It's cool that Dave says new cars lose 60% of their value in 3 years. That's not an issue for us, as we plan on owning it until it basically has "no" value. I really don't give a hoot if the car lost 100% of its value when we drove it off the lot. At the 0% interest we bought it for, it made more sense for us than taking money out of savings, given what the return on investment has been the last 3+ years we've had the car. We're keeping the car anyway, so we have no interest in how much value it holds. It was purchased as likely our last "new" car in retirement.
We bought a Toyota Matrix at 2% interest, decent down payment, in 2003. It's sitting in the driveway as I type. My investment account then was pulling in nearly 10%. That car has depreciated substantially I'd say, except it still has value for us as a daily driver, good weather, low insurance cost, low maintenance/high MPG vehicle that keeps the miles down on the new car.
The new car was a necessity as my wife was relocating for work to an area that has seen snow in every month of the year, ,with freezing night time temps a regular occurrence from Sept until June. The Matrix is 2WD, so we wanted to get her an AWD with newer safety features. And we hadn't had a new car for 13 years +, and we needed a bigger vehicle for the dog crates as the Matrix types no longer fit them due to changes in body style.
Where did I go wrong in getting my wife (and myself) a new vehicle, at no interest, while our savings is still earning good money (7%+ this year I think), she was safer driving into work in bad weather, the oil changes/maintenance was tossed in with the deal for three years, and we have a car that's going to last well into our retirement.............maybe until we no longer can drive?
Dave, and other financial experts have a lot of good ideas, but sometimes their ideas don't fit everyone's needs and wants.
Geno
