No. of Recommendations: 2
I did not include the loan payment in my calculations because it is meaningless to the analysis. This (and prior) discussions were never about cash flow, or payment affordability but about the wisest use of my dollars. If I had paid cash up front for a new car, principal payment (or the price) would never be broached in a cost to operate comparison. Had I followed suggestions in the earlier thread to fix the old car and not buy a new vehicle until I had enough cash in the bank (which would be now) my prior analysis indicates that decision would probably have cost an additional $2400.

I see now. Since NOT buying a new car was never an option, then I more or less agree with your original analysis. And including depreciation is meaningless.

But I would never look at the decision that way. You either drive an old car and spend a little money, or drive a new car and spend a lot of money. Once you pull the trigger to replace the old car, you still have to pay for it, regardless of what the cash (or cash flow) was doing prior to that point.

I'm going to buy a new car sometime in the next year, since I told my wife we would once she started working again. Analysis: 1) 19-year old civic is showing its age, and 2) we can afford it. Interestingly, she's the one who wants to wait now (home ownership has changed her view on how much of an e-fund is enough.)

Print the post  


UGC Disclosure Notice Regarding Credit Card Posts
Community board discussions about credit cards are not provided or commissioned by banks who may have advertising relationships with The Motley Fool. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.