time for a new car...

[Foggy_Goggles]

So how come no one balks at mortgaging a house for 30 years? Yes, obviously a house involves a much higher monthly payment in general, but it's the same thing. Yes, you'll pay a lot less interest with a 15 year loan, but if you can't afford to make the higher monthly payment it's a moot point.

The whole real estate financing model in build on the theory of an appreciating asset. A automobile is a depeciating asset. Create an Excel spreadsheet with the residual value of the car (what you could sell it for) in one column and what you'd need to pay to get out of your loan (outstanding principle) in the other. With low down 5 and 6 year loans, it take quite some time to get equity in the vechicle. With almost all types of mortgages (I/O, option ARMs excluded), you have equity instantly. That's the equity piece.

Now make another Excel spreadsheet detailing the total finance cost (gross interest paid) for 3-6yr loans. That's an opportunity cost, you could use that money to pay down your mortgage, save for college etc.

And that's without getting into the whole "living beyond your means" thing. I'm a strong beleiver in the principal that our society confuses want and needs. We drive cars that are too expensive, live in houses that are too big, and generally waste our money in the capital machine. That's why we are married to our jobs, will most likely never retire early and give ourselves ulcers once a month a bill paying tip [/side bar].

AG, I know you and Craig are smart as shit and will never make these mistakes. I look forward to seeing your pimp ride in the mutha fucking front row

[365wp]

So how come no one balks at mortgaging a house for 30 years? Yes, obviously a house involves a much higher monthly payment in general, but it's the same thing. Yes, you'll pay a lot less interest with a 15 year loan, but if you can't afford to make the higher monthly payment it's a moot point.

This is a good point, especially since the interest cost involved in a mortgage involves a lot more money than a car loan.

However...you can buy a used car for cash. It's a lot harder, if not impossible, for most people to pay for a house with cash.

When I was buying my Outback I thought, ok, I can pay this used car off in three years. Then I'll have $x/mo more in my pocket and I'll have a car. You have leeway to balance how much pain per month and how long the pain will last vs. how much car you're buying.

With the condo, it was more "ok, this is the cheapest thing in the state (MA) we can find that doesn't involve actually living in squalor. How do we finance it?" It's either rent or get a 30yr. mortgage, there doesn't seem to be any middle ground...at least for us.

[The AD]

The whole real estate financing model in build on the theory of an appreciating asset. A automobile is a depeciating asset.[/B]

OK, point taken. I guess the bottom line with a car is if you can't afford the payment for a five year (or less) loan, you should buy a cheaper car.

[eldereldo]

Take care that if you lease you know what mileage you can do, and what it will cost you if you exceed it. I could never lease a car that I intended to return as I put way to many miles on in a year. But the last car I leased I had no intention of turning in, made sure the buyout was low, took a 3 year lease and bought the car out at the end. My payments were the same as financing but I could write the whole lease payment off, where-as if I had purchased the car I could only write depreciation off so a slower write-off. And then I sold the car back to myself for the buy-out value and have driven it ever since.

[grrrr]

Good advice: Buy the most house you can afford, and drive the least car you're willing to.

[Buster Highmen]

1999 A4 Avant 112k: Bad headlight bulbs (0-70k), blown water pump (70k), fried driver door sensor (80k, $500 to fix). Other than that, it's been a great car, best I've ever owned. My toyota truck and Corolla are still running, but there's no comparison for how comfy my left nut feels couched in the Audi.

Next? With Audi downgrading their warranty, I'm looking really closely at the Volvo V50 T5 w/AWD and stick.

If Infiniti offered a stick on the FX35, I might get one of those. But I really want a stick.

[The AD]

If Infiniti offered a stick on the FX35, I might get one of those. But I really want a stick.

I know what you mean. Your left nut just can't feel comfy without a stick next to it.

[altagirl]

1999 A4 Avant 112k: Bad headlight bulbs (0-70k), blown water pump (70k), fried driver door sensor (80k, $500 to fix). Other than that, it's been a great car, best I've ever owned. My toyota truck and Corolla are still running, but there's no comparison for how comfy my left nut feels couched in the Audi.

Next? With Audi downgrading their warranty, I'm looking really closely at the Volvo V50 T5 w/AWD and stick.

If Infiniti offered a stick on the FX35, I might get one of those. But I really want a stick.

Yesterday I went and test drove a Volvo w/a stick (same engine, not a wagon) and then the Subaru Legacy XT Limited back to back. And I've gotta say, the Subaru is better - more powerful, faster, handles better (well, I guess it should - it has more hp/torque, weighs less, etc). It just doesn't look as sweet and the seats aren't as comfy. But it's 4k less with all the same options. I'd just be back w/my subaru maintenance guys that I occasionally want to kick in the head.

And in other news my accountant says he's yet to do taxes for a realtor who drove under 20k miles - most are a lot higher. And since I'm new, I may think I'm going to drive less than 15k, but how the hell do I know right now... He ran a bunch of hypothetical numbers and he says it would make more sense to buy. But that brings the payment up a bunch. I'm just sitting here trying to estimate my mileage, and even w/60 trips a year to Alta (which would be the upper limit considering how many times I catch a ride w/Mr.AG), going home to office 2x/day every workday (which I don't do everyday), and 50 miles of running around a day (which is that hard part to guess), I get 16,440 miles a year. It won't ever go on a trip or anything, because we have the truck for that. But he said he sees a minimum of 20k miles a year for all the realtors he does taxes for. And then just deducting mileage, you're deducting more than the lease payments would be and you can't do both.

Hmmm.... This is a pain in the ass. And I also need to set up an S-Corp so I don't have to pay self employment taxes. Which is a whole other pain in the ass.

But in better news... I'm off to a listing appointment. And then going to ride Mueller Park tonight.

[Buster Highmen]

Yesterday I went and test drove a Volvo w/a stick (same engine, not a wagon) and then the Subaru Legacy XT Limited back to back. And I've gotta say, the Subaru is better - more powerful, faster, handles better (well, I guess it should - it has more hp/torque, weighs less, etc). .

Was that the V50 T5 215 hp AWD?

[The AD]

Was that the V50 T5 215 hp AWD?

It must have been the S40 since she said it wasn't a wagon, but I'm curious too if it was the T5, because I test drove that car and it had lots of power.

And AG, what's the deal with the s-corp? My wife is self-employed and has to pay a ton in taxes. I'm definitely interested in anything that could reduce this.

[Pinner]

the V50 T5 215 hp AWD?

WTF? You tech people and your jargony ways...

[Buster Highmen]

Well, the ring buffer is allocated in GART USWC which starts 0x8000 bytes from the base of the page table. Whether the corruption in the IB occurred as a result of a thread writing into it or some other GART corruption is not yet known.

[altagirl]

Was that the V50 T5 215 hp AWD?

I test drove an S40, but it's the S40 T5 218 hp AWD. (The V50 is also 218 hp according to their website) The sales guys said they're the same car with different styling (not a wagon). The subaru 2.5 XT LTD is also a turbo but w/250hp and the clutch just felt better. More smooth less on/off feeling. And supposedly (according to the subaru guy) Subaru's AWD is better because Volvo, BMW, etc are all using a system where the AWD only activates when a front tire slips. Subaru's is active all the time so you don't need to slip in the first place. And if you get a computer problem, the AWD would go out - in the Subaru it's mechanical, so it can't go out.

Go try them out and tell me what you think. I was really rooting for the Volvo, so I was surprised.

[altagirl]

It must have been the S40 since she said it wasn't a wagon, but I'm curious too if it was the T5, because I test drove that car and it had lots of power.

And AG, what's the deal with the s-corp? My wife is self-employed and has to pay a ton in taxes. I'm definitely interested in anything that could reduce this.

It DID have lots of power - I'm not saying it was bad AT ALL. The subaru just had a little more and was smoother shifting. I still really like the Volvo a LOT, but am having a hard time justifying more money for less power and the same options - just a prettier car with extra comfy seats.

No self employment taxes (which is an extra 15.3% over federal and state) if you're an S-corp. Costs a couple hundred bucks to set everything up, and you break even if you make $10,000. If you made $50,000, you'd save more like $4,000. What they do is divide your income into stuff you're putting on a W-2 (to yourself) and the rest goes to you as a dividend, at about a 2/5 ratio. So you're only paying on 2/5 of it instead of 100% of it. Talk to your tax guy and they can set it up and do all the paperwork - you have to file quarterly and there's a whole list of things to file - but even paying someone to do it, you're saving thousands in taxes.

Plus, since you're a corporation, if someone sues you, it's a limited liability situation and they can't go after your personal assets (i.e. your house), just company assets.

[Buster Highmen]

I have no time to test drive. I'm chained to a bunch of compoopers and they've fired 1 of our team of 3.

I'm going to drive the Audi until it dies, then I'll be forced to go shop for a car. Hopefully, I'll have established my vacuum cleaner walking and flexibility consortium by then.

Cars are so bizarre. I have so many Subie devotee friends, yet there's a good number of Subie maintenance horror stories too. Same for Audi. And religion. And politics. And sex.

It's probably a good idea to analyze the reliability statistics and hopefully probability will smile on the choice.

Is the T5 a turbo? I'm leery of turbos. Sort of like a boob job on an engine.

[Buster Highmen]

...just a prettier X with extra comfy seats.

I've always considered that a lovely algebra.

[freshies]

[QUOTE=altagirl]Yesterday I went and test drove a Volvo w/a stick (same engine, not a wagon) and then the Subaru Legacy XT Limited back to back. And I've gotta say, the Subaru is better - more powerful, faster, handles better (well, I guess it should - it has more hp/torque, weighs less, etc).[QUOTE]

like i said on page one.....just pull the trigger on the new Suby. And, just buy it. Trade your old one in, and get the 0% financing from Subaru if you can. Its the way to go hands down: powerful, great all weather car, and looks nice when cleaned up for your clients.

[Pinner]

I've always considered that a lovely algebra.

Is that algebra a push-up?

[altagirl]

Is the T5 a turbo? I'm leery of turbos. Sort of like a boob job on an engine.

Yep.

"The V50 T5 and T5 AWD offers a transversely mounted, 2.5-liter, 5-cylinder turbocharged engine with 218 hp"

The Subaru guys swear they never have problems w/the turbo. (And yeah, what else are they going to say, but they could be selling me on the 3.0 engine that's just as much or more money, I guess). They just said that if you intend to tow much of anything you want the 3.0 instead. But that's what the truck is for...

Anyway, I think most Volvos are turbo unless you get one of the odd models like the 4.4L model of the XC90.

[altagirl]

I've always considered that a lovely algebra.

BWA!




Sorry you're chained to a desk. The finances are a headache, but the test driving is a blast.

[The AD]

Yep.

"The V50 T5 and T5 AWD offers a transversely mounted, 2.5-liter, 5-cylinder turbocharged engine with 218 hp"

A turbo, and a turbo 5-cylinder no less! Talk about an abomination

Actually I was surprised you liked the Volvo so much when you posted yesterday about it. When my wife and I drove it we were pretty underwhelmed. Yes, I thought the engine had good power, but nothing else about the car did much for us. But, I guess if we all liked the same car model there wouldn't be like 200 different ones on the market.

[Buster Highmen]

Sorry you're chained to a desk. The finances are a headache, but the test driving is a blast.

Thanks, but it's not your fault, it's my responsibility.

And it's __so__ time for a change, despite the fact that the money is really good. I'll be getting me one of them self employed thingys within a couple of years.

[natty dread]

My vote is for the suby XT, both for the turbo engine and the 50/50 mechanical 4wd. Subaru has been building turbo rally cars for years. Ask any WRX owner if they've had problems with their drivetrain; they are frickin bomber. The suby engine block can take over 350 hp with no internal mods and still be reliable (right KS?)--with slight mods, they pump them up to 500 hp for racing. Volvo engines don't have the time tested rally heritage of the suby. Subaru quality has improved greatly since 2000, check the reviews in comparison with volvo and audi, all suby models are recommended by CR. Plus they do well in the crash tests.

[Jumper Bones]

Volvo engines don't have the time tested rally heritage of the suby...

AHAHAHAHAHAHAHAHA, no. Ever heard of the 240? You know, the one they built for 20-some years straight, and that people still race to this day...and it's a 2WD at that.

I am a Volvo devotee, I was born and raised on them, but something AG said about the AWD system keyed me. With the Volvo being electronically-controlled, and the Subie being mechanically-controlled, I'd steer towards the Subaru. With my experience with airplanes and their systems, and with Volvo computers (my father's 850 had several issues), staying simple is the way to go, and getting sophisticated is generally asking from trouble. Complex, intricate, computer or electrically-driven stuff breaks, and mechanical stuff is far more reliable and a whole hell of a lot less finicky. You'd be surprised, but in aerospace stuff (at least from a systems point of view), the vogue has been to make things essential things like landing gear simpler and more effecient, learning a lesson from 60s and 70s engineering that making complex shit is just asking for trouble. AD, don't punk me on this like I know you can.

As I mentioned, my father's 850 Turbo had some issues with its ECU, one time a transmission issue and some other related issues (constant "check engine" light being on despite there being no problem and the system being reset, etc), enough of which we ended up getting a sport ECU from iPD of Portland, and all the issues went away - it's a hot rod now too, it gained about 50hp from the swap & a new sport exhaust system being added.

Also Volvo is a relative newcomer to the AWD game, but Subaru's been at it for god knows how long, without having to involve fancy technology. Their system is likely to be more robust.

Buster, I'm the opposite of you, I LOVE turbocharged cars and how they handle - the steep acceleration curve, the way they power up hills and around corners...I love 'em.

Natty pointed something very good out...all of Subaru's stuff has been recommended by CR. Volvo's hasn't.

That said I think Subarus still feel cheap on the inside, even when dressed up all pretty...and that 3.0 V-6, if it's still the same as it was with the "LL Bean" model, is hooked up to the world's most BORING shift program, so the car still sucks. The addition of turbos as an option are exactly what was needed for their line....or allowing the 6 to come with a stick.

[natty dread]

Sure the 240 is bomber and proven jumperb, but there is little resemblence between its drivetrain components and the current unreliable volvos. The drivetrain in the subaru uses the same technology currently used and abused in rallies for the last decade and a half--the EJ20/25 block is legendary for it's strength. Haven't seen volvo on the WRC podium in that time. 240/current volvos=apples/oranges. Sure, the subies interiors aren't volvo/audi/lexus/vw quality, but their engineering, especially today, is second to none.