[TXSTYLE]

Changed the Title to "New Car". I didn't want to shit on Hyundai because it's actually a really nice Brand these days. Oh and also, this type of scenario is happening all across the "Various Car Manufacturer Board".

Some interesting comments. Some are logical and some are simple bias.

As someone who has done all of the following: Financed New and Used
Leased
Paid cash for New and Used
Here's my take...

Ultimately, one should do what makes Common Sense for "their specific situation".
Now then, that is a very blanketed statement that would assume people have and use common sense.
Fact is, the majority of people don't. Did that make them "uneducated losers or desiring to file for BK"? Absolutely not. That is a poor assumption as well.
We live in a Society, particularly here in the States, where, "Greed is Good". We are bombarded with "Consumption Mindset". To NOT have certain or nicer "Things", literally weighs on folks minds and wallets, regularly. The old adage: Keeping up with the Jonses is always front and center. But should it be? Of course not.

Back to the situation from my OP. This specific case is very poor judgement. However, to a certain degree, the Capitalistic culture here shoulders some of the blame. How? People and Corps have been programmed to take, consume, spend. Couple that with the desire for material things, up to and including things some folks simply can not afford. On the flip side of that coin, you have said Businesses willing and ready to sell you shit that they know you can't or shouldn't try to afford. It's a vicious cycle that keeps churning and burning.
What is the solution? Well that is easier said than done. But actually using Common Sense and Education is a great start. Sadly, most won't do or choose either. Let's not forget the many buyers whose fortunes and work or businesses can change in an instant. As a educated, successful business owner who too has made financial misteps, I try and learn and grow from my mistakes and have. I thank Goodness, and thank using Common Sense and I'd be remissed to not not thank God for his grace.
I will add, the nearly automatic negative equity of @ 20-30% in the first year of a new vehicle ownership should be offset by either a financial clause or some mechanism, because that shit is absolutely ridiculous. This is exactly why I have not purchased new in over a decade and probably never will even though I've bought multiple cars in that time and haven't been burnt at all with negative equity.

[Efthreeoh]

Originally Posted by zx10guy

Don't see how buying a domestic is a mistake. The mistake is the buyer not doing their due diligence in ensuring the car they buy is the right one for them. Even if the car didn't meet up to their expectations, the prudent thing is to stick it out until it makes financial sense to get out of the car. I've owned 3 domestic cars and haven't been burned on any of them. Difference is I made sure these cars were the ones I wanted and I drove them all into the ground before moving on. Well, two of the three I drove into the ground. The remainder I sold off to a car buying service after owning it for about 14 years. Any car can be a financial nightmare if people are foolish enough to get out of a new car with the initial new car depreciation hit only after a few months of ownership.

Agree, trading in 7 months after purchase was the mistake regardless where the automobile was manufactured or what manufacturer produced it.

[Efthreeoh]

"Back to the situation from my OP. This specific case is very poor judgement. However, to a certain degree, the Capitalistic culture here shoulders some of the blame. How? People and Corps have been programmed to take, consume, spend. Couple that with the desire for material things, up to and including things some folks simply can not afford. On the flip side of that coin, you have said Businesses willing and ready to sell you shit that they know you can't or shouldn't try to afford. It's a vicious cycle that keeps churning and burning."

Sorry, but I have to take issue with your statement. And coming from a professed "business owner" really is completely confusing. You are actually blaming Capitalism? Lol. TEX, you are one of the members here who routinely posts about expensive luxury brands and exotic supercars. So much so, one could conclude you have much disdain for common automobiles.

WTF does Capitalism have to do with people making poor financial decisions? No one makes another person buy a car or forces them to buy a vechicle they cannot truly afford. It's simply personal responsibility and nothing more. We need more personal accountability in our society not more attacks on Capitalism, which makes the US the envy of the rest of the world (as evidenced by the tens of thousands who want to sneak in every month - lol).

Comeonman, Psychobabble.

[pbonsalb]

I was waiting for the “personal responsibility” post … not that I agree with that simple, black and white response in this gray world. Sure makes things simpler, though, to just blame the individual. You probably walked uphill both ways to school and are 100% self-made.

[zx10guy]

Originally Posted by ///MPhatic

In 1998 buying a Domestic car and not planning to keep it at least 4 years in excellent condition was absolutely a mistake.

No, not planning on keeping any car for at least a few years is absolutely a mistake. Doesn't matter if it's a domestic brand or foreign/Japanese. It's just that you take less of a hit on depreciation with say a sought after Japanese brand versus a domestic. ALL cars depreciate. It's just how badly it does differentiates different brands/models.

[pbonsalb]

It’s not a mistake if you want a new car every couple of years. That is a choice. Suits some even if they end up paying more. Not everyone wants to drive the same car for 5-10 years. I personally like buying slightly used and then keeping 5-10 years, but have also bought new, leased and bought well used though I kept them all for 5-10 years.

[G MONEY]

Originally Posted by Hit_Apex

Sure feels like these extreme cases are strategic - continue to parlay neg eq to absurd levels then file BK and start over. All to keep up appearances. Wild stuff.

Then you can become the president. Lol. Just sayin. Merica baby.

[MaxVO2]

***New member and poster. I have administrative staff that could comfortably afford a Toyota Corolla (new), but really really wanted a lower end BMW (1 series). They do not make BMW money, but really really wanted something they could *barely* afford with an incredibly long set of payments IMO (72 months).

Anyway, once Covid hit and we had to shut down business for a few months she found out she was *way* underwater on her car and eventually it got repossessed.

Certainly did NOT help with her credit, and it really hurt her financially. She would have been fine with the Toyota Corolla (new), but her eyes have always been bigger than he means to pay for what she really wants.

Very common in my experience.

[JayML]

When someone doesn’t want to wait for something they don’t want to wait. It’s just how most work.

I remember wanting a certain Rolex. I didn’t want to spend the money because I had 2. It wasn’t an affordability issue. It was the point. So I said when I make xx, I’ll get it. It didn’t matter how long it would take. Once I made it, I got the watch I wanted. Appreciated it way more because I didn’t just buy it cause I wanted it. This is how people live. No one wants to work towards a goal. Instant gratification, which wears off too fast.

[STi from DSM]

People will always do what they want in the end. I have lost money on cars and made money on cars. It happens. But the culture of the new Gen (Whatever the hell they call it these days) is I NEED IT NOW. They don't want to wait for anything and certainly couldn't be bothered to make a decision that is sound even though they have grown up with technology their whole lives. I lost a decent amount of money on my M5 when I traded that in. I had to roll that into my next car. It certainly wasn't $29k though. I made up a payment plan for the next vehicle I got and paid off the negative equity. It was a shitty situation, but had to be done. The M5 had some issues with it and unless I wanted a $60k brick sitting in my driveway it was time to get rid of it. I took a loss knowing it would suck to pay it off but I knew that going into it. I make enough money where it didn't matter that much in the long run.
People in Supercars and Hypercars that is a whole different ballfield altogether. But the person who mentioned the guy in the Escalade that was like $45k underwater, cars that have steep depreciation like that can really rock your socks if you aren't careful. The depreciation on an M850i is nearly 50% after 2 years. People have to know their facts about vehicles and most people don't care. It does matter to know what you are getting into.

[///MPhatic]

Originally Posted by zx10guy

No, not planning on keeping any car for at least a few years is absolutely a mistake. Doesn't matter if it's a domestic brand or foreign/Japanese. It's just that you take less of a hit on depreciation with say a sought after Japanese brand versus a domestic. ALL cars depreciate. It's just how badly it does differentiates different brands/models.

I explained this to him, as I did all of my customers, and explained that it's why many people lease. However, the $3,000 discount on the XR-7 was too enticing, so he had to learn the hard way.

[Alfisti]

There's really no hard rule for what makes the most sense, if you do enough miles a new lease every 3 years will make sense because servicing and repair costs on an older car are insane if you're doing 20 to 25K miles a year. I do 2500 to 3K miles a year so drive a 16 year old car because the depreciation of a newer car is more than repair costs on my beater. Really depends on your situation.

[BlkGS]

Originally Posted by Alfisti

There's really no hard rule for what makes the most sense, if you do enough miles a new lease every 3 years will make sense because servicing and repair costs on an older car are insane if you're doing 20 to 25K miles a year. I do 2500 to 3K miles a year so drive a 16 year old car because the depreciation of a newer car is more than repair costs on my beater. Really depends on your situation.

I doubt a 25k miles a year lease would make much sense either. That's probably hideously expensive.

[pbonsalb]

You don’t want to lease a car you drive 25-30k miles a year because lease rates for that mileage are much higher. Typical lease is 10k miles a year and the rates for that reflect the residual for a 3 year old 30k mile car, which is probably twice that of a 90k mile car.

There are a lot of Toyotas that have been driven 25-30k miles a year for 5-10 year that have been reasonable rather than insane to repair and maintain.

[zx10guy]

Originally Posted by Alfisti

There's really no hard rule for what makes the most sense, if you do enough miles a new lease every 3 years will make sense because servicing and repair costs on an older car are insane if you're doing 20 to 25K miles a year. I do 2500 to 3K miles a year so drive a 16 year old car because the depreciation of a newer car is more than repair costs on my beater. Really depends on your situation.

My 2019 C-HR bought new January of 2019 has over 156,000 miles on it which is roughly 26,000 miles a year. Car hasn't had any needed repairs. Only routine maintenance. Because of the nature of the driving I do, oil changes are done at 10,000 miles. Granted, I've DIY'd all the maintenance except the CVT fluid flushes which I pay for doing it at about ever 40,000 miles. I've replaced the serpentine belt twice, plugs once, front/rear brakes once (opted not to replace the rotors as they were in good shape, two sets of Michelin Cross Climate 2s, coolant drain and refill, and two engine air filters. Car is dirt cheap to operate.

So if one pics correctly with the car they drive, getting into a lease in fear of imagined repair costs on an old car makes no sense at all.

[Donatello.]

That's nuts.

Car pricing is so out of control these days that, even though there are some cars that I would buy, I'd not buying anything until things correct a lot more.

[BlkGS]

Originally Posted by Donatello.

That's nuts.

Car pricing is so out of control these days that, even though there are some cars that I would buy, I'd not buying anything until things correct a lot more.

So never?

Buying power is eroded man. Stuff that's expensive now I don't think will ever stop being expensive.

[Efthreeoh]

Originally Posted by Donatello.

That's nuts.

Car pricing is so out of control these days that, even though there are some cars that I would buy, I'd not buying anything until things correct a lot more.

That's the beauty of it, if we consumers stop buying, the market eventually corrects itself. We want more diversity in the auto market, not less. More regulation kills diversity.

[XutvJet]

Originally Posted by Alfisti

To spend on what? I have a sports car worth 80 grand sitting in storage right now (because winter), yeah I could invest that money and make a return so one day I can .... buy a sports car

Why not make your investments actively support your car habits That's what I do. A portion of our brokerage account dividends over the last 10 years have been used to buy our last 6 cars with cash:

2015 Outback, new, formerly my wife's car and now our daughter's
2016 M235, new
2020 4Runner, wife's car, new
2009 Cayman, used
2020 Mazda 3, son's car, used
2018 M2, used

We keep one full years gross salary in the money market account and then we skim off the top that for cars, home improvement, club sports, trips, etc. as needed. I could certainly reinvest those brokerage dividends, but we want to have some fun. Our other investment accounts reinvest.

Like others noted, people lack patience and want what they want now. Thing is, most people don't have the money and over extend themselves on cars, homes, clothes, whatever. It's sad really.

My wife and I are fortunate as hell to have what we have and what we can afford now, but it also took us 20+ years of financial patience, focus, and a bit of sacrifice to get to the point we are now.

[BlkGS]

Originally Posted by XutvJet

Why not make your investments actively support your car habits That's what I do. A portion of our brokerage account dividends over the last 10 years have been used to buy our last 6 cars with cash:

2015 Outback, new, formerly my wife's car and now our daughter's
2016 M235, new
2020 4Runner, wife's car, new
2009 Cayman, used
2020 Mazda 3, son's car, used
2018 M2, used

We keep one full years gross salary in the money market account and then we skim off the top that for cars, home improvement, club sports, trips, etc. as needed. I could certainly reinvest those brokerage dividends, but we want to have some fun. Our other investment accounts reinvest.

Like others noted, people lack patience and want what they want now. Thing is, most people don't have the money and over extend themselves on cars, homes, clothes, whatever. It's sad really.

My wife and I are fortunate as hell to have what we have and what we can afford now, but it also took us 20+ years of financial patience, focus, and a bit of sacrifice to get to the point we are now.

To have any hope of buying all of those cars cash you'd need to yield probably 20k a year in dividends. At an average return rate of 3% in a money market account, you'd need 600k CASH sitting in that account. That's simply unrealistic for all but the top 1-2% of earners. Even then, it's likely unrealistic for most of them too, lol.

[Vindicator3]

I'm old school I'm sure but if anyone were to ask me I would advise them never to borrow money to buy a depreciating asset like a car (rare investment cars aside).

My approach has always been to buy the car I can afford (favoring reliability, maintenance costs, and gas mileage first, then the fun factor) with cash, and then make car payments to myself thereafter to build up, with accrued interest, the pot of money to buy the next car. Recognizing as a part of this that the most economically sensible way to buy a car (unusual circumstances excepted) is to buy a 3-year old non-luxury car (with good reliability and good mileage) and drive it until the wheels fall off, then repeat, considering any variation from this as a luxury (that is, buying new instead of used, buying luxury instead of economy, selling before the wheels fall off, etc.) in which I can choose to indulge or not as my economic circumstances allow.

That meant I was driving a Civic or a TSX (with a growing pot of money in the bank to replace them) while others my age were driving newer or fancier cars (with no pot of money and lease or loan obligations instead), but it also meant that I was protected from economic shocks (no risk of losing my job and owing $20k on a car for example), and it also meant I spent less overall on transportation.

The advantage of this approach certainly decreased during that weird 10-15 year period when interest rates were essentially zero, but now that we're back to a normal interest rate environment the advantage is more obvious.

YMMV, of course, but that's what works for me. Buy with cash; if you can't afford to buy the car you want that way either wait until you can or buy a cheaper car; save up monthly for the next car; repeat.

And if you're just starting out and can't even buy a 10 or 15 year old Civic without a loan, then buy that 10-15 year old Civic (nothing newer, fancier, or more expensive), borrow the least amount possible to do so, and pay it off as quickly as possible, then try to make that Civic (or Corolla or whatever - but something cheap to acquire, bulletproof, and cheap to fix) last long enough to at least buy the next car with cash, even if the next car is a 5-year old Civic. Living within your means comes with much less risk and expense than living a leveraged existence, even if the leveraged life will "pay off" for some who never suffer an economic setback along the way. May we all be so fortunate.

[Alfisti]

Originally Posted by XutvJet

Why not make your investments actively support your car habits That's what I do. A portion of our brokerage account dividends over the last 10 years have been used to buy our last 6 cars with cash:

2015 Outback, new, formerly my wife's car and now our daughter's
2016 M235, new
2020 4Runner, wife's car, new
2009 Cayman, used
2020 Mazda 3, son's car, used
2018 M2, used

We keep one full years gross salary in the money market account and then we skim off the top that for cars, home improvement, club sports, trips, etc. as needed. I could certainly reinvest those brokerage dividends, but we want to have some fun. Our other investment accounts reinvest.

Like others noted, people lack patience and want what they want now. Thing is, most people don't have the money and over extend themselves on cars, homes, clothes, whatever. It's sad really.

My wife and I are fortunate as hell to have what we have and what we can afford now, but it also took us 20+ years of financial patience, focus, and a bit of sacrifice to get to the point we are now.

YOLO!

But you're right. Reality is the wife will spend whatever we make so may as well buy something for myself. Oh look at that, I just got a delivery from Fanatec .... goodie.