Financial Frippery

Another truism, we have been averaging 4 years for microwaves.
$88 for a magnatron
$150-175 for work
$350-400 for a new one
I remember back in the late 80s early 90s GM got into a little trouble by admitting they built their vehicles to last 60k-75k miles before major repairs were required.

 

We’ve been in our house 10 years. The dishwasher is the only kitchen appliance we haven’t replaced yet. But it is happening this week! Unreal. My mom had her washer 40 years.

 

I totally agree with @BTBAKER. There is something in the financial world called “Time Value of Money” (TVM). In short, it states that a dollar today is worth more than a dollar tomorrow. The principle is that if you take a dollar today and put it in a interest bearing account, you will make more money from that dollar. As opposed to taking that same dollar and putting it in that same interest bearing account tomorrow (a later date). That’s because you would make a day’s extra interest on your he first dollar.

So, with that said, @BTBAKER is in fact correct, when he said that his investment in his current home is worth more than the other option of buying less, and investing into a $70k vehicle that literally depreciate. Real estate investments are way more profitable, than a regular (none premium, massed produced automobile), automobile. Unfortunately, the only vehicles that are currently yielding high returns on investment (ROI), are high-end, limited production vehicles. Certainly not pickup trucks, Corollas, or any mass produced vehicles.

 

We live in a modest home.
I owned my last truck for 8 years (Tacoma).
I traded in my toy car (‘12 Mustang 5.0) and my Taco on the Tundra.
We’re DINKs.
We can afford it.

You only live once, and we don’t have kids to leave anything to. I don’t own a Porsche - I think I’m being fairly responsible with the $47k Tundra.

 

We had a Zenith swivel pedestal for a really long time. The chassis was real wood!

 

Financially speaking, in the current classic car market, you’re better off buying a $120,000 first generation corvette than a moderately used Camry.

I keep trying to convince myself to dump my Tundra for a 1st gen bronco.

 

Having the benefit of leasing and financing luxury German sedans with MSRP of 200k+, I will tell you who these guys are.

Most of them are business owners who can write off the truck as a business expense.

If I walk out of a dealership w 0 down and keys to a $80,000 brand new truck that I can write off as a business expense then why not?

You can depreciate the asset in 4-5 years about the sametime warranty runs out. You can now get a NEWER shape with all the bells and whistles.

So, why would I pay taxes on my hard earn income when I can buy a depreciating asset that i like with no money down, use it and get a new one.

Pickup trucks were initially used by farmers, not anymore. 80k pickup truck has everything that a luxury cars offers. Why not get a luxury truck and let the business pay for it.

A small percentage of this luxury truck buyers are enthusiasts but they never go away with any kinda car or truck. Then they are people like us who will buy Tundra for half the cost and keep it for a long time.

Thats called new era economy.

30-40 years ago,
Houses were cheap, interest rate were high. Now houses are expensive, interest rates are low.
Cars were cheap, interest rates were high. Now cars are expensive, interest rates are low.
Iphone was cheap when it was offered but u had to PAY for it and then use the carrier.
Call Tmobile, Verizon or any other carrier, u can pay $30-$40 a month until its paid off. As a convenience, it will be included in your bill.

Manufacturers are leaning towards monthly payment versus selling u something. Technology changes quickly and u will adopt accordingly as long as u are in the game.

By the way, u are not in the game if u are retired. U are not the target client. U have limited income and u wont work to pay for your gadget.

Wait till owning a vehicle become a thing of past. THEY dont want u to save. If you save, how the economy is gonna roll??

 

I’m no money manager, but see this cost thing as three dimension. First is depreciation. Toyota’s hold their value better than most, and why? Maintenance costs are low, which is the second cost. Third is operating, and the least important. Yes, the mileage isn’t great, that’s true, but you’re driving by choice a 7500lb vehicle. I’ve had good luck with Tundras and Toyotas overall. Yes, I go to the dealer for service, and that’s more expensive than an Indy shop, but the work is done well, and when I show up to trade, the fact it’s maintained by them has garnered me a fair trade. Cars are expensive. Driving new ones is more for sure. My 2cents.

 

Interesting perspective Harris. Thank you. Learning alot.. Good reading.

 

Maybe you can find O.J. Simpson’s Bronco....that should have some value to it

 

This bubble will also burst. Its coming.

What happened with mortgages is going to happen with car loans.

 

The write off the truck thing is only partially true. My truck is written off. That does not make it free. I still have to go out and make the money to make the payments. I am "excused from paying taxes" on the value of the truck, but it is divided over 5 years.... $50k truck....$10k of income with no tax annually. 30% tax bracket? I get a $15k discount, so the truck costs about $35k. If I need a new truck, then it is a nice thing to write it off. I don't go out "buying" write offs... You get $.30 of every dollar you spend. Don't forget... If I sell you the truck in six years for $25k, I have to pay capital gains taxes on that $25K!!!!! The tax man sometimes giveth... BUT the tax man ALWAYS taketh!!!!!!

 

So your saying you cant afford to save that much money? Me either.

 

What the world needs is more base/near base model regular cab pickups. All of you people with children should stick to station wagons or better yet, minivans.

 

OP asked about 80k truck so my post revolves around it. There is straight line depreciation for 5 years or there is accelerated depreciation for a shorter period. Income bracket changes w the income as well. You might be at 30% w 50k truck. Someone w 80k may be fall in the different bracket.

If the truck is written off doesnt mean its paid. 6-7 year financing can give u a lower payment w the benefit of writing off early or sametime.

U can always roll whatever equity if any u have left towards a brand new truck by trading in, pay less in sales tax. Our economy is business economy geared towards consumers.

Your example is based on Tundra that is worth 25k after 6 years.
Mine was 80k truck that we are discussing here.