You see that year/model of Chevy truck all over the road still. There’s a reason for that, that 2001 Silverado was five years into its production run. All the quality kinks had been detected and worked out of the manufacturing process by then. Our 2002 Suburban (purchased used in 2004) is the same. Still running reliably at 250k miles. That is the hidden secret of buying unreliable used vehicles.
I question the wisdom of purchasing new vehicles. With the ability to scan the entire country’s vehicle market on the internet, finding a well-maintained, reliable, low-mileage used vehicle is easy. Advantages: low cost, avoiding the depreciation penalty, good knowledge of the reliability of that make/model, lower insurance costs, sales tax savings. I recently purchased a 2012 Acura sedan with 56k miles from a dealer’s lot. Single owner, pristine condition, and a model that has an exemplary reliability record for $14k. Compared with an equivalent new vehicle I saved $2k in sales tax, my insurance cost is much less than half what a new vehicle would cost (just carry liability), my annual personal property tax bill (MO) is $180, rather than $1,200+, and I have a car that will last me at least another 150k miles. Buying used, rather than new, and keeping long-term rather than purchasing every five years (the average nationwide) has saved us over $400k over the past 25 years. Maintenance on our vehicles has been very low cost, due to the reliability factor. I stick with the brands that have proven themselves (mostly Acura and Chevy trucks). And I take care not to buy models that came off of new production lines (at least 3 years into their production run). We own a 2002 Suburban (going on 20 years) with 250k miles that is still running very reliably and will last us at least another 50k miles. I have yet to find a better way to save money anywhere.
As much as I sympathize with the dilemma and agree with the author’s analysis regarding human behavior, I don’t believe that relieving people of the responsibility of preparing for their future fosters the sort of character, citizenship, and self-sufficiency that we want in America. Transferring the responsibility of caring for the aged from the individual and, more importantly, the family onto the state strikes me as corrosive to liberty and to the importance of family. The current system may be flawed, but I believe your cure is worse than the disease in the long term.
Travel inhabits different purposes. None are inferior or superior to the others. Rest, Learning, Service. My family does all three. We serve at an orphanage in Mexico each year. Next month, my wife and I are taking a trip to Switzerland and Italy with one of my daughters. Valuable one-on-on time with her and an exposure to different cultures and languages. And, due to a very hectic job role, rest is invaluable so we hit the beach and do nothing for a week each year. All three types possess unique qualities and benefits and we are blessed to be able to do them all. I agree with prior comments, international travel is invaluable to help children better understand and engage their world. Not everyone can do it but, if you can, you should.
There is only ONE reason car manufacturers love leases. Over time they extract the most money from the consumer. The TCO of leasing still exceeds the TCO of purchasing a vehicle. By far the most efficient use of your money is to purchase a prove-reliable 2-3 year old vehicle (yes, even in today’s market), maximize your down payment (or pay cash if you can), then keep that vehicle till it dies. My wife and I own a 2002 Suburban (245k miles) and a 2012 Acura (155k miles). Both vehicles are well-maintained and running as well as the day we bought them. We have a minimum of 50k miles left on both vehicles, probably more. We haven’t made a car payment in 7 years, we haven’t paid sales tax in 9 years, and our total insurance costs are < $900 annually. I estimate that the amount of money we have been able to put away (rather than spending it on depreciating assets) and the return on those investments over the last 20 years has increased our net worth by close to $300,000.
A 72-mo loan at$750/mo? Do you have any idea what the opportunity cost of that purchase was? Never mind the sales tax, the likely huge increase in your insurance premiums, and (if you live in the STL area) the annual personal property tax cost? You would have been far better off economically if you had just replaced the engine in your pickup.
Love Pralana Gold. It takes a bit of work, but it yields a TON of insight and advice. Best I’ve seen, bar none. They’re releasing a web version (so long Excel!!) in 2024
QCD’s. Our plan is to live very frugally, fund special expenses (trips, car, etc.) from our Roth’s, augment SocSec a bit from pre-tax IRA’s and give the rest away either in the form of QCD’s or inheritance. A good possibility that we won’t owe a dime of income tax in retirement (given no changes in the tax code, anyway).
Comments
I meant “reliable used vehicles”.
Post: Racking Up the Miles
Link to comment from June 29, 2024
You see that year/model of Chevy truck all over the road still. There’s a reason for that, that 2001 Silverado was five years into its production run. All the quality kinks had been detected and worked out of the manufacturing process by then. Our 2002 Suburban (purchased used in 2004) is the same. Still running reliably at 250k miles. That is the hidden secret of buying unreliable used vehicles.
Post: Racking Up the Miles
Link to comment from June 29, 2024
That stat is absolutely correct. Borrowing for cars is a very bad financial decision.
Post: Racking Up the Miles
Link to comment from June 29, 2024
I question the wisdom of purchasing new vehicles. With the ability to scan the entire country’s vehicle market on the internet, finding a well-maintained, reliable, low-mileage used vehicle is easy. Advantages: low cost, avoiding the depreciation penalty, good knowledge of the reliability of that make/model, lower insurance costs, sales tax savings. I recently purchased a 2012 Acura sedan with 56k miles from a dealer’s lot. Single owner, pristine condition, and a model that has an exemplary reliability record for $14k. Compared with an equivalent new vehicle I saved $2k in sales tax, my insurance cost is much less than half what a new vehicle would cost (just carry liability), my annual personal property tax bill (MO) is $180, rather than $1,200+, and I have a car that will last me at least another 150k miles. Buying used, rather than new, and keeping long-term rather than purchasing every five years (the average nationwide) has saved us over $400k over the past 25 years. Maintenance on our vehicles has been very low cost, due to the reliability factor. I stick with the brands that have proven themselves (mostly Acura and Chevy trucks). And I take care not to buy models that came off of new production lines (at least 3 years into their production run). We own a 2002 Suburban (going on 20 years) with 250k miles that is still running very reliably and will last us at least another 50k miles. I have yet to find a better way to save money anywhere.
Post: Racking Up the Miles
Link to comment from June 29, 2024
As much as I sympathize with the dilemma and agree with the author’s analysis regarding human behavior, I don’t believe that relieving people of the responsibility of preparing for their future fosters the sort of character, citizenship, and self-sufficiency that we want in America. Transferring the responsibility of caring for the aged from the individual and, more importantly, the family onto the state strikes me as corrosive to liberty and to the importance of family. The current system may be flawed, but I believe your cure is worse than the disease in the long term.
Post: Retirement Do-Over
Link to comment from October 14, 2023
Travel inhabits different purposes. None are inferior or superior to the others. Rest, Learning, Service. My family does all three. We serve at an orphanage in Mexico each year. Next month, my wife and I are taking a trip to Switzerland and Italy with one of my daughters. Valuable one-on-on time with her and an exposure to different cultures and languages. And, due to a very hectic job role, rest is invaluable so we hit the beach and do nothing for a week each year. All three types possess unique qualities and benefits and we are blessed to be able to do them all. I agree with prior comments, international travel is invaluable to help children better understand and engage their world. Not everyone can do it but, if you can, you should.
Post: My Best Experiences
Link to comment from September 20, 2023
There is only ONE reason car manufacturers love leases. Over time they extract the most money from the consumer. The TCO of leasing still exceeds the TCO of purchasing a vehicle. By far the most efficient use of your money is to purchase a prove-reliable 2-3 year old vehicle (yes, even in today’s market), maximize your down payment (or pay cash if you can), then keep that vehicle till it dies. My wife and I own a 2002 Suburban (245k miles) and a 2012 Acura (155k miles). Both vehicles are well-maintained and running as well as the day we bought them. We have a minimum of 50k miles left on both vehicles, probably more. We haven’t made a car payment in 7 years, we haven’t paid sales tax in 9 years, and our total insurance costs are < $900 annually. I estimate that the amount of money we have been able to put away (rather than spending it on depreciating assets) and the return on those investments over the last 20 years has increased our net worth by close to $300,000.
Post: About That Fine Print
Link to comment from May 2, 2023
A 72-mo loan at$750/mo? Do you have any idea what the opportunity cost of that purchase was? Never mind the sales tax, the likely huge increase in your insurance premiums, and (if you live in the STL area) the annual personal property tax cost? You would have been far better off economically if you had just replaced the engine in your pickup.
Post: Driving Me Crazy
Link to comment from May 2, 2023
Love Pralana Gold. It takes a bit of work, but it yields a TON of insight and advice. Best I’ve seen, bar none. They’re releasing a web version (so long Excel!!) in 2024
Post: Financial Calculators
Link to comment from April 30, 2023
QCD’s. Our plan is to live very frugally, fund special expenses (trips, car, etc.) from our Roth’s, augment SocSec a bit from pre-tax IRA’s and give the rest away either in the form of QCD’s or inheritance. A good possibility that we won’t owe a dime of income tax in retirement (given no changes in the tax code, anyway).
Post: What’s your favorite tax-savings strategy?
Link to comment from April 30, 2023