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At the root of this thread is an issue about money.

Being very sensible, working, practical, business-minded Filipinos, I thought this would be the most appropriate forum.

Which would you choose?

I have working civic. probably worth 350k 6 years old. should i sell now?

I can buy a crv for 500,000 down (presumably taking 350k if sell civic NOW), then pay 10k every month for the next 5 years...

so under that scheme, cash out is 150,000 + (10,000 x 12 mos x 5 years) = 150k + 600k = 750k

so you can cash out about 750k over the next 5 years, or keep existing car for the next 5 years (it won't break down naman siguro in 5)...

the problem lang is that after 5 years, you have a fully depreciated car (most likely) which you can't sell (or maybe not for much), possibly can't use, and have to buy a new car ANYWAY, and with no "extra" resale capital to use.. ergo you pay the full amount..

so which would you choose?
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Comments

  • sell the civic

    raise 50k in cash and buy a second hand gen1 2000++ crv

    crv's are great especialy when taking it to makro or price smart.


    10 to 1 that after 5 years your used crv wont have depreciated as much as if you had purchased a new crv.
  • oh yeah.

    cars will never ever ever ever ever ever and i reiterate ever be an investment.

    they are liabilities
  • When did an depreciable asset became an investment....

    Technically they are not liabilities too kasi di naman sila utang, but they are more of a non-performing asset is the proper term.
  • still though. when you have to pay for insurance, registration, maintance like change oil and tire changes. and then subsequently spend upwards of 3000 pesos a month on fuel. they become liabilities. To maintain ownership of a vehicle especialy a new one entails a lot of cost not figured in the purchase price.
  • I simply want to point out the wrong term of usage. Maybe in a sense its a liability due to those costs associated with owning a car, but its not an utang which is the business term for liability.

    Its how some personal finance people (Kiyosaki) wants to make it simple to understand for the lay man.
  • Something that depreciates is not a good investment. Whichever you choose means the same: losing money from day one. I'm not sure if you've heard of the expression "equity bubble bursts" in trade equity.

    Keep the car and think about better things.

    :)
  • @#$%^^!!... Death, Taxes, DEPRECIATION.

    You can never win.
    You'll always lose.
    Endless cycle of gastos.. demmm

    hence the quotes around "investments" . *sigh*
  • You should have put "quotes" around "smart purchase" not "investments", unless you want to mislead.

    :)
  • the intention was not to mislead, but to find out whether I should sell my car and buy a new one, or stick it out with the perfectly working car that I have now :D hehehe
  • If buying that CRV will eat even just 10% of your monthly income forget about it (thats my opinion being a barrat so others might have some other opinions) and stick with that Civic. But if you're rich and maybe it just eats 5% of your montlhy income go ahead and enjoy the splash of leisure.

    Believe me it pains to pay those hulugans for the 5 years you have that CRV and your car is just half its price when you bought it and you're still paying for it. Yan ang pinakamasakit sa totoo lang.
  • KuyaDannyKuyaDanny Moderator PEx Moderator
    When it comes to transportation, I like to spend the least amount of money as I can.
  • AMEN! KuyaDanny

    Among luxuries I dont believe in spending for good cars, I rather buy a good watch (ie: Rolex) or a good house kaysa a good car....
  • actually masakit nga ang hulugan.. kung tv nga at P2k a month, 0% interest over 12 months.. was such a RELIEF when it was fully paid. then there was the ref at 0% din for 6 months, pero 6k. ouchies..

    KD, nasaan ka na....? hehehe ;)
  • KuyaDannyKuyaDanny Moderator PEx Moderator
    We have two cars, one is 11 years old, the other eight. I wouldn't really mind if they kept going forever. :lol:
  • a car's value depreciates rapidly in the first 3 years. so just buy a 2nd-hand car. let other people "subsidize" for that 3 years of depreciation.

    and you mentioned that you're still paying for other things you've purchased. is it wise to add another one? i don't know how much you earn, but you better make sure that you don't end up spending your entire paycheck on bills, with nothing left for savings or investing.
  • tennisacetennisace PEx Veteran ⭐⭐
    I think we’re all missing the point here.

    The question is, if you have a perfectly working car, why would you want to buy a new one and create a liability for yourself? If you’ve managed for 6 years with your civic, what circumstance is prompting you to buy a new car? A self-serving motivation to buy a new car is not always a sound financial decision.

    I agree with most of you guys that cars are depreciating assets, non-performing assets, liabilities, etc. Personally, I prefer good cars to a Rolex watch for a couple of reasons. A good, reliable car is a necessity for what I do; and my good car (and its operational expenses) is a tax-deductible expense. Speaking of over-hyped Rolex watches, I prefer real timepieces like Blancpain or Patek Philippe, but that’s another story.

    This is what I think:

    If you can raise 750k in 5 years, you’d be better off taking that money and making it work for you instead of making it work for somebody else. In 5 years, your civic will still be worth something, your principal will still be yours, and although you may pay taxes on your gains, you will have ended up making money (assuming that Mr. Cricket has good financial sense). Plus, you can use the power of leverage to acquire additional income-producing assets that may even allow you to go for something better than a small, under-powered and noisy CRV.

    I just wished that everyone in their right minds would be looking to place the better part of their money into income-producing assets. And we still wonder why the rich keeps getting richer and the poor keeps getting poorer?
  • magtataho wrote:
    a car's value depreciates rapidly in the first 3 years. so just buy a 2nd-hand car. let other people "subsidize" for that 3 years of depreciation.

    and you mentioned that you're still paying for other things you've purchased. is it wise to add another one? i don't know how much you earn, but you better make sure that you don't end up spending your entire paycheck on bills, with nothing left for savings or investing.
    buti nalang tapos na yung mga installments na yun. The thought of paying for something else again on installment, that will be devaluated by the time i finish paying for it...

    buying is not one of those things which are designed to get you ahead.. (unless you love cars hahaha )
  • At the root of this thread is an issue about money.

    Being very sensible, working, practical, business-minded Filipinos, I thought this would be the most appropriate forum.

    Which would you choose?

    I have working civic. probably worth 350k 6 years old. should i sell now?

    I can buy a crv for 500,000 down (presumably taking 350k if sell civic NOW), then pay 10k every month for the next 5 years...

    so under that scheme, cash out is 150,000 + (10,000 x 12 mos x 5 years) = 150k + 600k = 750k

    so you can cash out about 750k over the next 5 years, or keep existing car for the next 5 years (it won't break down naman siguro in 5)...

    the problem lang is that after 5 years, you have a fully depreciated car (most likely) which you can't sell (or maybe not for much), possibly can't use, and have to buy a new car ANYWAY, and with no "extra" resale capital to use.. ergo you pay the full amount..

    so which would you choose?

    The question is about money. If you can not afford it, then don't buy a new CRV. I have a 10 yr old car, it's running pretty well. Seldom masira. It's in how you take care of it, not how old it is.

    Visit my blog --> http://financialmind.blogspot.com
  • I hate to say this since I am a car enthusiast, but cars are liabilities.
  • tidus1203 wrote:
    but its not an utang which is the business term for liability.

    in this case, it is utang because NoisyCricket said:
    then pay 10k every month for the next 5 years...

    .
    tidus1203 wrote:
    Its how some personal finance people (Kiyosaki) wants to make it simple to understand for the lay man.

    i am a layman, how many here are not?
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