'Value' for the Enthusiast: Buying New & Holding vs. Buying Cheap & Used vs. Leasing

[XGC75]

Here's my take. Not the best example as I'm sold on this car and CAN'T BE TALKED OUT OF IT SO DON'T EVEN TRY.

I have some expensive-as-shit student loans. At first I was saving for the car, but got to thinking that it might be worthwhile to pay off the expensive student loans as quickly as possible. Now my plan is to buy a car for as little down as possible so I'm approved for a 2.5% loan on a 2010/2011 $18-$22k GTI. This way I make room in my budget for the expensive loan. It's almost like trading loan rates. The money that I would be saving for this car I put towards the GTI first, student loan second. Result: I save tens of thousands of dollars more on my loan than I pay in total (including the cost of the loan) for the GTI. Sick.

With this I have a car I'll want to drive into the ground like I'm doing to my Passat ('99 w/ 215k mi). It will last me enough time to pay off my student loans and save up for my next dream car (slightly used, no loans). Basically gives me a legit excuse to buy this car :w00t:

 

[maxtdi]

Here's my take. Not the best example as I'm sold on this car and CAN'T BE TALKED OUT OF IT SO DON'T EVEN TRY.

I have some expensive-as-shit student loans. At first I was saving for the car, but got to thinking that it might be worthwhile to pay off the expensive student loans as quickly as possible. Now my plan is to buy a car for as little down as possible so I'm approved for a 2.5% loan on a 2010/2011 $18-$22k GTI. This way I make room in my budget for the expensive loan. It's almost like trading loan rates. The money that I would be saving for this car I put towards the GTI first, student loan second. Result: I save tens of thousands of dollars more on my loan than I pay in total (including the cost of the loan) for the GTI. Sick.

With this I have a car I'll want to drive into the ground like I'm doing to my Passat ('99 w/ 215k mi). It will last me enough time to pay off my student loans and save up for my next dream car (slightly used, no loans). Basically gives me a legit excuse to buy this car :w00t:

Why don't you pay off the loan before you get more debt. Seems like the logical thing to do.

 

[XGC75]

It would take me 7 yrs minimum (no car). So you hear a lot about how graduates are faced with high debt and whatnot, if you ever hear about how much debt they have, triple that #. I'm up there.

No way I would be able to eek out so many years/miles out of a used car, and buying multiple cars in this time period isn't that frugal, either. Plus, I'm a gearhead. I need a car I want to drive, can drive fast, gets good mileage and is practical. The GTI is it.

 

[McQueen77]

You can't tell people that gambling another couple hundred bucks over 3-5 years leasing vs buying isn't worth it but then outright say getting a cpo is absolutely worth it, they are both gambles. Generally you as the consumer lose in both instances, if you always one companies would be losing money and stop doing it.

but you don't lose buying a brand new car? come on. you lose all 3 ways. if you are correct, you lose buying CPO because the price of the inspection to bring it up to 'certified standards' + the extended 'limited' warranty is rolled into the price, you lose leasing for obvious reasons and you lose buying new because of instant depreciation and instantly being upside down without a large enough down payment, hence the need for 'gap insurance' etc. i hear what you are saying but its not like you have some trick up your sleeve either thats enabled you to beat the house. you are still just a consumer too. unless guys who work for aftermarket tuning companies have some inside scoop i don't know about...

 

[troyguitar]

Why don't you pay off the loan before you get more debt. Seems like the logical thing to do.

If people waited until student loans were paid off before they bought anything else they'd be living on the street and walking to work until they're 30-40 years old. What's the point in that?

 

[maxtdi]

If people waited until student loans were paid off before they bought anything else they'd be living on the street and walking to work until they're 30-40 years old. What's the point in that?

That's another argument.

 

[nouse4aname]

Only reason I got myself a nice new car right out of school was because I had a job that paid for my tuition, so no student loans. If not, I'd definitely be driving a beater and paying those down.

 

[Chris@Revo USA]

but you don't lose buying a brand new car? come on. you lose all 3 ways. if you are correct, you lose buying CPO because the price of the inspection to bring it up to 'certified standards' + the extended 'limited' warranty is rolled into the price, you lose leasing for obvious reasons and you lose buying new because of instant depreciation and instantly being upside down without a large enough down payment, hence the need for 'gap insurance' etc. i hear what you are saying but its not like you have some trick up your sleeve either thats enabled you to beat the house. you are still just a consumer too. unless guys who work for aftermarket tuning companies have some inside scoop i don't know about...

Where did I ever say I had a trick of any kind or that one thing was better the other?

Buying used is great my only point was that buying CPO used actually makes it much less of a value especially in this market where used cars can be priced the same as a brand new one in some cases.

A friend of mine got a 2010 jetta tdi when they still had the tax incentives, and the cars were on close out. Drove it for about a year and traded it in for MORE THEN HE PAID FOR IT. He actually made money driving a brand new car for a year.. There is no guarantee in any of these scenarios and not all cars have an instant depreciation hit that put you upside down, especially right now when used cars are going for so much money.


There is a huge depreciation hit with used cars as well, not sure why people pretend it doesn't exist. Buy your used GTI for 20grand retail from a dealer and go right to another dealer see what you get for trade in, 15? 16? tops.. If you tried to sell i privately you'd get maybe 17-18. You still lost money the second you drove the used car off the lot.

Everyone gambles everyone weighs their options.. there is on one right answer and no where in my post did i say one answer was more right then another.

 

[rs999]

If people waited until student loans were paid off before they bought anything else they'd be living on the street and walking to work until they're 30-40 years old. What's the point in that?

True dat. I've been out of school for 10 years now and I'm only a quarter of the way through paying off my loans and I went to a state school for college.

 

[XGC75]

Only reason I got myself a nice new car right out of school was because I had a job that paid for my tuition, so no student loans. If not, I'd definitely be driving a beater and paying those down.

Had a job as a valet at night. $500/wk and I didn't feel like it made a dent. Will do my graduate the other way around: full time work, school at night. Should work out better

Actually, now that I look back on that job, I recall an agitated pedestrian shouting something about doing something with my life ("It's okay, you just drive cars for a living," or something to that effect). Heheh, pretty gratifying to think about that now.

 

[XGC75]

Has anyone bought through an internal VW auction before? I'm looking at a 2012 w/ convenience and sunroof with 7300 miles, starting at 22,100. MSRP is 26.7, invoice is somewhere around $24.5. That sounds like a win to me.

 

[maxtdi]

Has anyone bought through an internal VW auction before? I'm looking at a 2012 w/ convenience and sunroof with 7300 miles, starting at 22,100. MSRP is 26.7, invoice is somewhere around $24.5. That sounds like a win to me.

"starting at"?

You can get that car new for about 24-25.