Drastic Savings - Possibly dropping the car!

blossomhill_2

mgarl10024 wrote: »

My girlfriend has a car which she regularly uses, so we tend to use that where possible.

LOL, I don't think that counts towards giving up a car, just using someone else's!

gadgetmind

Ultrasonic wrote: »

finance permitting

There are some asset classes where it makes sense to borrow money to acquire them, but not cars. Not given their depreciation. Ever.

Reaper

There are always car clubs if you only want to use a car occasionally.

For example:
Zip Car - High tech street car rental
Whip car - Low tech rental of other members private cars

Ultrasonic

gadgetmind wrote: »

There are some asset classes where it makes sense to borrow money to acquire them, but not cars. Not given their depreciation. Ever.

I'm not sure if you may have misunderstood my post? What I meant by 'finance permitting' was whether or not the loan agreement that the OP already has allows for an early exit that made financial sense. Clearly the most cost effective way of buying cars is to not have a loan at all.

kidmugsy

gadgetmind wrote: »

There are some asset classes where it makes sense to borrow money to acquire them, but not cars. Not given their depreciation. Ever.

I disagree. In 1974, when a tidal wave of inflation was starting to rise, I borrowed to buy a car. It was effectively a gift of money from the bank to me. Naturally, I've not done it again since.

gadgetmind

kidmugsy wrote: »

It was effectively a gift of money from the bank to me. Naturally, I've not done it again since.

Periods when borrowers effectively receive net capital subsidies are few and far between.

A bit of googling suggests interest rates in 1974 of 12% versus inflation of 30%!

http://www.dj-forum.co.uk/lofiversion/index.php/t21173.html

jamesd

stones88 wrote: »

However, my question is, has anybody on here given up the car to drastically save and how was the impact on life style?

I've never given up a car because I've never owned one. Taxis and public transport often work, particularly in cities. It's not a big deal once you have the mindset that paying as you need it is cheaper than a costly subscription. £7,000 a year pays for a lot of grocery deliveries and taxi rides. Perhaps 700 of them a year. Not hard to use fewer taxi rides than that...

You've taken the first step, thinking about the costs. Now to give it a try for a few months to see what happens. Just pretend that you don't have a car for a while and see what happens.

Hooloovoo

blossomhill wrote: »

LOL, I don't think that counts towards giving up a car, just using someone else's!

My thoughts too! My own personal experience of people who "do without a car" do no such thing at all, they just cadge lifts off other people all the time and let them foot the bill. Even getting a contribution from them to petrol costs is hard enough a lot of the time - "well you're going there anyway"!

I hope mgarl10024 is contributing to the cost of his girlfriend's car and not just taking advantage for free.

gadgetmind wrote: »

There are some asset classes where it makes sense to borrow money to acquire them, but not cars. Not given their depreciation. Ever.

Not exactly true when buying a brand new car.

Very few dealers give you any discounts for cash these days. They want you to take out the finance so that they get the commission. You can get bigger discounts on the purchase price when you accept the finance than if you insist on paying cash.

So you need to look carefully at the terms and conditions of the finance. If it doesn't allow any overpayment or early closure then obviously the interest charge is going to vastly outweigh the discount you received. But many times it's perfectly allowable to completed pay off the finance once the first monthly payment has gone through, in which case you make the most of your purchase discount and only pay one month of interest.

Not to mention the fact that a lot of manufacturers are still offering two or three years 0% deals on new cars. Turning down any 0% offer is a waste when it gives you the opportunity to keep the cash in the bank for longer.

gadgetmind

Hooloovoo wrote: »

Not exactly true when buying a brand new car.

No, the best way to save money in that situation is to wander off and do a cash deal for a 2-3 year old one instead.

Hooloovoo

gadgetmind wrote: »

No, the best way to save money in that situation is to wander off and do a cash deal for a 2-3 year old one instead.

Depends where your priorities are

Although for the car I bought a few months ago I picked up one that was two months old with 139 miles on the clock for over five grand less than what it would have cost the first owner two months previous :cool: She decided she wanted the new model instead ... more money than sense springs to mind but I don't care if it works in my favour! [:rotfl:]