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Could an everyday joe like myself use the 10-15 year method to drive a new, high end sports car for life, with no real financial strain?
I just took an auto loan to get a 2017 Nissan Altima with 25k miles on it. I put a thousand down on it.
My auto loan is for 4 years with minimum payments every month, but I expect I can pay it off in 3.
Say that the day my Altima is paid off, I trade it in, or sell it privately for more and use the cash for my next down payment, and get, say, a new or barely used Jeep Wrangler.
Jeep Wranglers are more expensive, but depreciate a lot slower than most vehicles, and with the large down payment from trading in or selling the newer Altima, my auto loan payment might come out to about the same, because Id be borrowing about the same amount as I just did.
A few years later when the wrangler is paid off, same thing happens again. Sell or trade the 3-4 year old jeep, worth more than a 3-4 year old Altima,and get a corvette, again, with the large down payment, same ball park car payment as before.
Pay it off in a few years and next time around, Im driving a 100 grand sports or luxury car for the same ballpark car payment.
Then I figure Ill be driving new, very high end sports or luxury cars for the rest of my life for only about the same as Im paying for my Altima now.
I would always have a car payment, but id be an every day guy driving the latest and the greatest for an affordable price.
Could this work, or are there any flaws in my theory?
5 Answers
- Anonymous2 years ago
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- ?Lv 72 years ago
I would say the problem with your plan that the depreciation will be so great that you will get very little for the cars you trade in. Plus "high end sports cars" tend to be really expensive.
- jimanddottaylorLv 72 years ago
An even better idea is to pay off your Altima as soon as possible, then keep driving it for the next 10 to 15 years while you save amounts equal to what you would have spent on car payments. Then you can decide to buy a fancy car (if that is still your priority), or a house (real estate tends to appreciate), or look at early retirement. With a pile of cash you have many options
- Jay PLv 72 years ago
The financial strain is that you will be making continuous monthly payments and I also think you're under estimating the depreciation value on all vehicles, even Jeep Wranglers'.
Since you're already on the hook for the Altima, why not pay it off as fast as you comfortably can but then continue to drive it and put aside the money you would use for car payments into a separate savings or investment account. The money you put into that will work for you unlike the 'investment' of another vehicle which will depreciate in value. Once you have saved up for 10 years or so, you will have a nice slush fund to do with as you wish.
- 2 years ago
You will be making substantial car payments for the rest of your life apparently. I would say that the higher the value of the car you are buying, the faster it is going to depreciate, often depreciating faster than your car payments are made. I own a Mercedes SLK, one of my three cars (all paid by cash). Just keep in mind that like, a battery for a Mercedes can be $500 and an oil change can be $250. Tires also cost about twice as much and repairs can be many thousands. My one rule in life has been, you can have any car you want, but ya gotta pay cash for it.
