Cost of a car and HHI/NW

[Anonymous]

HHI 300k. bought a new chevy bolt that ended up less than 25K after tax credits. if you live in the city, this feels like a no-brainer

[Anonymous]

Anonymous wrote:

Anonymous wrote:Car culture is depressing. We are rich because we have only ever purchased one car, it was paid off in one year, it's 14+ years old, cost us 13K, and it has fewer than 90K miles on it. We take the bus, walk or metro most places. Spending 50K a year every few years (not to mention the insurance for an expensive car and fuel) is killing most Americans and then don't even know it.

That just means you value money more than you value time. You’re spending more time walking and taking the bus, or you just don’t leave the house. Many people enjoy going more than 6500 miles in a year outside the areas possible to travel by foot or bus.

DP: Not necessarily--we also rarely drive and keep one old car with low mileage. I enjoy walking and see it as a health benefit so I don't think of that as not valuing my time. Sitting in traffic in a car to me is not valuing my time. Needing to drive for every errand is not valuing my time or my well-being. Depending on where you live walk/metro/bus is quicker than driving and finding parking--and more environmentally friendly. We just use the car for occasional shopping trips and day trips/road trip vacations. We chose a walkable place to live to avoid needing a car for our daily life.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Do parents feel such an obligation to pay for college in other parts of the world? It strikes me as odd how often college money is the number 1 priority for a couple, even before their own retirement $$.

In other parts of the world, college is free or nearly free. We’re the only nation that allows are young and elderly to take out loans to afford $90k a year schools.

College is "free" but you pay 60-70% in taxes. I don't trust our government to utilize my tax dollars efficiently, so let's not go down that path. Also, most other countries limit who can attend college, quite often that limiting is done at age 10-12---don't make the cut then you don't have an easy path to college. Also don't make the cut then, and you will never major in STEM or premed as you wont get the needed classes in MS/HS. I prefer not to track kids at age 12---I like our system better.


Besides, in the USA there are paths to cost effective college or close to free. Start with CC, even better start with CC while in HS and complete Dual entry and earn your AA degree with your HS diploma--only costs are typically transportation to/from the college campus and books. You can get your AA for less than $1K in book costs. Then go to a state school, most states have several that are less than $10-12K in tuition. Live at home if that's possible, because in "the rest of the world" most kids do live at home for college, they don't live in dorms or apartments. A kid can live at home, work all breaks and PT during the year and pay for most of the $10-12K tuition on their own...if parents help a bit there is no need for loans even.

See, you can get a great education without attending a $90K/year school . In "other parts of the world" most kids do not get to attend an elite university---they go to whatever is local that they were tracked towards at age 12.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Car culture is depressing. We are rich because we have only ever purchased one car, it was paid off in one year, it's 14+ years old, cost us 13K, and it has fewer than 90K miles on it. We take the bus, walk or metro most places. Spending 50K a year every few years (not to mention the insurance for an expensive car and fuel) is killing most Americans and then don't even know it.

You are not rich because you drive a crap car that’s unsafe. If you were truly
Rich, you would value your time/convenience over saving a few bucks.

Technology makes modern cars so much safer for families. I’m not driving my kids around in a 15yr old beater.

You don’t need to buy a Mercedes, a new Toyota is just fine.

Your mindset is unhealt

No, your mindset is the issue. If the car runs and is safe (and plenty of 10+ cars are safe), why would you overspend if you don't have the money?!?!?! The mindset that you need/deserve a new car if you can't afford it is what gets people into debt/financial trouble. Because that mindset carries over to everything else financial. Then, you deserve a $5K vacation because you work hard---despite the fact you are not saving for "rainy day", college or retirement.

Here's a simple plan: buy a new Toyota for $25K (or whatever you can afford to pay off in 3 years) while trading in your old vehicle for $5K. Pay off your car loan within 3 years, then continue to save that car payment for the next 5 years. Now you have an 8 yo car and more than enough money to replace it by paying cash and possibly even able to upgrade if your financial health allows it. Then you never need another car loan.

Want an even nicer car? then drive the old Toyota for another 2 years, continue to save and then trade in your 10 yo car and pay cash for whatever you can afford.
Or buy the same style Toyota and you have your vacation fund for several years.

It's the mindset of "I deserve nicer things even if I haven't saved for them" that gets most into trouble. Save, have money for a rainy day, then when it happens you are still good financially.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Car culture is depressing. We are rich because we have only ever purchased one car, it was paid off in one year, it's 14+ years old, cost us 13K, and it has fewer than 90K miles on it. We take the bus, walk or metro most places. Spending 50K a year every few years (not to mention the insurance for an expensive car and fuel) is killing most Americans and then don't even know it.

That just means you value money more than you value time. You’re spending more time walking and taking the bus, or you just don’t leave the house. Many people enjoy going more than 6500 miles in a year outside the areas possible to travel by foot or bus.

And what's your point?

A used $14k Hyundai, Mazda, or Kia can do that as easily as a $50k Benz or BMW.

Cars are the stupidest waste of money on the planet.

Lol you can buy a 14k used bmw too. What on earth are you talking about? You can also buy a 50k hyundai.

You anti-car people are real nut jobs.

I don't care what you buy, just buy something you can afford. And my definition of afford is that you should be working towards paying cash for your vehicle by the time you are 30.
The real nut jobs are people who spend everything they make then complain they don't have any money when an emergency hits them....but they have been driving fancy cars, taking expensive vacations, etc. (I'm not talking about people who drive clunkers, live in a crappy apt and are struggling because they don't make enough for basics). The real nut jobs are people who cannot adequately define "needs" vs "wants"

[Anonymous]

Anonymous wrote:

Anonymous wrote:I live in DC - four person household, two teens. We drive <10,000 miles per year. In the past 20 years, we've bought/owned 3 used cars. Total purchase price for all 3? $45k. Current car is a 2017 model so we should have 5+ more years of driving it, plus my kids can learn to drive on it.

The other benefit of owning one car at a time and buying older models is that our insurance costs are pretty low - around $700/year for comprehensive coverage.

It's interesting to read threads like this because I realize how very far we are outside the norm.

I don't think you're outside the norm for people in comparable situations - live in an urban area, accessible to transit, walkable amenities, etc. When we lived in DC, we only had one car, and it was used primarily to get my kid to her charter school. But now that we're in the burbs, it isn't really an option (though WFH is making us rethink that).

Agree about not driving much being fairly typical for DC. I didn't own a car for years. And it never made sense to get a new one for many reasons including that it would just get dinged on the streets.

[Anonymous]

One car cost 60k and one cost 125k. I've never really stopped to think about what we should own based on our net worth. We just bought what we wanted with bonus money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Car culture is depressing. We are rich because we have only ever purchased one car, it was paid off in one year, it's 14+ years old, cost us 13K, and it has fewer than 90K miles on it. We take the bus, walk or metro most places. Spending 50K a year every few years (not to mention the insurance for an expensive car and fuel) is killing most Americans and then don't even know it.

You are not rich because you drive a crap car that’s unsafe. If you were truly
Rich, you would value your time/convenience over saving a few bucks.

Technology makes modern cars so much safer for families. I’m not driving my kids around in a 15yr old beater.

You don’t need to buy a Mercedes, a new Toyota is just fine.

Your mindset is unhealt

No, your mindset is the issue. If the car runs and is safe (and plenty of 10+ cars are safe), why would you overspend if you don't have the money?!?!?! The mindset that you need/deserve a new car if you can't afford it is what gets people into debt/financial trouble. Because that mindset carries over to everything else financial. Then, you deserve a $5K vacation because you work hard---despite the fact you are not saving for "rainy day", college or retirement.

Here's a simple plan: buy a new Toyota for $25K (or whatever you can afford to pay off in 3 years) while trading in your old vehicle for $5K. Pay off your car loan within 3 years, then continue to save that car payment for the next 5 years. Now you have an 8 yo car and more than enough money to replace it by paying cash and possibly even able to upgrade if your financial health allows it. Then you never need another car loan.

Want an even nicer car? then drive the old Toyota for another 2 years, continue to save and then trade in your 10 yo car and pay cash for whatever you can afford.
Or buy the same style Toyota and you have your vacation fund for several years.

It's the mindset of "I deserve nicer things even if I haven't saved for them" that gets most into trouble. Save, have money for a rainy day, then when it happens you are still good financially.

What? This isn’t relevant at all.

Also, a 5000 dollar vacation isn’t that expensive to the average DC a professional.

And why would you buy a new car? That’s a huge waste of money. If you buy the same car slightly used you can probably go on a 5000 dollar vacation and break even

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do parents feel such an obligation to pay for college in other parts of the world? It strikes me as odd how often college money is the number 1 priority for a couple, even before their own retirement $$.

In other parts of the world, college is free or nearly free. We’re the only nation that allows are young and elderly to take out loans to afford $90k a year schools.

College is "free" but you pay 60-70% in taxes. I don't trust our government to utilize my tax dollars efficiently, so let's not go down that path. Also, most other countries limit who can attend college, quite often that limiting is done at age 10-12---don't make the cut then you don't have an easy path to college. Also don't make the cut then, and you will never major in STEM or premed as you wont get the needed classes in MS/HS. I prefer not to track kids at age 12---I like our system better.


Besides, in the USA there are paths to cost effective college or close to free. Start with CC, even better start with CC while in HS and complete Dual entry and earn your AA degree with your HS diploma--only costs are typically transportation to/from the college campus and books. You can get your AA for less than $1K in book costs. Then go to a state school, most states have several that are less than $10-12K in tuition. Live at home if that's possible, because in "the rest of the world" most kids do live at home for college, they don't live in dorms or apartments. A kid can live at home, work all breaks and PT during the year and pay for most of the $10-12K tuition on their own...if parents help a bit there is no need for loans even.

See, you can get a great education without attending a $90K/year school . In "other parts of the world" most kids do not get to attend an elite university---they go to whatever is local that they were tracked towards at age 12.

I don’t think you have very much information about how a lot of the world operates.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Car culture is depressing. We are rich because we have only ever purchased one car, it was paid off in one year, it's 14+ years old, cost us 13K, and it has fewer than 90K miles on it. We take the bus, walk or metro most places. Spending 50K a year every few years (not to mention the insurance for an expensive car and fuel) is killing most Americans and then don't even know it.

You are not rich because you drive a crap car that’s unsafe. If you were truly
Rich, you would value your time/convenience over saving a few bucks.

Technology makes modern cars so much safer for families. I’m not driving my kids around in a 15yr old beater.

You don’t need to buy a Mercedes, a new Toyota is just fine.

Your mindset is unhealt

No, your mindset is the issue. If the car runs and is safe (and plenty of 10+ cars are safe), why would you overspend if you don't have the money?!?!?! The mindset that you need/deserve a new car if you can't afford it is what gets people into debt/financial trouble. Because that mindset carries over to everything else financial. Then, you deserve a $5K vacation because you work hard---despite the fact you are not saving for "rainy day", college or retirement.

Here's a simple plan: buy a new Toyota for $25K (or whatever you can afford to pay off in 3 years) while trading in your old vehicle for $5K. Pay off your car loan within 3 years, then continue to save that car payment for the next 5 years. Now you have an 8 yo car and more than enough money to replace it by paying cash and possibly even able to upgrade if your financial health allows it. Then you never need another car loan.

Want an even nicer car? then drive the old Toyota for another 2 years, continue to save and then trade in your 10 yo car and pay cash for whatever you can afford.
Or buy the same style Toyota and you have your vacation fund for several years.

It's the mindset of "I deserve nicer things even if I haven't saved for them" that gets most into trouble. Save, have money for a rainy day, then when it happens you are still good financially.

What? This isn’t relevant at all.

Also, a 5000 dollar vacation isn’t that expensive to the average DC a professional.

And why would you buy a new car? That’s a huge waste of money. If you buy the same car slightly used you can probably go on a 5000 dollar vacation and break even

Have you bought a used car in the last 3-4 years? They are almost same as a new car.
We keep our cars 8-10 years so we prefer new cars. Just sold my 12+ yo MDX and got over $10K for it. Given that it had $3k of body damages and over $1k of "electronics" that would need to be repaired, I'd say I got my money worth over the 12+ years

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do parents feel such an obligation to pay for college in other parts of the world? It strikes me as odd how often college money is the number 1 priority for a couple, even before their own retirement $$.

In other parts of the world, college is free or nearly free. We’re the only nation that allows are young and elderly to take out loans to afford $90k a year schools.

College is "free" but you pay 60-70% in taxes. I don't trust our government to utilize my tax dollars efficiently, so let's not go down that path. Also, most other countries limit who can attend college, quite often that limiting is done at age 10-12---don't make the cut then you don't have an easy path to college. Also don't make the cut then, and you will never major in STEM or premed as you wont get the needed classes in MS/HS. I prefer not to track kids at age 12---I like our system better.


Besides, in the USA there are paths to cost effective college or close to free. Start with CC, even better start with CC while in HS and complete Dual entry and earn your AA degree with your HS diploma--only costs are typically transportation to/from the college campus and books. You can get your AA for less than $1K in book costs. Then go to a state school, most states have several that are less than $10-12K in tuition. Live at home if that's possible, because in "the rest of the world" most kids do live at home for college, they don't live in dorms or apartments. A kid can live at home, work all breaks and PT during the year and pay for most of the $10-12K tuition on their own...if parents help a bit there is no need for loans even.

See, you can get a great education without attending a $90K/year school . In "other parts of the world" most kids do not get to attend an elite university---they go to whatever is local that they were tracked towards at age 12.

I don’t think you have very much information about how a lot of the world operates.

I think you don't have valid information on that either. This is how much of Europe functions, as well as India. So please, enlighten the group as to what is incorrect. This is how Europe works---most of my friends in Europe have their kids live at home and attend a local university. And yes, kids are tracked early on for what courses they take and what college the might be eligible for. Sure college is "free" in much of Europe, or relatively cheap, but they pay for it with taxes, high taxes. Most of Europe is not obsessed with attending Oxford or Cambridge.....the Europe equivalent of T20/Ivies.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Car culture is depressing. We are rich because we have only ever purchased one car, it was paid off in one year, it's 14+ years old, cost us 13K, and it has fewer than 90K miles on it. We take the bus, walk or metro most places. Spending 50K a year every few years (not to mention the insurance for an expensive car and fuel) is killing most Americans and then don't even know it.

That just means you value money more than you value time. You’re spending more time walking and taking the bus, or you just don’t leave the house. Many people enjoy going more than 6500 miles in a year outside the areas possible to travel by foot or bus.

And what's your point?

A used $14k Hyundai, Mazda, or Kia can do that as easily as a $50k Benz or BMW.

Cars are the stupidest waste of money on the planet.

Lol you can buy a 14k used bmw too. What on earth are you talking about? You can also buy a 50k hyundai.

You anti-car people are real nut jobs.

I don't care what you buy, just buy something you can afford. And my definition of afford is that you should be working towards paying cash for your vehicle by the time you are 30.
The real nut jobs are people who spend everything they make then complain they don't have any money when an emergency hits them....but they have been driving fancy cars, taking expensive vacations, etc. (I'm not talking about people who drive clunkers, live in a crappy apt and are struggling because they don't make enough for basics). The real nut jobs are people who cannot adequately define "needs" vs "wants"

Why should I pay cash when interest rates are 0.3-0.5% above what I am making in my savings account and I can pay monthly payments from cash flow.

Please lecture me on why debt is bad, David Ramsey. Debt is bad for poor people. Debt is awesome for a lot of people.

On a 40k car note over 4 years I’ll pay $4400 in interest at 5.2%. If I leave 40k in my bank account making 4.75% over 4 years I’ll make 8200 in interest. So by financing rather than paying all cash I’m saving 3800 dollars, over withdrawing and paying now. And if my savings account rate goes way down, I can always lump sum pay off the loan, if I want. To break even on the interest I need my savings account to stay at 4.75 or higher for around 2.5 years.

You’ll say “yea but if you pay cash and then pay yourself the monthly payment out of cash flow, you’ll be ahead!” No… I won’t. The math works the same way.

Accumulated cash is king. You can use it as collateral, you can invest it, you can do a lot with it. But the last thing you want to do is spend it.

A low debt ratio means missed opportunities. A high debt ratio is foolish and reckless.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Car culture is depressing. We are rich because we have only ever purchased one car, it was paid off in one year, it's 14+ years old, cost us 13K, and it has fewer than 90K miles on it. We take the bus, walk or metro most places. Spending 50K a year every few years (not to mention the insurance for an expensive car and fuel) is killing most Americans and then don't even know it.

You are not rich because you drive a crap car that’s unsafe. If you were truly
Rich, you would value your time/convenience over saving a few bucks.

Technology makes modern cars so much safer for families. I’m not driving my kids around in a 15yr old beater.

You don’t need to buy a Mercedes, a new Toyota is just fine.

Your mindset is unhealt

No, your mindset is the issue. If the car runs and is safe (and plenty of 10+ cars are safe), why would you overspend if you don't have the money?!?!?! The mindset that you need/deserve a new car if you can't afford it is what gets people into debt/financial trouble. Because that mindset carries over to everything else financial. Then, you deserve a $5K vacation because you work hard---despite the fact you are not saving for "rainy day", college or retirement.

Here's a simple plan: buy a new Toyota for $25K (or whatever you can afford to pay off in 3 years) while trading in your old vehicle for $5K. Pay off your car loan within 3 years, then continue to save that car payment for the next 5 years. Now you have an 8 yo car and more than enough money to replace it by paying cash and possibly even able to upgrade if your financial health allows it. Then you never need another car loan.

Want an even nicer car? then drive the old Toyota for another 2 years, continue to save and then trade in your 10 yo car and pay cash for whatever you can afford.
Or buy the same style Toyota and you have your vacation fund for several years.

It's the mindset of "I deserve nicer things even if I haven't saved for them" that gets most into trouble. Save, have money for a rainy day, then when it happens you are still good financially.

What? This isn’t relevant at all.

Also, a 5000 dollar vacation isn’t that expensive to the average DC a professional.

And why would you buy a new car? That’s a huge waste of money. If you buy the same car slightly used you can probably go on a 5000 dollar vacation and break even

Have you bought a used car in the last 3-4 years? They are almost same as a new car.
We keep our cars 8-10 years so we prefer new cars. Just sold my 12+ yo MDX and got over $10K for it. Given that it had $3k of body damages and over $1k of "electronics" that would need to be repaired, I'd say I got my money worth over the 12+ years

Yes, I bought one with 10k miles on it from 2 model years ago for about 25-30% off current MSRP of a new one. Probably total depreciation of 15%ish of the original MSRP, maybe more. Don’t believe the hype about the used car market. I didn’t even have to look that hard and only negotiated about 3k off asking. Certified used luxury brand.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do parents feel such an obligation to pay for college in other parts of the world? It strikes me as odd how often college money is the number 1 priority for a couple, even before their own retirement $$.

In other parts of the world, college is free or nearly free. We’re the only nation that allows are young and elderly to take out loans to afford $90k a year schools.

College is "free" but you pay 60-70% in taxes. I don't trust our government to utilize my tax dollars efficiently, so let's not go down that path. Also, most other countries limit who can attend college, quite often that limiting is done at age 10-12---don't make the cut then you don't have an easy path to college. Also don't make the cut then, and you will never major in STEM or premed as you wont get the needed classes in MS/HS. I prefer not to track kids at age 12---I like our system better.


Besides, in the USA there are paths to cost effective college or close to free. Start with CC, even better start with CC while in HS and complete Dual entry and earn your AA degree with your HS diploma--only costs are typically transportation to/from the college campus and books. You can get your AA for less than $1K in book costs. Then go to a state school, most states have several that are less than $10-12K in tuition. Live at home if that's possible, because in "the rest of the world" most kids do live at home for college, they don't live in dorms or apartments. A kid can live at home, work all breaks and PT during the year and pay for most of the $10-12K tuition on their own...if parents help a bit there is no need for loans even.

See, you can get a great education without attending a $90K/year school . In "other parts of the world" most kids do not get to attend an elite university---they go to whatever is local that they were tracked towards at age 12.

I don’t think you have very much information about how a lot of the world operates.

I think you don't have valid information on that either. This is how much of Europe functions, as well as India. So please, enlighten the group as to what is incorrect. This is how Europe works---most of my friends in Europe have their kids live at home and attend a local university. And yes, kids are tracked early on for what courses they take and what college the might be eligible for. Sure college is "free" in much of Europe, or relatively cheap, but they pay for it with taxes, high taxes. Most of Europe is not obsessed with attending Oxford or Cambridge.....the Europe equivalent of T20/Ivies.

Sure. I’ll enlighten you. I actually know a lot about the tax structures in Europe. There’s no European nation with an income tax bracket of 60-70%, let alone an effective tax rate that high. The highest marginal rates are in the 50s. The US is at 37%. Pensions add to it, but they’re pensions like ss, certainly not being used to fund higher education. The consumption tax, or VAT, isn’t clearly passed onto consumers in the sense that without it prices would be 20% lower. It certainly has a distortive effect on the economy, but doesn’t equal individual tax payers having an effective rate of 60-70%.

American universities are superior in many ways. But Ireland, UK, France, and Germany all have multiple world class global universities and students from around Europe and certainly around those countries apply and attend.

In addition, a much higher number of Europeans obtain masters degrees.

And during college, many participate in Erasmus, which is like our study abroad across the EU, but not eye poppingly expensive.

On top of that, they have an excellent transportation infrastructure and some countries deliver excellent healthcare at a relatively low cost.

Any other questions?

[Anonymous]

We paid 65k for a Tesla Model Y when our income was 580k. This is after selling our old car for 26k that we bought for 33k after driving it for 6 years.