Are cars making folks broke?

Jensenman wrote: Of course there are always those who fall at the far ends of the spectrum, but statistically speaking the great majority of luxury car buyers fall in the definition of 'middle class'.

Where I work, we like to say that they have expensive houses with no furniture.

It's sad when people are driving newer 7-series BMWs on bald tires with no working gauges, complaining about the cost of an oil change, while other people see no issue at all with dumping $2500 in maintenance and repairs in, say, a ten year old Taurus.

Someone's living within their means, someone isn't.

Knurled wrote: It's sad when people are driving newer 7-series BMWs on bald tires with no working gauges, complaining about the cost of an oil change, while other people see no issue at all with dumping $2500 in maintenance and repairs in, say, a ten year old Taurus. Someone's living within their means, someone isn't.

Those two people are on opposite sides of the idiot spectrum.

How so? Is it wiser to junk a perfectly fine vehicle that just needs some brake and suspension work?

When you're spending significantly more than the car is worth to fix it, it might be time to give up.

http://boston.craigslist.org/gbs/cto/1800464443.html http://boston.craigslist.org/sob/cto/1800479343.html http://boston.craigslist.org/gbs/ctd/1800071294.html

Better to sell it for $1000 to someone like us, who can spend $500 and a weekend fixing it up and flip it for $2500. $3500 can buy a pretty nice 10 year old Camry/Accord that won't need as much work over time.

$3500 will not buy a nice 10 year old Camry or Accord, at least locally, and I'm not convinced that there's a such thing as a nice ten year old Toyota.

Heck, in as-is condition, aside from the check engine light (faulty coil pack - the bottom rusted out) that would result in a failed emissions test, the car would still be worth $3000. The chassis was solid, the interior not torn up (rare for a wagon), and the engine and drivetrain in good shape.

$1000 will get you something that has enough body left to last a year, tops, and has some pretty hardcore mechanical faults... you know, the kind of car you get if you don't maintain it.

Yes, I'm used to traveling long distances when I want to buy a car. The local market sucks.

Knurled wrote: $3500 will not buy a nice 10 year old Camry or Accord, at least locally, and I'm not convinced that there's a such thing as a nice ten year old Toyota. Heck, in as-is condition, aside from the check engine light (faulty coil pack - the bottom rusted out) that would result in a failed emissions test, the car would still be worth $3000. The chassis was solid, the interior not torn up (rare for a wagon), and the engine and drivetrain in good shape. $1000 will get you something that has enough body left to last a year, tops, and has some pretty hardcore mechanical faults... you know, the kind of car you get if you don't maintain it. Yes, I'm used to traveling long distances when I want to buy a car. The local market sucks.

Well, I have absolutely no idea where you live, so I can't speak to that, but If I had a friend looking to put $2500 into a 10 year old Taurus I'd smack him upside the head.

Sub-4k Camrys galore: http://boston.craigslist.org/gbs/cto/1800283613.html http://boston.craigslist.org/gbs/ctd/1800194373.html http://boston.craigslist.org/gbs/cto/1799668638.html http://boston.craigslist.org/nwb/cto/1798267942.html http://boston.craigslist.org/gbs/cto/1798154604.html

In reply to Josh:

And not a V6 or wagon among them.

Don't get me wrong, I like Camrys. They have spectacularly expensive emissions failures all the time.

Pretending there's anything better about a Vulcan V6 than a 5S-FE isn't really helping you seem rational, but since I didn't see this perfect 2000 Taurus (which I thought was hypothetical anyway), and you evidently live in a place where '99 Camrys are as precious as the souls of babies, I'll probably always be wrong. Right?

Josh wrote: .....but If I had a friend looking to put $2500 into a 10 year old Taurus I'd smack him upside the head.

I put $5000 engines in 10 year old vans. I would rather do that than spend 5-10K on a used one or 25K+ on a new one. Done that to two of them so far. One a 99 the other a 97. They explode between 250-300K miles. Throw in another engine and they are good for another 200K+. When the body starts to go to pieces I go get another sub $2000 van fully expecting to put an engine in it in the next year.

Putting $2500 in a 10 year old car wouldn't hurt my feelings too much. I don't think I would do that to a Taurus, but I would do it to my Wife's Chevy Venture in a heart beat and it's 13 years old.

A lot of that does depend on the car. Given their overall dependability, I'd hesitate to drop $2500 into an old Taurus. But an Accord or a Camry I could drive for 5 more years? Hmmm.

But back to the thread subject: spending more than a car is worth to fix it can be looked at several ways. Let's say the car is worth $2500 running and driving but needs a $3000 engine and is otherwise in good condition (tires, brakes, tranny, AC etc are all in decent shape). You can either 1) plop $3000 in this car and drive it 5 years ($600/year for the repairs) or drop that same $3k and an additional, say, $3k (total of $6k) on a used car (we are now looking at $1500 a year, figuring interest only on the additional $3k) or go buy a new car ($25,000 or ~$7000/year for the same five years figuring in interest). None of these figures include maintenance, insurance or gas on the vehicles or the cost of any additional repairs that may be needed. In case number 1, you gotta do what my dad called 'driving it out' because you damn sure can't get your money back by selling it.

But those numbers are why I drive the ol' Trooper and keep fixing it. I have seen a LOT of people who, when faced with the need for a major service ($600), a set of tires (another $600) and front brakes ($250) at ~45k miles for a total of $1450.00 (we are talking people who do not know how to fix their own cars, remember) instead opted to trade for a new car, thus spending $35K to avoid spending $1450.00. They would then come back to get their personal stuff out of their trade in, smirking at how they showed ME what they though of my big ol' service estimate. I just smile and wave, knowing in three or four years they will be doing it all over again but just getting deeper into debt, because that whole upside down thing will bite them even harder next time.

You'd think being "upside down" would increase circulation to the brain, and foster better decisions.

Apparently that ain't so..

NYG95GA wrote: You'd think being "upside down" would increase circulation to the brain, and foster better decisions. Apparently that ain't so..

Good one!

Josh wrote: Those two people are on opposite sides of the idiot spectrum.

i expect to see this in the GRM's quotes from the web next month...

Jensenman wrote: The number 1 vehicle of the average American millionaire? The Ford F150 pickup. A book well worth reading: The Millionaire Next Door. http://en.wikipedia.org/wiki/The_Millionaire_Next_Door

Most of those millionaires are not car guys. To them, the F150 is a tool that can work well on the balance sheet, not a hobby or a thing that can make them happy by itself, like a lot of our favorite cars can for us.

I know a number of millionaires that are what they are so they can have a nice collection of fun cars, either race cars, hot rods, or collector cars. But none of THOSE millionaires will be in that little book...

Chris_V wrote: The number 1 vehicle of the average American millionaire? The Ford F150 pickup. A book well worth reading: The Millionaire Next Door. http://en.wikipedia.org/wiki/The_Millionaire_Next_Door

Its also the number one selling vehicle in the US so depending on how they do the math that can be a completely useless piece of information.

Ian_F wrote: Chris's comments about not always waiting rings true to me as well. And in a way, it is this concept taken to the extreme that has gotten us into so much trouble (which I know all too well...). Like anything, the key is moderation.

Agreed. Living within your mneans can indeed mean living within your future means, but you have to be realistic about it, AND not pile on because you don't understand the ramifications of doing so.