Your thoughts on Expesnvie car vs cheap car & house?

Discussion in 'Fred's House of Pancakes' started by Higgins909, Aug 4, 2020.

  1. Higgins909

    Higgins909 Member

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    This thought has recently been back in my mind. I had recently tried to work on my Prius and may have made things far worse. Someone probably sarcastically suggested I should look into a new vehicle depending on what the dealer tells me is wrong. (Going tomorrow)

    I'm currently trying to save up for a house in 2~ years. But I don't really want another beater type of car. I know people that buy nice new/newish cars but are still living with their parents or are scraping by in an apartment or something. I personally don't know anyone that owns a house and has more of a beater vehicle... I guess that are on the poorer side. I do know people with a nice house and nice car but they got it made.

    I was thinking it would be financially unwise to buy a new/newer car when you can't afford to live on your own. But would a beater and a house be that much better? ...I've kinda lost where I was trying to go with this.

    What are your thoughts on people with nicer new/newer cars but are not independent and don't live on their own, when they could have gotten more of a beater car and a house?
     
  2. Prius Maximus

    Prius Maximus Senior Member

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    New cars lose value as soon as they drive off the lot, and continue downward after that. A house, historically anyway, increases in value over time. The choice to me is clear. HOWEVER, these are new, strange times. With us Baby Boomers getting even older, housing values may actually decline due to over supply? I don't know, just rambling. But maybe something else to think about.
     
  3. John321

    John321 Active Member

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    I'll take a stab at this.
    I was in my 40's when I bought our first new car.

    We usually keep our cars 10 to 15 years. I bought two new cars in the last two years. Both were planned for. The new cars replaced a 17 year old Sienna we had bought new and the other new vehicle replaced an 12 year old Prius we had bought new.

    I would hope each of these new vehicles last in excess of 10 to 15 years. We buy new cars but hold on to them for a long time.

    If you are looking for financial advice a person could do a lot worse than listen to Dave Ramsey

    A Proven Plan for Financial Success | DaveRamsey.com

    Be forewarned he is straightforward and can even be abrasive but his advice has helped many people to become financially independent and he seems to specially like helping young people.
     
    #3 John321, Aug 4, 2020
    Last edited: Aug 4, 2020
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  4. Trollbait

    Trollbait It's a D&D thing

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    There is a spectrum of cars between cheap beater and expensive new.
     
  5. Mark57

    Mark57 Senior Member

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    A beater car can cost a lot if you have to repair it all the time. Spending a little more upfront can save a lot in the long run. It also needs to be reliable enough to get you to work and back reliably. That helps preserve your cash to get into a house. Houses can be the same way. Don't start with a castle. The term is a starter home. Once you get in, you can graduate to better homes over time. Always assume a house will cost more to operate that you expect, because it can. Insurance goes up, property taxes go up, etc.
     
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  6. Rmay635703

    Rmay635703 Senior Member

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    All my cars end up beaters eventually, as long as the beater is reliable or cheap enough to buy and drive until failure without repair don’t worry about it.

    I know a lot of folks who had a new car and the car aged with them until it’s a beater in front of their $300,000 house.

    I don’t think it’s a big deal, beaters can be much more fun to own in some respects.

    But any generic car over a particular age but not old enough or interesting enough to be a collector by most is automatically a beater, keeping up with the jones never pays and a lot of folks who are anal about everything and overpay all around usually have at least one beater despite the rest of the package.

    in my area housing prices are chaotic every 5 years or so, move up and down 80-90%, if it’s economically cheaper to rent the same house you could instead pay property taxes on their is little reason to own. That’s just the reality in many areas.
     
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  7. Leadfoot J. McCoalroller

    Leadfoot J. McCoalroller Senior Member

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    I felt good buying some better-than-beater used cars in the past. A sense of accomplishment, striking a good deal, achieving value etc.

    I felt about 3% better than that the day I bought our Prius brand new.

    I felt about 40000% better the day we bought our house.

    We made some investments in the car- dashcam, better stereo etc. The car and those upgrades will all be worthless in ~15 years.

    We also made some investments in the house- air conditioning, new electric panel etc. Those will still be worth something- probably more- in 15 years.

    So we have a house we love with a couple of beater cars parked in front. And one gorgeous entry-level Prius hatchback as our super splurge.
     
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  8. Kenny94945

    Kenny94945 Active Member

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    Post 4.
    There are many nice used cars in the $20K range.
    Maybe even in the $10K range.
    $1K cars will have repair expenses, but you can have only liability insurance cost and not collision ins.
    Then there are new car leases for $200 a month, but again add collision insurance and DMV.
    As for a house, regions of the country vary; Calif House $1M West Virginia House (stereotype) $50K.

    ".... thoughts on people with nicer new/newer cars but are not independent and...gotten more of a beater car and a house?"
    I really can't make a meaningful comment on that other than my above comments.

    I could say that a Harley Davidson and a tent can be a valid solution :)
     
  9. bisco

    bisco cookie crumbler

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    i don't know what it's like in your part of texas, but around here, it's a moot point.

    our daughter traded her 08 prius for a new suburu, net cost 15k.

    the cheapest house you can get around here, is $5-600,000. 15k ain't gonna help much.
     
  10. Rmay635703

    Rmay635703 Senior Member

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    My rent on a little duplex is only $500/month and I have a yard makes owning look silly
     
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  11. bisco

    bisco cookie crumbler

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    that's pretty sweet. our daughter pays $1,700. for her small 2 bedroom apartment. no yard. cramped parking.
     
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  12. Montgomery

    Montgomery Senior Member

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    I appreciate your thinking ahead. This will help you actually get a house. Whatever your goal is, keep it! Don't let financial set backs like getting good transportation get in the way. You sound like you just need to sit down and put together a plan. It may be good to just fix your vehicle and drive it till you get the house. Or, sell it for what you can and get a better used vehicle with small payments. Or, get a new vehicle and and buy the house in 4 years. I will say this, the right time to buy a house is when you can afford one. So, don't worry about values going up, interest rates and the like. When you can afford to buy one, you will get one.

    1. Set your plan
    2. Allow room for setbacks
    3. Let real estate agents know about your plan. They actually may find something sooner!

    And please, enjoy the journey! Don't make it a headache. Ask questions.
     
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  13. ChapmanF

    ChapmanF Senior Member

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    I took a job once where a lot of my co-workers were wealthy (how wealthy? what was I gonna do, ask? different from my social circle, ok?). My boss there had clearly grown up around money, in a yachting family, I was kind of prepared to dislike him at first but got over that quickly. Nicest human being you'd hope to meet.

    When he retired he got a lovely house close to Grand Traverse Bay and near a marina where they raced and took a few years fitting out their boat for Atlantic crossing, did that, sailed around the Mediterranean for a while.

    When I'd go up to visit them, it was ... the beautiful house, well-kept boat, old faded black Mercury Tracer parked in front (essentially a Mazda 323 but made in Mexico).

    He used his resources on the things he cared about and loved, and didn't fuss over the other stuff.

    Made sense to me.
     
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  14. ETC(SS)

    ETC(SS) The OTHER One Percenter.....

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    May not be the best plan.... ;)

    If you're going to rely on a dealership to diagnose and fix a ten year old Prius, then you probably need to be rolling newer equipment.
    It will be cheaper in the long run.

    Depending on your age and the relationship you have with Mom and Dad it might be the best OR THE WORST thing in the world for you to move into a house in a few years.
    It's really impossible to say without more info.
    If I still had a kid in pre-launch mode I would be more interested that person investing in career first, and then start worrying about things like car, house, etc....but that's ME being ME.
    Since everybody else is already taken, YOU are going to have to be YOU.

    It sounds to me like right now, career prep is going to have a much larger influence on your life's trajectory.
    Buying a house early in life is sometimes good stuff - but you have to keep in mind that THIS will involve some significant debt.
    After all.....they call them MORTgages for a good reason. The term comes from Old French, and Latin before that, and literally means something like 'death pledge.'

    Worrying about what kinda car you're driving is important but only as far as how dependable it is.
    ALL ten year old cars have maintenance issues, and this is one of those areas in life where you're going to have to spend TIME and MONEY wisely....but be careful!!
    A dealership might try to convince you that in this stage of your life that time is more important than money which is why they make it so very easy to go into debt.
    And.....you're getting your car fixed at.........(wait for it!)..........a dealership. :eek:

    ...and as much as I love to heap hate on dealerships, they're NOT the sleaziest predators out there for young adults.
    Many student loans have them beat by a country mile.

    Remember also that you're going to face some of the same decisions when you buy a house.
    THEY need maintenance and repairs too...


    Good Luck!
     
    #14 ETC(SS), Aug 5, 2020
    Last edited: Aug 5, 2020
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  15. Higgins909

    Higgins909 Member

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    Thank you all. For the time being my car is working decent again after visiting the Toyota Service Dept. (dealer?) I was trying to charge the AC because every summer (this is the 3rd summer I've had car) it's really hot to drive in. I ended up overcharging and then the compressor was acting funny. I was fearing I damaged the compressor and it was going to be $1500 for a new one plus $1000 for labor or some astronomical repair that it may just be better to get a new vehicle as the head gasket is probably a ticking time bomb as it's at 180k miles right now. Luckily it was only a $150 job to essentially recharge the AC and it's working better than before but I'm not sure if it's all that great, for now.

    I guess I was a little vague on the term beater car. This 10' Prius is my 2nd car, my first being a 04' Accord. I think both were around 165k miles when I got them. The Accord unfortunately did not last long. I was going too fast for conditions on bad Kumho tires and spun out. They were full tread tires but just old and dry rotted and squealed every turn until I put them on the back. I try to spend as little but get a vehicle that would last me at least a few years, if not more. Neither are very pretty, but It wouldn't be the end of the world for me if something happened to one of them.

    Since I've never owned a nice car, I was wanting my next vehicle to be nice. Depending on vehicle I feel like $20k is a sweet spot for a fairly new but used vehicle. There are Corrolas around $13k but it isn't quite my style. Financially wise, yes. Want it to be something I really want but will last and be a good purchase. I really want to get back into 8+ way power leather seats. I like trucks, very comfortable. If you ask me I don't think the Prius if for tall people. (6f2in) If I start calculating a rough 5 year ownership cost and I then think I could do a lot with that $5,000 saved over 5 years having a car instead of a truck. I have 0 use for a truck and to this day think if I ever actually needed one, I will put a hitch on my Prius and buy a single axle utility trailer.

    I assume a day like that would come when I actually buy a house. I guess I have goals and am trying to reach them. I'm currently 24 and still living with parents rent free and am putting as much as I can into savings. I would like to be in my own home before I get too old. I see I need to invest in a career, don't rush it, expect the unexpected, create a plan. Once again, thanks everyone!
     
  16. Salamander_King

    Salamander_King Senior Member

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    A house and a car can be both a necessity or a luxury. They are the two largest expenses for most people, but you should try to live within your means. As long as you stick to your budget, I think it's totally up to you which one you spend more. Personally, if I was living alone in a city, I would have just rent both house and car. With a family in a rural setting, that is not always possible or practical.
     
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  17. Tideland Prius

    Tideland Prius Moderator of the North
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    Summary for those who didn't read all the posts

    • 24 years old
    • Lives rent free with parents
    • Salary all goes into savings
    • Plans to buy house in 2 years
    • Deciding if next car should be "beater" or "newer, nicer lightly used car" ~$20k is the sweet spot
    • Would like a truck but have no use for it
    • Would like to have some luxury (e.g. power front seats and leather upholstery)
    • Vehicle must fit 6ft 2in frame


    1. At 24 years old, you have plenty of time to save up. I don't mean "plenty of time so spend it now" but "plenty of time to save up for downpayment which = lower interest cost"
    2. Make sure you set similar expectations for a house - i.e. don't go for the "truck" if you don't need a "truck". Don't buy more house than you need. It depends on your market so I can't be specific but generally the faster you can pay down the mortgage, the better you'll be. If that means buying a smaller, cheaper place then upgrading in the future, then by all means. I also understand it's PITA to move so some prefer the "buy once and stay forever" method. That could also work assuming your job is immobile or you plan to stay where you are + also factor in your life plan --> do you plan to get married/common law? have kids? want to stay close to parents? Job opportunity? etc
    3. Like @Trollbait said, there's a spectrum. When you say "beater" car, what you really mean is "reliable" car. You want one that will last so that you don't spend more than you need to on unexpected repairs or expensive maintenance schedules. For example - I bought my 2010 Prius brand new in 2009. A colleague bought a used 2010 Nissan Murano in 2013. They both cost about the same (but granted were bought 4 years apart). My 2010 had zero repairs even though it's a hybrid (and it was the 2010 model year with the head gasket issue). Theirs started at 40,000km when they bought the Murano used. We both roughly put 160,000km over the lifetime of our vehicles (100,00 miles). Their Murano needed repairs to the transmission, AWD system and one other mechanical bit to the tune of nearly Cdn$6,000. Also, that last one (AWD) was an expensive repair and they ditched it for a newer 2014 Murano before I traded my 2010 Prius in. One car was bought brand new and had the stigma of "expensive to buy" cause it's a hybrid and "expensive to repair" cause it's a hybrid and another is a run-of-the-mill midsize SUV. This doesn't include the gas cost difference (Cdn$800/annually for the Prius vs. $1,800/annually for the Murano).
     
  18. ETC(SS)

    ETC(SS) The OTHER One Percenter.....

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    The head gasket time bomb can be diffused.
    Plenty of vids out there and since you're still at home you probably have access to hand tools and a place to work on it.
    However (comma!!) if you're 24 and this is the third summer you're rolling a 2010 Prius then I'm not gonna throw rocks at you for wanting to throw $20 kilobucks at a newer car.

    @Trucks
    Don't buy one unless you need one....and I say this as a current truck owner...and one who has never been without a truck for more than a year.
    BUT.....I own acreage and regularly tow 1200# worth of gear.

    People who do not regularly haul stuff used to buy trucks because they were inexpensive and simple to maintain.
    Now, they're neither.
    If you look at the most expensive vehicle on most dealer lots, it's more than likely to be a truck or a body-on-frame SUV (as opposed to crossovers, which are cars dressed up to look like an SUV.)

    Good Luck!
     
    #18 ETC(SS), Aug 6, 2020
    Last edited: Aug 6, 2020
  19. Rmay635703

    Rmay635703 Senior Member

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    Agreed with the above, I have an old 2wd 1/2T truck It’s a nickel and dime scenario and has been a lifesaver I’m glad to have but definitely a very high cost per mile, much more mandatory maintenance and repairs, lots more rust issues than a car.
    All of Which are moderately affordable To address but required quite often compared to a car.

    I always joke that this is my last truck I will ever own

    Unless the op finds an ancient cherry of a truck all the new stuff is in the avoid category as the repairs are expensive
     
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