Upside Down

[LJay]

I recently bought a 18-month old truck from a private party. It was $43K new. 18 months and 23,000 miles later I got it for $25k. So it depreciated $1000 a month. I can afford new, but I prefer used. I save up and pay cash. I like to keep a vehicle for 10 - 20 years. I have other priorities than expensive new cars.

My Advice: use credit to buy appreciating assets. Use cash to buy depreciating assets. If you have to delay a purchase because you don't have the cash, then be honest with yourself if you really need it or can wait. 150,000 miles on the right modern vehicle is no big deal.

5 years from now that new Prius will be obsolete due to advances in assisted driving technology. I'm going to bet that you're not someone to keep a car forever.

The modest monthly difference in loan payments seems irrelevant. Getting out of debt earlier is worthwhile if that is possible. It seems like the bigger issue is that you now realize you bought the wrong car for you. You might have to live with your existing car for a few more years.

If the dealer makes you an offer and doesn't give you a few days to think about it, then that is just a pressure tactic to close the sale. There are car buying services now, and you can get quotes from competing dealers right over the internet. You can do most of the legwork from home. If you walk uninformed into a dealership, you just made yourself a target for paying too much for more vehicle than you need.

@ Camfer: AMEN AND AMEN!!! I can't say that I have always been in a position to implement this advice but it is certainly sound. I am 68 years old and I have had five cars. It would be four, but one was totaled while sitting at the curb. This was done by a passing drunk idiot at midnight while I was in the house watching TV.

Cars are for transportation. If you have the urge to drive something fancy, you can always rent it for a weekend and get it out of your system.