Chronic Car Buyers Anonymous

corvette

"So I negotiated my buy out and purchased my vehicle with all the CPO stuff at 1.9%..."

I didn't know BMWFS still allowed negotiation of lease buyouts.

So, guys, does a lease buyout count as a punch for purposes of our punch list? On the one hand, it's treated as a purchase for sales tax purposes, but on the other hand, you're buying a car you already have.

ohenryx

the e-brake pads on one side of the volvo broke and jammed up the wheel. Took me all of about 20 minutes to get her operational again.

I think for most of us this would be a call for a wrecker and a trip to the dealer / independent mechanic. And involve renting a car at least temporarily.

It is a very nice luxury to have a spare car, isn't it?

breld

Well, the good thing is, while it's certainly fun (for all of us) to think about your options, you don't have to do anything. When your BMW lease is up, you can simply try out the Prelude as your DD for awhile. If you like it, great, if not, you can start looking for a cheap used car or lease at that time.

Many who lease are in a position where they have to get a replacement right away.

breld

And we didn't even come close to buying something!

We looked at and drove an '08 GTI with only 29k miles. We liked it quite a bit, but are thinking it may be a bit much for our young driver. But the blind spots were better! :P

laurasdada

Hi: Your comment about fearing for college and Bar Mitzvah's instantly triggered this list of acronyms in my mind:

IRA
401(K)
529

I'm sure you know all this, it sounds like you are quite financially thoughtful. But Sandy's comment of 30 years flying by, with kids time flies exponentially. Make sure you're paying yourself first in retirement accounts and start funding the college accounts as early as possible. This year has begun eight straight years (at least) of college expenses for us, scary numbers. But, we've been saving and are lucky enough to be in good shape there. Knock wood...

jayrider

The safety technology in a 12 year old car can't compare to the new stuff. No side/head airbags ? Ask your kids and wife if they are ok with you having second rate crash protection. But, if your happy, I'm happy. Your choice.

qbrozen

It is a very nice luxury to have a spare car, isn't it?

It is convenient, yes. Not sure its necessarily a luxury. I mean, I like to think having a spare sitting around actually saves me money in the long-run when compared to $110/hr labor + 100% parts markup + rental fees.

Now, cars 4 & 5 on the other hand...

tifighter

IRA
401(K)
529

Good reminder. I am 38 and have really been trying to make sure retirement contributions stay on my radar. Nobody is angry to have some money to play with when they are older.

jayrider

Don't forget to add Powerball / Megamillions tickets to your retirement portfolio. Remember that you can't buy youth with money, so take a few minutes every day to appreciate that wonderful state of being.

laurasdada

And, you can borrow money for many things. Retirement? Not so much...

We're intending that our kids have no debt (other than their own doing!) coming out of college. Post-Graduate degrees? Start saving, kids!

laurasdada

Yes, MegaBucks is part of my get rich (extraordinarily, painstakingly slow) plan: I've had a season's subscription for over 20 years (so, playing the same "lucky" numbers 2x/week for over 20 years) and our gross winnings are probably very, very close to $200! And, unlike other investments, I don't think I can write off the losses... But, I only need to win once!

kyfdx

It's hard to believe that you haven't won, yet! ;-)

I have the same goal for my son... bachelor's degree with no debt... Anything else he wants to do is up to him... (boy, are we having issues right now, though... another story)..

nyccarguy

A Cheap Lease vote from the man with the Mustang. Yes, I seriously depend on my car to get me from my home in Stamford, CT to The South Bronx. 6 days a week. I leave the house by 6:20 AM and don't want any trouble cruising down 95:)

nyccarguy

True. Also an excellent point!

nyccarguy

Yeah, yeah, yeah... I know about those as well. Thanks for reminding me though. That's something I've got to think about too with a 7 year old who will be starting college in 11 short years.

qbrozen

my goal for my boys at the moment is that they don't spend any significant amount of my or their money on college. At the current tuition rates, it is a waste, IMHO. A full ride? Great. A few thousand bucks? OK. $100k debt? HELL NO. I would say probably a good rule of thumb (and I am totally pulling this out of the air right now so I may change my numbers slightly) is that it should cost the parents/kid no more than what said kid would make in their chosen field the first year out of school.

Between my parents' donations and my loans, my 4-year degree cost me less than 2/3rds my starting salary once I got out and got my first real job (which took a year to get, BTW). And, in my chosen field, the degree was functionally useless. It did contribute to getting me in the door, but I learned nothing from college that I apply in my job. So, as I'm fond of saying, I could have easily lied on my resume for that first job, nobody would have been the wiser, and I would have been just as successful.

Boy, did I just go off topic! Sorry.
ummm... well, I wasn't a CCB'er until after college and was making decent money.

qbrozen

Mine are 7 and 3.
I've been instructed not to use the 529. Save the money in other ways. Don't tie it up in something that requires the kid go to school to get it or pay a penalty.

kyfdx

Getting a scholarship? That was easy... it's keeping the scholarship that seems to be the problem... Trust me, once they start college, you've lost all control of the information, and that is what gets you....

nyccarguy

Interesting, my boys are 7 & 4 1/2. My Daughter will be 2 in November. I don't have nearly enough saved for college at this point in time. It is barely a drop in the bucket. I'm curious as to what other vehicles you are using to save for college. Drop me a line when you get a chance: (l)arry (c)harles (s)am at gmail. Thanks!

laurasdada

I'm no financial wiz, and I don't make decent money, but like a Roth IRA, I believe 529 is after-tax $ so the principal isn't really tied up. And, unlike Roths, the income levels (if there are such yardsticks for a 529) are much higher so as not to restrict donations. My wife setup the 529, that's why I'm not as up on it as I am on the rest of my money-losing investment schemes! So, due diligence...

The bottom line is as long as you're saving, if that is part of your life plan. My daughter is a Frosh at a fine midwestern institution of higher learning while my son is a Frosh at a fine northeastern high school. So, eight straight years of colllege payments on the table. Or, I could buy a new S4 every year for the next 8...

corvette

529 is the least important of the three, according to a lot of financial planners. Kids can borrow to go to college, if they need to (and you can help them pay the loans off as you're able), but you can't borrow to pay for your retirement.

I don't have any kids, but I have the IRA/401k covered. Generally, though, chronic car buying isn't conducive to financial responsibility.

stickguy

the advantage of a 529 is that interest accumulates tax free. the downside is that you have to use it first basically. Not a big deal if you are really well to do and not getting need based aid, but if you are poorer, there is a real possibility the family ends up paying more overall.

Calculating FA (especially the EFC) is something akin to the black arts.

many people think it is better to save money in retirement plans, your house, etc. and pay for college out of borrowing, cash flow or other savings. The key is figuring out how much the tax free earnings of the 529 is actually worth to you.

want to know the best way to go cheap (outside of CC living at home)? Be poor, and get into an ivy league school. That way, it is basically free. And poor can be relatively "well to do" in many parts of the country.

if you were lucky enough to have a lot of house equity built up (bought right time right place) taking out a HELOC at a very low rate is a good way to finance it. The payments are even tax deductible (the interest part).

another fine way is the 2 income plan. Live on one, budget the other one to pay for school, and no debt. usually you will have to cut back on your 401k, etc. doing this.

but the key is, either be really rich or really poor. Don't be middle class in an expensive area!

steine13

We're far afield from cars, but in CCBA, there's rarely any hasslin' about "off-topic" from the hosts...

So I'll chime in.
With the 529, only the "earning" are tax-free.
WHAT earnings?

The stock market is for long-term stuff, and I don't consider 10 or even 15 years "long term" in this sense. It's bad when you need the money and you can't have the market be down. So from that point of view, the 529 makes little sense. But that's my view, not the conventional wisdom.

We only have one child -- she's a frosh in HS -- and if I'm still working, as I hope, I'll just pay college expenses out of pocket and continue to live like a grad student. Nothing wrong with that.

If I'm not, we'll take it out of retirement savings, which are legal to use for the purpose. Which is why instead of a 529, I ramped up my supplemental retirement account years ago. Now it's tax deferred, and I can take it out or leave it in. Much more flexible.

In order to do this, though, one has to (i) actually put the money aside and (ii) mentally earmark it for college expenses. It's a very flexible approach. The conventional wisdom is different, but I believe this is a better approach than the 529 -- unless everything else is maxed out.

For most middle-class people the order should be:
1 - 401(k)
2 - Roth IRA
3 - supplemental retirement account
4 - 529 or nice car or craft beer or ....

I got religion on this subject around 9/11 and the market upheaval that followed the attacks. I started a Roth for wife and one for myself, opened s supplemental IRA etc.

I highly recommend it, but it's easier if you live in a midwestern college town. BMW's were not part of the plan...

Cheers -Mathias

stever

What's incongruous is that the savings and retirement talk is happening in Chronic Car Buyers.

tifighter

No doubt the irony is thick. We are flawed critters, yes?

stever

I always try to bite my tongue - you have to spend your money on something. And it's fun living vicariously through everyone, especially when it's the thrill of the chase that winds up being more fun than the actual ownership.

This discussion does make me want to dump my SEP now and then.

kyfdx

For most middle-class people the order should be:
1 - 401(k)
2 - Roth IRA
3 - supplemental retirement account
4 - 529 or nice car or craft beer or ....

Agree with this.... though, craft beer might be #3 in my book...

nyccarguy

Ok, so something like this 2008 Lexus ES 350 might work for a year or two, thus cementing my CCBA membership. I know it is a dressed up, loaded Camry (booooooooring). Look at the upside, it is comfortable, dealer serviced, had the PCV valve replaced (someone here mentioned that was a problem on some RX 350s). Bought/serviced/traded at the same local dealer (Lexus of Greenwich & Lexus of Mt. Kisco are sister dealerships).

Qbrozen - what do you think they paid? $11,500 - $12K on the trade? $13,500 takes it home?

stickguy

I like that one. A lot. Would make me happy. Yes, I am getting soft in my old age. And actually would probably be a perfect machine for your commute. And in the low teens, lot of bang (and miles) for the bucks.

interesting service history. New coil packs and a rad in 30k? Not very Yota ish!

and who puts 1 tire on a car with 54K? Then with 69k, just 2? That sounds scary. TC may not like that too much. At least now it seems like they are all recent, as are the brakes.

nice interior.

nyccarguy

The 2 of us need to get to bed. We're up later than all the west coasters I think;). How's MOM btw?

nyccarguy

The '09s & '10s with similar mileage seem to be listed @ $20K

Michaell

Y'all must have been up late watching the Jets game.

I like the Lexus too. Should get to 150-200K Pretty easily. Five to seven years withnthe kind of miles you do.

qbrozen

haha. not sure I understood the encrypted address.

But, just real quick, both kids have their accounts with a credit union. We were using CDs when the rates were good, but now they are complete garbage, so its all in their kids savers accounts at about 1% interest. Its horrible, but at least its not LOSING money. I have a monthly deduction from our account into each of theirs. At this point, my oldest has more money saved up than I do (not counting my 401k, that is), but it still wouldn't even pay for 1 semester of college these days. Funny enough, he has about the same amount now that my parents paid out of pocket for my entire 4-year degree.

qbrozen

oh good god. SLOWLY BACK AWAY FROM THE KEYBOARD! You are obviously tired and need some time to rest.

nyccarguy

stick & I are both Giants fans. We're having a rough year! 0 - 5 UGH!

nyccarguy

HA!

fintail

Not a lot more expensive than a similar Camry, and although it is the superduper version, it is more car for the money. You'd still have your fun "old" car so it's not like you've given up - probably can't go wrong with this, especially as it will go a long time, and be decent on rough roads. A co-worker has one of that era she's driven for 4 or 5 years now, zero issues.

corvette

Looks nice. Miles seem a little high for a 2008 model luxury car. I'm not sure whether it has Bluetooth.

crkyolfrt

haha,

fwiw, you can tell that parking was not the previous owner's strong suit. Hard to tell from the pics just how hard they were curb bashing the poor thing, but if severe enough, can put a lot of strain on the inboard axle bearings of the transaxle.
And of course wheel bearings front and rear, but at least on the rear they are much more affordable and usually have fewer expensive ramifications later on down the road..unlike the front.

Seems to be quite a lot of value tho..it's a premium drinker though in 08 pretty sure, so fueling would take some of the shine off, but then you're used to that premium anyway..

fezo

Funny thing about talking about taking a car up to 150 - 200K. I just bought my second daughter an 04 Camry with 190K on it. It was owned by a Toyota mechanic and is like a new car. I count two scratches on the whole thing and they are minor.

It was an LE but he put a stabilizer bar and sport struts in it (not to mention amazing vented brakes - brand new). Fantastic. $4K

qbrozen

We went on a bit of a cleaning binge this weekend. Went down the line from the Mustang to the Volvo to the T&C. The volvo merely got washed, while the T&C was washed and then detailed inside, and the stang was washed and waxed.

This was my first time washing/waxing the stang since purchase. It is typically at this time that you start to notice any flaws. Thing is, I was pleasantly surprised to not find any. Ford really did a top-notch job. I'm impressed. I have never had a vehicle before now that I didn't find paint flaws on.

fintail

Not bad. That generation of Camry still seems to have amazing resale value. I see 10 year old ones carrying 10K asking prices all the time.

stickguy

I usually stay up later. But I also don't have to leave the house at 6:20 anymore. Heck, I don't get out of bed until 8:00 most days!

the Giants? Blow them up. Might be time for old Tom to move on too. I don't think he would survive that.

Lexus? Don't listen to the doubters. Perfect wheels for your situation, and what you need it to do. Embrace getting old and decrepit. Much calmer that way.

as to the savings, like I mentioned before, the whole FASFA process is almost a game to play. The bottom line is the EFC it spits out (expected family contribution). And if you are middle class, where you have assets makes a big difference.

Basically the way it works is they base EFC on a % of your income, and a % of your assets. But they weigh assets differently. I think home equity is excluded, and retirement savings. Normal savings get hit.

what gets hit the most though is anything in the kids name. Including 529 plans. Then their savings. so they might expect you to use 5% of your personal savings each year, but 20% of the kids (spitballing there). and (unless you get a rare merit scholarship) the school does not start kicking him until above the EFC level, hence the gamesmanship (making that come out to be as low as possible).

jayrider

Just watched the movie Fargo and enjoyed the 95 Oldsmobiles . All brand new in the showroom and on the road. still see a few Siennas driven by the super senior crowd.

corvette

Fargo is an awesome movie. If you like that one, a lot of people also like Raising Arizona (same writers/directors), although it's not my favorite. The Big Lebowski is my favorite movie ever, and No Country for Old Men is also really good.

fintail

Here's a pic for ya

What I remember most from that one is a Tempo on its roof in the snow.

Those Cieras were like a retro car in 1995.

jayrider

Thanks for the pic. I remember them well but never got serious about buying one. Seems I bought about everything else.

kyfdx

What is this "waxing" that you speak of? Totally unfamiliar..

nyccarguy

Drove the Prelude to work today & had to fill up on the way home. 24.7 mpg is pretty good for a car with "only" 5 forward gears. 5th is not an overdrive either. Engine spins 4,000 rpm @ 80 mph in 5th.

js06gv

One of my favorite movies. I think the car timeframe was supposed to be more like 1988 though (isn't that the last year of the RWD two-door Cutlass?). The Ciera in the foreground is a goof however, as you can see a drivers airbag and that wasn't available until the mid 90s I think. Funny with that Ciera, in that Oldsmobile built basically the same car for 15 years straight!