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Originally Posted by Jason14h
Who 'needs' to trade in a car after 7 years. I guess if you had 3 kids in that time?
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Quote:
Originally Posted by Weitz
While all true. It really depends on what it is you are buying and what you can do with all that money instead of dumping it into a depreciating asset.
As a poster earlier stated "Rich people use other people's capital to finance depreciating assets."
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To some people cars are a passion/hobby. I buy a different car every couple years. If you looked in my garage at my Sienna, Mercedes CLS550 and Cooper S Convertible, you could think I way overspend on cars; however, they were all bought used and their total worth is less than what you'd pay for a new Ford Explorer. And they're eight billion times more fun (and practical in the case of the minivan).
The best thing about cars as a hobby is it costs barely anything if you time things right. Buy low, sell as high as you can, and have fun. An unexpected repair can throw a monkey wrench into that, but I've been buying and selling cars since I was 16 and I haven't been burned yet so I'm doing okay. Pre-purchase mechanical inspections are obviously important in all this.
I think you're right that if you're going to buy new, financing is the best way to go with rates as low as they are. The other poster has the cash available, though, so buying used is more financially prudent for him unless he absolutely has to have a new car. It's not even crazy to have a new car (I was considering a new GTI for my wife next year, but I'm not loving the new styling enough to be sure on that) - but I think you're kidding yourself if your rationale is you should do it that way because that's what rich people do.
Isn't almost everything a depreciating asset? I doubt many rich people are heading over to The Brick for the Don't Pay a Cent Event. They just buy their furniture. You can get to a level of wealth where $60k on a car is nothing, and if you're going to call someone rich I think they have to be at that point. Farting around with financing a car to somebody I consider rich wouldn't be worth their time/hassle. Could be wrong on that, though. My sample size of rich guys I know is pretty small.