Cars - a waste of money?

[jess]

Wow, first can I say what a great format. Have been absent for the past few months. Looking great!

Anyway, on topic. We all know diecast isn't a waste of money But what are your thoughts on a 1:1? Unlike diecast, I guess it's not money in the bank and you'll obviously lose some money in the long term, but if cars are your passion and you enjoy them, it's fair to assume buying/owning/driving the car you really want isn't a waste of money? I ask this as I've got a considerable amount of cash saved up (enough to buy a car outright) and rather than putting this toward a house deposit and then getting a loan for a nice car, it's perhaps more sensible buying what I want now, thyen save for a house, and not have to worry about a car loan at my age? I dunno.

What are your thoughts?

Cheers Jess

[Graeme]

Jess,

Too many variables to give you a straightforward reply ... if you are 19 years old, happily living at a home and enjoying "the single life" then maybe do as I did and spend on your dreams.

I got myself an E Type Jag at 20 yrs of age and a house later on at 26 yrs ... but this was the early eighties and asset values were pretty stable.

More recently, in 2004, I sold an investment property at what I thought was a likely high point, in order to cash up and buy some more dreams ... real estate has still pushed on up in value in Perth, so in retrospect I should have soldiered on with the house payments and taken out an equity loan for some dream spending.

What I do remember about early home ownership was the burden of payments robbing me of previous pleasure spending ... I was single and therefore not sharing the burden of home ownership with a wife/partner. I did think about taking on boarders but sharing a house with others - who aren't your best mates or family - can be the pits.

[HSV GOD]

yeah ya lose money but if it makes you happy then it's money well spent..............less road rage if you are happy in your car he he he he

do you make money when you go clubbing
do you make money when you go to the pub
do you make money when you go out to a restaurant
do you make money when you go to the football
do you make money when you go fishing
do you make money when you go to the movies
do you make money when you go to the strippers
do you make money when you go clubbing oops already said that one..............................get my drift

[jager]

Hey Jess, this is more a question for a financial adviser and will depend upon you job, income etc - but here's my 2 cents worth.

Scenario 1
Buy a new car (say $30,000). In three years time it will be worth approx half and you'll have spent another $6,000 in rego, insurance etc. So, after three years you've spent $36,000 and have a $15,000 asset.

Scenario 2
Use the $30,000 as a desposit on a $300,000 house and take out a loan for the car. Assuming the property grows 10% pa the house will be worth close to $400,000 in three years time. However, you'll have spent $59,000 on loan repayments, another $6,000 in council rates etc, perhaps $10,000 in stamp duty and another $7,000 in loan repayments for your car plus the bills for rego, insurance etc.

You've outlayed a lot more money ($82,000 !), but you now own assets worth $415,000 with a loan of $270,000 giving you net assets of $145,000. As they say, "you need money to make money".

Of course, this all depends on the property market where you live - some parts of Australia are flat and others are booming. The question is whether its worth taking the risk that the house you want will cost you $100,000 more in a few years time.

[ferrari fan]

The values of the old classic cars have gone banana's.
To be able to buy a classic might meanthat you can sell it later for a handy profit.
Plus you drive arround insomething you realy like, if this is yer cuppa tea.
You are taking a punt onpropperty prices.
Trees do not grow for ever, and nor do house values, they have to stabelise sometime,somehow.
You live only once and whatever you realy want doing is what is the outcome.

[MarkHM]

you can sleep in a car but you can't drive a house!

[BB]

We have just had renters move in next door and the guy is a courier driver. I met him the other day, nice enough chap. Anyway I walked past their house yesterday and behind their roller door which is never opened I saw a what looked like Lotus 7 "Clubman" backed in amongst all this other crap.

I suddenly turned a lighter shade of green than the car!

That is my dream. When my kids are off the scene and I have the house and driveway to my self, to be able to take something like that out for a Sunday drive up through the hills would be awesome.

[brchi17]

Jess do what makes you feel happy the most. At the end of the day it's only money & you've got plenty of time to earn some more. What's the point of all this $$$ if you can't enjoy it ???

I was faced with a similar situation some time ago & I bought a ski boat :D !!! It's been one of the best things I've ever done & not for one day do I regret it.

Yes it wasn't the best choice speaking from a monterey point of view, but I figured a boat was a lot more fun that a patch of grass. I must admit, that by getting the toy before the house I now really enjoy my house. Had I not had my boat, I think I'd still be yearning for one & now that I've got a mortgage I doubt whether I'd be in a position to get that boat :eek:

cheers. :)

[Dingo]

Yes it wasn't the best choice speaking from a monterey point of view You didn't tell us you were moving to California :D

[spoonster05]

I agree with the majority of the other posters Jess.

Only you know what will make you happier and with your situation you are probably in a better state financially than most of your age.

Rewarding yourself now with a car you have worked for and is yours (and not 'owned' by a finance company until repayments are complete) is a good idea and the money you would be saving in repayments could go into an account for a house deposit anyway..

[singer]

Jess,

I'm in agreement with most of the posts so far.

However if a car is what makes you happy, I'd invest in a car that you can work on (even if that means a Motor maintenance course at the local Tech) not one of these newer vehicles which rely on computers to regulate the running of motor & transmissions.

[chups]

you can sleep in a car but you can't drive a house!

my reasoning on buying my ute....
you can live in a ute, but cant drive a house to work. :D

still got my ute, and live at home with my parents :P

[BB]

my reasoning on buying my ute....
you can live in a ute, but cant drive a house to work. :D

still got my ute, and live at home with my parents :P

I see your also a member of Pro-utes. My sons ute is on there too. His u/n is utellemo

[Kenseth17]

The basics are keeping your car serviced and running well, not over driving it to the point you are hurting the engine, gearbox and tyres amongst other things (incl sacrificing road safety) and don't change cars too often.Try to get one you like and stick with it for as long as you can.Slowly work your way to something that you would really like or dream of.
As the saying goes 'Rome wasn't built in a day' and I think you need a car.

[Ford Boy]

Do whatever makes you happy. Personally Im at the point where Ive thrown too much money at cars for someone my age, and want to start to do something "worthwhile" with my money, such as save for a house. But again, each to their own, and good luck with whichever you choose.

[Dragferret]

In the early '80s I bought my Mustang from a car yard on Parramatta Rd Sydney. It was original and unrestored. I was young and it was my dream car. It was my sole transport for over 20 years. Last year I finally retired it so that it only comes out on weekends now. It is still unrestored, and won't be while I own it. Every time I fire it up I get just as big a kick as that day I drove it home over 20 years ago. Money well spent? Hell yes! Investment? Who cares.

[Esses]

When I was 19 & the proud owner of a bright red "Cooper-ised" Clubman Mini-van I had the chance to buy a genuine 997 Mini Cooper. The FIRST Mini Cooper. It had 31 000 miles & looked like it had just driven off the showroom floor. The guy wanted $3 000.00 & I could only raise $2 500.00, cash. He wouldn't budge, unfortunately. Had I got it, I'd still have it, garaged somewhere, driven only on weekends & worth a MOTZA.
Enjoyment AND investment.:D

[biante11688]

As jager said, this is really financial advisers territory. I suggest doing your homework either way. But it all really depends on what your income is, idea of car is & whether your still living at home or would consider living at home.

Assuming your’ve got about $30k you could do both. Use a smaller proportion of your $ to buy a classic car of you liking/ brand that you’ll be happy with & it’ll get you from A – B. there are still affordable cars out there, so long as you don’t want it yesterday. Then use the larger proportion of your $ (leaving a couple of $ in your back pocket) & buy a house (dosen’t have to be in an expensive area or even where you would live yourself, so long as rentals are in demand in that area & your $ + rent $ less expenses are what you can afford & still live) then rent it out, enjoy your car & live at home. Yeah it’ll be tight for a couple of years, then you’ll have both. Then when you want to buy another car/ shift out of home you’ll have the options all over again.:D

This advise was given to a friends two kids. 1 followed it & is doing quite well. The other……..Yeah! tomorrow……….if the sun rises tomorrow. We’ll worry about it then .:cool:

Steveo

[Rodders]

Hard choice but the thing is...we want what we love..Now...and want what we need..Later. But if you can hold off for a year or two you might be able to have both. I'd get a house first and build up your equity with extra repayments. Even in a flat market, house prices trend upwards more so than downwards, in general terms.
If you are looking at a new/second hand car, then late model cars trend downwards for many years. So..a couple of years down the track you could use the equity in your home to redraw money to buy your dream car.
As far as I'm aware, home loans are the "cheapest" source of money you can get.
Personally, I'm keen on the HSV Y series 2, so a year a go I visited my local Holden dealer, got a brochure and dream about it. In the mean time making extra repayments on my home loan. Equity in home goes up, car price comes down. Soon I'll be buying my dream car with low Km's cheaper than new and with less funds. My equity in my home will still be greater than if I bought the car new.
Good luck in what ever you decide.

[bev]

Lots of interesting opinions here, but we are mostly car fans, so there is a bias. If you have a good stockbroker, you could increase your savings, less tax, and have the house deposit as well as a modest car for now until you save some more.

New car values drop whereas property does not.

Financial advisers can be handy. but check that their nett worth is greater than yours!!!

Bev

[BILLFORD1]

you can sleep in a car but you can't drive a house! Confucius would be proud of that one Mark !! :D

[MarkHM]

I prefer the other Chinese philosopher...ConFuSing:)

[BILLFORD1]

I prefer the other Chinese philosopher...ConFuSing:) He'd be EXTRA bloody proud !!! :D

[MarkHM]

Nice to see that a sense of humour still prevails in Oz:D

[fozziebear]

my reasoning on buying my ute....
you can live in a ute, but cant drive a house to work. :D

still got my ute, and live at home with my parents :P

Houses are more important BUT cars are very important too. I always say buy what you like not what you think will increase in value. In most cases houses go up and cars go down. A lot of cars go up in value but we don't know which ones will. You will be safe with most Aussie Muscle Cars and American Muscle Cars.

As for Chups living in his ute.....mmmmmwwwwhahahahaha Would love to see that.....wouldn't last for 5 minutes.