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Comments
Ross
This car will depreciate over time and will be worth far less when it decides to give up the ghost. I would agree that he should wait if he was planning on financing the whole amout, but he's not.
So, the majority of 'money' he would be spending on that new WRX is not something he can tuck away in the bank and have it collect interest. It is tied up in that Prelude which will only depreciate in value over time.
I don't believe in living beyond your means, but I do believe that you don't have to live without. The pursuit of money is nothing more than a pissing contest later in life. I mean it's nice to say "I have 3 million in the bank now that i'm 60 because I didn't spend anything up until now". But now you're 60 and most of your life has gone by and you deprived yourself of so much joy that you could have had just so you could say you have that 3 mil.
No, you should not spend every cent you have and yes you should save money. But we aren't talking ferrari's here. It's a $25,000 car, he's not going to go into financial ruin by buying it. If for some reason his priorities change drastically he can sell the car easily.
I'm already feeling regrets about college. I look back now and see that I probably should have partied more and worked less. I feel as though I missed out of part of what it's supposed to be like being a kid. Now I'm out and have a steady job and my one bedroom apt. Driving this car is one of the few things I find absolute joy in. I'm so glad I didn't wait longer before buying it. I'm also sure that I would have been kicking myself in 20 years for buying something cheaper but more sedate.
-mike
Ken
Hey, once you get out of school you will be too busy to enjoy a car and take care of it anyway. Concentrate on getting ahead of your peers financially. When they are 25 and struggling to pay their rent and car loans, you could be shopping for a house with a nice down payment.
This whole paragraph made me chuckle. I have plenty of time to take care of my car even with my job. Also, the last time I checked it wasnt a race. I don't NEED to get ahead of my peers financially (though I am). As long as you are happy, that's all you need.
By the time I'm 25, I will have already bought a house (or a condo), there's no doubt in my mind. I should have a good down payment saved by the end of the summer easily. I intend to aim at only living in my apt for one year and buying somthing to live in instead.
You CAN have your cake and eat it too. The only drains on my bank account are rent, car payments, and school loans. I have plenty of left over money to save/invest/have fun with. And in 5 years when everything is payed off (except the house) I will be sitting pretty. Yeah maybe I won't have as much money saved or invested as someone who was a tightwad, but I will have everything I need and I will have enjoyed it greatly for the previous 5 years.
-mike
Adam must have a pretty good job. Congratulations! It does sound a bit (to me) like he's bragging just a tad. Unless he owns his own company, and even then, who's to say what he'll be doing 5 years from now. I do wish him the best however.
Companies are bought and sold every day, there are no more lifetime career jobs as far as I can tell. Things change every day. I know of a lot of people who have be forced to change in recent months. One guy has a Master's degree and has been looking for a job for over six months, it turns out he is "over-qualified" for most of the jobs he has applied for. Just prior to his layoff, he was doing "Great" also.
Just look at Enron, who'da thunk it?
I don't want to crush anyones dreams, but "[non-permissible content removed]" does happen, even to the best of us. You just have to be able to accept the challenge.
That's why I reiterate my statement. "You only go around once!"
You never know what lies ahead. Take the bull by the horns and ride him anyway!
Ken
Sorry, if I bore anyone.
Ken
You've given some great advice. I hope some of the younger people will listen to you.
As for the Prelude, S4, WRX question, I've had all these cars and also suped up an Integra GSR.
No way I'd supe up the Prelude. Could be a real money pit and a major headache. Also no way I'd trade for a used S4 or WRX. I might go for a new WRX if the budget allowed, but for the difference in performance, it might not be worth missing any meals to switch.
It worries me a little about what would happen if I lost my job, but that's the beauty of having virtually no credit worries. If I were to be unemployed tomorrow, I could move back home and then my only expenses would be...
Car $399/month
Insurance 130/month (actually it would be less at my parents house)
School loans 192 /month
I could get a job flipping burgers and be able to cover that easily. But it won't ever come to that.
Yeah I live in PA, nothing wrong with that at all. Hey, if the job you are looking at doesn't pay you what you think it should for your area, MOVE! I've considered leaving my job a few times in the last two months because I felt I wasn't getting paid what I should. I'm not too worried about finding a new job either.
The job market is not that bad. In fact, they have just launched an Ad program in PA BEGGING people to say here since we have a shortage of skilled people.
Your situation is what you make it, and it's not up to luck at all. If you want something, go for it and don't let anything stay in your way.
That way they can take care of their son. JUST KIDDING!
You're right in some respects though, you don't get your kind of position without working for it. Unless you are born into it, or know somebody. Yes THAT happens too. I just hope you don't find out the hard way, how quickly your world can fall apart. It happens to a lot of people.
I also hope you don't think the world will provide for you just because you worked so hard for it.
Just because you have talent or skills don't make you invincible. You say "your situation is what you make it, and it's not up to luck at all." Well for the most part you are correct, I'm glad you think that way, because it's likely you will be very successfull, assuming you do have a little luck. But what if you had an accident? or, god forbid, some kind of health problem? Does "luck" play into that at all? Just for your information, sometimes things happen that you cannot control. Yeah, that's why we buy insurance, but what good is that, if you can't do your own thing? My point is... You should be very proud of your accomplishments, and thankful to your parents for supporting you in your goals, you also have bragging rights as long as you don't put down others who are trying their best. But at the same time don't be so bold as to think that nothing can change that. There is a certain amount of luck involved, and that is, that one day you are not unlucky!
Ken
For his situation, with that much in trade, he isn't going to have hardly any payments anyways.
BTW, flipping burgers in my area is a $10 hr /job, with a 500 signing bonus (no joke). That's how hurting they are for workers (on any job level). From what I hear from my college roommate living in DC, things are the same out there. They can hardly get enough skilled people to take jobs.
I just refuse to live afraid of my life cowering behind "what if's". If I fall, I fall. I'll get back up again. I'd rather take the risk and enjoy myself than play it terminally safe all the time.
It is true that I live in the nations highest per capita living expense directly proportional to income. (Living expense/income), and I suppose time will only tell what I will do. One thing for sure which is the consensus is (Don't put more money into my prelude). Thanks for the advice. If I were to get a car, it would definitely be new. But why not certified used? And somebody said that the sport shifter has been having problems...if so, i may think of getting out of the prelude for another reason. But never the less. For now, my additional cash is sitting in a low interest savings account gaining that interest.
I probably sound like Im about 102 years old, but Im not, Im 30. I just remember being young, reckless and carefree once too. When the only person that a poor choice could drag down was myself, Im sure I threw caution to the winds. When you have a family, and people depending on you, your first thought isnt for yourself any more.
"Your situation is what you make it, and it's not up to luck at all. If you want something, go for it and don't let anything stay in your way."
Unless you are self-employed (and even then!), your "situation" is at the mercy of things bigger than you and beyond your control.
Was there really a time when I didnt believe this? It seems like a cold hard fact now.
"I just refuse to live afraid of my life cowering behind "what if's". If I fall, I fall. I'll get back up again. I'd rather take the risk and enjoy myself than play it terminally safe all the time."
Resilience is a good quality to cultivate, but even trapeze artists dont work without a net.
-mike
First I'm going to explain out my current situation and why I've made the decisions I've made. Then I'll talk about your my view on your current options. I'm going to try NOT to say "do this" and instead help explore each alternative.
I'm 26, independent/no family, and right now my job earnings are considerably above my mandatory/unavoidable monthly expenses (rent, insurance, student loan). As a result, in 2001 I saved/invested 25% of my pre-tax income in various mutuals, money market, etc. The company I work for is very shaky right now, but I'm assured of getting my Q1 bonus (only half my Q1 bonus last year, but ah well) and am 95% confident I'll be here through end of Q2 (which means I'm hunting right now). But let's discount job-security worries.
I currently drive a '96 Neon with 73K miles. I've been careful with the car, so it's clean and well maintained (it didn't start yesterday morning and I believe the starter solenoid is shot, but that's the only major mechanical trouble I've had, and it's not that $$$ to fix). Even so, I know for a fact that I won't get diddly in trade value, so I intend to keep the car until next May, and give it to my younger sister as her first car. Last February I first saw the WRX and resolved to get one by June; at the time my company was still on a good track and I predicted I'd be able to pay pure cash by this point.
But as the year passed and I thought about it, I realized that, with nothing compelling me to get a new car, it only makes sense to hang on. The longer I wait, the higher I can make my down payment while having a warmer "security blanket" in case my job does evaporate, and the less I wind up paying for the car in total. That "security blanket" should be in everybody's financial picture.
In other words, I could get the car right now with nothing down; the monthly ($500) would sound outrageous, but I can afford it easily. If I did lose my job on Monday, I'd still have many months before I'd be really sweating. On the downside, that would increase my debt/income quite a lot, hurting my credit rating and making it harder to, say, buy a house or get a loan for something else in the next 5 years. If I throw everything into a down payment, the monthly becomes a relative pittance, but if I lose my job I'm immediately hosed. Somewhere in between is a comfortable balance. For me, that point is where (current assets) divided by (monthly expenses including new car payment) gives me 4 months of blanket time; anything beyond that only makes things easier. My decision is to wait until I've reached that point, and if I DO get the WRX before next May, I'll use the Neon as daily driver to keep the WRX newer longer.
Lately, though, I'm being tempted by the ability to, after end of Q1, completely retire my student loans (after just 3 of 10 years repaying) That would really improve my overall situation, not just now but over the next 7 years. However, as I went to a cheap state school, this situation may be completely different from yours (you may have 10s of thousands in outstanding loans), so only think about this if it's within the realm of reason.
#2: It seems the only CON is "having to drive stick in traffic." In this option, your primary concern should be that equation of (assets on hand) divided by (monthly expenses with new car). You should have AT LEAST 3 months of "blanket time," UNLESS you have ironclad job security or are in a field where you can easily get a new job paying as much/more (quite likely the two go hand-in-hand; if you're completely sure of your job you're probably in a high-demand field)
#3: As many have said, the STi isn't even confirmed for US sale in 2003, and will likely be a low-production vehicle when it does arrive. You'd feel kinda silly if you focused your lust on a vehicle that turns out to be impossible to get because the 1st year's production run sold out months prior to first delivery (a la the TT, etc). I'm not sure how much "sticker premium" dealers will be able to get; the STi isn't the TBird or NewBeetle, with the multi-million dollar ad campaign behind it, targeting a demographic segment that can more easily afford an extra 10% just for the prestige of owning an icon from their youth.
Also, as many have said, insurance rates may be rather high (see if you can compare your premium to somebody a few years older who has a similar car). Assuming you get some decent returns out of your current invested money, and you do manage to save that entire 9K of extra income you're getting from now on, I believe you'll be just as able to afford an STi "then" as you are a WRX now.
#4: No. If people turn in their leased vehicles rather than buy, or many people trade theirs, resale values will drop precipitously which sounds good. But that could mean that these cars have been mistreated. And, really, if you're this hyped about the car, and you're willing to form a plan and stick to it to get one, shouldn't you get a new car? I really think that any money you save by buying used will be offset by the fact you're NOT buying new :-)
DjB
You'll find an article listing CR's picks, including ours truly as "Fun to Drive." But right next to it is an article about Consumer Report's alleged foreign-car bias. Interesting!
DjB
I'm glad there are still parts of the country where jobs are plentiful, there's just not much around here in the Midwest. I hope you don't consider flipping burgers as "skilled" labor. hehe! If you do, can I come work for you?
Yeah, I don't think a person should save all their money either. But like bruticus stated, a "Security Blanket" is a good thing. IMO a person should have a stash large enough to get them by at least 6 months, without any outside help whatsoever. A full year would be better, but I think 6 months is sufficient. A lot of people say spend a little, save a lot. I say, save a little, spend a lot.
I think poondogger will figure out what he wants to do. It's just a tough dicision sometimes.
It is a smart person that will ask for advice sometimes. It means he wants to be sure to cover all the angles as best he can. For a lot of people, a new car is a big investment. Not that a car is a good investment, but I think you know what I mean.
Ken
Personally I find the former mindset quite frightening. I guess it's no wonder so many Americans are hopelessly in debt...
Man I love the WRX though! I heard that for 2003 they may offer a sunroof (it's already available in Austrailia I understand). Patti, any insider info you might *accidentally* let slip?
I agree also with the sunroof idea. My wifes legacy wagon has both the sunroof and the moonroof, they are great! She can actually get fresh air without blowing her contacts out!
Ken
Anyway, to each their own.
As far as sunroofs, you cant beat the one in the Forrester! I love that set up! That thing must be five feet long! (Wonder what effect that has on structural rigidity)
-mike
We're just trying to give you a little insight.
Just wondering...
Wouldn't the WRX be a really cool Police pursuit vehicle.
Ken
Here is the pic - http://auspol.topcities.com/warrencampbell2.jpg
Do your state troopers use Camaro pursuit vehicles? Ours do. There is no getting away from them. It was pretty hard to elude the 5.0 mustangs they used to use, now its virtually impossible unless you drive an exotic.
Ross
He's really enamored with his car and wants to mod it, but doesn't want to make any rash decisions. I also wanted a slightly louder exhaust and got a straight pipe installed at a local muffler shop. It's just a custom-bent 2.25" pipe from the flange right before the rear diff, and polished tip. The sound is great, but a bit loud, especially on the freeway at 80+ mph. At 60-80 mph, the sound is pretty quiet. It's pretty raucous around town, but it's not obnoxious, I hope. It burbles with the proper boxer engine sound.
I did this mod because I don't have the funds to do a proper catback or turbo-back system right now, plus I don't want to remove the cats because I don't really want to destroy Subaru's efforts at making this car an LEV.
-mike
http://www.wolfesauto.com/subaru.html
-Dennis
It would take one hell of a catastrophic event to force me to move back home, and if that would happen i think whether or not I could keep my car would be the least of my worries.
I'm a careful planner, i was an economics minor in college, i already have a retirement fund working for me (I started contributing to my 401k from my first paycheck), i also have investments and just plain old money saved in a bank account. Sure there were better things I could have done with my money than go out and buy this car, but it's not going to kill me. I needed to buy a new(er) car and i wasn't going to just settle on something (if you need to put out the money anyways, you are better off getting something you really want).
I'm confident that whatever life hands me, i'll be able to work though it and come out alright. I look at where my dad is now and where he started. When I was 8 he was fipping steaks at a steakhouse earning an Associates degree part time. Since then he as worked his way up to the point where he was able put two kids though college and finally be able to start killing off debts they amassed when they didn't have much. I'm already ahead of the game in my book.
On the affordability issue, my last car was a 1985 Olds Delta 88..ak the Boat. Now that I can afford the WRX, and don't have family responsibilities yet, this was the time to go for a fun car, and I couldn't happier. I drove it for the first time in the rain this week and it felt like dry pavement.
Only problem I'm finding with the car is that I every time I get out of the car, I want to get back in and keep driving. Anyone else have this trouble?
Eric
-mike
Yes, it's a common problem, and it doesn't get better over time.
I agree with practically everything that Bruticus has said, he just beat me to posting it.
I'll rebut one point made about saving money by trading in the Prelude sooner due to depreciation. This doesn't quite fly in that the largest deprication typically occurs when you drive a new car off the lot. Whatever gains in depreciation of the Prelude, he'll probably lose more than that on buying a new WRX.
Like Poondogger, I've been looking at trading/selling an existing car (my 99 Civic SiR) for a WRX for the last year. Why else would I be surfing internet WRX boards?
Left side of the brain (financial, practicality) says it doesn't make sense to trade in a virtually paid off car (5 months to go) that'll last at LEAST another 7 years, gets better mileage (26 mpg vs 18 mpg city), and is a great daily driver.
Right side of the brain says: "You've wanted this car since you first heard about it 5 years ago, go get it NOW! NOW! NOW!"
Yes I've test driven the car and yes I loved it. Scared the crap outta me, but loved it none the less
PD to help give my Left-Brain some ammo to ward off Right-Brain, I make sure I visit www.i-club.com 's Warranty Forum EVERYDAY. I take everything they say in there with a grain of salt, but it's a good way to ward off the inevitable.
Patti:
Yeah, any insider info on if the Aussie WRX options (sunroof, keypad immobilizer) are going to come here in MY03? I'm particularly interested in the keypad immobilizer because I've been paranoid about car security since owning my SiR. I like what Honda / Acura 's done with implementing ECU immobilizers throughout their model lines in the last couple of year and am hoping the keypad immobilizers are just as effective. I'm worried about the WRX because it's getting so darn popular and has much less expensive models that are available to younger kids, who will be tempted to buy parts stolen from them. i.e. a repeat of the Integra Type-R, Si(R) phenomenon.
Pursuit Cars:
Yup, I was going to post that Wolfe Subaru RCMP WRX. That's also in Vancouver, Langley to be exact.
Everything:
That's all folks. Thanks for reading and thanks for posting. I really enjoy the discussions on this board.
Cheers,
Jim
That's the main reason why i traded in my '92 mazda protege on it sooner than I had initally planned. The car was still worth a good amount but it was still an older car. My main worry (which helped me justify it) was that I didn't want to have to start dumping money into that car to keep it on the road. There were no inital indications of anything going wrong, but that model year had a few specific things that commonly DID go wrong and each was $500-$2000 to get fixed. I already had to replace the window switch that quit working that set me back $90.
One event pushed me to do it. My boss wrecked his Acura Integra and totaled it. He was stuck two weeks without a car while he searched for a new/used one that fit his budget at the time. That sucked for him, made his life hell for a few weeks.
It was a foregone conclusion that I was going to purchase a WRX, nothing else made economic sense. Anything else I would get new that measured up to my protege feature and power wise would have ran me near 20 grand anyways. So in my mind it didn't make sense to shell out 20 grand and get not quite what I wanted or to shell out 5 more and get exactly what I wanted.
So, my bosses situation weighed on my mind. What if my car broke down severely and required a grand to fix it? Not only would it cost me time, it would force me to put a good portion of the car's total value into it. (Hmm, i guess I do worry about what if's after all.) Either that or I would trade it in broke which would also cut it's value down.
Worse yet, what if I was forced to get rid of my car and there were NO WRX's avaliabe that met my criteria (blue/manual)?
I didn't want to be forced into a decision, i wanted to control things on my own terms. I almost bought a newer used car. I looked around a bit and found a low milage '97 Tiburon. I test drove it and said I would be back the next day to deal on it (this was a tuesday). The next day they appraised my car, tried to tell me I had a blown head gasket, and were only offering a fraction of it's worth in trade in. I walked out of there immediatly. The next day I noticed the Subaru dealer near my parents house had two blue manuals. I decided what would it hurt if I went to just talk with them and see what they could do number wise? So on Saturday I drove over there. They were also a mazda dealership and were eyeing up my trade in from the moment i got there. They offered me $3500 for my car which was $1500 over book value (the other car dealership was only going to give me $900). Now they didn't discount the sticker at all so really I look on it as them giving me book value for my trade and taking $1500 off of the sticker (which put me at $500 above invoice). Either way, i basically got the most that I possibly could for my trade in.
The final result is I have the car i was obsessing over for a year. I can enjoy driving it every day. And I have the piece of mind knowing that I don't have to worry about repairs on it for 3 years. My parents don't have to worry about me possibly having an unreliable car (not really their place to worry, but my dad found me that protege so he would feel responsible). They also have the piece of mind knowing that I'm driving around in something MUCH safer than the protege.
There's my full story. I just wanted everyone to know that this wasn't just a case of young person + money = going out and buying toys he shouldn't.
It was a very carefully thought out decision and I don't have a bit of regret when I write the car payment check each month.
I can see exactly where you're coming from for the repairs vs buying another car. My g/f was in a similar situation a little over a year ago. The extended warranty had run out on her VW Corrado (forget what year it was, doesn't matter), she'd just paid $400 to fix a problem with her cooling system, and just found out she'll need to fix her transmission ($700-$1000 quote). Can you say money pit? So she went car shopping with the intent of getting rid of the Corrado before the tranny quit. Ended up getting a Celica GT-S. Didn't get much for the Corrado, didn't save much off of sticker, but just happy to be rid of the junker. She's happy with her car now.
I'm glad you made the smart + informed choice. That's why we're all reading and posting at Edmunds I guess.
Jim
And they usually have some "practical" reason why it makes economic sense to do x,y, or z, in defense of their purchase.
I mean its fine to get what you want, Im not knocking gratification at all. And if it makes some people feel better about it, to come up with supplemental (although usually not valid) reasons for doing stuff, then whatever.
For example, nobody really likes to keep having to put money into a car to keep it up. They then justify that they could take that same money and use it to buy a new car. Problem is, this is rarely ever a realistic assumption, because even with a very modest monthly car payment ($300 or so), that is far less than even a troublesome car is going to cost you, on average, to maintain.
I have a 7 year old 5-series BMW, and I have dumped so much money into it recently that I think to myself "man, why I am doing this? I could be driving a new car and not have to deal with it!" But even after a horrendous year of repairs, when I add it all up, the most I have spent in one year is about $2000, far less than a $300/month payment.
And, there is something to be said for a car you have owned for a while, which is that you and the car have a history...you know whats wrong with it, if it has a "problem area", you generally become aware of it after a few years. A new car is, although new, a total unknown.
Plus, the depreciation on buying a new car is a real problem for serial car buyers..its just throwing money away.
Not that I am against buying new cars. I love new cars. But I also like money, and not wasting it needlessly. It pains me knowing I am throwing thousands of dollars out the window each time I drive off that lot, so to balance that out, I tend to keep my cars a while.
Well, I would have bought the other AWD 227hp sports car used
I know you didn't aim this directly at me, but really if you think about it, there are only four choices.
1) Get lesser performance
2) Pay the same amount on a used car with similar performance.
3) Modify a new (or used) car to get the performance.
4) Just buy the damn car
#1 just wasn't happening for me. I was tried of driving around in sub 100hp econoboxes (the exception being my protege at 125HP which still isn't exactly a powerhouse)
#2 makes no sense whatsoever. Yeah I could buy a couple year old M3 or 3000GT VR4, but i'm not SAVING anything by buying used (if I intend to keep the car long term)
#3 is a recipe for headaches and unreliability
#4 wins
I'm the king at self justification, i freely admit that. The purchase of this particular car was a want, not a need. But it does make the most sense if you want performance on a budget.
And I'll add, I don't like money. I like the things you can GET with money, but the actual dollar itself I have no afinity for. For me, the opportunity cost of not buying the car was greater than the opportunity cost of buying it.
You should clarify that with "in a brand new, 4 cylinder, turbocharged, sedan", since performance on a budget would more easily be obtained with a used Camaro or Mustang or some other high horsepower car.
For example, you can buy a 1988 Fox body mustang for $4K and put $3K into it and have an 11 second car (if you wanted to)
turns out it's the give out financial and life advice board.
my mistake.
*where's that back button?*
Mustang - > unless you buy a cobra, you aren't touching a WRX. A GT gets eaten alive
Camaro -> Better buy a Z28, the V6 model doesn't stand a chance as well.
And modifying a '88 to run an 11 second falls under my #3 catagory.
Not to mention, speed in a straight line is not the full measure of performance. A wrx would eat both a stock camaro (even Z28) and mustang once things started getting twisty.
RWD also isn't a great daily driver when you have hills and ice.
5) Just keep driving what you have now, if it is reliable and affordable.
Admittedly, this choice does little for the right side of your brain, but it is the one that worked best for me. Sorry bedabi, I'm off the fence ;-)
But geez, what a poser, living vicariously through youse guys who got the WRX! I feel myself weakening...I MUST GET MY HANDS ON A STEERING WHEEL..(hmm, maybe STi)....
Bob
http://www.scoobynet.co.uk/bbs/thread.asp?threadid=78814
And the Z28 is much much faster than a WRX and will whoop it on a road course. By Road Course, I mean a paved racetrack...Sears, Laguna, Willow, etc.
Stephen