I hope you had a good Columbus Day. Yes, I have a day late (as usual). I'm still trying to find out what kind of vacation it's all about. The children and their wife had no school or work, but the stock market was open. At this point, if I did not understand it, I probably will never do it.
This four-word title has been under construction for almost six years. Let me recap:
The Subaru Forester
At the end of December 2012, we bought a Subaru Forester. The return to New England with a newborn made my old Ford Mustang impractical.
I wanted to buy a slightly used car to take advantage of the fact that someone else is paying amortization. However, there were very few Foresters gently used in New England. I think people tend to drive them for years. The dealer had two or three used Foresters, but the reduction was only a reduction of about 8% compared to a new one, not a big saving. In addition, there were incentives for dealers with new cars that were not available with used cars. I felt that they wanted to keep these worn objects to attract new customers to the showroom.
One of the incentives offered to dealers was 0% financing over 60 months. Why yes will take your loan interest-free, Mr. Subaru!
Many personal finance gurus will say that we made the wrong financial decision by buying a new car. The numbers worked better with the new car. It was a reasonable new car purchase at $ 25,000. Finally, we attach great importance to the safety of the newborn. We had an incident with the old car and it reaffirmed that life is very different when you're newborn with a newborn.
The Acura MDX
Eight months after the Forester, we ended up buying a luxury SUV, the Acura MDX. We are expanding the family with another son. It made sense to sell the Jeep from 2004 with 125,000 km and acquire a larger one than the Forester for longer family trips. Two children, a big dog and a stroller take up a lot of space. When we travel with luggage at the airport, we use almost every square centimeter of space.
From a personal finance perspective, a new luxury SUV ALL the rules. It is a capital sin. There is no way to justify spending a lot of money on a depreciating asset, is it?
As I wrote in this article, my wife's two previous cars were both the "junk college car" and the "need a car now" car (Jeep 2004). At the time of the purchase of the car, she was a pharmacist for a dozen years. This is another way of saying what I was writing at the time: "She won a luxury car, then a few." She travels about 90 minutes a day about twice a week to her office – a great reason to choose a luxury car. Finally, did you notice from what precedes that she was pregnant twice in a very short time?
We drove through a dozen luxury cars (as mentioned) and eliminated a lot of the luxury SUVs of $ 70,000 or more. The Acura MDX checked all the luxury boxes. It was also only $ 42,000. I realize that "only" in this case can mean different things to different people. Personal finances are relative. However, when you plan to spend $ 70,000, $ 42,000 is a good deal.
We have funded Acura through USAA, TrueCar's partner. It was 60 months at 1.35%. If someone wants to lend me thousands of dollars at an interest rate of almost 1%, I will not say no. Unfortunately, it's not as good as the one with Subaru.
Fast forward to today. The 5 years (60 months) have passed and we have the titles. We went from "buying" two cars to "owning" two cars.
The plan is to drive both cars for several more years. I hope we will have 8 more. At this point, this 50 year old man will experience another midlife crisis and will buy the Mitsubishi 3000GT that caught his attention at college. (I'm trying to plan my next quarantine crisis because it means I will live forever, no?)
Like everything in life, plans change. We will reevaluate all the time as we always do.