http://www.bloomberg.com/gadfly/articles/2016-05-20/negative-equity-hits-the-car-market
who finances their cars? so hacksaw AND beta. i buy my cars straight cash fool. say all you want how you can cover finance cost with the $ invested elsewhere. That never works out.
^ from my experience, almost everyone finances or leases their cars, BSD or not.
Why would you finance a depreciating asset?
Financing is just a means to an end, once you’ve decided you want the depreciating asset. Also good for credit history.
I leased my very first car: I had paid down the bulk of my student loans and thus was cash-challenged. Now that I’m all growed up and respawnsybill, I pay cash for cars and drive them into the ground!
i laugh at ppl that buy new cars. wait 2 years and get the same car for 30% less plus it will still have a 2 years warranty
^I agree fully. Get 40% less car for 30% less price.
what is 40% less car
It’s all personal preference. I like having reliable cars with relatively new technology, so driving a car that is 15 years old doesn’t appeal to me. Also I don’t think anyone cares what a car’s book value is…
That is like Pitcher thrown at 75 mph, when the actual speed is 100 mph, you know what i mean?
You said you drive an old beater truck, right?
^I do now while my business is ramping up. Even when I was driving a luxury sedan I bought it cash…1 year old w/ 8k miles on it for about 70% of sticker price. that’s the best deal for the money regardless of the type of car you buy – low miles, on the flatter part of the depreciation curve, cash money. That’s how you minimize the cost to drive any particular car.
I’m a firm believer in efficient markets in the used car space. I don’t believe “deals” exist. If you pay 70% of the price, you’re getting 70% of the car.
there is nothing efficient about the used car space market although carmax is trying
I’d like to hear hpracing’s opinion on this.
Well, people are paying a risk premium when they buy new cars. The new car premium reflects not just numerical quantities like lack of physical deterioration or full warranty, but also the “insurance price” of near perfect information on the state of the car. Used cars are cheaper than new cars, all else equal, because the buyer is compensated for uncertainty.
Of course, this risk is probably over priced in general. So statistically, new car buyers are probably paying too much for certainty. But this is no different from say, insurance companies, who will generally make money after diversifying their risk across many customers.
^ I’m not even sure a new car really gives you that much more certainty. Having a couple years of maintenance history could help avoid a lemon.
Not sure what it says about the efficiency of the used car market, but having done some work for one of the larger dealer networks in the country, I do know that they make their money on used car sales, not new car sales. New car sales are basically a bridge to warranty repairs and regular maintenance, which are also big money makers for the dealer.
Can someone make a damn concrete statement here.
My lease ends in 3 weeks and I need to know whether to lease again or buy. I make all my life decisions based on the BSDs of this forum.