Going to the other side

[Adam H.]

The POS of it all

Hey,
I just read replys and such. My Hawk is a 2002 #536 M6 with 40,400 miles to date. My fiance wanted to put her 2 cents in and said that the Slowstang is the POS that I will be driving around.

Thanks again,
Adam H.

[Joe 1320]

I've merged all the threads.... there is no need to open a new thread with every reply.

[Dave M]

I will give one more vote to what the others have said. There is really no point to buying a brand new car, even with an employee discount. I can't fathom how your payments will go down any significant amount. If you want to stay in the performance arena, there are plenty of slightly and not no slightly used TA's, Hawks, Camaros, and Mustangs out there that you could pick up at a fraction of the cost of a new one, and you wouldn't have to worry about the high depreciation of a new car. If your finances are really that tight (I know all about tight finances) forget a sports car altogether and get a used car that has a low cost of ownership. Something reliable and easy on gas. Drive it for as long as you need too, until your finances are better, then go back to what you want. Cars are not the most important thing in life, and you have to get your priorities straight.

I'm guessing you bought the Hawk for about $30k. Assuming you financed it all at a rate of about 7% for 5 years you're paying about $594/month. I don't know what you still owe on the Hawk, but let's assume you sell it or trade it in for what you owe so you're still financing the full amount of the Mustang. If you can get out the door paying $25,000 at 7% (unlikely if you're having credit problems) for 5 years you'll still be paying $495/month. These numbers, of course, aren't exactly what you're paying, but it illustrates how little you'll actually be saving. If you can't get the same or better interest rate on the Mustang, then you've erased just about all savings altogether. However, let's say you find a nice used car you like for $10,000 and finance it 4 years at 7%.... you'll be paying just $239/month... less than half what you're paying now and $250/month less than if you bought the Mustang. I'd suggest you think long and hard about your aversion to used cars.

[Joe 1320]

not to step on anyone's toes.......

but I also smell a fiance's decision in the brew. I know when I was married, the mrs was really quick to try to convince me into getting new cars. 10 years ago I was dumping loads into new cars, trading them every year or two. She almost ruined me. Go figure, she had bad credit to start with and should have told me something. Then during the divorce, my credit got questionable. I quit buying new cars and concentrated on lowering my exposure (debt).

But hey, Adam is the one who will have to live with the aftermath so if that's what he wants, let him go for it. That being said, what's wrong with a V6? Seems to me with the similar discounts you will be saving lots more money, That is if finances are indeed the issue. Since you are calling the stang a slow POS why not save the dough and be a hair slower. In reality it doesn't matter whether it is a Mustang or a Volvo. What I'm trying to allude to Adam, is if saving money on a car payment is the main issue, you shouldn't be looking at the performance upgrade. Considerable money is to be saved by going with the base model and using it as transportation and not a playtoy. If finances aren't the issue, then what you are doing is in the clear because it's a matter of want and not need. That's the bottom line. Going one step further, a new car is one of the worst financial moves one can make. There is a huge depreciation in the first 3-4 years. let someone else take the depreciation and pick up a nice 3-4 year old car with low miles. You'll be way ahead in the long run. And don't let the banks dictate what you buy. They try to steer you into a new car by dangling a lower interest loan vs. a higher one for used, making it seem like you are getting a better deal. The reason is that because of the higher purchase price, the interest rate makes them more money. Who cares if a new car loan is 6% on 30K? you can pick up a nice used 4 year old car for 8-12K with a 10% loan. Do the math on that one!

Now that those things were brought up, it's pretty evident your mind is made up so enjoy the new car and we all hope that we don't read about another financial crisis in a year or two. Best of luck to ya.

[Jay 02 TA ws6]

Hey,
I just read replys and such. My Hawk is a 2002 #536 M6 with 40,400 miles to date. My fiance wanted to put her 2 cents in and said that the Slowstang is the POS that I will be driving around.

Thanks again,
Adam H.

It'll be tough to get $22K for it... but it's not impossible.

[Jay 02 TA ws6]

If your finances are really that tight (I know all about tight finances) forget a sports car altogether and get a used car that has a low cost of ownership. Something reliable and easy on gas. Drive it for as long as you need too, until your finances are better, then go back to what you want. Cars are not the most important thing in life, and you have to get your priorities straight.

Golden. Could not be more dead-on. It really sounds like priorities need to be re-thought.

[Jay 02 TA ws6]

I wasn't going to do it... I was just going to let this die, but I just couldn't help myself.

Here's how you can avoid losing too much money when it comes to buying/selling cars:

1) Only buy used cars
2) Only buy cars in good condition, with low miles
3) Only keep them for a short period of time
4) Be ruthless in negotiations, both buying and selling
5) Only buy cars that hold their value well.
6) Only buy cars cash (if you follow the other steps, this one is less important, because the total amount of interest you pay will be minimal).

Example (numbers aren't exact, but you get the idea)...

My mom's boyfriend bought a 2000 BMW 545i last summer for about $35,000. It had 17,000 miles on it. He sold it about 6 months later. He had put 6,000 miles on it, and sold it for $34,000.

So when all was said and done, he paid $1,000 in 6 months to own the car... the equivalent of $2,000 a year, or $166 a month, and that includes depreciation expense.

On a new car that costs $35,000, if you finance it, you have a monthly payment of $590. That includes interest and principle, but does not include depreciation - anywhere from $.05 to $.25 per mile depending on what you drive. If you keep that car for 3 years and put 40K on the clock, it's worth $18,000. So, now you've lost $17,000 in depreciation alone. You probably owe about $10,000 remaining (you've paid off $25,000 and about $5,000 in interest) on your financing, so you can gain $8,000 back in your pocket from the sale. Let's do the math:

$35,000 initial cost, financed over three years


- 25,000 principle payments
- 5,000 interest payments
- 17,000 depreciation
+ 18,000 proceeds from sale

Net: $29,000 LOSS!!!!!!!!

So... in three years, you spent $29,000 on this car. That's a monthly payment of $805 PER MONTH!!!!!

Tell me again how this "makes sense".

[Joe 1320]

Well, there is something that you left out of the equation....... the fact that if there is a lein on the car, you are required to have the maximum insurance coverage. That alone is equal to another car payment each month.

[Jay 02 TA ws6]

Well, there is something that you left out of the equation....... the fact that if there is a lein on the car, you are required to have the maximum insurance coverage. That alone is equal to another car payment each month.

Yeah... but if I bought a slightly used BMW 545i, I would want to keep it fully insured anyway. But you're right... you could save even more money if you are brave enough

[Joe 1320]

I was thinking more along the lines of buying what I call a throw away car. Something with maybe a $2000 price tag. If it totally breaks or gets crunched, you simply throw it away. I've done that for years, purchasing a POS beater and having just the minimal coverage. As an example, I purchased my Honda Accord with a few blemishes for $2000. I put about $500 in parts over the year for a total investment of $2500. I drove the car for 35K miles and traded for the 94 Camaro. In reality, I could have sold the car for $3000. That means my only expense was gas and basic insurance coverage for 35K miles. Try that with newer cars.

[Steel2686]

I was thinking more along the lines of buying what I call a throw away car. Something with maybe a $2000 price tag. If it totally breaks or gets crunched, you simply throw it away. I've done that for years, purchasing a POS beater and having just the minimal coverage. As an example, I purchased my Honda Accord with a few blemishes for $2000. I put about $500 in parts over the year for a total investment of $2500. I drove the car for 35K miles and traded for the 94 Camaro. In reality, I could have sold the car for $3000. That means my only expense was gas and basic insurance coverage for 35K miles. Try that with newer cars.

My Bravada is the same thing. I paid $700 for a nicely taken care of '91 Bravada with 112K and everything working (4WD, A/C, stereo, etc...), no leather rips, and just a cap/rotor swap and new front axle. Total cost was just over $1,000 (will be slightly more as it needs new tires). Probably looking more towards $1,500 when all is said and done.

[Adam H.]

Insurance on the hawk is 90 dollars a month. It was 120 until I turned 30.

[Adam H.]

One more thing. I guess (besides the stupidity I seem to have) the only thing my ex-wife left me with is my vanity.

[Joe 1320]

One more thing. I guess (besides the stupidity I seem to have) the only thing my ex-wife left me with is my vanity.

You're one of the lucky ones. My wife didn't even leave me with my vanity or dignity. She did however leave me with over 40K in debt (not including the mortgage). It was two years before I even regained some resemblence of pride. They say: that which doesn't kill you makes you stronger. Well she put me damned close to death and I know that is the reason I'm such a tough SOB now.