New car VS exotic car + decent used car = NO LOSS on something most LOSE ON

Random Ramblings
1

I have never owned a NEW CAR in my life…I understand the attraction and I also understand that some folks just NEED a new car…They don;t have the time or desire to do what I’m about to recommend…and that’s fine…This ain’t for EVERYONE.

Life is about CHOICES…You can CHOOSE to SLEEP WALK through life or you can choose to LIVE IT…

I like to LIVE IT!!!

I also like things OTHER PEOPLE DON’T have…Things that add SPICE and FLAVOR to life. Things like Dodge VIPERS…Porsche 911’s
Nice furniture, water front homes. speed boats, Vintage GUITARS, old TUBE amplifiers…Nice fishing equipment.

One of the WAYS to GET these things is to NOT make the same MISTAKES the HERD makes.

Case in point…

CAR PURCHASES…

Most people go out buy a new car, FINANCE IT, and drive a COOKIE CUTTER like the next guy at the “office.”
I enjoy driving my Viper, or my Air Cooled Porsches because you don’t SEE these cars everyday…Cripes…I make OTHER PEOPLES day just letting their KID sit in the Viper at the GAS STATION while “dad” takes a picture with his phone!!

So HOW do you do this???

Let’s look at some NUMBERS and see EXACTLY how this works…

Now before I get started let me say this takes EFFORT…you know WORK!! So if you’re LAZY…STOP right here…

Ok…You’re still reading so lets’ continue.

2 cars…(these are REAL examples of cars I own)

1st one…1995 Dodge Viper RT/10 with 32,000 miles on it…Green with tan interior 450 hp V=10 engine that runs like a TANK and has been as relaible as a TOYOTA COROLLA.

Purchased it for $21,000 from a boat service shop owner in 2008 when GAS PRICES hit $4.00 and NO ONE put their boats in the water that summer. DODGE no longer makes the VIPER and as a result, these cars are ALREADY moving up in price.

2nd car…Used 2003 Ford Explorer purchased for $6000 in 2008 when GAS prices hit $4.00/gallon and dealers would NOT TAKE SUV’s in trade…REMEMBER THOSE DAYS??..I purchased this car with 40,000 miles on it from the original owner who PANICKED when gas hit $3.90/gallon…But he was a HERDER…He FOLLOWED the COW in front of him!

So two cars owned OUT RIGHT for a grand total of $27,000…The Viper is worth $28,000 to $30,000…The Explorer maybe $8000.

So instead of buying that NEW $30,000 car and financing it so it EVENTUALLY costs $38,000…I own 2 cars that are worth MORE than I paid for them…and ones a VIPER!!!

The VIPER is covered by COLLECTOR CAR INSURANCE for $400/ YEAR (5000 mile limit per year, premium goes higher if you want more miles)

Driving that VIPER is THERAPY for me…It just makes you ENJOY the experience…It’s LOUD, it’s INSANELY FAST, and it’s the THUMBS UP parade everytime you get in that car!! People LOVE it…they ask questions, take pictures…FORGET going to a gas station in it…Everyone wants to see the engine…It’s fun if your a car guy…People that don’t like cars won’t understand…But for “car guys” it’s a blast sharing something with other people that you enjoy.

AND…you can do it for less than the cost of a NEW CAR…IF you want to expend the EFFORT!!!

It’s all about CHOICES PEOPLE…You can CHOOSE to drive a loaded up CAMRY for $30K??? Or spend some time, GROW A SET. get a USED COROLLA for $5000 and buy a VIPER, a PORSCHE, a 550 SPYDER or whatever with the other $25,000 and ENJOY THE TIME YOU HAVE HERE!!

Be smart, work hard… but PLAY HARDER!!!

2

I’m totally with you on this one Jake. While I may not be in your league, I could afford any new car CASH if I wanted (and I really mean ANY new car), but I’ve never owned one. We’ve always owned nice cars (a Mercedes, several Porsches, several BMWs, a Lexus, a Jaguar, Acura, other fun cars, as well as a few mundane, cars) but I’ve NEVER purchased a new one. I simply cannot bring myself to throw away several thousand dollars the second I drive it off the lot. I probably take it even a step further than you by purchasing light to moderately damaged cars with salvage titles, do the repairs myself, and often drive them till they drop (or sell them at a profit). I get double the satisfaction from this: 1) the satisfaction of practicing the craftsmanship necessary to create something beautiful from something ugly, 2) the satisfaction of “beating the system”. My goal is to have 50% or less of the retail cost into the car when I’m finished.

I started doing this when I was a kid and wanted nicer cars than I could afford and continue to do it because of the satisfaction. I apply the same thinking to my real estate purchases and that has worked out modestly well for me also.

I’ve seen friends and relatives routinely buy new cars with big loans when they had perfectly serviceable cars…and they wonder why they live paycheck to paycheck.

Most of the people I know think I’m a little …“eccentric”.

jmd_forest

3

JMD…

There’s an incredible amount of satisfaction that comes from REPAIRING something with your own TWO HANDS and knowledge. those damaged high end cars can be CASH COWS…ESPECIALLY if you have the talent to do the body work yourself. :beer

I have a good friend who grew up in the body shop business…His family does highend restoration work on Vintage cars…he drives a Jaguar C-type that was built as a body and frame in england and shipped to the US in the 1990’s…The guy who ordered it went bankrupt and my friend purchased the body and frame for $5000…
He used parts from a rotted out E-type Jag that had been sitting behind his shop for years to finish the car…It is LITERALLY BREATH TAKING!!!

He’s into it for about the cost of a USED Land Rover…the car STOPS TRAFFIC when he drives it…

http://www.classicdriver.com/upload/images/_uk/11833/img01.jpg

4

That Jag is simply beautiful. Mine was (IIRC, it was quite a few years ago) a '67 XKE coupe (NOT a 2+2) that was in a dozen boxes when I bought it from a discouraged hobbyist. When I finished it was nice…but not anywhere near the exotic appeal of the C Class in that picture.

I do almost all the work myself from mechanical to welding, to body repair, to painting. The only things I outsource are machine shop, serious frame straightening, and seamstress fabrication (seatcovers and headliners from scratch).

I’ve generally moved away from vintage cars (too much rust) but keep my eyes peeled for a really good deal. Today I stick to mostly late model semi-luxury cars like C class Mercedes, Lexus IS, BMW 3 series and such.

Like I mentioned in one of your other posts, I’m think I may really start looking for a 911 project if I don’t find a new RE rehab project soon.

jmd_forest

5

Fdjake,

I wanne be like you when I grow up!! :biggrin

All kidding aside, I have to agree with everything you’ve said. I’ve really only owend 1 new car in my life and that was my 94 civic that I still have. Although it’s been bullet proof,with 240k, still runs like a champ, I wish now I hadn’t spent the 12k + interest for it. Now, I can’t even STAND that thougt of financing a car and having monthly payments. I think I hate car payments more than I hate stepping in sh%&# while cutting grass, and I really hate it!! I don’t intend to ever have a new car again, even though I can go out and pick one up today.

I’ve also had my fare share of crappy used cars. One thing I can honestly say, be VERY careful buying a used car at a dealer. Many of the used cars on their lots have been beaten to death by their previous owners and in some regards the dealer them selves. Every used car I’ve ever bought from a dealer has always ended up having all kinds of issues. I had purchased a 95 Toyota 4runner, bought in 2001 that had 53k miles on it and the thing had a check engine light issue that NO one could fix. And yes, the computer was checked out and was fine. I even had a Toyota Master mechanic with many years of experience look at it, and he could not figure out what the issues was, because it kept spitting out different codes every time. And since you can’t pass inspection in my state with a check engine light on, I couldn’t get it re-registed. I finally ended up taking a loss on it. That was the last used car I ever bought at a dealer. :flush

Your best bet is to seek out private owner owned cars, make sure you have it inspected and the reason they are getting rid of it is because they need the money, or want to get rid of it to make space for another car, and not because they are anxious to get rid of the car it self. It’s usually a sign there is something wrong with it they aren’t telling you. Also, make sure they have some documentation on the repairs and maintanence they say it’s had. If they can’t prove the timing belt was changed at 80 k miles, then it didn’t happen. I usally tell the person I can’t take their word for it and that needs to come off the price I’m willing to pay.

I recently picked up a 95 Ford Escort that had 79 k on the engine. It was driven and owned by a senior couple that used it as a trail along on one of those big bus type campers. The car had been well maintained and runs like a champ. I payed 1250 for it (a bit more than I wanted to, but the only thing I could find wrong was a small leak on the oil pan, everything else was perfect) and those engines are built almost as good as Honda and Toyota engines, easy and cheap to work on and the car is 80% based off of the Mazda protege. The thing is great on gas and I use it for work, look at houses and carry stuff I need. I get laughed at by the guys I work with and I always love asking them if they mailed out their car payment on time this month and how much it’s costing them on gas every week. That’s when I start laughing. :biggrin

This is why I can’t part with my older Hondas, they are very well built, easy to work on (I can go out and get a used engine that has 45 k miles on it taken out of a Japanese imported salvage for 500 bucks and stick it in my civic) cheap to repair, and as long as the frames hold up without getting into any major collisions or rotting out, I can keep driving them. Those older Honda engines will easily last 400k if they are kept up. AND, the newer Hondas have gone down in quility in comparison to the older cars. I can see the cost cutting they have done over the last few years and people are complaining how they rattle and need to be serviced much more often than their older Hondas. It used to be these guys would engineer a better car to BEAT their competitors, now it’s all about cutting costs and building the most profit into them. Hence, Toyota’s issues these days.

6

Lots of good info here and I pretty much agree with the general consensus about used cars. My first car was an 87 Crown Victoria that my grandparents had bought new and they gave it to me. The car was ugly gun metal/battleship gray on the outside but was super nice on the inside. Huge comfortable sofa like benches and with 6 feet of steel out in front of you I was sure I’d be safe in an accident. We eventually donated that car to the needy and my dad bought (he paid so all of my summer job money could go into my Roth IRA) me a 96 honda civic that I still have to this day. Sure the outside paint has a few scuffs and is starting to get worn in a few places but the car runs like a champ and I still get over 30 miles to the gallon and can carry 4 people comfortably. I’m probably going to ride it into the ground so I can save up some money and buy one of the recommended Porsches and pocket the rest that would of been spent on a new car.

BTW your friend’s car is super sweet…he should let that cherry model for magazines.

7

Sounds like Jake is to Porsche 911SC what I am to 1996-2002 Audi A4/S4. I have found no other car on the planet that can do as much, as well as these cars with little INITIAL money out of pocket. They are not “Dated” looking, they don’t rust, they don’t sag or squeak and with a few tweaks you get up to 500HP (S4) out of a V6. On top of it all, they are the BEST winter cars ever built. One of these with snow tires WILL be better in winter than a 4x4 in most everyday driving situations. Good old QUATTRO.

My best deal was a red w/Black leather 1997 Audi A4 2.8 Quattro. A kid inherited it from his parents then drove it far from home and the timing belt broke. I paid $400ish taxed, title and license. I put a new timing belt kit on (found one in my garage) and have driven it since. It is worth about $3500 today.

Here is a picture of my old 2000 S4:

http://i510.photobucket.com/albums/s345/bradymullikin81/DSCF0988.jpg

Here’s the $400 one under the knife:

http://i510.photobucket.com/albums/s345/bradymullikin81/7e7c47c4.jpg

S4 after 15" of snow UP my steep driveway. Car is lowered substantially:

http://i510.photobucket.com/albums/s345/bradymullikin81/DSCN1164.jpg

THe problem with the S4 is it is sooooo pricy to fix if you can’t do it yourself. If you can, you still have parts that need to be bought in 4’s instead of 2’s (quattro) and 2’s instead of 1’s (BITurbo)

S4 is gone now but I dream of finding a 2002 Casablanca White S4 Avant (wagon) with sport package and 6-spd manual transmission. It is a rare bird.

8

FDJAKE. I know what you mean about used cars. I bought my 2002 suburban in 2006 for $17500. Its loaded with leather, power everything, etc. I think it was about $45K when it was new. Other than routine maintenance, it runs and looks great. I bought my Honda Accord new in 2005 and it still looks and drive like new. The only reason to get another vehicle is when your current one is no longer reliable IMO… I’m still up here in lake George on Vacation. my 7 yr. old son wanted me to pull into a chevy dealership to check out the new Camaro’s. I wandered over to a 2010 Tahoe… $57,000!!! :shocked :shocked… I said to my son, we can buy 2 of our 2002 sububans and a new Camaro for less than the cost of that Tahoe… He said, " Go ahead Dad!"… Then I had to break the news that I was just making a point… He’s still pissed at me… :biggrin… Anyway, That’s a great point about used cars… I got a lot of good insights by reading “The Millionare Next Door”. Its a good book about what the MAJORITY of millionares are like, what they buy, who they associate with, etc… It’s not the ones on TV with the cars and mansions… They have a healthy respect for money and and a general disdain for debt…

9

i found this on craigslist afta reading all these great posts. FDJake if you write it I will buy it!

http://boston.craigslist.org/nos/cto/1842227964.html

10

THAT’S what I’m talking about!!!

How do you beat that car for the money???

That car when new was OVER $40,000!!!

11

As usual, good stuff from fdjake. Makes a lot of sense FINANCIALLY. But there’s more to life than money (really, people, there is :bobble).

I’ve owned many new cars in my life and have one now as usual. I can afford to take the hit and the satisfaction I get as I’m driving my new wheels (my virgin, if you will) away from the showroom floor outweighs that little buyers remorse that I get every time I buy new.

In the end it’s whatever gives a person the most satisfaction. I like my new cars. And in about 2 hours I will go to Twin City Harley and drive away with my brand spanking new Harley Ultra Limited. I don’t care if it costs me $2000 to drive it off the parking lot.

You only go around once and you can’t take it with you. You work hard to make money and get deals. For once, take care of number one and go out and spend some of that money on yourself (or a loved one). You deserve it!

How much will my bank account matter when I’m laying in the casket?

12

I think the difference is the fact that FDJAKE was talking about buying a car for an investment instead of everyday enjoyment. Most people buy a new car/toy and finance it. Then they use it every day. In 5 yrs. they paid more than the car was worth before they drove it away because they paid interest on the loan. It’s also worth less because of depreciation. FDJAKE was talking about paying cash for a good used car for day to day use and a another for an investment for the same price as a new car. I’m of the opinion that if you buy a quality new car, it should last a minimum of 10 yrs.