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05-08-2014, 08:22 PM
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#1 | | Proud to be called a RS Regular!
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| Second Car or Investment?
I have an SUV as a DD which uses about $3500/year in gas according to Fuel Economy
The SUV is old and likely won't depreciate anymore but as a DD it still runs fine, however, I am considering getting something a lot more fun and at the same time a lot more fuel efficient, which, according to the above site should cost me about $2500/year.
The car I'm looking at will cost me about $8000 after tax. The car is in good shape and has low mileage so depreciation won't be that high. Insurance is the same price and assuming maintenance costs are a wash, I would save $1000/year in gas from getting a second car.
The issue now is that $8000 - what is a realistic return I could get on it? As of now it is sitting in my bank account generating 1% interest before I decide what to do with it.
From an investment stand point is it worth it to get the second car?
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05-08-2014, 08:29 PM
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#2 | | I WANT MY 10 YEARS BACK FROM RS.net!
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yes because we know your socioeconomical situation...
helps if you at least post what you drive now and what you're looking to buy
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05-08-2014, 08:53 PM
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#3 | | Proud to be called a RS Regular!
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If I post the car, people will give answers based on how they feel about the car. I'm looking for objective answers.
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05-08-2014, 08:58 PM
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#4 | | My homepage has been set to RS
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is the $8,000 the only money you have to your name? If so, don't buy the car. When you are buying a "fun" car, you need to consider the future. If you happen to need money all of a sudden, are you gonna be stuck in a bind where you have to sell one of your two cars in order to make ends meet?
You have to be able to think of the money as good as gone. If you can't come to terms about never seeing that $8,000 again, then don't buy the car. I know the car may not depreciate that much and you can get the money back when you sell the car, but for the duration of your ownership, you will not have access to that money.
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05-08-2014, 09:06 PM
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#5 | | MiX iT Up!
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do you NEED a second car or just WANT a second car?
if you can live comfortably with your current DD - keep it and invest the 8k in some short term investment (maybe stick it in a cash-TFSA and get 2.25% instead of 1%)
if the wife always bugs you to borrow the car and you bus to work and it's a drag, get the second car for 8k. The time you save on transit will hopefully be recouped by driving.
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05-08-2014, 09:12 PM
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#6 | | Head of HR....have a seat on that couch
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Do you need an SUV?
What's it worth?
Maybe consider getting something more fuel efficient and sell the gas guzzler.
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can we stop, my pussy hurts...
Originally posted by asian_XL
fliptuner, I am gonna grab ur dick and pee in your face, then rub shit all over my face...:lol
Originally posted by Fei-Ji
haha i can taste the cum in my mouth
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when I was 13 I wanted to be a video hoe so bad RSUV #7 | |
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05-08-2014, 09:28 PM
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#7 | | Rs has made me the man i am today!
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| Quote:
Originally Posted by moldex  I have an SUV as a DD which uses about $3500/year in gas according to Fuel Economy | Erm...you don't know how much you ACTUALLY spend on gas? Quote:
Originally Posted by moldex The car I'm looking at will cost me about $8000 after tax. The car is in good shape and has low mileage so depreciation won't be that high. Insurance is the same price and assuming maintenance costs are a wash, I would save $1000/year in gas from getting a second car. | From the sounds of it you will also SPEND $8K to save $1k/yr since you're not selling the current car. Quote:
Originally Posted by moldex The issue now is that $8000 - what is a realistic return I could get on it? As of now it is sitting in my bank account generating 1% interest before I decide what to do with it. | 5-7% if you put it into a low cost ETF but that's a long term investment. Are you going to need the money in the near future? If you do then a GIC is the best bet and you'll get 2-2.5% on it. Quote:
Originally Posted by moldex From an investment stand point is it worth it to get the second car? | From an investment standpoint it is never worth it to get any car. Cars lose value, cars need maintenance, cars need gas and insurance. An investment generally makes money. Totally different consideration.
If you're doing well financially then you don't need anyone's advice to spend $8K.
If you're not doing well financially then the only advice you should get from any of us is that this is a stupid idea since.
I had a similar choice last year when I bought a Miata for $20K as a second car but I also put $40K in my RRSPs. The car is totally frivolous but I put $40K in RRSPs so I rationalized that I was balancing my short and long term desires.
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05-08-2014, 09:39 PM
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#8 | | Proud to be called a RS Regular!
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What I meant in my original post is that spending $8000 on a second car saves me $1000 compared to the SUV. If I were to invest the $8000 and get 2.25% interest, that's only $180.
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05-08-2014, 09:55 PM
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#9 | | I bringith the lowerballerith
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| Quote:
Originally Posted by moldex What I meant in my original post is that spending $8000 on a second car saves me $1000 compared to the SUV. If I were to invest the $8000 and get 2.25% interest, that's only $180. | Except you would be instantly $8000 richer the second you decided to NOT buy a second car. And be earning X.XX% in compounding interest instead of spending $XXXX/yr on insurance for a second vehicle.
You still haven't given an idea of your financial situation, IE is this throw-away money thats burning a hole in your pocket, or......? That would sway a lot of people's advice in a single direction instead of generic answers covering both choices.
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05-08-2014, 10:17 PM
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#10 | | Proud to be called a RS Regular!
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I wouldn't insure both cars at the same time, the SUV would simply be for winter so insurance cost isn't a factor.
I graduated 2yrs ago and have been working since then. TFSA is maxed out and and I have tuition credits left over so did not put the $8k in RRSP. I initially designed as a vacation fund but the thought of the second car came up so that's why I'm on here.
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05-08-2014, 10:23 PM
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#11 | | Rs has made me the man i am today!
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| Quote:
Originally Posted by moldex I wouldn't insure both cars at the same time, the SUV would simply be for winter so insurance cost isn't a factor.
I graduated 2yrs ago and have been working since then. TFSA is maxed out and and I have tuition credits left over so did not put the $8k in RRSP. I initially designed as a vacation fund but the thought of the second car came up so that's why I'm on here. | Buy it. That's a fair balance of short term fun and long term planning.
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05-08-2014, 10:25 PM
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#12 | | I bringith the lowerballerith
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Save it for a down payment/mortgage/rainy day. You have a vehicle that functions perfectly well by your account. It would take you more than 8yrs to recoup the cost of buying this second vehicle that would save you $1000/yr (I'm guessing thats over a full year's worth of driving, not just summer months).
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"Never give a match up halfway through. Never say that you do not feel up to it, that your condition is bad, and throw in the towel. Fight to the very end, always looking for your chance to break through." - Kazuzo Kudo
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05-08-2014, 10:43 PM
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#13 | | Proud to be called a RS Regular!
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Forgot to mention I intend to keep the car for 1-2 years before selling it
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05-08-2014, 10:56 PM
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#14 | | Even when im right, revscene.net is still right!
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Don't do it. I don't think you can buy anything for $8k as fun car, nor is it enough for a down payment. I would save more and see if your priorities changed within the next year or two.
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05-08-2014, 11:15 PM
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#15 | | Captain Happy Bubble is my Homeboy
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I would say buy it.
Don't forget the second car he's buying is also good shape and low mileage, so he would not lose much when he sells down the road.
If it's reasonable in financial situation. Enjoy life, you are only young once.
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05-09-2014, 12:21 AM
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#16 | | I am Hook'd on RS
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like the others have said, if you really desire to own a fun car then go for it but if 8k is all you have then just keep it or invest it. There are times where days are rainy and you don't want to get stuck in the situation where money is in need when you simply don't have it.
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05-09-2014, 12:28 AM
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#17 | | Willing to sell a family member for a few minutes on RS
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Originally Posted by BBMme Don't do it. I don't think you can buy anything for $8k as fun car | This is a genuinely insane statement. 1987 BMW E30 325is
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Originally Posted by boostfever Westopher is correct. | Quote:
Originally Posted by fsy82 seems like you got a dick up your ass well..get that checked | Quote:
Originally Posted by punkwax Well.. I’d hate to be the first to say it, but Westopher is correct. | | |
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05-09-2014, 01:01 AM
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#18 | | Head of HR....have a seat on that couch
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| Quote:
Originally Posted by Funnel I would say buy it.
Don't forget the second car he's buying is also good shape and low mileage, so he would not lose much when he sells down the road.
If it's reasonable in financial situation. Enjoy life, you are only young once. | He did say it was for a vacation fund, so if he can afford to spend it on a toy, why not? The way he's crunching numbers led me to believe he's thinking more practically.
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Originally posted by v.b.
can we stop, my pussy hurts...
Originally posted by asian_XL
fliptuner, I am gonna grab ur dick and pee in your face, then rub shit all over my face...:lol
Originally posted by Fei-Ji
haha i can taste the cum in my mouth
Originally posted by FastAnna
when I was 13 I wanted to be a video hoe so bad RSUV #7 | |
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05-09-2014, 09:37 AM
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#19 | | I am Hook'd on RS
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lots of opinion's in here for sure, but I recently did a similar purchase so here's mine too.
I used to drive jeep grand Cherokee, I had it 2 1/2 years and it was minty when I bought it and still is but it was getting old a shit was breaking. I ended up taking out a loan and buying car. I am so much happier now, even with the price of premium gas, higher insurance, and the car loan payment im spending less than I was before and I don't have to worry it wont start when I need to go to work.
I did keep the jeep for camping/winter driving. so if your able to save up 8k in 2 years since grading then Id say go for it. you work for your money and are able to save it, you mine as well enjoy it.
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05-09-2014, 10:33 AM
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#20 | | Proud to be called a RS Regular!
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Originally Posted by ICE BOY He did say it was for a vacation fund, so if he can afford to spend it on a toy, why not? The way he's crunching numbers led me to believe he's thinking more practically. |
I'm considering it from a practical point while at the same time having some fun. If I keep the SUV for sure then spending $8000 to save $1000/year is a 12% return, assuming no depreciation. If my money can't generate the same return then from that point of view its better to get tthe car no?
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05-09-2014, 10:52 AM
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#21 | | What hasn't Killed me, has made me more tolerant of RS!
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There are numerous investment products that will easily generate much, much more than 1%, maintain liquidity on your cash, and require little to none of your own management. Look around; they're not difficult to find.
There's no need to have that much non-emergency money sitting around in a useless savings account
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05-09-2014, 11:28 AM
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#22 | | To me, there is the Internet and there is RS
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Since you were considering (and able to) spending some or all of it on a vacation I'd say get the car. Getting a fun car is like having a vacation that you can enjoy all summer long. Yes technically from a purely financial standpoint holding the money is better but if you lived your whole life based purely around the optimal financial decision there wouldn't be much point in living anyways since nearly everything fun is technically a "waste" of money.
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