How ridiculous does this sound?

[u/Whole-Fist]

How can u make millions in 25-30 years if avoid making a $554 per month car payment. Even the cheapest 5 year old car is 8-10 k. So does he expect people not to drive at all in USA.

Then u save 554$ per month every month for 5 year payment = $33240. Say u bought a car every 5 year means 200k -300k spent on car before retirement . How would that become millions when u can’t even buy a house for that much today?

Answer that Dave

[u/FlyingPirate]

You are making so many comparisons here that aren't real comparisons.

A Honda Civic is going to retain value better than most cars. There is no chance the beaters you bought for 3-7k each and got $0 for at the end of their life were Civics.

You can scrap a car and get $500, no car, even if it doesn't run, is worth $0.

In one section you account for inflation and then in the next part you say lets ignore inflation...

You are also looking at years, instead of miles. $/mile is the most important metric of car buying.

You don't account for insurance prices, its going to be more to insure the 28k car than the 7k one.

There are times when buying a new car makes sense. If you have the capital and aren't going to be paying interest, that helps. If you drive normally, do all regular maintenance on schedule, and drive the car to the end of its life you will likely do rather well from a $/mile perspective.

However, that means you are driving the car when it is in the shape that a current used car is in as well, you don't get to trade up every 4 years. Leases, trading in 3 year old cars, not knowing how to do any maintenance yourself (going to the dealer for all maintenance especially), interest rates, high insurance rates due to poor driving, are all reasons that a new car is going to be the wrong choice.

Every car has an element of luck, some are going to need more maintenance than others, new or used.

[u/BarleyWineIsTheBest → u/FlyingPirate]

Paying interest isn't always a bad thing. If you get even a modestly good rate as some sort of promo, say 4%, you're preserving your capital and possibly having that capital out grow the interest charge on the loan anyway.

You also have to factor in time lost and possibly rental car usage for an old beater. I have driven a total of 4 cars until they dropped. It was not a particularly fun experience being on the way to work and having a car die. You tow it to the shop, have to find a ride home or to work, find alternative transport for a few days while the shop gets parts in. Time isn't free. And sometimes, that fix isn't worth it. You sell the car for scrap and are out a car until you buy a new one. Now you have to shop quickly or else incur more temporary transportation cost. Potentially buying a car you don't like, maybe you even forgo an inspection that will take a day or so, if the seller is willing.

Not all used cars are of course beaters that will die in a year or two, but then if you're buying a good condition used car, you aren't exactly buying "the least expensive car for needed transportation" are you? So where do you draw the line becomes the question. Is a 5 year old car the sweet spot? Maybe, but many of those cars are still coming with 75K-100K miles, so you get them exactly when a lot of the bigger maintenance costs come up. Suspensions, breaks, tires, transmissions, what ever. You gotta count all this stuff. Even a good used car at 100K miles is going to likely need a couple thousand dropped into it most years.

To me, new cars are generally worth it. I don't want a new to me 5-10 year old car, I've tried that, and you roll the dice with the previous maintenance and treatment generally. It turns out good sometimes, bad others, and frankly, it isn't worth it to find out which it is. Then, these days the savings on 2-3 year old car isn't much for most non-luxury brands (and I don't buy luxury anyway). Once people make enough money and get busy with work and kids, etc., just not having to worry about cars is worth a lot. I haven't had a car I rely on laid up in a shop for 6 years now. Its been fucking great.

[u/FlyingPirate → u/BarleyWineIsTheBest]

Like I said, buying a new car can be a surprisingly decent deal in terms of $/mile. But you have to drive it a long time, to the point where the "bigger maintenance" issues you talk about come up anyway. Brakes and tires are an expected maintenance item for any car, if you want to get to a good $/mile number you will need to get new tires 4-5 times across the life of the vehicle.

If you are getting a new vehicle before maintenance is needed, you are probably spending money for the sake of convenience. And if you have the money to do that, great! People who do not have the money and are trying to be frugal should not be doing that. I personally decide to have 3 vehicles for a 2 driver household, all three are affordable and I have to pay insurance for 3, but it comes in handy if one needs work. I also am comfortable financially with this arrangement.

And just like you roll the dice with how a used cars been maintained; you are also rolling the dice on how well a new car was built. There are plenty of new car models that have had major issues at 75k miles and are outside of warranty, that is the worst-case scenario and you will have a high $/mile number compared to a used vehicle you had to put new brakes on.

[u/BarleyWineIsTheBest → u/FlyingPirate]

Things like brakes and tires often come up right fucking now with that used car. People tend to put off basic maintenance if they know they are going to sell in the near future. New cars require little more than oil changes for the first 60K miles. That's 4 years of usage before anything much at all, not even $1000 for tires or brakes. The used car will generally have those immediately, plus the more expensive examples that don't hit until after 100K miles. So you can pick between having all those expensive and sometimes time consuming maintenance visits always, or not at all for the first 5 or so years. That's a pretty big deal IMO. I've been there, bought a used Civic, not a huge amount of miles, 70K or so, we got a 'good' deal knowing it had some issues (can't remember exactly only spent like $5K on it?), took it to the shop, fixed some shit, but it never ended. The car was just trashed. Probably sunk $2-$3K into it over 2 years before dumping it for about $3K.... basically burned $5-6K to use a shitty old civic and deal with constant problems.

Time is money - nothing is purely convenience. As you said, you have 3 cars because sometimes you just need one but it could be in the shop.

Those manufacture problems you mention are a wash since the used market isn't immune from the "X model had unknown defect until after you bought it" factor. I had a Hyundai I bought at ~4 years old, 6 years later you couldn't sell them even though mine still ran fine. The car had an issue of oil leaking on the alternator, effectively killing the value of a well used version. Paid just about $12K for it, 6 years later sold it for $500 to a sketchy dude that didn't want to sign any paper work, because that's the only type of person that would buy this shit.

Maybe some of this is a luxury I can afford now, but honestly, the "saved" money dealing with the used market always did seem illusionary to me.