Hypothetical questions are fun…right?

February 12, 2010 · 39 comments

Forgive me PDITF loyalists, for I have sinned. It is way to late for me to really think of anything worth writing about, so on this glorious Friday morning, I ask a simple, but thought provoking question.

How much money would you have to be given tomorrow to go out and buy a new car?

I asked this question to the roomy and he said if he was given $200,000 tomorrow he would consider going out and buying a $50,000 car. He then turned the question around to me. I think I would have to be given a million bones before I would consider upgrading to a $30K to $40K car. My roommate and I had two very different answers, so I’m wondering how it would work for you.

I think this question is interesting for a few reasons. First, playing the hypothetical game is always fun. Second, good/reliable cars are a necessity for most of us as we spend a good chunk of time behind the wheel. But I think the most interesting piece of this question lies in the fact that cars are a depriciating asset. Wise investing says “D0n’t buy things that depreciate” but the materialist in us says “It would be so nice to have heated seats, gps, a microwave, and a wireless headset in my new car.” Cars are interesting because they are so important, yet counterproductive to our financial well being.

So here’s what I want to know…

1) What kind of car do you currently drive. (Year, Model, Street Value)

2) How much money would you have to win/inherit/steal before you would even consider changing vehicles? (Would you upgrade right away, or have to be given over $100K, $300k, etc?)

3) From that ideal amount, how much would you spend on a car? (i.e. would need to be given $500K in which I would spend $20K on a car, or would need to receive $200K in which $80K would be put towards a car, etc)

Drop your details in the section below. I suspect there will be a huge fluctuation in answers.

{ 39 comments }

1 Jake Stichler

1. 2006 Honda Big Ruckus PS250, $3500

2. Ten grand would suffice.

3. Five grand would suffice. No need to be wasteful, now.

2 Kyle C.

Car 1: 2004 Isuzu Rodeo 4X4 – $6,800
Car 2: 2005 Nissa Altima 2.5s – $9,900

I don't need or want a new car, however my wife does so the magic number would be around $36k since she wants a Tahoe. I can' seem to win the disagreement about it. We have two cars in good working condition that have served us well and will continue to serve us well.

3 Executioner

Cars are disposable items meant to get you from point A to point B. Even if I was given 1.21 gajillion dollars I would still own a low-key car, probably a well-maintained used one. I personally avoid driving cars as much as possible because I hate traffic. Bicycles are way cooler.

4 Ashley

1) I drive a 2009 Toyota Yaris… street value probs at this point around $11-12,000.
2) I don't want a new car since I am perfectly happy with my new one. It would be pretty hard to get me to switch at this point, because I'm still in the honeymoon phase and love every little thing about it. Plus I like the idea of not having to think about cars or go car shopping again for a long time. I think if I inherited money I would like to use it to buy a house or something like that… but since that is not the name of this game… I would buy a new car if I received a million dollars.
3) I would buy a really sick sports car (I really do have a weakness for cool, beautiful, fast cars!), maybe around $50-60,000. Then I'd still have enough left to buy the house!

5 Rupit

1) 2005 Scion xB – $8,000
2) I only have 2 debts- my car and my house. So, the amount of money would need to be either enough to pay off my car and purchase a new one, or it would need to be enough to pay off the house and a car. Basically, I would decide whether or not it's "enough" when I see it. My preference would be $200K+ so that I can pay off both and have some left over.
3) Regardless of the amount, I'd research to find the vehicle that's most reliable and cheapest to repair. Cars suck, so I'd pay a premium for the reduction in headache.

6 Becca

1) None! I don't have one right now.
2) I'd say 80K, because I have other goals that I'd like to accomplish before getting another car.
3) 50K of that would be spent on a car….only b/c if I'm in hypothetical land, I want a Tesla Model S!!!

7 psychsarah

Hypothetical questions are fun!

1. I currently drive a 2005 Saturn Vue-I'm not sure what it would be worth now…it has really high kilometres on it…maybe $10-15,000
2. I would need to get about $250,000 so I could pay off my house, my husband's Jeep and beef up the emergency fund before proceeding to buy a new car.
3. I would probably spend about $30-35, 000 on something fuel efficient, safe, reliable, long lasting, inexpensive to repair, and good for winter driving. I'm not much of a car person, though I drive a ton for work. It would have a good quality stereo system though, because my music and audiobooks keep me sane while driving all over the place

8 tom

1) 2005 Jeep Liberty – $13,000 & 2006 Saturn Ion – $8000

2) At least $200K – Both cars work great. I just bought the Liberty and it only has 26K miles, the Ion would be the first to go.

3) I'd buy my wife her dream car – brand new baby blue Mustang convertible so $30K at most (her tastes are much simpler than mine, I'd go for an Aston Martin DBS). If I got $500K, I'd buy a Tesla Roadster (or wait 3 years for the Model S to mature).

9 Kristen

1) 2008 Nissan Rogue ~20K
2) It would have to be gigantic amount, because I love this car and would rather use the money elsewhere (house, travel, etc)…5 Million
3) Would prob spend 50-70K on something interesting.

I've ran 2 used Subaru's into the ground and I never thought I was the type of person to buy a new car because it seemed stupid to take the depreciation hit. But thinking long term, buying a reasonably priced, trustworthy new car is not that bad of a move as long as you plan to own it for its entire lifespan plus you control the maintenance & upkeep.

Selling a new car after only 3-5 years would be the worst move financially, because you end up paying the highest upfront cost & get the least return.

10 Alice

I live in the city with lots of public transport, so given the money I would not buy a car. I do not own a car now but did before in the city and am not willing to shell out money monthly for parking, maintenance, and gas. The wonderful bus and train system can get me there, cheaper, while I can support the cabs if I am running late. Maybe one day when I am a millionaire I will buy a car again. But I told myself IF I were to get a car again… my next car is a (used) BMW 7 series and I told myself I am paying cash for my next car… doesn't look like I will be getting one before I retire! :-)

11 Guest

1) I have no car – I live in a city. Boyfriend kept his car when we moved up here, though – 2007 Mazda 3, probably worth around $12k now.

2) Other goals are more important – I'd have to have a pretty sweet house before I would buy a car at all. And since I live in one of the most expensive real estate markets in the US, my tipping point would probably be around 2 or 3 million.

3) I really can't imagine spending more than $40k on a car. I don't want an SUV or a luxury car, so that knocks out all the expensive stuff. I'd love a zippy little Hybrid – small and easy to park in the city. I would def. buy new because I like knowing everything that has ever happened to the car and not having to worry about if the seller concealed anything, and I'd probably get it fully loaded, which would put it in the $30k range.

12 Erin

Car No. 1: 2006 Honda Civic, 48K miles, $10000-$12000
Car No. 2: 1996 Dodge Dakota, 130K miles, $1500-$2000

We would probably have to inherit around $50K before we would consider it.

We would pay off student loans first which are aorund 28K. Then we would use the remaining to buy a new used truck to replace the old truck I've had since high school. We rpobably wouldn't use 22K so we would have some left over to put in the EF. I don't know how much it would cost for me to replace the civic. I love it and want to drive it until it doesn't drive any more. :)

13 Red

1) 2005 Dodge Stratus with about 60k miles (40k when bought used)
2) Good grief! I would have to be out of debt completely, so there's $30k. I'd want to own a home and have a large stash of emergency money for maintenance for the rest of my life (ha, it's hypothetical!) so that'd be another $2 mil or so. Plus D's debts and enough for a small, elegant wedding. Then and only then could I say that everything was paid for that is more important than a new car – actually, I'd probably want a hefty sum to put in a retirement account and a high-yield savings account to generate some extra money for travel. Total, I'd say $7 million. And even then, I wouldn't spend the money on a new car until mine gives out. (I've always thought it was silly that people who have otherwise reliable vehicles win the lottery and immediately buy a new one!)
3) I'd give myself $50,000 for a new car, if I got $7 million. (Hey, why not? It's pennies at that point!) Then I could get a car with all the luxuries – including a microwave! – that was also fuel efficient.

14 Michelle

1) 2000 Toyota 4Runner, worth about $6K
2) Megamillions/Powerball type money…I LOVE MY PAID FOR VEHICLE
3) Once I'm a millionaire, if I were to find that 1968 Cougar that DH regrets selling to this day, I would pay up to $50K for a pristine restoration…

15 ImAfuziPlatypus

We have three cars: I drive a 2006 Lexus IS250 AWD, the wife drives a 2003 Acura TL, and we have a 2000 BMW M Roadster Convertable.

The BMW and Lexus were bought new, and we will retire the remaining $9M in debt on the Lexus this year.

We will consider upgrading cars when one wears out, money wouldn't be determining factor. When we do upgrade, 20-30% of the price will come from our downpayment, and we will structure a 24-36 month repayment on the rest. I don't have a figure for what that would be since it's determined by our cash flow ability when the need arises.

Hypothetically, if I were given over $5MM; the first $250M would go to an Aston Martin DBS or Vanquish.

16 Larry

1) Funny you should ask. A Toyota Camry LE 2010, purchased last month for $23.6K before the s**t hit the fan (but with a Denso gas pedal that would have exempted it from the Do Not Sell list in any case). I put $6.5K down and financed the rest through the dealer at 2.9%, which is minimal interest over 4 years. Don't ask me the street value now; I hope it's more than $23.60. Seriously, this is my third Toyota and I think it is a fine car. There are a few minor things I don't like as much as the 2000 but so far acceleration, braking, handling, and ride are all superb and completely responsive. I would not have bought a new car just now except that my 2000 Camry was rear-ended and totalled a month ago. My answer to the depreciation issue is to hold any car I buy as long as possible, 10 years or more if I can. I want to hold it long enough that it pays for itself and not so long that it starts developing major problems.

2) Well, if the car starts accelerating unexpectedly . . .

3) No matter how much I won/inherited/stole, I see no reason to pay more than about $25K for a car.

17 Dave (twoyoung.com)

2006 Volvo s40, 62,000, $13,000

I would have to be given $180,000…

I would spend $20k max

18 Rebecca

1. 1996 Ford Taurus. Since we just replaced the heater core, are replacing the brakes this weekend, and the blower moter shortly thereafter I'd say its worth about $3.

2. Right now $1500 would buy me better than what I have. But to buy a new car I'd say $187,000.

3. $147,000 to pay off all debt including mortgage and $40,000 for a conversion van with all the bells and whistles. I think I am the last person alive that wants one of those. But we had one we drove until in died and I loved it. The space inside, oh the glorious space. But knowing myself I'd probably cheap out and buy a used one for 6 grand and put the difference in a savings account. Well, after I went grocery shopping and bought a steak.

19 Kd_trying2B_debtfree

1. 2007 Dodge Caliber aka ladybug
2. 50k, but if I had that much it would go to buy a house. I'd sit nice in my lady bug on the way to the new house.
3. None! If i have spare money it would pay off student loans or home purchase.

20 Investing Newbie

1. No car. Unless by car you mean the MTA bus and train system.

2) I was originally going to say the price of the car, but reading other people's answers made me realize there is so much ore that goes into it. I've always dreamt that if I won the lotto, that my breakdown of money would go into paying off my parent's debt (first), opening a savings account with a giant iBank and living off the interest (while keeping my job!), donating to charity (setting up an account to support a lifetime donation), buying a house, and THEN buying a car. So if I factor all of that in we're looking at somewhere between $30-50M. LOL. What, I'm making sure of everything!

3) I've only dreamed of having the following cars in life: Lexus Rx450, Porsche Cheyenne, Range Rover (what I love me some SUVs!). So somewhere upwards of $80K will go towards the car.

Thank goodness this is all hypothetical. I can have a fancy shmancy dream.

21 Mel

I drive a 2007 Ford Escape, on which I owe slightly under $13k on the remainder of the loan. I'd happily pay it off and keep it for a couple more years. But only if I received somewhere around $50,000-75,000.

The remainder, a "toy car" – Pontiac Grand Am '77, preferably in black with red leather interior.

22 Stargirl Heuser

I currently drive a 1997 Olds Achevia. It's a complete POS and needs repairs on a more than regular basis. (Luckily my father is handy with cars). I don't think it's first owner loved it very much. It's probably got a negative street value.

If I was given 20,000 tomorrow, I'd go buy spend $10,000 (max) on a car from Car Max… probably closer to, say 7-8000. This would be a huge leap for me, as the most I've ever spent on a car is $2,250. I'd spend the other 10-13,000 on debt. It would make a substantial dent.

However, more ideal would be about $45,000. With that, I could pay off my student loans (~$30k….stupid private colleges!) credit card debt (~2.5K), buy a car(~8k), and move into a decent apartment (my apartment is really run down. And a little creepy sometimes). And have a little to put in the bank (I don't have an emergency fund. I'm working on it, but please, my paycheck is a pittance.)

23 Allen

2005 Chevy Malibu Maxx est value $5,000 and paid off 2 years ago.

If I got $100,000, I might consider $20,000 for a new car….depends how I'm feeling.

24 BakinBaker

1. 2009 Scion xB, trade-in value is about $15k
2. I'd have to get $150k or more to pay cash for a new car.
3. From $150k, maybe $30k – $35k. We want a van so any opportunity to get it would be taken.

25 Pam

Great question!

Drive a 2005 Ford Focus ZX5 (unsure of street value now). Original purchase price $27,000 (winter package was necessary since i live in the snow belt of Ontario)

To upgrade my car I'd probably need about $500,000 (canadian). That takes care of my $23K debt, a nice neat amount for an out right home purchase, and a chunk for the retirement fund. Leaving me with about $30K for a car. When I purchased the car I have now it was 3 days after a massive accident, writing off my previous car. it was not the one I wanted. It was the one I was already comfortable with, didn't even test drive the thing. the state of mind I was in was far different than now. I got a car that would transition from sporty and cute in my 20's to handling a family in my 30's. I was 26 when I bought my car. I'll be 31 this year.

I said $500K – however, I'd prefer $1 million before I would actually upgrade to a high standard, more expensive car. Most of you probably cringed when I said I drive a Ford. Truthfully my car of choice for my first car would have been a Mitsubishi Eclipse. When you have an accident, aren't used to a standard car and really don't want anything to do with driving, the purchase you make is seriously altered. I wouldn't trade my car for the world now – but every time i drive by an Eclipse/it drives by me, I long for the what if.

26 air15sheena

1. 2005 Nissan Sentra SE; worst est $5-6,000
2. I would want to pay off my student loans, buy a house, and have a chunk of savings left before I buy another car, so I would need $450,000.
3. I would pick – up a 2009 Infiniti G35 from CarMax; spend no more than $30,000

27 MoneyHoneySF

1) 06 BMW 330 coupe.

2) $100,000. Maybe in a few years. Not neccesarily have to be paid in full. Would consider 20% downpayment on new car.

3) $50,000. which is half of the inherited, winning amount.

I like your post and question you pose. Because I have considered to buy a car a few years later. It's interesting to see everyone's perspective on this issue.

http://moneyhoneysf.blogspot.com/

28 Larry

1) Funny you should ask. A Toyota Camry LE 2010, purchased last month for $23.6K before the s**t hit the fan (but with a Denso gas pedal that would have exempted it from the Do Not Sell list in any case). I put $6.5K down and financed the rest through the dealer at 2.9%, which is minimal interest over 4 years. Don't ask me the street value now; I hope it's more than $23.60. Seriously, this is my third Toyota and I think it is a fine car. There are a few minor things I don't like as much as the 2000 but so far acceleration, braking, handling, and ride are all superb and completely responsive. I would not have bought a new car just now except that my 2000 Camry was rear-ended and totalled a month ago. My answer to the depreciation issue is to hold any car I buy as long as possible, 10 years or more if I can. I want to hold it long enough that it pays for itself and not so long that it starts developing major problems.

2) Well, if the car starts accelerating unexpectedly . . .

3) No matter how much I won/inherited/stole, I see no reason to pay more than about $25K for a car.

29 eemusings

1) What kind of car do you currently drive. (Year, Model, Street Value). Um, i don't, even though I half own one. Bf drives it – 1990 or 1991 Mazda Familia, worth less than 2k probably.

2) How much money would you have to win/inherit/steal before you would even consider changing vehicles? (Would you upgrade right away, or have to be given over $100K, $300k, etc?) – At least half a mil :P Preferably more like $750k. I'd rather buy a house first!

3) From that ideal amount, how much would you spend on a car? I dunno – have no idea what new cars cost really. Maybe 20k?

30 Anon

1. I drive a 2005 Acura RSX worth maybe 9k. Wife drives a 2001 Acura CL Type S worth maybe 6k.

2. Both cars run great and still look nice so they would be tough to replace. With so many other things vying for our cash, new home, vacations, retirement… I'm guessing about two million bucks to push me to buy a new car.

3. With two million bucks I'd probably shoot for a Audi S5. But my dream car is the Audi R8 5.2, which I would need about 3 million to justify it.

31 Shelby

1. 2002 Nissan Altima 3.5L V6
2. $500K minimum because my car is paid for and I Iike it like that. I hate how car loans make me feel poor.
3. I'd spend about $50K on a good 2 years used 7 series BMW which I can pick up around here at that price because there's a lot of money locally and cars like these are common.

32 Meg

Ninja, there's something inherently wrong with your question…. Is the money I get for a car? Am I thinking of a car already? Or do I need to save some of this? Because people like me exist…. You'll see why in a sec why I've asked. ;)

1. a) '97 Mazda Miata, my DD, never gonna sell so it don't matter ;)
b) '01 Honda S2000, hubby's DD, probably get at least $10k, I'd hope, if we did sell (I don't wanna!)
c) '90 Nissan 240SX, my toy, hell no I ain't selling her ;) Fun's just getting started!
2. Have money to spend on a car, will spend on a car. I love cars, they're the hobby of this family. :)
3. I can find a car to fit any budget, I promise. I paid $2k for my 240SX, and spent $1.7k on a new engine and tranny for her alone. (Planned, not entirely necessary replacement.) I would love to add a rolling 240Z chassis to my collection, so that's the next car purchase for me. $1.5k should suffice for that, it's the engine and tranny that'll break that project. (RB26DETT, or RB25DET if I cop out.)
OR I would spend up to the $125k for a Ferrari 550 Maranello that's my (in reach) dream car. If the hubs dies on me (and he better not, by the way) and I'm forced to have an insurance pay-out, that car will be in the driveway before he's buried, I swear. But I plan on having it while he's with me anyhow. :)

I mean…. My first investment account, individual non-retirement has the nickname "Saving for my Ferrari." So I'm cool with working for a while. I just want her before I'm 40. (21 right now.)

Sooooooo, in a nutshell, Ninja: Great question for regular people, not so great for us car enthusiasts. ;)

33 joetaxpayer

Toyota Avalon '07, $32K new, 45K miles now.
There's actually no amount. I am not a car person.
It's like asking how much money would it take to buy a bigger house. I simply don't want one. Next house will be 2/3 the size of this one.

34 CBC

We have a 2000 Ford Contour SE with 153,000 miles on it. Paid for. It might bring $1,000-$2,000 at best. It's kinda beat up. But again… paid for.
We need another car. The Mrs. and I make do but there are times the logistics are challenging. We're lucky we don't live in a huge city.
If we had a windfall of $20k, we'd likely buy a nice used vehicle in the $14,000-$16,000 range, and pay cash. The leftover would be to bring anything up to snuff… new tires, etc, as needed. There's always something.

35 Sandy L

Wow..I guess it depends on how old your car is and if it's paid for already.

We have a 2008 Honda Element and a 2005 Camry both paid for. I guess to buy a newer car right now, it would be a total waste of money. It would probably take over $1MM as I'd rather put that money into other goals instead.

Now, If one of our cars were 10 years old, then the number would be a lot lower..like $25K. I guess it all depends on how close you are to buying that next vehicle anyway.

I'm with Joe Taxpayer..cars are an expense and not something I covet. I'd blow $10K on a vacation or experience before I would spent it upgrading an already reliable car.

36 Chad Arnold

99' Honda Accord $2500. I would have to have a million dollars in the bank to justify purchasing a new car with cash. With a million in the bank I think it would justify purchasing a 40-50k car.

37 BRB

1. 1994 Chevy Cavalier $500 maybe

2. $25,000, I'd use $10000 to pay off debt and take what was left for a car. A new car for me is going to be on the list pretty soon for us anyway.

3. I could see paying $12000 for a "new" car. I'd have my father use his ebay motors skills and find me a 2002 Camry, preferably hybrid.

38 WJW

1. '03 Mitsu Montero Sport: $4500; '04 Mazda 6s: $6000.
2. $100k
3. $25k, would not be used

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