where idd you get 3.99%? I would like that!

 

It's through Chase.

 

For the OP ... your asking a financial question in an enthusiasts forum. By definition, IMO, thats an oxymoron

I suggest you read this The real reason you're broke

and this Keep your old Clunker or buy a new car?

It all come down to what is important to you.

"In general" extended warranties are a bad deal. They don't make money buy paying for you warranty repairs. New car warranties are factored into the price of the car. However. ... for MINIs it might not be a bad idea if you DO keep the car.

The bottom line is ... WHAT is important to you?

If reliability is the issue, you probably bought the wrong car as clearly there is emperical evidence that other car makers are more reliable.

If you can live with the reliability but dont want to see a car shop for repairs ... thats another issue.

As others have said, buying a depreciating asset is not an investment ... its all a personal choice.

Financially, clearly, its best to drive the car until the wheels fall off but realistically, most Americans simply refuse to drive more than 100K miles even though the car may be reliable far longer. The truely wealthy (not car collectors) don't get that way buy buying a new car every 4 years.

Its up to you

Best of Luck

 

Getting a little bit back on topic, yes, I think used Mini's are somewhat overpriced and therefore trading more often than you otherwise would might make some sense.

Having said this, study after study shows the same thing: if you want to drive a car cheaply, the best thing you can do is to keep the same car for a long time - the cost of repairs will almost never rise to the level that it offsets the high depreciation of a new/newer car. And many, when trying to economically ratinoalize a new car, forget all the extra expenses you incur when you flip a car: dealer fees, taxes, license plate fees, upgrades you never get your money back out on, higher insurance, old car marketing expenses, etc. etc. etc. People tend to look at it through rose-colored glasses, see that their old car is worth $20K and the new one can be had for $24K, and assume the entire price of the upgrade is $4K, when in reality it is probably $6K or more.

So the nice resale of Mini's (which won't last - nothing like this ever does) tilts the economics to make upgrading every few years a little cheaper than it would be otherwise. But it doesn't make it cheaper than holding onto your old car. It never does.

- Mark

 

Having always regretted selling my TR-6 which was purchased new, I decided early on that my 2003 MC was going to be a keeper. In 20 years, it'll be a genuine classic and I know how it was maintained - besides, the kids have already put in their requests for it once they hit dirving age.

 

well said and your points are in the reference articles

Since dealer are now discounting 06s left on the left ... just like most other cars now, the free depeciation ride is over.

Another point is that you gotta read the fine print in extended warranty carefully. Exactly what they cover and, more importantly for MINIs, if you mod the engine ... no coverage in most extended warranties.

There used to be a vendor here that sold extended warranties and they would not even warrant a JCW car dealer installed. Another point to consider, even if your engine blows ... how much is a new MCS engine vice a new car? Your not talking a $30K engine here. Its always going to be cheaper to get a rebuilt engine than new car payments.

But ... many Americans simply want something new.

 

That's pretty ridiculous. If you can do that, then that's wonderful for you, but to expect no one to have a new car until they can pay cash is unrealistic, to put it mildly.

 

Also consider that a lot of of us have poured more than a few bucks into after-market mods in the "youification" of our babies. That money is shot as I would not expect to get a better sales price because of the mods; maybe even worse! If I go to a new car, do I start over in the modification business?

Rodan's warranty runs out on the 25th (20,000 miles) and the dealer wants to sell me another year for $850. Seems like a lot but if the brakes go out in that year . . . Then again, that money would go a long way toward new Wilwoods, wheels and tires. Decisions, decisions . . .

 

Unrealistic? It's actually quite realistic with some patience. You simply drive an older/cheaper car for the few years it takes to have enough in the bank to pay cash for the new car.

Given that a new Mini will typically have payments in the $500/month range, it's not hard to drive an older used car for $100 month depreciation/repairs and put $400/month in the bank. With some investment income, you'll have the $20K you need to pay cash for your next new car in about 4 years. Do this once in your life, and you can be car-payment free for the rest of your life.

What may be unrealistic is to expect very many people to have the common sense to do this.

- Mark

 

Spoken like a true american. I think my favorite line is when someone says they are saving up to buy a bed..., yet have a huge car payment.

 

Last car I had was a Jeep which I had for 11 years and put 108k miles on. If you do some simple math and put $500 away a month for 11 years with a return of say conservatively 6% you would have a little over $93,000 dollars. This is sooo far off topic but if some people would just realize the importance of starting young we would all be better off...

When someone says its rediculous to not have cash for a car... after looking at some simple math I say they are rediculous

 

I used to live in upstate NY and keeping a car over 100K miles was never an option b/c even though it would still run great at some point it would start to erode away. Maybe it's better now than back in the day with rustproofing and all but metal is still metal, salt is still salt, and the two together don't make for a happy combination. Living in the south was the best thing I could do for the ability to run a vehicle for an extended period of time, lol. Not to mention resale value but really I don't care as much about that. I'm more concerned about getting my "money's worth" out of a vehicle.

Though I would expect to get 150-200K or more out of a vehicle these days, assuming you keep it well maintained. I know that it's not a Toyota, Nissan, etc., and can't expect to drive it an extended period of time without putting additional $ and effort into maintenance, but is that mileage unrealistic with the MINI or indeed any BMW product?

Agro, thanks for your input on the extended warranty. I'm just out of warranty but since I'm still within 4 model years and under 50K on the clock I'll still be able to get an extended bumper to bumper exclusionary contract for a reasonable price (covers everything except maintenance items like brakes and oil), not from the dealer though. If I do that obviously I'll have to stop with bolt on, reverseable mods like what I have now, and not get a new pulley or anything like that. The other issue is that in previous cars I've owned it seemed that after the initial warranty period where you have immediate issues fixed, barring a defective part you typically wouldn't have big money type failures until around 100K or more, though I'm not so sure that's so true of the MINI. If it is true, then extending my warranty to 100K is a waste of money. But if not, then it might be worth it. It's a gamble for sure.

 

I've owned a lot of cars over 30 years of driving, most used, some new, some cheap to own, and some expensive to own. If your objective is to keep your costs down (not saying other objectives aren't valid), the best choice is to buy a relatively high mileage car that is 2-5 years old and has documentation of meticulous maintenance according to specifications. This car will have depreciated a lot and have a lot of life left in it. The high miles in a short time will mean lots of low-wear highway miles.

If you buy new, maintain it religiously and keep it until it dies. Alternatively sell it when it still has about 10% of factory warranty left--it will be worth quite a bit more than when the warranty has just expired. Also, try to sell it a few months before the next model year comes out--used car prices seem to drop more at new model release than any other time of year.

Apart from the realities of one's financial situation (the key factor in my mind), the rest of this boils down to understanding how cars are manifested in your lifestyle and what the cost trade-off is compared to other components of your lifestyle.

 

There are also third party extended warranties, that you can buy from other companies. I don't really know anything about them, but it is something to research and compare, and maybe others have input on this.

 

My Suburban (yeah, I know...) has 217K and I do all the repairs. Think that's long enough that I can have a new car?

 

brakes are a wear item. Rotors, pads, you pay.

 

You and I both! Chase hooked me up with that rate, too. And I too have a money market account earning right around the same as yours. The only difference is, I am going to pay my MINI off earlier, but only because I can then use that $300 a month to put towards other debt (wife's car and student loans). My goal is to become debt free (except for the house payment) within the next 2 to 3 years. But I totally get where you're coming from in not putting extra money towards the car with a rate lower than you're earning on your savings account.

 

I paid cash for Brandy and hadn't even thought to make payments now for my next car, probably because I can't figure out what my next car will be.

Lowb35, I find it ironic you would mention rust being a limitation in New York given I was just reading up on Irv Gordon's 2.5million mile Volvo P1800, talk about keeping a vehicle, the car still looks beautiful. http://www.worldcarfans.com/classics...th-anniversary

 

It's all about doing what YOU want to do and what YOU are comfortable with.

Personally, I told myself I would never own a MINI out of warranty for quite a few reasons. I had two of them, they both gave me more than their share of problems and I can't imagine having to pay for some of the repairs I did out of my own pocket.... even if I had savings from lack of car payment (though my warranty would have been up before the car was paid for because of how much driving I do). The repairs on my 04 would have amounted to about a 12 months worth of payments, yes, really.

Also, I commute 23 miles each way every day and I need to be able to get there and back every day without worry. I do not own a second car.... I will soon but haven't yet. My car is not only a commuter car, it's something that I enjoy a lot and drive the crap out of. Putting 12-15K a year on a car for me is impossible.

Also, I want a newer car. Cars are my biggest passion in life and I refuse to be unhappy with what I drive. It's what I chose to spend my money on and I love it. I have savings, I have retirement money, I'm an accounant.... I know how to handle money. I love cars and I chose to spend money on them that I don't spend elsewhere.

You have to pick what is right for you. Sure, it's financially smarter to hold onto a car, my mom does this and it's worked very well for her. But you have to look at your life and see what works.

 

x2

Jenn B is right.

It is financially smarter to run a car into the ground. The best financial move would be to buy a high mileage, relatively new car (hoping that it's mostly highway mileage) and drive it forever.

However, each person has their own values and it may be that they place greater importance on what they drive, eat, live in versus cash in the bank. For some people, it might be cars, for others, it might be houses. I have a friend whose father never replaces his car, but he'll spend $25,000 on tea leaves per purchase...

You get one life to live and having tons and tons of money sitting in the bank may not be the best way to maximize your happiness.



P.S. - It may also be a smarter financial move to take a loan out on a car even if you have the cash in the bank depending on market conditions and cost of capital...

 

Personal finance is much more than just the math!.....If you are talking about funding capital for a buisness that EARNS you money that is diffrent!.....How you make decisions is totally diffrent when you have sacrificed and saved all you can to pay cash....you make your decisions much more carefully....When you just sign up for the payments, even though you may have the cash to cover it.....you make that decision much diffrently....you make it emotionally and it dosent really seem like you spent 25k but when you carry stacks of cash to the dealer you register that in your mind differently

When you make decisions based on emotion it always will cost you more

 

This only holds true if 1) the car was purchased by a Company or 2) your marginal tax rate is 20% or lower...

Maybe it's because it's a Friday, but I have no idea what you're saying...

 

How this could be offensive gets to the root of why so many 20 and 30 somethings are in financial trouble these days (or are but don't realize it yet). Patience for a few years means getting yourself to the point where you can walk into a dealership and buy a car on your terms without having to bend over and take it.

All that means is having the discipline and common sense to put of what you can't really afford until you're ready.

I agree with Mark - if you can't pay cash you should wait. If you can't wait 4-5 years you're on your way to bigger problems in 20-30 years.

Never ceases to amaze me.

 

When you pay with cash it feels diffrent....You feel as though you actually spent the money.

When you sign on to payments (even IF you have the money to pay cash but leave it invested) it does not feel the same....you end up spending more because it is just not as much of a realization that you just spent 25k....you are not as carefull with purchases.

You know its like those who use credit/debit cards for their purchasees.....studies show that you spend more using a card than paying with cash....whether you pay it off every month or pay the minimum most people just spend more and more careless about what they pay for a good or service

financing capital expenditures while having the money invested earning more is mathmatically correct though it does not account for the behaviorial influences mentioned above......so while in buisness it is the most adventageous....in PERSONAL finance it rarely is......Not to mention a buisness keeps a balance sheet....most individuals do not! If you keep track of your net worth like a buisness then you SEE the cost of that car but most people dont keep a written budget let alone a tally of net worth handy so financing a car while holding on to the cash is an illusion of stabillity

 

Ahh, I see what you're saying. I guess I'm a bit different since corporate finance is all I do during the week and it helps me decide a lot of personal financial matters.