Cars. Status symbols? Containers to get you from point A to point B? Debt mongers. hmm.
The other day, a mechanic who worked on my car once, came into the bank. He asked how my car was running, I said its running great. He mentioned how much work had been done on it, and I agree it had a lot of things that needed to be replaced. And here's the kicker, he asked why I didn't get a new car, and since I work in a bank, I should be able to get a loan. Well, lets think about that for a second:
Current situation: 1984 Mercedes-Benz 300d Turbo
Purchased for $2300
Replaced:Battery $100
Replaced: Alternator $200
Replaced: Radiator $350
(changed mechanics)
Replaced: Water pump $200
Replaced: Alternator: Under warranty: $84
Oil change: $30 every six months
Insurance: $200 every six months
Total put into my used beater of a car in the year I've had her: $3694
I'm editing this post to add that according to The NADA guides on classic cars, my car is worth on the LOW end $4875. Not too bad. On the high end its $9750. So, in this instance, my net worth has gone up.
Hmm, now where would I be if I decided to buy a new car?
I'm going to guess that the new car is going to cost $12000
Assuming a 10% interest rate since my credit is crappy and a 72 month term. My monthly payment would be $222. Not too bad, I could probably afford that much a month, but in the end that brand new car in just loans is costing me $16006. And new cars are going to need to be maintained also. Oil changes, routine maintenance, not to mention that that car that is costing me $16006, is only worth about 9000 once I drive it off the lot. Ah, and insurance is going to go up on that shiny new car, I'll have to pay for full coverage. I'm estimating it will cost about $600 every six months to insure the new car.
So do I keep my used car and just keep up with the maintenance? Or do I sell it and go into debt for a new shiny car?
3 comments:
I'm with you! Keep the car! In this time of change and discomfort, having the car of your dreams is great comfort. I can think back to when I was in your boat and bought the van. It provided us with such freedom and stability. Cool Kuhl!!!
I think you're right that you should keep the car. If you can afford to buy a slightly used car someday with no debt, it may work for you. For now, keep the car.
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