Sanity Check - Kioti

[coobie]

You seem to have left out your buddy's truck is still worth something for trade or sale towards his next vehicle.
I've owned my pickup for 23 years, and our cars a 2005. Haven't made a vehicle payment in years.

And Don"t forget the lease down payment of maybe $3,000 bucks every time and the lease insurance just in case you scratch it.LOL.

 

[nards444]

And Don"t forget the lease down payment of maybe $3,000 bucks every time and the lease insurance just in case you scratch it.LOL.

Lease insurance if you so choose to get it is like 300 bucks, often times its thrown in. I dont do down payments, doesn't make sense, as you total the truck tomorrow you lose that money, just gets rolled in, I only pay around 450-500 bucks, so really doesn't matter.

In the end the lease down payment is no different than a down payment when purchasing, you either put it down and if you dont it gets spread across the term, so its not new or extra money. The total lease amount is the same whether you do lease down payment or not.

 

[nards444]

You seem to have left out your buddy's truck is still worth something for trade or sale towards his next vehicle.
I've owned my pickup for 23 years, and our cars a 2005. Haven't made a vehicle payment in years.

Your missing the point and being short sighted. Im also not comparing this against somebody that owns vehicles for 20 years plus. Average time someone keeps a vehicle is only like 7 years.

So back to my scenario I am looking at vehicle ownership in 10 year increments which is pretty logical given the way people own them. And yes my buddy would have something he owns to trade or sell after 10 years you are right. On average of 15k miles a year for 10 years, that vehicle has well over 150k on it, I would guess hes maybe looking at 10-12k in equity. But over those ten years hes also got two sets of tires he had to replace, a few brake jobs, exhaust, battery, probably a front end job. Thats just on wear items, this doesnt include any break fix that will happen. End of the day any equity he had at after 10 years was probably swallowed up by maint over those ten years. Bottom line we pay roughly the same, Im driving new all the time without having to fork over money for fixes, he is not.

 

[rScotty]

We all buy what we want sometimes because this is America and we can, no issues with that. I just have a hard time with some comments where people actually believe things are investments or are saving money, when it simply isnt true.

You seem to have left out your buddy's truck is still worth something for trade or sale towards his next vehicle.
I've owned my pickup for 23 years, and our cars a 2005. Haven't made a vehicle payment in years.

It sure would be a simpler world if there was one right way and one wrong. But renting versus owning is just like in politics or religion - there's not one simple right answer.

As I see it, for short term use it makes sense to rent or lease. For long term owning is better.
Renting/leasing is fast and easy, but you give up things too.

Generally, the shorter the time period, the more it favors renting/leasing. And the longer term favors ownership.
Choose a tool wisely, take care of it, & keep anything long enough and the watch the value go up, not down.
There's no reason good tools can't be good investments - all it takes is buying quality and having a bit of luck.
Same as anything else....
rScotty

 

[nards444]

It sure would be a simpler world if there was one right way and one wrong. But renting versus owning is just like in politics or religion - there's not one simple right answer.

As I see it, for short term use it makes sense to rent or lease. For long term owning is better.
Renting/leasing is fast and easy, but you give up things too.

Generally, the shorter the time period, the more it favors renting/leasing. And the longer term favors ownership.
Choose a tool wisely, take care of it, & keep anything long enough and the watch the value go up, not down.
There's no reason good tools can't be good investments - all it takes is buying quality and having a bit of luck.
Same as anything else....
rScotty

Agreed 100%. If you want to keep something for 20-30 years buying can absolutely be great. I was only trying to interject the devils advocate into the equation, all to often people see things in terms of buying vs renting, loan vs cash although you wont change any minds many do not truly understand the Xs and Os of what they are doing. For what its worth I have done everything, rent, buy, cash and loan and I have learned lessons from each method. I just have a hard time with people thinking inflation makes them money on something they bought and other like comments, as it truly shows a lack of understanding.

Where I disagree is that tools are investments if your looking at it in it's truest sense. Investments typically make you money when the dust settles, now I would say they can be a personal investment of sorts and save you money, but rarely will somebody privately purchase say a 10k tool and make money on it, most will probably either break even or lose money on it eventually.

 

[rScotty]

Yes, looked at purely as an investement it is rare to make money on a tool in even a modestly inflationary economy. You have to get your value out of them some other way than financially.

For example, I began like most of us do as a poor kid just buying cheap tools as I needed them. But later - about 1975 - I consciously switched to "investment quality tools" with the expectation of keeping them for a lifetime.

That's worked out real well as far as the tools go (including trucks & tractors). Along with luck, I've had good service, pride of ownership, and surprisingly few repairs.

But as you say, from a strictly investment perspective it doesn't often work. A little bit of online inflation arithmetic will show that for every 1000 dollars spent in 1975, I'd need to get almost 5000 dollars selling that tool today - and that's just to break even. It does happen; even to me. A few tools actually did go up in value more than that. But most do not.
rScotty

 

[nards444]

Yes, looked at purely as an investement it is rare to make money on a tool in even a modestly inflationary economy. You have to get your value out of them some other way than financially.

For example, I began like most of us do as a poor kid just buying cheap tools as I needed them. But later - about 1975 - I consciously switched to "investment quality tools" with the expectation of keeping them for a lifetime.

That's worked out real well as far as the tools go (including trucks & tractors). Along with luck, I've had good service, pride of ownership, and surprisingly few repairs.

But as you say, from a strictly investment perspective it doesn't often work. A little bit of online inflation arithmetic will show that for every 1000 dollars spent in 1975, I'd need to get almost 5000 dollars selling that tool today - and that's just to break even. It does happen; even to me. A few tools actually did go up in value more than that. But most do not.
rScotty

Right makes sense. I went through the same process on simple things buying the cheap drill, now I mid mid grade or high end, was tired of replacing cheap stuff, which ultimately saved me money and frankly time.

I see the same inflation mixed of math on car forums. You got guys talking about keeping cars as investments(which by the way can be true) and they point back to buying early 70s muscle cars for 4 grand and selling for 40-50k, but they fail to realize that to break even they had to sell that car for 20-25k in todays money and forget the 20k they put into it restoring, now while theyre are people making money this way its just not the average joe blow doing it.

Again I go back to the fact if you want something and works for you, I have no issue with it, I do it to. Only trying point out it might be worthwhile evaluating the situation from a 360 perspective, somethings just arent what they seem

 

[paulfun9]

We all do things because we want and because we enjoy it. Dont take me wrong in what I am saying, not saying people are dumb and stupid for what they buy etc etc. My point was to merely point out the financial implications that is all. Reality is a lot of people do things or buy things because they think they are saving money, and it is simply not true. Theyll buy equipment for 20k use it twice a year and think man I saved money because I didnt have to hire somebody, the problem is the reality is much different.

Most people dont like to hear it, but it is getting to the point renting everything is a much wiser choice at least financially. Actually had an argument with a buddy about buying a truck vs leasing, he said youll always have a payment I wont. I said I dont care Ill save money you wont, didn't believe me. So we laid it out, we both bought 50k trucks there abouts. He had a 6 year note and with interest would end up paying 55k for that one truck that he planned on keeping for ten years. Ive been averaging 450-500 per month for leases, over 10 years I paid or will pay around 60k. My 60k spent means no maint and i get three new trucks in that span, he gets one and has to pay maint, of which over ten years new tires, and breaks at least once, battery, and probably exhaust. Best case scenario is he breaks even with me, reality is he probably spends more.

We all buy what we want sometimes because this is America and we can, no issues with that. I just have a hard time with some comments where people actually believe things are investments or are saving money, when it simply isnt true.

I just did the math on maintenance and repair for a truck I have owned for 16 years and the numbers dont add up as you suggested..
I got free lifetime inspection on the purchase and it has only taken tires, brakes since brand new. Sorry but my finance charge is zero and there have been zero break downs.
Considering there is still a resale value worth more than than the cost of a years lease at your 450 cost (using the lower due to year) but is actually most likely between the 2 and 3 year range due to condition and desire ability of a good diesel. Your numbers just dont compute as being better.
Now understand I used the maintenance cost based on 16 years not ten so this should have given your system an advantage but it doesn’t

Now let’s ´ talk mileage and cost per?
Want to figure out your actual cost per mile and compare it to real world numbers where people actually keep a vehicle that does not give them problems?
The real cost of ownership is actually in miles driven not years owned and every lease I see has a mileage limit. For the ability to drive more miles you pay more keeping the cost yet again on the same level.

 

[nards444]

I just did the math on maintenance and repair for a truck I have owned for 16 years and the numbers don稚 add up as you suggested..
I got free lifetime inspection on the purchase and it has only taken tires, brakes since brand new. Sorry but my finance charge is zero and there have been zero break downs.
Considering there is still a resale value worth more than than the cost of a years least at your 450 cost (using the lower due to year) but is actually most likely between the 2 and 3 year range due to condition and desire ability of a good diesel. Your numbers just don稚 compute as being better.
Now understand I used the maintenance cost based on 16 years not ten so this should have given your system an advantage but it doesn稚.

Now letç—´ talk mileage and cost per?
Want to figure out your actual cost per mile and compare it to real world numbers where people actually keep a vehicle that doesn稚 give them problems?
The real cost of ownership is actually in miles driven not years owned and ever lease I see has a mileage limit. For the ability to drive more miles you pay more keeping the cost yet again on the same level.

My numbers add up if your talking the averages, averages are 12-15k miles a year, if you are the average you have almost 200k miles on your vehicle in which case you should have more than one set of tires and some brakes. My math doesn't take into account the odds and eachs or the guy that is only driving 2-3k miles a year. Also your talking about a truck that you purchased in 2003 which means it probably didn't cost over 30k and 0% interest rates, which i am comparing trucks that for the most part have been 40-50k for the last 5 years and 0% interest rates have all but disappeared in the last few years and your paying 3-5% for now.

My equation works if you hold on to the vehicle for 7 -10 years only and drive the average amount of miles a year and are comparing like vehicles with like purchase prices and comparing stuff in the last 5-10 years not almost two decades ago. If you purchase something to drive for 20 years and a million miles renting is a terrible idea.

And cost per mile vs cost per year can be one in the same or relevant. But when you talk cost per mile your also factoring in MPG, insurance etc which makes it a different ball game, again we are talking purchase price only.

So while I see where you are coming from and it probably works for you, but when comparing two things they have to be the same or similar, of which you are not doing. If we both started fresh today and both went and bought like trucks with like usage, I guarantee I either match or beat you for the next ten years in terms of purchase price only. Again people arent keeping vehicles 20 years data supports that, so your situation is not the norm.

 

[coobie]

Lease insurance if you so choose to get it is like 300 bucks, often times its thrown in. I dont do down payments, doesn't make sense, as you total the truck tomorrow you lose that money, just gets rolled in, I only pay around 450-500 bucks, so really doesn't matter.

In the end the lease down payment is no different than a down payment when purchasing, you either put it down and if you dont it gets spread across the term, so its not new or extra money. The total lease amount is the same whether you do lease down payment or not.

You must be leasing cheap stripped down trucks with those payments of $450-$500 with no money down.Maybe I should redo my math then.When I looked into leasing with.$4,000-$5,000 down payments were still $600 plus per month on a 36 month lease.