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SUVs Honda CR-V 2001 - 2006 Honda CR-Vs
16152 messages, Last post on Nov 23, 2009 at 9:50 AM
You are in the Honda CR-V Forum. Your Hosts are steve_ & tidester
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Replying to: jimbres (Nov 06, 2009 6:10 am) Me too. All 3 cars paid for, house is on a 15 year mortage. 2nd property is paid off.  Life is good.
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Replying to: ateixeira (Nov 06, 2009 8:55 am) |
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Replying to: jimbres (Nov 06, 2009 6:10 am) You're smart to do this as long as you pay cash, don't run into some major repairs and don't mind the ride and ambiance of the car deteriorating a bit. If you have the equipment and skills to do the repairs, that's even better. Here's the problem for most though, many people don't bank the car payment (heck a lot of people cash out their 401K rather than rolling it over when they change jobs). By not saving the cash to buy a car, the less the trade is worth, the bigger their problem at replacement because this situation often forces them to both take an extended duration loan and a higher principal amount. The longer the loan, usually the higher the rate as well. If a car isn't real popular they might get a lower promotional rate, but that usually means forgoing the rebate so it doesn't end up helping them as much as they think, plus the less desirable new vehicle will likely depreciate even faster next time. A $20K loan for 5 years at 7.5% results in over $9K in additional interest cost. That puts a big cut into their net savings from depreciation avoidance. In effect, this situation means the nonsavers end up with a cash flow problem that negates their opportunity to minimize vehicle cost. People that can't save may actually end up better by just having a set lease payment every month unfortunately. As for fleet vehicles, trucks tend to last longer than cars. However, there is the issue of increasing repairs and fleet down time as well as direct cash outlay and recoupment. A lot of firms ditch a vehicle around 5 o r 6 years because they can still get some residual value back and they avoid increasing repair frequency and vehicle downtime impacts. |
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Even if people don't have the cash to buy their first new car outright, they can make it happen with their second car. Let's say they financed a car for 5 years at $300/month. After the loan is paid off, and they keep te car, but they put the same $300/month they were spending on the car note into a interest bearing account. After 5 additional years of using the same car, they would have accumulated $18,000 in principal and some interest. Even if they used that account to pay for the repairs, they would still have enough money to not to have to finance their second car. Even if the car prices run away and an average transaction is $30,000, they are already $18,000 ahead.
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Replying to: blueiedgod (Nov 10, 2009 12:32 pm)
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Replying to: ateixeira (Nov 11, 2009 8:56 am) Majority of the people have this mentality of "I see it, and I want it now!!" The troubling part is that they have been elected to offices and are now running the country in the same manner. Spend, spend, spend, think later. Unfortunately, there is no bankruptcy protection for when you run the country into the ground.
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Replying to: blueiedgod (Nov 11, 2009 9:56 am) People get bored with what they are driving. Boredom equals unhappiness. |
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Replying to: blueiedgod (Nov 11, 2009 9:56 am) As a result, these people tend to panic when their warranties are are about to run out. The prospect of a big repair bill, no matter how remote, terrifies them because they have no cash reserves. So they trade for a new car, often rolling negative equity into the next loan. I set aside money from every paycheck to cover repairs. I learned long ago that for real peace of mind, you can't beat a healthy balance in an interest-bearing account. This money is available not only for car repairs but to cover any unexpected large expense that comes along - the clothes dryer that starts eating my socks, for example. In any case, I have no plans to get rid of my '06 CR-V EX, purchased in November, 2005. Not only has it been absolutely trouble free, it also has something that I can't get in a new CR-V: a stick & 3 pedals. If Honda wants to tempt me, it'll have to bring that back.
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Replying to: jimbres (Nov 12, 2009 5:07 am) Yup, the lost their market there. Mine is a 3 pedaled one as well.  Hopefully, they will deliver on their promise of the Diesel CR-V with 6-speed manual. Although, I am not really in the market. There is absolutely nothing that interests me. And the ones that do catch my eye are not available with stick.
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Replying to: steve_ (Nov 11, 2009 10:05 am) Yeah, but they have bought a boring vehicle in the first place. Where is the fun of putting the shifter in "D" and stomping on the pedals? I agree, there is no fun. There is no way an automatic could repllicate the feeling of putting the shifter in gear and feeling the gear catch as you release the clutch, and making a very synchronous movement... Had people drove manuals, they would have been excited about their cars longer, perhaps?
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