this post was submitted on 20 Nov 2023
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[–] [email protected] 14 points 1 year ago (4 children)

Getting a loan on a depreciating asset...

[–] [email protected] 24 points 1 year ago (3 children)

Is how most people afford vehicles. You paid for yours in cash?

[–] [email protected] 6 points 1 year ago

Exactly. Every time I've had an auto loan, the vehicle was still worth quite a bit and ran fine when the loan was paid off. Meanwhile, I was able to get to work and other places.

[–] [email protected] 2 points 1 year ago* (last edited 1 year ago)

All 2k of it my FIL's still dailies a £500 Citroen Picasso that's from 2004.

[–] [email protected] -1 points 1 year ago (1 children)

Not them but every vehicle in my life except one in cash. I don't trust banks and credit is evil.

[–] [email protected] 1 points 1 year ago (1 children)

Credit is a tool that can be misused.

[–] [email protected] 12 points 1 year ago (2 children)

If you rely on your vehicle to get to work, an old beater is a false economy.

[–] [email protected] 6 points 1 year ago (1 children)

I would disagree with a 15-year-old car that is well maintained. New cars go wrong all the time too.

[–] [email protected] -2 points 1 year ago (2 children)

And how can you assure it's well maintained?

[–] [email protected] 6 points 1 year ago (2 children)

The same way your mechanic does, manufacturers have a weird habit of putting specs on everything. Even doing easy things like keeping on top of tyre pressures and oil is enough to make the vehicle run well and for a long time as those two things have a big knock on affect to the rest of the components. But I think maybe with that question you're prob not that bothered and just want an old contrarian Reddit like argument.

[–] [email protected] 1 points 1 year ago

That's very helpful when you're buying second hand, and the previous owner DIYed the maintenance.

[–] [email protected] -1 points 1 year ago (1 children)

How does this help you at all when buying used? The number of 15 year old cars with maintenance records at all is abysmally small. And usually it's an enthusiast car that's not gonna be reliable anyway. Being on top of tire pressure and oil changes is definitely not nearly enough to keep a car maintained for 15 years. It really sounds like you're not familiar enough with cars and just have a contrived idealistic view of the car market.

[–] [email protected] 1 points 1 year ago

Not sure about where you live, but it's common here in the UK to expect a folder with a load of service history as well as MOT records being public.Additionally, you have a V5 which tracks ownership. I think every vehicle I've brought came with a Haynes manual to boot

" Being on top of tire pressure and oil changes is definitely not nearly enough to keep a car maintained for 15 years" I don't get this logic, I make a point about even the easiest maintenance jobs being a big contributor to keeping a car going, and you take it as I should have listed every single job you would need to do? I think everyone can do a basic service and use a good mechanic for yearly checks and services, something you'd do and pay for with a new car, too except you'd have to use their shops and parts what a win!

"It really sounds like you’re not familiar enough with cars" Already stated I've kept a Ford Fiesta on the road for over a decade to add to that I've restored a 1987 Honda 90 and ran that for another 20k before swapping out the engine for something a bit more peppy which isn't saying much for those. I'm not an amazing mechanic but I like to think I still have the skill set my parents generation had.

Ultimately, the new car market is in a bit of crash at the moment and people are having to wait months to years for new cars. Do what makes you happy, but it doesn't undo my very first comment that it's not financially smart to lease a car with all their terms & conditions. They've done a good job convincing people they can afford things that should be a once in a lifetime purchase of passion to shift stock, that's my opinion it's been really fun discussion all the pros and cons with you all.

[–] [email protected] -1 points 1 year ago

Buy new and have for 15years which is no longer being a possibility

[–] [email protected] -3 points 1 year ago (1 children)

Incorrect. You are saving a fortune on insurance and no interest in car payments.

[–] [email protected] -1 points 1 year ago (1 children)

You're also unemployed because you can't reliably show up to work, you absolute dunce.

[–] [email protected] 0 points 1 year ago (1 children)
[–] [email protected] 0 points 1 year ago

Excellent counter point, you really changed my mind.

[–] [email protected] 10 points 1 year ago (2 children)

... is normal.

Look inside any manufacturing facility. All the pieces of equipment are depreciating assets, often purchased after issuing debt.

[–] PizzasDontWearCapes 6 points 1 year ago (1 children)

Not really the same thing. The manufacturing equipment generates revenue greater than its financing costs

[–] [email protected] 7 points 1 year ago* (last edited 1 year ago)

If you use a car to commute to work, then the return on a car far exceeds the financing costs.

[–] [email protected] 0 points 1 year ago (1 children)

Yeah except that equipment will last over half a century or more. I have worked on metal presses that were almost 19th century and know people who have worked on ones from the days of wood computers of the 1870s. Heck the OEM I work for was originally running everything off belts. One motor moving energy around with belts in the floor and ceiling.

You can't compare the two intelligently. Especially since safety standards keep rising and there isn't practical methods to make those old vehicles safe. Metal presses for example, gates and light curtains. No big deal. Try taking some car from the 1950s and adding airbags and a crumble zone. I imagine it is remotely possible to do it but not widespread.

[–] [email protected] 1 points 1 year ago* (last edited 1 year ago) (1 children)

Useful life depends on the type of equipment. I'm sure there are some metal presses that last a hundred years, but there is plenty more equipment that has a useful life measured in years, especially high-tech equipment.

The iPhone is only 15 years old, how much of the equipment used to build the original model do you think is still in use?

Same is true of non-manufacturing sectors. For example, a hospital might issue bonds in order to build a new clinic or hospital wing. Much of the hospital equipment bought with those bonds will be replaced within ten years.

[–] [email protected] 0 points 1 year ago (1 children)

Well yeah it depends, I always tell my clients that the moment we have to add a touchscreen they have to prepare to have a problem within 5 years. Which is why I push them to consider the extra warranty if they go that route. Most do some don't.

It's still not a great comparison. Individuals aren't too big to fail.

[–] [email protected] 1 points 1 year ago* (last edited 1 year ago) (1 children)

The point is that depreciation is not the most important consideration when considering whether to finance something.

The most important consideration is the return on investment. If the equipment will allow you to make more money than you pay in financing plus depreciation, then you should buy it today even if it requires financing. You're not buying it because you expect it to appreciate.

And if you use a car to get to work, then the return on investment is your entire income. So if you need to finance a car to get to work, then finance it.

[–] [email protected] -1 points 1 year ago

Right but people don't work the way businesses do. If everyone bought a car only when they needed a car to get to work and back the world would be much much different.

So many people at my work make a third of what I make and I see their giant pickups. Me? I drive a small economy car.

[–] [email protected] 2 points 1 year ago

Mine paid off about 18 months ago after 5 years at 2.42%. I feel like that was the better move even if I'd had all the cash to put in.