Trade-in or Run Till the Wheels Fall Off?

• se-alum

  

  queencitybuckeye wrote:

  se-alum wrote:

  queencitybuckeye wrote:

  se-alum wrote: Get ya a new ride man. Debt isn't fiscal irresponsibility.

  For lifestyle, it certainly is.

  It's irresponsible to not be in control of your debt, but having debt doesn't make you irresponsible.

  Why you have debt is the determining factor. Using debt to build wealth can be smart. Using debt to live beyond one's means is irresponsible.

  But what do you consider living beyond one's means. For example, my car payment is $250, I can easily afford it. I'm not using the debt to build wealth, and i'm not using it to live beyond my means. It simply allows me to have something nice that I couldn't afford to buy outright, but can easily make a monthly payment on. Also, I got in some pretty bad credit card trouble while I was in college, my current debts have helped me raise my credit score to be able to get Tier A interest rates. That will come in handy when I go to buy a house next year.
  
  I definitely see both sides of it, it just depends on how one prefers to live.
• ytownfootball

  

  True, some people weight wants more heavily than needs.
• queencitybuckeye

  se-alum wrote:
  
  I definitely see both sides of it, it just depends on how one prefers to live.

  Exactly true. My preference in your position would be to drive a paid for piece of crap and bank the $250, as I'd rather have (conservatively) the $400,000 this would cause me to have in 30 years rather than driving a better car.
• believer

  

  queencitybuckeye wrote:Why you have debt is the determining factor. Using debt to build wealth can be smart. Using debt to live beyond one's means is irresponsible.

  For argument's sake let's say that I determine that a reasonable car payment within the monthly budget is simply part of the cost of doing daily business (IE: I need reliable wheels to get me to and from work, church, the grocery store, etc.).
  
  Is that debt irresponsible or is it a necessity?
  
  Let's say, for example, I buy an economical used Ford Focus vs. a brand new Lexus. Both get you from point A to point B. Is the Focus a reasonable debt and the Lexus irresponsible if one can assume that the Lexus will hold its value far more easily over the long haul as opposed to the Focus?
  
  Or let's say I decide to run my existing car into the ground. While I'm doing that the tranny goes out on me costing me $1,500 or so in repair bills and then 6 months later the timing belt needs replaced at $500. Would I have been better off trading in my piece of crap when I had the chance or do I have to enjoy pulling out the checkbook to pay for the repair bill and feel good that I'm "building wealth"?
  
  Just for argument's sake of course!
• ytownfootball

  

  Now consider also for tha sake of argument that extra $250/mo. going into something that actually builds wealth like a variable life insurance policy?
• queencitybuckeye

  believer wrote:
  Let's say, for example, I buy an economical used Ford Focus vs. a brand new Lexus. Both get you from point A to point B. Is the Focus a reasonable debt and the Lexus irresponsible if one can assume that the Lexus will hold its value far more easily over the long haul as opposed to the Focus?

  I would say it might be possible for the Lexus to be the correct answer, but pretty unlikely.
  

  Or let's say I decide to run my existing car into the ground. While I'm doing that the tranny goes out on me costing me $1,500 or so in repair bills and then 6 months later the timing belt needs replaced at $500. Would I have been better off trading in my piece of crap when I had the chance or do I have to enjoy pulling out the checkbook to pay for the repair bill and feel good that I'm "building wealth"?
  
  Just for argument's sake of course!

  Depending on what the car is worth, the point the transmission breaks may be the point where the car is deemed "driven into the ground". Time to break out the checkbook not for a repair, but for your next car.
• believer

  

  ytownfootball wrote: Now consider also for tha sake of argument that extra $250/mo. going into something that actually builds wealth like a variable life insurance policy?

  I could up my 401K contribution a percent or two. Since my employer matches me dollar for dollar that could add up!
  
  But then again the smell, ride, and shine of a new car with a jammin' stereo system sounds equally sweet!
• believer

  

  queencitybuckeye wrote:Depending on what the car is worth, the point the transmission breaks may be the point where the car is deemed "driven into the ground". Time to break out the checkbook not for a repair, but for your next car.

  True but when I was able to drive the car in on its own power as opposed to towing it in to the dealer that might have given me a slightly better edge in its resale value thus minimizing the financial hit on the trade.
  
  That's my point: At what benchmark does it make sense to make the switch? Is it when your gut tells you it's time based on high mileage and the slight mechanical oddities you're beginning to notice...or do you wait and pray that the dealer will give you at least "something" for your now-crippled piece of crap?
• I Wear Pants

  believer wrote: I'm giving serious thought to trading in my ride on a new USED vehicle. I refuse to take the depreciation hit on a new car.
  
  I only have about $500 of negative equity in my existing car loan which isn't too bad compared to some folks.
  
  My existing car has about 85,000 miles on it but runs fine. It needs a new air conditioner compressor which could set me back about a grand with parts and labor but Kelly Blue Book value on this car is only $4,500.
  
  I have to admit that I'm bored with my car and feel the call to "invest" in a new set of problems.
  
  So do I trade, fix the A/C compressor, or just roll the windows down and run the SOB till the wheels fall off?

  85,000? Quit your bitching.
  
  Why would you spend money if the thing still works?
• THE4RINGZ

  

  I own five cars, each one is paid for. They range in miles from 63,000 to 190,000. Because we don't have car payment we are able to save a couple of hundred dollars a month in a savings account to pay for either repairs, or as a growing fund to replace a vehicle if needed.
  
  I don't believe in making payments on something that loses value quicker than the balance diminishes.
  
  Just my opinion on the how to get through life without debt.
• Red_Skin_Pride

  

  believer wrote: I'm giving serious thought to trading in my ride on a new USED vehicle. I refuse to take the depreciation hit on a new car.
  
  I only have about $500 of negative equity in my existing car loan which isn't too bad compared to some folks.
  
  My existing car has about 85,000 miles on it but runs fine. It needs a new air conditioner compressor which could set me back about a grand with parts and labor but Kelly Blue Book value on this car is only $4,500.
  
  I have to admit that I'm bored with my car and feel the call to "invest" in a new set of problems.
  
  So do I trade, fix the A/C compressor, or just roll the windows down and run the SOB till the wheels fall off?

  I was thinking about something similar to this a few months ago, and almost did it, but right before I did, one of my good friends said something that made me change my mind..."If it runs good and you own it {or almost own it, as in your case} outright, you better hang on to it". I guess I hadn't really thought about it like that before he said it, but think about it...with the economy the way it is, do you really want to go buy another vehicle that might have something go wrong with it in 3-6 months? You can always go buy something else if it comes to that, but why not get as much out of your current vehicle as you can while times are tough? Who knows, maybe in a year or two, it will be turning around, we'll all have more money, and you can afford to get something even better than you would be able to get if you bought in the current state of things
• Con_Alma

  Why won't you wait until you can pay for it as opposed to insisting on taking out a loan?
  
  It sounded like you were proud of only having $500 negative equity on your car and loan because other people were more worse off than you. Don't limit yourself by comparing yourself with other people. Most of them are idiots.
• Swamp Fox

  We have historically driven our cars quite a ways before investing in another car, almost always used. Currently my "Baby" has just under 180,000 miles on it, only 25,000 or so have been put on it by me. I want to eventually "restore" it to a reasonable semblance of what it was like when it rolled off the assembly line in 1996. For the record, it has taken me four years plus a few months to put that mileage on my car. My wife has a 2004 car with a little over 42,000 miles on it. It runs fine and has been a great car. No need to trade it or change it. I do find it mildly amusing and somewhat revealing to read one poster's suggestion that we should certainly not try to help the economy out until the color of the electoral map changes. That smacks of politics before economic well-being to me. I'm shocked that our citizens would try to delay the economic recovery until another party resides in the White House. these must be the same folks who want to destroy the current health care bill and "start over". Don't people realize that having a healthier economy benefits all people and not just one side?
• pinstriper

  Swamp Fox wrote: We have historically driven our cars quite a ways before investing in another car, almost always used. Currently my "Baby" has just under 180,000 miles on it, only 25,000 or so have been put on it by me. I want to eventually "restore" it to a reasonable semblance of what it was like when it rolled off the assembly line in 1996. For the record, it has taken me four years plus a few months to put that mileage on my car. My wife has a 2004 car with a little over 42,000 miles on it. It runs fine and has been a great car. No need to trade it or change it. I do find it mildly amusing and somewhat revealing to read one poster's suggestion that we should certainly not try to help the economy out until the color of the electoral map changes. That smacks of politics before economic well-being to me. I'm shocked that our citizens would try to delay the economic recovery until another party resides in the White House. these must be the same folks who want to destroy the current health care bill and "start over". Don't people realize that having a healthier economy benefits all people and not just one side?

  Nice post Barack...haha. How in the world did you just turn a post about trading in/buying a car into a healthcare debate? Wow.
• Cat Food Flambe'

  

  Financially, you're far better off fixing the A/C and running it - I can do a lot of repair work in lieu of a $225 car payment. Circumstances play a factor, though:
  
  With my family, we have five drivers with their own cars same general area - we can work around having a vehicle down for a couple days. If you're single, and the closest person with a working car AND that will speak to you is 200 miles away, dependability is a little more critical.
  
  If you're driving out in the middle of BFE or down in da hood at 2 am two or three nights a week, a breakdown (or catching a ride) might be more of a problem than it would be for say, my wife, who commutes all of a mile each way, in daylight, through a relatively safe part of town.
  
  Beyond that, it's just a matter of deciding if this is something you want to spend your "fun money" on. If you'd rather spend the extra cash on a nicer ride than on, say, concert or sports tickets, furniture, beer, or a vacation, it's a choice you're entitled to make. Just don't do the dumb thing and try to rationalize the expense - or spend money you don't have.
  
  Out of curiosity, how did you wind up upside down on car with that much mileage on it? Excess miles on a lease?
• I Wear Pants

  The car I drive is coming up on 210k miles. Works fine, not really any rust (little bit where there is a paint chip because of a small dent), and is reliable. I will never understand the obsession with people who don't make tons and tons of money getting new cars. Like, people who live in $100k houses that still have a mortgage and drive $30k cars. What the fuck are you doing?
• dwccrew

  

  Personally, I run them til the wheels fall off.
• Gameover

  Run til the wheels fall off. I traded in my '94 Eagle Talon with 223,000 miles on it. I now have Ford Escape and will have it paid off 18 months early and will run it til it goes as well. I hope I can never make a car payment after the Escape is paid off. I striving to pay cash for eash car purchase here on out.
• fan_from_texas

  Cat Food Flambe' wrote: Beyond that, it's just a matter of deciding if this is something you want to spend your "fun money" on. If you'd rather spend the extra cash on a nicer ride than on, say, concert or sports tickets, furniture, beer, or a vacation, it's a choice you're entitled to make. Just don't do the dumb thing and try to rationalize the expense - or spend money you don't have.

  Ding, ding, ding! This is a winner.
  
  If you want to spend money on something to enjoy, go ahead. But don't try to rationalize it as being a good financial decision (in the same sense that buying Indians tickets isn't exactly an investment). From a wealth-building perspective, run 'til the wheels fall off. From a fun perspective, do whatever you want, assuming you're financially secure.
• Go_Fast_Sports

  

  Woollums9 wrote: Roll down the windows and run the SOB into the ground

  Or have a wheel fall off or axle break and run into someone and possibly fatally injure them.