Am I being unnecessarily cheap about new car purchase?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Always buy used and pay cash. Never buy new. Save your extra money. Live practically and frugally as much as possible. The more you owe, the less freedom you have.

This is horrible advice when looking through the lens of the current car buying market.

Agree. The only way this makes sense is if he buys a total junker on the cheap for sub 3k.

[Anonymous]

OP here. I don't think I explained my question very well (that's my bad). That being said, some of the posts have been very helpful so thanks!

Here's, hopefully, a better explanation:

I know the "ideal" advice is to pay cash for used car and never take out loans. In my situation, I don't think that makes any more sense than simply repairing my Jeep. If I bought a used SUV/minivan for $25K, I wouldn't feel any more comfort with its reliability than spending $5K to have my Jeep repaired and it wouldn't be covered by a warranty.

If I get my Jeep repaired, I'll address the problems I know about, but I wouldn't feel any more comfort with its future reliability (and I already sunk about $3K in it late last year). I'm still on the fence about just getting my Jeep repaired again but at some point I don't want to keep throwing good money after bad.

As far as new cars (if I decide to go that route), assume that I've already found what I want for around $40K which would result in a note of around $600 (after trading in the Jeep).

So I'm really only looking at two options: repair the jeep or get the new car (with a loan...I don't want to spend upwards of $40K cash).

My actual question is whether that $600 note is really reasonable based on a $300K HHI or am I being cheap by balking at spending that much. Online guidance says it's affordable and my financial advisor says I have it to spare. Mentally though, it's hard for me to accept.

I am reading everyone's responses and taking it all into consideration but I don't see how a "new" used car with no warranty coverage trumps my "old" used car with no warranty or an actual new car with a warranty. If the market wasn't as crazy, I'd buy a CPO but the price difference from a new car isn't significant enough

[Anonymous]

Anonymous wrote:OP here. I don't think I explained my question very well (that's my bad). That being said, some of the posts have been very helpful so thanks!

Here's, hopefully, a better explanation:

I know the "ideal" advice is to pay cash for used car and never take out loans. In my situation, I don't think that makes any more sense than simply repairing my Jeep. If I bought a used SUV/minivan for $25K, I wouldn't feel any more comfort with its reliability than spending $5K to have my Jeep repaired and it wouldn't be covered by a warranty.

If I get my Jeep repaired, I'll address the problems I know about, but I wouldn't feel any more comfort with its future reliability (and I already sunk about $3K in it late last year). I'm still on the fence about just getting my Jeep repaired again but at some point I don't want to keep throwing good money after bad.

As far as new cars (if I decide to go that route), assume that I've already found what I want for around $40K which would result in a note of around $600 (after trading in the Jeep).

So I'm really only looking at two options: repair the jeep or get the new car (with a loan...I don't want to spend upwards of $40K cash).

My actual question is whether that $600 note is really reasonable based on a $300K HHI or am I being cheap by balking at spending that much. Online guidance says it's affordable and my financial advisor says I have it to spare. Mentally though, it's hard for me to accept.

I am reading everyone's responses and taking it all into consideration but I don't see how a "new" used car with no warranty coverage trumps my "old" used car with no warranty or an actual new car with a warranty. If the market wasn't as crazy, I'd buy a CPO but the price difference from a new car isn't significant enough

No offense intended, but as someone who could write your exact post with regard to our 2009 Subaru, is looking for an EV or PHEV that will reasonably accommodate our small family, and are therefore necessarily looking in the 35-40k range, but with an HHI of $130k, yes, you are being cheap.

[Anonymous]

Anonymous wrote:I don’t plan on ever buying a new car again. They’re all garbage now. Why pay a premium for garbage?

What new car today is garbage? This is 20 years out of date.

[Anonymous]

Our HHI is a bit more than yours ($500K). We bought an Acadia for about 30K. 1 year old, 20K miles, our payment is about 400/month. That thing is a workhorse.

[Anonymous]

I can sympathize. I think $40k is a lot to spend on a car and I have a higher hhi. I'm probably cheap.

[Anonymous]

A car is a depreciating asset. If your car will run for awhile after getting it fixed, pay for the repair. In most cases, it would be cheaper than a car payment. Keep in mind that a new car comes with higher insurance, higher property tax, sales tax, title and registration fees, etc.

[Anonymous]

Anonymous wrote:Our HHI is a bit more than yours ($500K). We bought an Acadia for about 30K. 1 year old, 20K miles, our payment is about 400/month. That thing is a workhorse.

Why do you need a loan on that income?

[Anonymous]

Anonymous wrote:A car is a depreciating asset. If your car will run for awhile after getting it fixed, pay for the repair. In most cases, it would be cheaper than a car payment. Keep in mind that a new car comes with higher insurance, higher property tax, sales tax, title and registration fees, etc.

And take the money you're saving to put towards buying your next car outright. Don't borrow if you don't have to.

Also, if you're thinking you'll borrow and pay it right off, check to see if you'd still be obligated for the interest you originally contracted for. Car loans aren't like mortgages -- you can't put money towards the principal and reamortize.

[Anonymous]

Cars are expensive AF. You're mentality around the 40k is rooted in car prices from a decade ago. If you found what you want for 40k, a 600/mo payment is very reasonable given your HHI. I would buy the new car and cut the Jeep loose.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Our HHI is a bit more than yours ($500K). We bought an Acadia for about 30K. 1 year old, 20K miles, our payment is about 400/month. That thing is a workhorse.

Why do you need a loan on that income?

We've just always financed cars. Car and mortgage are our big monthly payments. What can I say we're new money

[Anonymous]

Anonymous wrote:$40k I not that much. I'm surprised you were not worried about driving the cars you have been driving. Get a Honda or a Mazda.

This. Get a new pilot or cx9.

[Anonymous]

Anonymous wrote:

Anonymous wrote:$40k I not that much. I'm surprised you were not worried about driving the cars you have been driving. Get a Honda or a Mazda.

This. Get a new pilot or cx9.

No, get a truck. Carmax has used trucks for 40k. Make sure it's a V8 with 4 wheel drive.

[Anonymous]

Anonymous wrote:Cars are expensive AF. You're mentality around the 40k is rooted in car prices from a decade ago. If you found what you want for 40k, a 600/mo payment is very reasonable given your HHI. I would buy the new car and cut the Jeep loose.

OP here. This is a good point and it's kind of embarrassing I didn't think about it in this way but inflation certainly needs to be taken into account

[Anonymous]

Your financial advisor says it's OK.

Do you second-guess your doctor also?