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-   -   Optimal Cycle for Buying a new Jeep (http://www.jeepgarage.org/f73/optimal-cycle-for-buying-a-new-jeep-67770.html)

mswlogo 11-10-2013 12:12 AM

Optimal Cycle for Buying a new Jeep
 
I used to think folks buying a new car every 2-3 years was crazy.

I love having no car payment for like 7 years and keeping the Jeeps for like 10-12 years and 200K+ miles.

I used to think I saved a ton of money doing this, but now I'm not so sure.

Like my 2002 GC Limited I believe was $32K.

So that's about $3000.00 a year.

If I bought say a new Jeep today for say $38K

And drove it say for 3 years and had 45K miles on it.

If I sold it for say $28K that comes to approx. $3300.00 a year.

I'm not sure if $28K is reasonable to expect.

But If you sell a car that soon, there is no Maintenance needed.

Unlikely need tires or brakes.

Where when keeping it for 10-12 years I did 3 sets of tires and 3 sets of breaks, plus what broke. So it's probably a lot more than $3000.00 a year.

But excise tax and insurance would be more on the new car.

Bottom line I was thinking it would be like 2-3x cheaper to keep it a long time.

Now I'm thinking it's close to same or only slightly cheaper to keep it a long time. At the cost of living with an older Jeep.

Has anyone run the numbers all the way through with realistic prices and cost of maintenance etc.

I feel like I must be missing something.

If I'm not, what's the optimal time frame, 1,2,3,5, 12, 50 years?

Actually to compare apples to apples I should compare the same cost Jeep.

So say I bought a $32K Jeep and drove that for 3 years. I probably could sell that for $22K. That is 33% loss after 3 years.

jacko15 11-10-2013 12:20 AM

Re: Optimal Cycle for Buying a new Jeep
 
Interesting math problem, but I'm trying to figure out why you put this in the Audio/Visual/Navigation threads.

mswlogo 11-10-2013 07:27 PM

Re: Optimal Cycle for Buying a new Jeep
 
Because I screwed up.

Bostondan77 11-10-2013 09:12 PM

Re: Optimal Cycle for Buying a new Jeep
 
Haven't been buying cars for as long as others but gone through 3 since I started and all of them had low mileage for the year of the car but the thing is this it really stems down to how much you bough the car for. Now if you read post such as the ones about 1-5% under invoice your good but people who buy it for msrp or worst dealer posted price with all the stuff you don't need that's where there is the problem. If you bought the car under invoice and negotiate properly you should be able to walk away from your loan because they will pay off your loan or better cut you a check for the difference.But if you buy a car for Msrp you will most likely roll the money into new loan or pay to make the loan even up front. My experience has been since I got the cars for a great price originally 2/3 times I had some equity to put into my new purchase and the other I was able to walk away and they paid loan off. Of course this isn't accurate if you paid cash but for financing this was my experiences.


You will obvs loose down payment also, but the key is not to put down a terrible amount just enough to get the monthly price you need when negation over price has ceased.

JeeperJohn 11-10-2013 09:26 PM

Re: Optimal Cycle for Buying a new Jeep
 
I have always bought my Jeeps for slightly under invoice, financed with no down payment and relatively low interest rate. Traded them in after 2 or 3 years, always got more on the trade in than I owed on the loan. Use the excess for the down payment. Don't put on tires, brakes, etc. only oil changes and wipers. In an era of 3% or 4% interest rates gives you another alternative to keeping it till the wheels fall off. Something to be said for both approaches.

jacko15 11-10-2013 10:41 PM

Re: Optimal Cycle for Buying a new Jeep
 
This may, or may not work, for others. When I bought my first new car at the age of 20, in 1970, I took out a 3 year loan to pay for it. Back in those days a 3 year loan was about the max term. I drove that car for 7 years. After I paid off the loan I put the amount of my monthly payment in savings, plus whatever extra I could manage, for the 4 years of loan free driving. I did most of my own repairs in those days, the cars were much simpler, and new car warranties were 1 year for the most part. After that four year period I had saved enough to buy a new car with my saved cash. That first loan was the only auto loan I've ever taken out. I've been replacing my cars about every 6 years, and that works out just right for me. I know interest rates aren't that bad these days, but I can remember new car rates in excess of 6%. I hate giving money to banks. Like I said, this may not be for everyone, but when I go vehicle shopping I look for what I need, and what excites me to drive, and normally order from the factory, paying a little under invoice. I make a car payment every month, to myself.

denis4x4 11-10-2013 11:01 PM

Re: Optimal Cycle for Buying a new Jeep
 
I factory order every new car or truck with the expectation that I will get a decent discount if there is an "earn and turn" that allows the dealer more vehicles than his factory allotment. There are other discounts like advertising and flooring costs as I pay cash and drop off my trade in when I place the order. I buy a new car or truck every other year and while it may work for me, it is not for everybody. I like the way Jacko15 explained his buying practices. One other thing; I've been buying from the same dealerships (family owned) for almost 26 years.

Bostondan77 11-11-2013 12:05 AM

Re: Optimal Cycle for Buying a new Jeep
 
Agreed guys I think every person/budget has there certainwaythat works for them. I'm just glad I never allowed myself to get into a spiral because once you make that 1 bad deal you will be in a hole that would be hard to get out of.

mswlogo 11-11-2013 12:52 AM

Re: Optimal Cycle for Buying a new Jeep
 
Quote:

Originally Posted by jacko15 (Post 927998)
This may, or may not work, for others. When I bought my first new car at the age of 20, in 1970, I took out a 3 year loan to pay for it. Back in those days a 3 year loan was about the max term. I drove that car for 7 years. After I paid off the loan I put the amount of my monthly payment in savings, plus whatever extra I could manage, for the 4 years of loan free driving. I did most of my own repairs in those days, the cars were much simpler, and new car warranties were 1 year for the most part. After that four year period I had saved enough to buy a new car with my saved cash. That first loan was the only auto loan I've ever taken out. I've been replacing my cars about every 6 years, and that works out just right for me. I know interest rates aren't that bad these days, but I can remember new car rates in excess of 6%. I hate giving money to banks. Like I said, this may not be for everyone, but when I go vehicle shopping I look for what I need, and what excites me to drive, and normally order from the factory, paying a little under invoice. I make a car payment every month, to myself.

That's what I used to do. About 5 years 100k.

Problem is, during those years you are saving, your car is still devaluating.

So if you average it all out. It's not different if you keep it longer.

Cash or loan doesn't matter much with the rates. It's the same either way.

I usually put half down and pay it off within 2 years, if it's not 0% interest.

offroader 11-11-2013 01:57 AM

Re: Optimal Cycle for Buying a new Jeep
 
3 years unless you don't like the new Jeep then 4 years.

AAAA 11-11-2013 11:08 AM

Re: Optimal Cycle for Buying a new Jeep
 
OK. Let's see... if the eastbound train left Chicago at 3 AM traveling 60 mph and the westbound train left Boston at 6 AM traveling 55 mph........

whartung 11-11-2013 12:54 PM

Re: Optimal Cycle for Buying a new Jeep
 
Pretty much every article I've read on buying vehicles suggest that if you want to have the lowest costs of vehicle ownership, buy a used one, 2 years old (largest depreciation hit), pay cash (no interest), and sell it in 3 years for another 2 year old car.

Vehicles with lower depreciation schedules than not are cheaper to own, as they simply lose less value over time.

You "never" save money buying a new vehicle.

That said, I don't practice that -- I hate buying cars, I'm not a car "guy", so I drive them in to the ground. I bought new because the model just swapped over and was significant enough that I didn't want to wait another 2 years, as my truck wasn't worth keeping that long.


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