rear-wheel-drive sports car is a pain in snow. Lastly, such cars tend to attract unwanted attention from the cops.

Like the others have said, start out gradually, until you get your feet on the ground. You can always move up to a Mustang later. Considering that model's sales, I don't see Ford killing it off any time soon

[TheSHAD0W]

A new car loses 20% of its value the moment it leaves the lot. When you buy a new car, you're buying the luxury of its *probably* not breaking down on you in the next 3-4 years. No guarantees though, and proper service can still cost you. $75K is a nice amount of cash but is a tiny blip on having enough to retire on. (You do want to retire eventually, right?)

If you do get a new car, I recommend one that's much less expensive and more efficient; Hyundai is very well thought of. I'd still rather recommend a used car that came off a lease instead.

[Jester]

Weighing in here.....

In the end it is your money, and you can do what you want with it, of course. However, you came here for advice, and you should have it.

My opinion is that, if you really, REALLY want the car, you should get it.

Just not yet.

Here's my thinking. Yes, $75,000 is a decent bit of money. Sure, something could happen that you don't foresee. I see both your mom's viewpoint and yours.

That being said, you said you are currently unemployed, but I am going to assume you are currently looking for a job. If you are indeed doing that, keep the Cavalier FOR NOW, while you are unemployed. However, once you land a job, and have been there long enough to feel comfortable that you are going to stay there (i.e., you like the job and your employers like you), at that point, once you have money coming in, go ahead and get the car, either by straight payment (cheaper version) or by financing (credit-improving version). This gives your mother less objections, puts you in a better position to buy a car, and gives you more time to look over your car options (you may want the 2014 Mustang, you may decide you want something else that is flashier, more economic, or in other ways superior to the Mustang, at least in your opinion). All in all, a good balance of practicality and fulfilling your desire for a new car.

To put my advice in its simplest terms: Job, THEN flashy car. Not the other way around.

[MaggieTheCat]

Do you have health insurance? I ask because $75k will go very, very fast if you are in any sort of serious accident or have any kind of serious illness and need to pay for recovery out of your own pocket. A good friend of mine fell very, very ill a few years ago. The total cost of her hospital stay, tests, medications, and rehab/physical therapy was over $400,000. Thankfully she had a very good insurance plan which covered most of it. And I will admit that the disease she had is extremely rare so chance of you (or anyone) getting it is literally 1 in 100,000. But even more common complications can be very expensive. I had my gall bladder out a few years ago; it was a planned surgery, not done in the ER, and everything went smoothly and I did not have to stay in the hospital over night. It was still nearly $40,000 total (my insurance covered about 90% of it.)

I'm not saying you should hoard your money due to the remote chance that you could have high medical bills. But, those are examples of answers to the "why would I ever need this much money all at once?" question.

[dalesys]

... 200 MPH ...

Does it have dual engines, dual exhausts, dual wheels, dual speedometers, dual steering wheels...

... It's one of those cars that comes equipped with twelve complimentary speeding tickets. When the cop pulls you over, you just put one on the little tray.

Christmas time!

I've looked all over, and I CAN NOT figure out where the cops are hiding. Near as I can guess, they're in my trunk.

Here are the keys. Don't worry, it's paid for. You take this car and give it to George Wallace.

[blas]

Get a Pontiac G6. Still flashy, somewhat newer, maybe not really a super fast car, but it runs a hell of a lot better than the shitboxes I see most people driving. It's had a few problems, nothing the warranty won't cover, though.

Get something new enough to still have a warranty, buy pre-certified if you can

[Greenday]

If the idea is to have a reliable car, save money and enjoy yourself.. you MIGHT want to rethink the style of car. A sportscar is for people who have no money worries. You say you have no job, but have accumulated 75K. that's more than most people make in a year, and more than most will have in the bank until WAY later in life (if ever.) This says to me, that you inherited it, saved it from gifts over several years, or lucked into it. Correct me if I'm wrong.

I graduated college in August 2010. Signed up for a contracting job and spent a full year in Afghanistan working on explosives 84 hours a week. With the money I made from that job, I paid off my student loans and got to travel around the world.

To those who are mentioning the worth of the car depreciating, that's not too relevant seeing as this is going to be a long term car. I'm keeping this car until it can't run anymore.

[Andara Bledin]

Honestly, if you want a long-term car, I'm not sure a Mustang (or any performance vehicle) is really a good choice. Other than getting around fast and having fun, they're not very practical in day-to-day life.

Back to the depreciation, you might want to consider taking advantage of that and going used for right now. There are a lot of people who get a new leased car every single year, leaving some great opportunities on last year's models.

^-.-^