How much spend on car? Boglehead Standard

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stoptothink
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Re: How much spend on car? Boglehead Standard

Post by stoptothink »

BernardShakey wrote: Sun May 22, 2022 8:32 pm
KlangFool wrote: Sun May 22, 2022 6:32 pm OP,

1) I save 1 year of expense every year.

2) I only buy new car.

3) I did not overspend on my house.

4) Hence, I spend whatever I can afford on a new car after I save 1 year of expense every year.

5) In my opinion, if you have to think about how much to spend on a car, you had spent too much.

KlangFool
Why do you only buy new cars? For many, many years (last couple years notwithstanding), buying a lightly used, recent model with low miles was more financially prudent. Unless you're one of the "I just have to have a brand new car" guys, I don't get it.
That's really an oversimplified generalization. If you are patient and know what you want, buying slightly used hasn't always necessarily been a better financial deal. While we aren't opposed to buying used, we bought our last 2 cars new for significantly less than we were able to find the exact same model used (anywhere).
sambb
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Re: How much spend on car? Boglehead Standard

Post by sambb »

On this forum, hard to make sense of it. Its ok to buy a tesla, but you are "keeping up with the jones" if you buy a bmw or mercedes.
I would buy any reliable car, and enjoy.
Bogle-007
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Re: How much spend on car? Boglehead Standard

Post by Bogle-007 »

I have to say that some of the responses in this thread are so bizarre that I am second-guessing the other financial advice I take from this forum 🤔😬
KlangFool
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Re: How much spend on car? Boglehead Standard

Post by KlangFool »

BernardShakey wrote: Sun May 22, 2022 8:32 pm
KlangFool wrote: Sun May 22, 2022 6:32 pm OP,

1) I save 1 year of expense every year.

2) I only buy new car.

3) I did not overspend on my house.

4) Hence, I spend whatever I can afford on a new car after I save 1 year of expense every year.

5) In my opinion, if you have to think about how much to spend on a car, you had spent too much.

KlangFool
Why do you only buy new cars? For many, many years (last couple years notwithstanding), buying a lightly used, recent model with low miles was more financially prudent. Unless you're one of the "I just have to have a brand new car" guys, I don't get it.
I save enough money to afford a brand new car. I could afford this luxury. So, why not?

Money is just a tool to live your life. It is not the goal by itself.

KlangFool
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02nz
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Re: How much spend on car? Boglehead Standard

Post by 02nz »

Beensabu wrote: Sun May 22, 2022 7:31 pm
02nz wrote: Sun May 22, 2022 7:07 pm So it's an 8- to 9-year old car. Which was covered by a comprehensive warranty for 3 years and powertrain for (probably) 5. Nothing remarkable about that - in general cars are pretty reliable these days.
No comprehensive. 3 year or 100k miles powertrain. Never used it. I'm just happy I haven't had to sink beaucoup dollars into keeping it running.

So if cars in general are pretty reliable these days, then does it really matter what make you buy? If my car has made it this long with just the one out-of-norm issue (and a Chrysler to boot, who'd have thunk!) and it's resale value has held steady at a pretty reasonably low value since that repair has been made, then perhaps we have reached a place in time where 5-8 year old cars selling private party for ~$5k are indeed a good deal. Most likely, there's one major repair that may need to be done immediately (which is why it's being sold) or a little bit down the line.

Just another way to think about car spend.
Your 2014 Chrysler most definitely came with a bumper-to-bumper warranty - 3 years / 36K miles, not just a powertrain warranty (which is for 5 years /100K miles). You can look it up yourself.
BernardShakey
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Re: How much spend on car? Boglehead Standard

Post by BernardShakey »

stoptothink wrote: Sun May 22, 2022 8:43 pm
BernardShakey wrote: Sun May 22, 2022 8:32 pm
KlangFool wrote: Sun May 22, 2022 6:32 pm OP,

1) I save 1 year of expense every year.

2) I only buy new car.

3) I did not overspend on my house.

4) Hence, I spend whatever I can afford on a new car after I save 1 year of expense every year.

5) In my opinion, if you have to think about how much to spend on a car, you had spent too much.

KlangFool
Why do you only buy new cars? For many, many years (last couple years notwithstanding), buying a lightly used, recent model with low miles was more financially prudent. Unless you're one of the "I just have to have a brand new car" guys, I don't get it.
That's really an oversimplified generalization. If you are patient and know what you want, buying slightly used hasn't always necessarily been a better financial deal. While we aren't opposed to buying used, we bought our last 2 cars new for significantly less than we were able to find the exact same model used (anywhere).
I agree, and thus my parenthetical "last couple years notwithstanding." Right now, with patience, buying new may very well be the better bet. But for a long time, it wasn't.
An important key to investing is having a well-calibrated sense of your future regret.
mhalley
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Re: How much spend on car? Boglehead Standard

Post by mhalley »

Dave Ramsey’s standard has been no more than one years household income, with no new car till net worth of one million. I also only purchased new cars once I became a high income professional. To make up for this I always kept them for 10 years. This generally worked well for me, though there was this one Monte Carlo that was a lemon that I got rid of in a couple of years.
BernardShakey
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Re: How much spend on car? Boglehead Standard

Post by BernardShakey »

KlangFool wrote: Sun May 22, 2022 8:59 pm
BernardShakey wrote: Sun May 22, 2022 8:32 pm
KlangFool wrote: Sun May 22, 2022 6:32 pm OP,

1) I save 1 year of expense every year.

2) I only buy new car.

3) I did not overspend on my house.

4) Hence, I spend whatever I can afford on a new car after I save 1 year of expense every year.

5) In my opinion, if you have to think about how much to spend on a car, you had spent too much.

KlangFool
Why do you only buy new cars? For many, many years (last couple years notwithstanding), buying a lightly used, recent model with low miles was more financially prudent. Unless you're one of the "I just have to have a brand new car" guys, I don't get it.
I save enough money to afford a brand new car. I could afford this luxury. So, why not?

Money is just a tool to live your life. It is not the goal by itself.

KlangFool
Sure, ok. I think I've heard you use these words before -- you do what you do, I do what I do, to each its own. Peace.
An important key to investing is having a well-calibrated sense of your future regret.
CletusCaddy
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Re: How much spend on car? Boglehead Standard

Post by CletusCaddy »

BernardShakey wrote: Mon May 23, 2022 12:00 am
KlangFool wrote: Sun May 22, 2022 8:59 pm
BernardShakey wrote: Sun May 22, 2022 8:32 pm
KlangFool wrote: Sun May 22, 2022 6:32 pm OP,

1) I save 1 year of expense every year.

2) I only buy new car.

3) I did not overspend on my house.

4) Hence, I spend whatever I can afford on a new car after I save 1 year of expense every year.

5) In my opinion, if you have to think about how much to spend on a car, you had spent too much.

KlangFool
Why do you only buy new cars? For many, many years (last couple years notwithstanding), buying a lightly used, recent model with low miles was more financially prudent. Unless you're one of the "I just have to have a brand new car" guys, I don't get it.
I save enough money to afford a brand new car. I could afford this luxury. So, why not?

Money is just a tool to live your life. It is not the goal by itself.

KlangFool
Sure, ok. I think I've heard you use these words before -- you do what you do, I do what I do, to each its own. Peace.
I don’t buy used cars for the same reason that I don’t buy used mattresses.
Wannaretireearly
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Re: How much spend on car? Boglehead Standard

Post by Wannaretireearly »

Trying to find an appropriate anchor point:
I’ll go with 0.5X. Half of my annual expenses max, incl taxes etc.

What is that to you? Does that make sense? Why not?
“At some point you are trading time you will never get back for money you will never spend.“ | “How do you want to spend the best remaining year of your life?“
stoptothink
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Re: How much spend on car? Boglehead Standard

Post by stoptothink »

BernardShakey wrote: Sun May 22, 2022 11:53 pm
stoptothink wrote: Sun May 22, 2022 8:43 pm
BernardShakey wrote: Sun May 22, 2022 8:32 pm
KlangFool wrote: Sun May 22, 2022 6:32 pm OP,

1) I save 1 year of expense every year.

2) I only buy new car.

3) I did not overspend on my house.

4) Hence, I spend whatever I can afford on a new car after I save 1 year of expense every year.

5) In my opinion, if you have to think about how much to spend on a car, you had spent too much.

KlangFool
Why do you only buy new cars? For many, many years (last couple years notwithstanding), buying a lightly used, recent model with low miles was more financially prudent. Unless you're one of the "I just have to have a brand new car" guys, I don't get it.
That's really an oversimplified generalization. If you are patient and know what you want, buying slightly used hasn't always necessarily been a better financial deal. While we aren't opposed to buying used, we bought our last 2 cars new for significantly less than we were able to find the exact same model used (anywhere).
I agree, and thus my parenthetical "last couple years notwithstanding." Right now, with patience, buying new may very well be the better bet. But for a long time, it wasn't.
The "last couple of years" has now been nearly a decade.
bltn
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Re: How much spend on car? Boglehead Standard

Post by bltn »

BernardShakey wrote: Mon May 23, 2022 12:00 am
KlangFool wrote: Sun May 22, 2022 8:59 pm
BernardShakey wrote: Sun May 22, 2022 8:32 pm
KlangFool wrote: Sun May 22, 2022 6:32 pm OP,

1) I save 1 year of expense every year.

2) I only buy new car.

3) I did not overspend on my house.

4) Hence, I spend whatever I can afford on a new car after I save 1 year of expense every year.

5) In my opinion, if you have to think about how much to spend on a car, you had spent too much.

KlangFool
Why do you only buy new cars? For many, many years (last couple years notwithstanding), buying a lightly used, recent model with low miles was more financially prudent. Unless you're one of the "I just have to have a brand new car" guys, I don't get it.
I save enough money to afford a brand new car. I could afford this luxury. So, why not?

Money is just a tool to live your life. It is not the goal by itself.

KlangFool
Sure, ok. I think I've heard you use these words before -- you do what you do, I do what I do, to each its own. Peace.
I wonder if certain models have new car warranties, like 4 years/50,000 miles, that don t transfer to the second owner. I believe that might be the case with BMW. Possibly others .
RJC
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Re: How much spend on car? Boglehead Standard

Post by RJC »

A nice, premium car used to be in the 40-50k range. Now? You probably have to spend around 60k for the same thing.

When I see cars pushing 80-100k, it seems crazy to me. There are better things to put your money in.
runner3081
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Re: How much spend on car? Boglehead Standard

Post by runner3081 »

KlangFool wrote: Sun May 22, 2022 6:32 pm 5) In my opinion, if you have to think about how much to spend on a car, you had spent too much.
Disagree with this. Should always be thinking about how much to spend on bigger ticket items. No matter how much or little money you have.
runner3081
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Re: How much spend on car? Boglehead Standard

Post by runner3081 »

bltn wrote: Mon May 23, 2022 8:47 am
BernardShakey wrote: Mon May 23, 2022 12:00 am
KlangFool wrote: Sun May 22, 2022 8:59 pm
BernardShakey wrote: Sun May 22, 2022 8:32 pm
KlangFool wrote: Sun May 22, 2022 6:32 pm OP,

1) I save 1 year of expense every year.

2) I only buy new car.

3) I did not overspend on my house.

4) Hence, I spend whatever I can afford on a new car after I save 1 year of expense every year.

5) In my opinion, if you have to think about how much to spend on a car, you had spent too much.

KlangFool
Why do you only buy new cars? For many, many years (last couple years notwithstanding), buying a lightly used, recent model with low miles was more financially prudent. Unless you're one of the "I just have to have a brand new car" guys, I don't get it.
I save enough money to afford a brand new car. I could afford this luxury. So, why not?

Money is just a tool to live your life. It is not the goal by itself.

KlangFool
Sure, ok. I think I've heard you use these words before -- you do what you do, I do what I do, to each its own. Peace.
I wonder if certain models have new car warranties, like 4 years/50,000 miles, that don t transfer to the second owner. I believe that might be the case with BMW. Possibly others .
Nearly all, if not all, bumper-to-bumper warranties are on the car, not dependent on owner. That starts changing on some of the longer term drivetrain warranties though.
KlangFool
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Re: How much spend on car? Boglehead Standard

Post by KlangFool »

runner3081 wrote: Mon May 23, 2022 9:43 am
KlangFool wrote: Sun May 22, 2022 6:32 pm 5) In my opinion, if you have to think about how much to spend on a car, you had spent too much.
Disagree with this. Should always be thinking about how much to spend on bigger ticket items. No matter how much or little money you have.
runner3081,

"Should always be thinking about how much to spend on bigger ticket items. "

A new car is a bigger ticket item to you. It is not to me. Hence, it lies the difference.

As per my point of view, a car should not be a bigger ticket item to the person. If it does, the person had spent too much.

KlangFool
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playtothebeat
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Re: How much spend on car? Boglehead Standard

Post by playtothebeat »

I never quite understood the “$5000 car” view unless money is exceptionally tight. Just safety etc alone makes me question that.
To each his own.
Spend what you’re comfortable with, whether talking about cars, houses, watches, vacation, etc.
hoofaman
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Re: How much spend on car? Boglehead Standard

Post by hoofaman »

For me it depends on the value I would get from the vehicle based on how often I would use it. I don't really drive much anymore as I'm 100% WFH, my car just sits in the garage 99% of the time, I drive maybe 1-2k miles per year. Why spend money on something I barely use anymore?

If I was someone who did a lot of long distance driving, took family road trips, often drove in remote regions, or was an on call medical professional I think the calculus would be much different.
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Re: How much spend on car? Boglehead Standard

Post by Jack FFR1846 »

bradinsky wrote: Sun May 22, 2022 7:42 pm

Don’t forget the Chevy Vega. Just sayin
Ah, the unsleeved aluminum cylinders that crack before 50k miles. My dad had a 71. This first happened at 35k miles and Chevy fixed it free. Then again at 51k miles and Chevy said pound sand. Not to mention the almost completely rusted away front fenders. I was driving the second time and looked in my mirror and it looked like someone put a sheet on the back window. Car was burning anti-freeze through the sides of the cylinders.
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secondopinion
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Re: How much spend on car? Boglehead Standard

Post by secondopinion »

Buy a car according to one’s budget, pay little fees for the purchase, do not buy too much or too little of a car, save for it often, and so on.

Like the investment portfolio, use the same algorithm for the car.
Passive investing: not about making big bucks but making profits. Active investing: not about beating the market but meeting goals. Speculation: not about timing the market but taking profitable risks.
Mike Scott
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Re: How much spend on car? Boglehead Standard

Post by Mike Scott »

What is your transportation budget? You need something that fits within that budget. Some people really enjoy cars so they probably increase their transportation budget to account for that. Some people have more or less money so % rules run into some odd cases at the ends of the spectrum.
BogleMelon
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Re: How much spend on car? Boglehead Standard

Post by BogleMelon »

Vanguard User wrote: Sun May 22, 2022 5:31 pm About $15k?

Sweet spot is certified used about 4 years old and under 50k mileage.

I have a Ford Fusion at 38k only now. It’s a 2016. It’s worth more than I paid for.

I believe buying a Honda/Toyota for reliability is a myth.
And so is buying a "certified" car
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mmmodem
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Re: How much spend on car? Boglehead Standard

Post by mmmodem »

If you can pay cash for the vehicle, you can afford it. That's my standard. It doesn't mean you have to pay cash. You can finance with low or no interest loans if you prefer.

This meant when I was younger, I could only afford a few hundred dollars. Any vehicle I purchased then was more than I could afford. So I purchased the lowest cost vehicle that did the job. The question wasn't how much I can spend. It was how little I can spend?

Now that I can afford cash. The standard is the same. I can buy the Plaid Model S but I may be just as happy with the base Tesla Model S.
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dm200
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Re: How much spend on car? Boglehead Standard

Post by dm200 »

Now in retirement, my wife and I choose to still have two cars. We only drive about 3,000 miles per year on each of our two vehicles.

We buy and keep driving older used cars. Our current cars are a 2003 Toyota Corolla (purchased 2 years ago) and a 2008 Toyota Camry (purchased 1 year ago)

We hope that these two cars will last us for many years.
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Beensabu
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Re: How much spend on car? Boglehead Standard

Post by Beensabu »

02nz wrote: Sun May 22, 2022 10:37 pm Your 2014 Chrysler most definitely came with a bumper-to-bumper warranty - 3 years / 36K miles, not just a powertrain warranty (which is for 5 years /100K miles). You can look it up yourself.
You're right about the 5 years - I guess it didn't matter to me to remember correctly once it passed, whoops. However, only the powertrain warranty is transferrable to a new owner, not the original basic bumper-to-bumper. Something to keep in mind with buying a used newish car - what warranties are transferrable, and do any of them change (up to fewer miles / years) upon transfer.
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H-Town
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Re: How much spend on car? Boglehead Standard

Post by H-Town »

JMS3272 wrote: Sun May 22, 2022 3:31 pm Obviously, every person's situation is unique, but I'm wondering if there is a boglehead philosophy on how much to spend when buying a car? I'm not asking about cash vs. financing, but just how much total would be recommended assuming your financial situation is pretty much in order. I don't want to buy an old car that is going to have repair issues, but I don't want to spend more than I need to. I've always looked to 3-year-old cars w/ less than 45K miles, but I'm not stuck on that and there's a huge price range even if I did stick w/ that. Thank you!!
I have never bought a new car before. Now that we are in the situation that we can "burn some that dough", I'll consider buying a new car next time.
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MrBobcat
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Re: How much spend on car? Boglehead Standard

Post by MrBobcat »

My general rule is whatever won't make me cringe too much when I write the check for a car (new or used). I'm up to $31,463. When I was younger and raising kids there were 2 times I needed something a bit more reliable than cash available and I had to finance those, they were both used, one cost $7,700 and the other $13,000.
02nz
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Re: How much spend on car? Boglehead Standard

Post by 02nz »

Beensabu wrote: Mon May 23, 2022 12:08 pm
02nz wrote: Sun May 22, 2022 10:37 pm Your 2014 Chrysler most definitely came with a bumper-to-bumper warranty - 3 years / 36K miles, not just a powertrain warranty (which is for 5 years /100K miles). You can look it up yourself.
You're right about the 5 years - I guess it didn't matter to me to remember correctly once it passed, whoops. However, only the powertrain warranty is transferrable to a new owner, not the original basic bumper-to-bumper. Something to keep in mind with buying a used newish car - what warranties are transferrable, and do any of them change (up to fewer miles / years) upon transfer.
I'm not aware of any manufacturer (in the US market) where the basic warranty is not transferable. There are some nuances, e.g., Hyundai's 10 year/100K mile powertrain warranty is limited to the original purchaser, dropping to 5 year/60K if the vehicle is sold. But that doesn't affect the original basic (limited) warranty) at all.
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Re: How much spend on car? Boglehead Standard

Post by We're wolves »

KlangFool wrote: Mon May 23, 2022 9:54 am
runner3081 wrote: Mon May 23, 2022 9:43 am
KlangFool wrote: Sun May 22, 2022 6:32 pm 5) In my opinion, if you have to think about how much to spend on a car, you had spent too much.
Disagree with this. Should always be thinking about how much to spend on bigger ticket items. No matter how much or little money you have.
runner3081,

"Should always be thinking about how much to spend on bigger ticket items. "

A new car is a bigger ticket item to you. It is not to me. Hence, it lies the difference.

As per my point of view, a car should not be a bigger ticket item to the person. If it does, the person had spent too much.

KlangFool
I believe runner wasn't using "bigger ticket item" to mean large compared to your net worth, but instead to mean large compared to other things you normally buy (gallon of milk, pair of shoes, etc). So unless you are regularly buying other things that cost $30-50k, then, unless you are truly ultra high net worth, new cars are indeed bigger ticket items who's cost you should consider a little more closely than you would a $12 book for example.
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Beensabu
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Re: How much spend on car? Boglehead Standard

Post by Beensabu »

02nz wrote: Mon May 23, 2022 12:36 pm
Beensabu wrote: Mon May 23, 2022 12:08 pm
02nz wrote: Sun May 22, 2022 10:37 pm Your 2014 Chrysler most definitely came with a bumper-to-bumper warranty - 3 years / 36K miles, not just a powertrain warranty (which is for 5 years /100K miles). You can look it up yourself.
You're right about the 5 years - I guess it didn't matter to me to remember correctly once it passed, whoops. However, only the powertrain warranty is transferrable to a new owner, not the original basic bumper-to-bumper. Something to keep in mind with buying a used newish car - what warranties are transferrable, and do any of them change (up to fewer miles / years) upon transfer.
I'm not aware of any manufacturer (in the US market) where the basic warranty is not transferable. There are some nuances, e.g., Hyundai's 10 year/100K mile powertrain warranty is limited to the original purchaser, dropping to 5 year/60K if the vehicle is sold. But that doesn't affect the original basic (limited) warranty) at all.
I was about go "well dang, my $800!" but then I remembered the car had more than 36K miles on it when I bought it. I'm just spewing misinformation, aren't I? Thanks for fixing it!
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Broken Man 1999
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Re: How much spend on car? Boglehead Standard

Post by Broken Man 1999 »

There certainly are those BHs on the forum who might believe there is a BH Standard for automobiles. I find the idea ludicrous!

-BHs buy/lease.
-BHs buy/lease at all price levels.
-BHs buy new/used.
-BHs pay cash/finance.
-BHs keep 3/20+ years.
-BHs buy/lease ICE/Electrics/Hybrids.
-BHs buy/lease sub-compacts/compacts/sedans/SUVS/pickups/vans/mini-vans/big hulking trucks

Just for grins I googled the average age of vehicles on the road today. Seems to be at an all-time high of 12.2 years, per link below. No idea how accurate the figure might be.

https://finance.yahoo.com/news/average- ... 00582.html

FWIW, our vehicle is a full-size van, 2008 Ford E150 bought new in August 2009 for around $40,000 cash (including aftermarket stuff). It is a wheelchair specialty vehicle that I added a three-person bench seat with seatbelts for hauling grandkids around, running boards, wheel well trim, a kick-a** sound system w/GPS/DVD/AM/FM,1200W AMP/back-up camera/subwoofer w/4 extra speakers/sound deadening in doors/window tint/side decals. Mileage when I last replaced tires on 02/24/22 was 106,148. My van is a little older than average vehicle on road. Possible replacement priced out recently: $75,000 - sale price/trade-in of existing vehicle.

Hopefully I can squeeze a couple of years more use out of it.

I submit my vehicle is just as much a BH standard as whatever any other person drives, if such a standard actually existed. But it doesn't.

Broken Man 1999
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Re: How much spend on car? Boglehead Standard

Post by AerialWombat »

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Last edited by AerialWombat on Fri May 27, 2022 11:00 pm, edited 1 time in total.
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Re: How much spend on car? Boglehead Standard

Post by KlangFool »

We're wolves wrote: Mon May 23, 2022 12:40 pm
I believe runner wasn't using "bigger ticket item" to mean large compared to your net worth, but instead to mean large compared to other things you normally buy (gallon of milk, pair of shoes, etc). So unless you are regularly buying other things that cost $30-50k, then, unless you are truly ultra high net worth, new cars are indeed bigger ticket items who's cost you should consider a little more closely than you would a $12 book for example.
We're wolves,

To each its own. Your opinion and your point of view.

When I need to buy a new car, I buy a new car. I consider what I want in that new car. Price does not come into consideration at all. Maybe it does for you.

" new cars are indeed bigger ticket items who's cost you should consider a little more closely than you would a $12 book for example."

My question to you is this. Why should this be true? If the big ticket spending does not affect my annual saving, why should this matters? I can pay this with cash and fit the spending within my annual expense.

I save enough. Then, I can spend the rest.

KlangFool
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carminered2019
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Re: How much spend on car? Boglehead Standard

Post by carminered2019 »

I buy new expensive car whenever my portfolio hits ATH. My last purchase was 185K and I am on the waiting list for another new car with the money already set a side since last December. Let's the markets feed my hobbies.
:sharebeer
mancich
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Joined: Fri Sep 05, 2014 2:05 pm

Re: How much spend on car? Boglehead Standard

Post by mancich »

Bought a new (at the time) 2019 Accord, base model in August 2019. $24,000. It is white, efficient, and thrifty... just like me.
Eno
Posts: 9
Joined: Thu Sep 25, 2008 11:06 am

Re: How much spend on car? Boglehead Standard

Post by Eno »

I think the current market is the absolute worst time to buy any vehicle but it's a great seller's market. I know this won't answer your question but it depends on the vehicle. My last vehicle purchase was in May of 2020 for a 2016 Toyota Avalon XLE 66K miles on it for $17K. Prior to that was in Feb 2018 on a 2001 almost mint condition Lincoln Town Car 69K miles on it for $2,200. Kids asked me why the storage compartments on the door armrests were so small... 2 weeks ago CarFax offered $3750 for the Town Car that now has 85K miles on it. That's how crazy this market is.

I usually pick a few vehicle models I would be interested in buy then do my research here:
https://www.carcomplaints.com/ Lists issues on car models and years some cars get "Avoid like the Plague", "Clunker", "Pretty Good", "Awesome".
https://www.iihs.org/ Lists safety ratings.
https://joinyaa.com/ They discuss the various processes involved at dealerships and what to watch out for.
https://www.youtube.com/c/TheCarCareNut/featured Toyota/Lexus mechanic giving honest opinions about Toyotas/Lexus models and issues to look for. He seems honest and knowledgeable.

I have never bought a car when I had to buy a car but I keep a watch on what's for sale in my area. If I see what I think is a good deal I'll jump on it but not needing a car allows me to walk away unworried if I don't get the deal that I want.

One last thing to keep in mind when buying an older formerly expensive luxury car is that the repairs will cost you like it would as an expensive luxury car. Cars models that are plentiful have parts more available and cheaper repairs.
We're wolves
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Re: How much spend on car? Boglehead Standard

Post by We're wolves »

KlangFool wrote: Mon May 23, 2022 1:16 pm

When I need to buy a new car, I buy a new car. I consider what I want in that new car. Price does not come into consideration at all. Maybe it does for you.

" new cars are indeed bigger ticket items who's cost you should consider a little more closely than you would a $12 book for example."

My question to you is this. Why should this be true? If the big ticket spending does not affect my annual saving, why should this matters? I can pay this with cash and fit the spending within my annual expense.

I save enough. Then, I can spend the rest.

KlangFool
Price DOES come into consideration though! Even for you as you explain above. Although unstated, you are clearly making an initial assessment whether the cost of the car will affect your annual savings. If it does, then it is too expensive.

It seems for you, that this initial price consideration is the only step in the process. For others, they will consider additional effects that the car price will have on their finances, most notably how will this purchase affect my ability to purchase other things I want while still maintaining my desired annual savings? In either case, consideration of price is taking place.
H-Town
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Re: How much spend on car? Boglehead Standard

Post by H-Town »

AerialWombat wrote: Mon May 23, 2022 1:15 pm Interesting discussion so far. Prompts me to ask: What's the Boglehead standard for number of cars in the household?

I'm thinking about buying a backup car. Nothing is wrong with my existing car. I'm just thinking it would be a good idea to have an old clunker as a backup, in case something does happen to the main car.
We have 2 cars in the household. No way that we would get a backup car. To us, car is a money pit (depreciation, insurance, taxes & registration, etc.). If we could have practically gone to 1 car, we would have.
Time is the ultimate currency.
H-Town
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Re: How much spend on car? Boglehead Standard

Post by H-Town »

sambb wrote: Sun May 22, 2022 8:59 pm On this forum, hard to make sense of it. Its ok to buy a tesla, but you are "keeping up with the jones" if you buy a bmw or mercedes.
I would buy any reliable car, and enjoy.
lol I never understand the love affair with tesla from some of the members on this forum.
Time is the ultimate currency.
ronno2018
Posts: 567
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Re: How much spend on car? Boglehead Standard

Post by ronno2018 »

[/quote]

Oh, I didn't forget the Subaru. It's a bipolar supporter brand here. Those who hate them will tell you about the head gasket failures, oil consumption, steering pump failures, c clip transmission failures, timing chain guide failures, plastic impeller failures, plastic end cap radiator failures, head cracking, oil cooler failures, oil line failures, gas tanks outside the frame rails and behind the rear axle, unhardened cams, brake hard lines rusting and popping!

If you haven't figure it out, I've combined failures of Subaru EJ and FA, Acura NSX, Range Rover, BMW, Lotus Elise/Exige/Evora, Jeep 4.0L and BMW 5 series of the 80's, air cooled Porsche 911, chevy trucks, ford pinto, 70's Chevy small block trucks, GM large trucks.
[/quote]

This is why my next car will be an electric cargo bike. :sharebeer https://twitter.com/fietsprofessor/stat ... AZOVcGzDzw
Kaizen Soze
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Re: How much spend on car? Boglehead Standard

Post by Kaizen Soze »

stoptothink wrote: Sun May 22, 2022 8:43 pm
BernardShakey wrote: Sun May 22, 2022 8:32 pm
KlangFool wrote: Sun May 22, 2022 6:32 pm OP,

1) I save 1 year of expense every year.

2) I only buy new car.

3) I did not overspend on my house.

4) Hence, I spend whatever I can afford on a new car after I save 1 year of expense every year.

5) In my opinion, if you have to think about how much to spend on a car, you had spent too much.

KlangFool
Why do you only buy new cars? For many, many years (last couple years notwithstanding), buying a lightly used, recent model with low miles was more financially prudent. Unless you're one of the "I just have to have a brand new car" guys, I don't get it.
That's really an oversimplified generalization. If you are patient and know what you want, buying slightly used hasn't always necessarily been a better financial deal. While we aren't opposed to buying used, we bought our last 2 cars new for significantly less than we were able to find the exact same model used (anywhere).
I bought my first new car 2 years ago. We looked at lightly used HRV's and ended up buying new for less than the used price we were looking at.

If a new car is slighter more expensive than lightly used, I'd rather be the first owner than buy a car that someone didn't want after a short period of ownership. On the other hand, I bought my luxury car at 6yrs. old with 26k miles, 46% off MSRP price and still looks new.
mega317
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Re: How much spend on car? Boglehead Standard

Post by mega317 »

AerialWombat wrote: Mon May 23, 2022 1:15 pm Interesting discussion so far. Prompts me to ask: What's the Boglehead standard for number of cars in the household?

I'm thinking about buying a backup car. Nothing is wrong with my existing car. I'm just thinking it would be a good idea to have an old clunker as a backup, in case something does happen to the main car.
We have one car per driver (his and her). I feel we have enough backup options that owning another car is not necessary. Uber, rental, borrow each other's, neighbors, grandma I think has a car we could use for a while.
When the oldest starts driving I will be thrilled to buy a 3rd car and stop driving him around everywhere. Whatever the cost will be worth it for my time. Just waiting in those school pickup lines can be painful.
YeahBuddy
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Re: How much spend on car? Boglehead Standard

Post by YeahBuddy »

I buy new unless able to save 30%+ on a 3-4 year old vehicle. Our last 2 vehicles we purchased new and they have barely depreciated at all. My rule of thumb is buy the most reliable, cheapest, high quality brand. For me, that's a Toyota around $25k - $35k.
Light weight baby!
Vanguard User
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Re: How much spend on car? Boglehead Standard

Post by Vanguard User »

BogleMelon wrote: Mon May 23, 2022 10:27 am
Vanguard User wrote: Sun May 22, 2022 5:31 pm About $15k?

Sweet spot is certified used about 4 years old and under 50k mileage.

I have a Ford Fusion at 38k only now. It’s a 2016. It’s worth more than I paid for.

I believe buying a Honda/Toyota for reliability is a myth.
And so is buying a "certified" car
https://www.youtube.com/watch?v=hOH8jXTwELg
Certified means it’s taken care of with maintenance.
stoptothink
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Re: How much spend on car? Boglehead Standard

Post by stoptothink »

H-Town wrote: Mon May 23, 2022 1:43 pm
AerialWombat wrote: Mon May 23, 2022 1:15 pm Interesting discussion so far. Prompts me to ask: What's the Boglehead standard for number of cars in the household?

I'm thinking about buying a backup car. Nothing is wrong with my existing car. I'm just thinking it would be a good idea to have an old clunker as a backup, in case something does happen to the main car.
We have 2 cars in the household. No way that we would get a backup car. To us, car is a money pit (depreciation, insurance, taxes & registration, etc.). If we could have practically gone to 1 car, we would have.
We had one car (crazy busy family of 4, both of us work) for 6yrs and there were zero issues. Not one time did we need a 2nd car. We bought a 2nd car ~5 weeks ago...guess how many times the older car (6yrs and 67k miles) has been used since? I tried to get the wife to allow me to sell the older car, but was unsuccessful. Like most questions posed on this board: it depends - there are certainly families that absolutely need 2 (or more) cars.
Last edited by stoptothink on Mon May 23, 2022 3:11 pm, edited 1 time in total.
MattF
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Re: How much spend on car? Boglehead Standard

Post by MattF »

I’m probably a little different than a lot here but I like cars and like working on cars. I don’t have a big salary (relatively to a lot here) so to stretch it and incorporate my car hobby I buy cheaper stuff that’s better at 1 thing than a newer compromise on all things. This lets me have more cars (which I like) that are probably still cheaper than one newer, nicer car.

Current vehicles are a 1998 truck for towing, 1999 suv for off roading, 2001 Miata for fun, 1998 Lexus for long highway drives, and a 2008 bmw awd wagon (just got this one, might replace the Lexus if it ends up being reliable enough) for winter driving.

All in purchase price on these was 27k combined, my insurance is comparable to friends who have 2 brand new cars which cost ~80k combined.

Maintenance on my cars is higher than something new but doing it myself keeps it reasonable and I like doing it anyway! Modern cars (1990s and newer) can be very reliable if you keep up on maintenance; average age of my fleet is ~21 years old and 180k miles, I have no concerns driving them anywhere (well, maybe the BMW but I’ve only had it for 200 miles so it’s not proven yet!)
WhiteMaxima
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Re: How much spend on car? Boglehead Standard

Post by WhiteMaxima »

Car is a transportation tool from A->B
H-Town
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Re: How much spend on car? Boglehead Standard

Post by H-Town »

stoptothink wrote: Mon May 23, 2022 3:06 pm
H-Town wrote: Mon May 23, 2022 1:43 pm
AerialWombat wrote: Mon May 23, 2022 1:15 pm Interesting discussion so far. Prompts me to ask: What's the Boglehead standard for number of cars in the household?

I'm thinking about buying a backup car. Nothing is wrong with my existing car. I'm just thinking it would be a good idea to have an old clunker as a backup, in case something does happen to the main car.
We have 2 cars in the household. No way that we would get a backup car. To us, car is a money pit (depreciation, insurance, taxes & registration, etc.). If we could have practically gone to 1 car, we would have.
We had one car (crazy busy family of 4, both of us work) for 6yrs and there were zero issues. Not one time did we need a 2nd car. We bought a 2nd car ~5 weeks ago...guess how many times the older car (6yrs and 67k miles) has been used since? I tried to get the wife to allow me to sell the older car, but was unsuccessful.
I'd imagine it would take a lot of planning and level of organization to make it work with just one car. We just could not do it without sacrificing something that each of us cares about.
Time is the ultimate currency.
stoptothink
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Re: How much spend on car? Boglehead Standard

Post by stoptothink »

H-Town wrote: Mon May 23, 2022 3:15 pm
stoptothink wrote: Mon May 23, 2022 3:06 pm
H-Town wrote: Mon May 23, 2022 1:43 pm
AerialWombat wrote: Mon May 23, 2022 1:15 pm Interesting discussion so far. Prompts me to ask: What's the Boglehead standard for number of cars in the household?

I'm thinking about buying a backup car. Nothing is wrong with my existing car. I'm just thinking it would be a good idea to have an old clunker as a backup, in case something does happen to the main car.
We have 2 cars in the household. No way that we would get a backup car. To us, car is a money pit (depreciation, insurance, taxes & registration, etc.). If we could have practically gone to 1 car, we would have.
We had one car (crazy busy family of 4, both of us work) for 6yrs and there were zero issues. Not one time did we need a 2nd car. We bought a 2nd car ~5 weeks ago...guess how many times the older car (6yrs and 67k miles) has been used since? I tried to get the wife to allow me to sell the older car, but was unsuccessful.
I'd imagine it would take a lot of planning and level of organization to make it work with just one car. We just could not do it without sacrificing something that each of us cares about.
I primarily WFH (and I can walk to my office) and wife is hybrid. Biggest thing is we pretty much do everything together.
HootingSloth
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Re: How much spend on car? Boglehead Standard

Post by HootingSloth »

Normchad wrote: Sun May 22, 2022 3:47 pm I buy new. And I spend whatever it costs to get what I want.
student wrote: Sun May 22, 2022 5:35 pm I like to buy a new econobox or one step above an econobox.
PharmerBrown wrote: Sun May 22, 2022 3:53 pm How dare you forget the Subaru.
donaldc wrote: Sun May 22, 2022 5:59 pm Highest one month gross income.
These generally describe what we have done. For our first car, we wanted a new Honda Civic, so that's what we got. It cost about one month gross income at the time. Later, after we had gotten rid of the Civic, we wanted a new Subaru Forester, so that's what we got. It cost about one month gross income at the time.

Obviously these rules of thumb don't necessarily lead to the same answer though. I doubt we would have gotten the Subaru if the price for what we wanted was much higher than one month gross income, as we've never really been car people so the "want" is never all that strong. So I guess our real rule of thumb would be more like buy a new econobox or if you want something more expensive, and it doesn't cost much more than one month gross income, buy that instead.
AerialWombat wrote: Mon May 23, 2022 1:15 pm Interesting discussion so far. Prompts me to ask: What's the Boglehead standard for number of cars in the household?

I'm thinking about buying a backup car. Nothing is wrong with my existing car. I'm just thinking it would be a good idea to have an old clunker as a backup, in case something does happen to the main car.
Re number of cars in the household, we have never had more than one, and I hope that we never will. We barely drive enough to justify the first one.
Global Market Portfolio + modest tilt towards volatility (80/20->60/40 as approach FI) + modest tilt away from exchange rate risk (80% global+20% U.S. stocks; currency-hedge bonds) + tax optimization
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