Why do people buy new cars when they lose like 4000 as soon as you leave the lot?

DPobserver do you also think 100k is not rich?

100k a year is rich. Coming from my area where the average wage is 32k a year and how few make 100k a year yes 100k a year is good money. Maybe not really rich but compared to other people its crazy.

 

I am from an area where average wage is 7k a year, but that doesn't mean I think 100k is rich. Simply lot of people in my country poor.

P.S. Yeah I know people with 100k income.

 

Because the desire of owning a car is greater than the depreciation, if you are not a car lover you won't understand, its just like women with their 30 pairs of shoes, 100s different clothes, its their preferences.

And yes it also kind of shows off your "status' but not necessary unless you drive top of the line models.

 

"unless you drive top of the line models." also true, it's not right for my country where if you have new car at least C class like civic or so you already "have money" but in western world I assume it works as well but car should be at least bmw and so on cause of much higher income / less car price.

To OP you can also buy second hand clothes, eat in MD, drive bycicle, not travel, use old electronics and so on but quality of life will be worse. And you remember yourself as a "save money guy" not rich. Rich spends money and try to earn more (but not save and don't spend), when I say spend I mean spendings = investments as well.

 

One thing rich people seem to have in common is thriftyness or thats what I read on a article about millionaires.

We dont all drive bmw's over here and infact most dont.

 

Thats what I read from many who are rich. Some drive beat up vehicles.


One thing I think is its better to buy a used car and pay in cash, then to get an auto loan over 5 years and get a new car that not only depreciates a lot, but also causes you thousands in extra interest. Although more importantly to me is I don't want to get stuck with a monthly payment. I Personally would rather buy something in cash even if its used, then have to worry about a stupid monthly payment every month. If you can buy new in cash, thats even better, but most can't afford to buy a new car in cash.

 

I would rather put my money in real estate rather than car which is a depreciating asset.

 

Have you looked at the real estate market lately? I do agree though. Yes people don't seem to mind 4k in interrest and the 4k or more in loss as soon as you leave the lot. I wish they would give me $8,000 and I would go get them a GREAT used car.

 

Someone has to buy the new cars lol.

 

Rich people will buy a expensive car if they are making a good amount of money but yes they invest there money and thats how they get richer while the poorer save up money and then go blow it.

 

an old car is like a girlfriend with a shady past and pssibly Aids

 

A used car can get very expensive in the long run, because you've got to pay to keep up its maintenance, which is more if you get a new car, because of car warranties which used cars doesn't have. Insurance is slightly higher than a new car, and a new car has its benefits as nothing bad has happened to it (if anyone has done any crap to it).

 

Yes.I agree with you.You cannot compare the new with old car.

 

That is not true ....
A smart investor won't do that, if they have 10k in hand, plenty project to invest (need to monitor) and need a car, they might go for car with MAX loan ....
Cause an automobile loan interest will always lower the personal loan ..

For example :
If i in fighting mood (Young with big dream)
I have 10k saving.
1 business start for two year with income.
I will choose buy a car with loan, the 10k might be needed for some accident, investment or something unpredictable.
There is no reason i invest 10k for a car that save me 4% annually compare with personal loan that might up to 10% ......
Yes you might say when u need money, you can sell ur car but a rush sale will cause ur car more depreciation (same happen to new and used car) .....

If i in retired mood.
10k saving.
1 business with income (no plan to invest, upgrade or improve).
Then i might consider pay off the loan (or no loan) with relaxing mind ...

by the way my daily car is full pay off cause :
1. My is classic car can't get loan anymore.
2. Is my hobby.
3. My business is stable now.
(i have two identical car, 1.6 n 1.8 with extra space car for space part) and do up my car in weekend and enjoy it ....

My new car :
1. full loan, so i can deduct TAX.
2. My company pay off the loan (tax purpose again).
3. No headache on service, repair and maintenance (I love car but i don't like too much of electronic control car).

 

SonnyCool, nice explanation!
It's obvious lot of people on DP need math and basic investment lessons

 

Thanks .....
cause we from poor country have to squeeze our brain to make every cent worth ....
i still remember, 10 year ago my credit card limit is 500 usd and i squeeze all my card (more then 10 card) to get my business capital, which is not easy, interest rate is 1.5% monthly, one single mistake will drop me into bankrupt list
New car is sweet to drive when u make it with ur own hand

 

You are stupid you moron.

 

To answer the question in the thread title.
Cars serve as an investment for one purpose.Travel.
Not any financial investment.(except vintage cars and the like)

 

A new car for a guy is also about ego and bragging rights, thats why.

 

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