Why would someone pay $3,154 on interest on a new car loan when they could buy a decent used one for under that amount without a loan (or interest)?

I buy new cars about every eight or ten years. I had my share of used vehicles when I was younger and spent a lot more than 3,000 on upkeep, repairs, replacing parts, etc. I have no idea how to work on cars, nor do I want to. When my car starts costing me more than just the usual upkeep such as oil changes, tires, and brakes, then I buy a new one. I have never spent over 18,000 on a new car though.

Some people like the status. Some people want the latest technology. Some people like knowing no one has ever farted in the seat before. Whatever.

It’s just personal preference, and the person who does it does not think the money is “lost.”
I bet you have financial habits that would cause other people to think good money is lost.

@Likeradar I probably do have financial habits that others may find wasteful. That’s OK, we all have our own tastes. I never, EVER, in my 42 years paid interest on anything before, and hope never to in the future. I’m not judging or whatever, was just curious. It seems a lot more can be done with $3,200, but than again, it is your money and you have absolute right to do with it as you wish with explainations to nobody.

Unless you’re a car expert and can fix all the stuff wrong with a used car and/or avoid a shitty used car, then a newer car is worth lack of hassle.

The “new car smell”?
Because it’s the orthodox thing to do?
Because car salesmen recommend it?
Because they like the way they are treated by car salesmen and other status-oriented people when they do?
Because it’s easier to do?
Because of the warranty and service plans?
Because they were raised with shame attached to the idea of buying things used?

Some people like warranty coverage, something that often is only available (at least in full) to the original purchaser.

Some people abhor “sloppy seconds” and will only buy “virgin” cars

Some people like to flaunt their wealth, or at least appear wealthy.

Some people like the latest and greatest.

Some people are really fucking stupid.

Often it is some combination of those reasons. Personally, teh most I have ever paid for a car is $1,375 and most have been under $500. Yeah, most have needed some repair so the total cost was often closer to $800 or so, but that is less than one car payment and the difference in insurance costs for most people.

What would you think of a $300 car that the seller honestly told you all of it’s issues, including the need for about $750 in repairs ASAP, but needed nothing except maintenance thereafter? I ask because that is pretty much the old Corolla I’ve driven for the last couple of years, though I found a mechanic that did a quality job for only $500.
Many people pay thousands of dollars for something they don’t keep very long. I pay a few hundred dollars for something that lasts me long enough to both save enough money to replace it and do other things with the money I am not spending while the car lasts.

@Blackberry Those that cannot avoid a shitty used car often can’t maintain a new car and turn it into a shitty car anyways, thus rendering the point moot. Granted, I can do a lot of my own work, but I am too old and lazy to do so very often any longer. Now, which is more of a hassle; having a trusted mechanic or car-savvy friend inspect your purchase and possibly calling around for estimates or having to tell the landlord that you can’t afford to pay them this month because you have a shiny new car that you will soon be living in?

@jerv If I were in the market for another vehicle, that would be one I’d consider. Save a lot of cash, and give you a hobby as a bonus. My sample was based on a $25,000 car with the interest rate that my bank offers for 48 months. But I swear, if a car salesman ever tells me a car, ANY car, costs $25,000, I’d laugh right out the door and all the way home. That’s close to what I paid for my house.

@jerv To your first sentence: indeed lol. That reminds me of my recent question on self control. I know I could drive my car a little better, but it’s hard to do.

@12Oaks That is also more than I make (or have ever made) in a year.
Just for shits and giggles, I looked into a car loan once. I went to the dealer, found a $12,000 used car, and was offer 19% “simple interest” that was drawn up in such a way that it amounted to $23,400 at 0% APR; no way to pay extra towards the principle to reduce future interest since it was already rolled in up front.
The dealer was confused as they apparently had never seen a prospective customer with the math skills to know precisely how they were trying to fuck me but they were actually amused by the humorous and quite detailed ways I recommended that their financing department could fuck themselves.

@jerv 19%?!?!?!?! Holy cowsilks!! My bank charges 5.95%. 19% would up the interest to $10,880, which is still way too much for a car without any interest tagged onto it. Or maybe I’m just too cheap. Or it doesn’t play into my long-term financial roadmap. Either way…..

You must have a gift for finding reliable vehicles under $4000.00, most of the rest of us don’t. I know I never have. Like others, I’ve had my share of hand me down cars and a few beaters I bought myself, what a nightmare. If I could, I’d only ever have cars new enough to be under factory warranty and I’d make sure to do the recommended services so I don’t end up with huge repairs like I see others incur when they think all they have to do is put oil in a car for 10yrs.

Most people are not very well informed on financial matters.

The last car I bought for $3,500 three years ago has cost me almost $6500 in maintenance in that time period. For what I spent on “saving” money, I could have purchased a new car. Many people have income, but not savings.

@Neizvestnaya The most costly repairs I’ve seen were mostly on newer cars. Try getting a head gasket done for $50, or replacing a pair of shocks for under $100. My wife had a car under warranty, but that didn’t cover replacing the transmission ($2,800 for a rebuilt one; we couldn’t afford $4,100+ labor for a new one) or re-replacing it a year later. We let the bank have the car as the second replacement would’ve been more than she owed on the car.
By contrast, I bought, repaired, maintained, and registered five cars over the course of seven years for less than that one repair on her new, “under warranty” car cost, not counting what that car cost!
As you might guess from the number of cars, most were not reliable, but I have racked less repair costs in the last twenty years with $500 beaters than that one new car did in three. I have spent less than $10,000 in that time on purchases and repairs. Try getting a new car and driving it that long for that little!