Should I or shouldn't I?

[SHISVX]

ummmm....isn't that completely obvious?


Kelli

[UberRoo]

Originally posted by Beav
I'm just trying to inject a little more reality into it.

Point taken. I'm not sure how exotic you can get before this equation goes outside the boundaries of reality. It'd be interesting to plot out the expenses of these different cars over time or mileage to see where they meet.


I saw a nice graph once with one line that depicted the value of a car (over time) and another line that depicted the amount owed on the car (with a standard interest rate.) Both lines started at the same point. The first line (value) dropped very rapidly at first but then leveled out slightly and declined slowly but steadily. The second line (loan balance) dropped at a relatively steep but constant rate.

After a couple of years, the two lines crossed. During the first years, the loan balance was much higher than the value, but afterwards the value of the car was higher than the loan balance. What this showed is that if you sold the car shortly after it's purchase, it would not fetch as much as you owed. During this time, you'd be taking a huge financial hit. After several years, the car would be paid for and effectively cost you nothing to own. If you sold the car during this period, it would fetch more than you owed (obviously,) but if you sold it and then bought another new car, you'd be taking that huge financial hit once again. What this means is that people who buy new cars and sell them as soon as they're paid off - well, they pay a huge price for that. People who buy used cars shortly after they're paid off get a pretty good deal because the new buyer bears that depreciation expense instead of the used buyer.

[dcarrb]

Originally posted by Chiketkd

Very good point. Drive even a car that holds value well off the lot like a BMW/Lexus and you'll still take a 3-4K hit.

-Chike

To carry it one step further, and relate the issue directly back to the SVX: Before I bought the SVX, I test-drove a late model Impreza with just a tick over 100,000 miles. The guy was asking $7500. For roughly $2500 less (purchase price plus restorative work), I have an SVX with comparable mileage, probably in equal or better overall condition than that Impreza, and in all honesty, with the latter I probably would have incurred much the same expenses to restore it to top shape. That sealed the deal for me.

dcb