Cars

[Faramir]

I am picking up my next car in 1/2 hour.

My old car I purchased new back in 2009. Suzuki Swift Sports. My tiny business had a loan/lease. My Swift Sports had the right shape to put advertising vinyl stickers on it and the advertising worked well for a while. End of 2013, my business was going well, I paid off the balloon easily instead doing what most people do - get another lease and another car.

Last Friday after 9 years, the head gasket blew up and it refused to start. There’s a crack in the engine block as well. Very angry that it only went to 224,600km. How can my car have such a short life before dying!!! I was expecting it to goto at least 300,000km. I never liked the term throwaway cars. That’s what my ex mechanic called it. Another mechanic purchased it for $750 and he is going to change engines - I have no time nor expertise to do that myself.

So I purchased a Toyota Corolla 2016 Manual for $15,500. It has 11,500km and nearly 5 months rego. No one in Sydney wants to drive a manual. I thought I wouldn’t buy a Manual neither. The seller’s daughter hates manual. Corollas will last longer than Swift. I drive roughly 25,000km-26,000km per year. I like l to think that I maintain cars well. (My maintenance bills says I do.)

That money I used came from my business emergency fund. It took me many years of saving. I am loathe to take out another car loan. I refused to listen to my Franchisor/boss and take out more loans.

Now, do I stop paying my investment account and repay my emergency fund. My business is not doing as well as it did years ago.

I just received my funds from Zentias Healthcare ZNT and I am so tempted to use that fund for my emergency account. It’s in my investment account but I do not know what share/s to buy.

I brought the Corolla. I saw the opportunity that the seller was having trouble trying to sell it. The other auto Corollas were selling very quickly at much higher prices and kilometres.

Yet I lack the ability to find shares the same way I found my next car (and my partner’s car last year.) If my old Swift broke down in 4 years time, I could have purchased a new car as my “rest of my life” car.

I don’t change cars often. Only my 5th car in 28 years of owning cars.

Maybe my next car will be electric. Maybe I will get better at investing.

 

[tech/a]

From someone with a fleet of vehicles.
I strongly suggest to anyone in business to
lease. The interest is tax deductable.
The vehicle is depreciated if you do the
math the car basically costs you very little.

Using cash on a depreciating asset is in my
view crazy! Particularly if you have a business!

 

[Macquack]

Just upgraded my trusty old Ford Falcon XR6 turbo utility with 400,000 kms on the clock. Being a Ford man and with Australia not making motor vehicles anymore the only option was the Thailand built Ford Ranger. The Ranger has the nice high driving position that I wanted as I am sick of not being able to see over or through the majority of vehicles on the roads which all appear to be SUVs. The Ranger has a few high tech features compared to the old falcon, but I am disappointed at the engine power. The Ranger's five cylinder 3.2 litre turbo diesel is down almost 100 kWs on the Falcon's six cylinder turbo petrol engine. In addition, the ranger weighs nearly half a ton more than the falcon so the performance is underwhelming. I am keeping the old falcon as it may become my retirement vehicle.

 

[Garpal Gumnut]

Believe it or not the auto magazines are tipping the Toyota Camry Dual as the pick of the bunch.

Top of the range is in the mid $40,000

gg

 

[SirRumpole]

Does anyone own a Ford Everest ?

If so, what is your experience with it ?

 

[Value Collector]

I am picking up my next car in 1/2 hour.

My old car I purchased new back in 2009. Suzuki Swift Sports. My tiny business had a loan/lease. My Swift Sports had the right shape to put advertising vinyl stickers on it and the advertising worked well for a while. End of 2013, my business was going well, I paid off the balloon easily instead doing what most people do - get another lease and another car.

Last Friday after 9 years, the head gasket blew up and it refused to start. There’s a crack in the engine block as well. Very angry that it only went to 224,600km. How can my car have such a short life before dying!!! I was expecting it to goto at least 300,000km. I never liked the term throwaway cars. That’s what my ex mechanic called it. Another mechanic purchased it for $750 and he is going to change engines - I have no time nor expertise to do that myself.

So I purchased a Toyota Corolla 2016 Manual for $15,500. It has 11,500km and nearly 5 months rego. No one in Sydney wants to drive a manual. I thought I wouldn’t buy a Manual neither. The seller’s daughter hates manual. Corollas will last longer than Swift. I drive roughly 25,000km-26,000km per year. I like l to think that I maintain cars well. (My maintenance bills says I do.)

That money I used came from my business emergency fund. It took me many years of saving. I am loathe to take out another car loan. I refused to listen to my Franchisor/boss and take out more loans.

Now, do I stop paying my investment account and repay my emergency fund. My business is not doing as well as it did years ago.

I just received my funds from Zentias Healthcare ZNT and I am so tempted to use that fund for my emergency account. It’s in my investment account but I do not know what share/s to buy.

I brought the Corolla. I saw the opportunity that the seller was having trouble trying to sell it. The other auto Corollas were selling very quickly at much higher prices and kilometres.

Yet I lack the ability to find shares the same way I found my next car (and my partner’s car last year.) If my old Swift broke down in 4 years time, I could have purchased a new car as my “rest of my life” car.

I don’t change cars often. Only my 5th car in 28 years of owning cars.

Maybe my next car will be electric. Maybe I will get better at investing.

I would treat the money you took from the emergency fund as a loan, and repay the emergency fund just like you would if you borrowed he money from a bank.

Figure out how much the payment on a 3 year loan would be and make those payments but the he emergency fund.

Once you have paid back the fund, continue making the payments into a savings account and save for your next car, so that when this happens again it’s not an “emergency” because you have a car replacement fund already funded.

 

[Value Collector]

From someone with a fleet of vehicles.
I strongly suggest to anyone in business to
lease. The interest is tax deductable.
The vehicle is depreciated if you do the
math the car basically costs you very little.

Using cash on a depreciating asset is in my
view crazy! Particularly if you have a business!

I think it’s still better to buy the car with cash.

If you buy the car with cash, you still claim the depreciation, and costs.

Sure interest is tax deductible, but I would rather not pay the interest in the first place, and hence not have interest losses to claim.

This video explains it well.

 

[tech/a]

VC
Sure you can do that and there is no cost in interest

But for me I’d rather have the cash in the business.

Trucks Excavators vehicles in my case are a few 7 figures
Add that to the pit of debtors that’s another 7 figures and
You can see that cashflow is king. If I payed cash I’d not have
Any surplus and would be Working on overdraft.

Haven’t worked with OD for 15 yrs and with interest at 5 %
It doesn’t cause a big issue with cashflow.

If I can use my cash to make 12-20% net profit I’d rather do
That.

But my situation won’t be for everyone.

 

[Value Collector]

VC
Sure you can do that and there is no cost in interest

But for me I’d rather have the cash in the business.

Trucks Excavators vehicles in my case are a few 7 figures
Add that to the pit of debtors that’s another 7 figures and
You can see that cashflow is king. If I payed cash I’d not have
Any surplus and would be Working on overdraft.

Haven’t worked with OD for 15 yrs and with interest at 5 %
It doesn’t cause a big issue with cashflow.

If I can use my cash to make 12-20% net profit I’d rather do
That.

But my situation won’t be for everyone.

Generally there are cheaper ways to get cash into your business than by using car loans.

In effect what you are saying is that you have good uses for cash in your business, So you are choosing to take on debt to purchase a car, so you can use the cash is other ways.

But in reality what that means is you are using a car loan at higher interest as a way to inject capital into your business, but as I said this can be expensive source of capital.

 

[tech/a]

Generally there are cheaper ways to get cash into your business than by using car loans.

In effect what you are saying is that you have good uses for cash in your business, So you are choosing to take on debt to purchase a car, so you can use the cash is other ways.

But in reality what that means is you are using a car loan at higher interest as a way to inject capital into your business, but as I said this can be expensive source of capital.

Trucks are $250k each so to are Excavators
Utes etc 50k

I’m interested in how you would finance them cheaper other than your own cash?
Over draft is no cheaper
Business loans no cheaper.
Every now and again you get company backed 1% loans
But other than that ???

 

[Value Collector]

Trucks are $250k each so to are Excavators
Utes etc 50k

I’m interested in how you would finance them cheaper other than your own cash?
Over draft is no cheaper
Business loans no cheaper.
Every now and again you get company backed 1% loans
But other than that ???

Am not against financing or leasing, they are good tools to have when you need the capital.

All I am saying is that if you can finance a vehicle yourself that is going to be cheaper than involving a third party that is there for profit.

Also, for the average person just leasing a car for personal use or for a small business, the interest rates after all fees and hidden costs is no where near 5%, you are looking a 10%+, so yeah in my opinion, it’s definately better to avoid it.

 

[Value Collector]

I posted this in another thread before, but it is a great example what you can do when you avoid paying interest, and instead generate savings.

 

[Faramir]

Thank you @Value Collector and @tech/a for your input. I wasn't looking for the right answer. I just wanted to state that I brought a Corolla and how I purchased it. Unlike in 2004 and 2009 where my business was growing, I rightly or wrongly didn't want a lease again. Leases did help me back in 2004 and 2009. I took 4 years leases with a high deposit, fairly moderate monthly payment and a low balloon.

I needed to take mum to appointments. I am less interested in my business since my partner had breast cancer two years ago. I couldn't be bothered ringing up a broker to find the "best" lease available. (It took ages last time I applied for a lease.)

So I will repay my fund but maybe at a slower (or faster) rate, depending upon how things go next year. Will my business be around in 4-5 years? At least my car should be around and I own it. So I might be wrong but I don't need machinery, multiple vehicles, equipment, etc - so a lease was not attractive this time. Having said that, I still admire and respect tech/a opening up about how he manages his business and his input about what is best for him. Whether we agree or not, kudos for opening up about it.

I just need a car that is reliable. I was so sick of my boss/franchisor taking high leases with show off cars like BMWs, HSVs and other status cars when I know his cashflows are not good enough to support those leases.

Am I fortunate? I can whinge this and that and how I feel that my decision making process is not as sharp as it could be. I do feel fortunate with regards of my car only having 11,490km and the previous owner taking most of the depreciation. It feels like a start of a new stage of my life.

Thank you to others who talked about their cars. I love cars but I do not love them enough to take out a loan again.

 

[Value Collector]

Thank you @Value Collector and @tech/a for your input. I wasn't looking for the right answer. I just wanted to state that I brought a Corolla and how I purchased it. Unlike in 2004 and 2009 where my business was growing, I rightly or wrongly didn't want a lease again. Leases did help me back in 2004 and 2009. I took 4 years leases with a high deposit, fairly moderate monthly payment and a low balloon.

I needed to take mum to appointments. I am less interested in my business since my partner had breast cancer two years ago. I couldn't be bothered ringing up a broker to find the "best" lease available. (It took ages last time I applied for a lease.)

So I will repay my fund but maybe at a slower (or faster) rate, depending upon how things go next year. Will my business be around in 4-5 years? At least my car should be around and I own it. So I might be wrong but I don't need machinery, multiple vehicles, equipment, etc - so a lease was not attractive this time. Having said that, I still admire and respect tech/a opening up about how he manages his business and his input about what is best for him. Whether we agree or not, kudos for opening up about it.

I just need a car that is reliable. I was so sick of my boss/franchisor taking high leases with show off cars like BMWs, HSVs and other status cars when I know his cashflows are not good enough to support those leases.

Am I fortunate? I can whinge this and that and how I feel that my decision making process is not as sharp as it could be. I do feel fortunate with regards of my car only having 11,490km and the previous owner taking most of the depreciation. It feels like a start of a new stage of my life.

Thank you to others who talked about their cars. I love cars but I do not love them enough to take out a loan again.

I think you made the right choice in your situation, all you have to do now is just work that emergency fund back up over time.

An interesting way to think about it is to ask yourself this question.

“Would you take out a loan at 8% interest to refill your emergency fund?”

If the answer is no, then you shouldn’t agree to taking on a loan to avoid withdrawing from the emergency fund either.

 

[Faramir]

I agree with you @Value Collector.

To play devil's advocate, in my early years of my business, I took out a lease. The remaining money went into marketing and that paid itself many times over. So I easily beat that 8%. Since his wife took over many things, it all became a shamble and I have lost interest. I just now want a change.

So now it makes no sense to take out a lease for me now but it did make sense back in 2004 and 2009. In business, I seen people buy cars fast, use them fast, change them fast and make the cars set a business image. Especially if you use them as an advertising billboard OR you go and visit clients. Visiting clients with a broken down VL 1986 Commodore back in 2004 didn't make sense, so I had to upgrade. Now things are different for me.

Again thank you everyone. @SirRumpole I can't remember the last time I saw a Ford Everest. So I can't provide any information.

 

[tech/a]

Faramir
If your business cannot support a lease and you have lost interest
Regardless how you pay for your car - You need to find a better
Paying profession!
Congratulations on your car purchase as well I think it’s a great buy.

Now for a twist
My own car which the missus drives all week I paid cash for.
Why? Private use and fringe benefits tax would be a killer!
It’s not a company car.

Rumps
My neighbor had a brand new Everest and had nothing but trouble
The guts of the car are the same as the Ranger
I have a Wildtrack which I’ve had no trouble at all over 4 yrs.
Now looking at a Raptor.

 

[ianna]

Saw the thread and thought it might be interesting, but no. Anyway, here's my input. I've got a Ford Escort 1979 panel van (three owners from new including Telecom). Have to keep upping the insurance cover as it keeps going up in value! Cheap to service and repair. Never have any trouble with onboard computers, electric motors or other so called driver aids. On the rare occasion that something goes wrong can be fixed on the side of the road with a basic tool kit, some wire, string or racing tape. Fun to drive especially on a nice winding road and one can end up making a new acquaintance just filling up or stoping for a coffee.

 

[Wyatt]

At the risk of being seen as a total tosser and after having owned just 2 cars in 37 years of driving, basic 4cyl utes, I've upgraded to something a bit err.... less fuel efficient with a bit more go.

And firstly I am not alone in believing cars, especially for young folk and going into debt is a massive financial mistake full stop, I could not resist this fully Australian developed and made piece of art with a truckload recently spent, for not much. A 2010 XR6T with 85000klms and well, frightening acceleration, it is such a thrill.



There seems to be little demand for these things that some people get addicted to modifying, maybe a Southern Cross tattoo is in order...Not

More info for anyone interested in the Barra engine.