Are you looking to buy a new car but feeling overwhelmed by the options and steps you need to take? In this episode, Josh & Austin dive into everything you need to know before buying a vehicle. Join the guys as they discuss how to research and compare different models, consider financing options, and avoid common mistakes that can drain your wallet. Whether you're a first-time buyer or a seasoned car owner, these expert insights will empower you to make a savvy and informed decision on your next vehicle purchase.
For the full transcript, show notes, and resources, visit theinvesteddads.com/192
Sign up for our exclusive newsletter here!
The Invested Dads: Website | Instagram | Facebook | Spotify | Apple Podcasts
Are you looking to buy a new car but feeling overwhelmed by the options and steps you need to take? In this episode, Josh & Austin dive into everything you need to know before buying a vehicle. Join the guys as they discuss how to research and compare different models, consider financing options, and avoid common mistakes that can drain your wallet. Whether you're a first-time buyer or a seasoned car owner, these expert insights will empower you to make a savvy and informed decision on your next vehicle purchase.
For the full transcript, show notes, and resources, visit theinvesteddads.com/192
Sign up for our exclusive newsletter here!
The Invested Dads: Website | Instagram | Facebook | Spotify | Apple Podcasts
Welcome to The Invested Dads Podcast, simplifying financial topics so that you can take action and make your financial situation better. Helping you to understand the current world of financial planning and investments, here are your hosts, Josh Robb and Austin Wilson.
Austin Wilson:
All right. Hey. Welcome back to The Invested Dads podcast, the podcast where we take you on a journey to better your financial future. I'm Austin Wilson, Co-Portfolio Manager at Hixon Zuercher Capital Management.
Josh Robb:
And I'm Josh Robb, Director of Wealth Management at Hixon Zuercher Capital Management. Austin, how can people help us with our podcast?
Austin Wilson:
Please, subscribe if you're not subscribed, you get new episodes when they drop each and every Thursday, and it'd be great if you'd leave us a review on Apple Podcasts or Spotify so that other people can find us and hopefully we'll be able to help them out as well. So today, something I'm passionate about.
Josh Robb:
Okay.
Austin Wilson:
This has really been brought on by things happening in my personal life that have made me consider this discussion. Now the discussion is-
Josh Robb:
Air conditioning.
Austin Wilson:
Ooh, that's a good one.
Josh Robb:
We're recording today without air conditioning.
Austin Wilson:
Yeah, it's pretty toasty.
Josh Robb:
So it is warm.
Austin Wilson:
No airflow and no air conditioning.
Josh Robb:
It's warm.
Austin Wilson:
No, it's actually about buying a vehicle. As a matter of background, the why this came up in my mind as a topic was I recently had some issues with one of my windows went out, motors went out on my '07 $190,000 Honda Pilot.
Josh Robb:
190,000 mile.
Austin Wilson:
Not dollar. Yeah, mile.
Josh Robb:
Yeah. That's an expensive Honda Pilot.
Austin Wilson:
170,000 mile.
Josh Robb:
Ooh, is it made of gold?
Austin Wilson:
Much less money than that Pilot. And I was really frustrated with it for a number of days. Long story short, I ended up fixing it myself, but through this whole discussion, my wife and I were like, "It's a nice car, but it's older, not worth a lot of money. At what point do we sell it and just get something a little bit nicer and more reliable perhaps?" So the discussion was, "Do you want to buy a new car?"
And I've had a lot of thought around this, and long story short, I've decided no.
Josh Robb:
No.
Austin Wilson:
But there's a lot of reasons that we're going to talk about today as to why that is.
Josh Robb:
Okay.
[1:58] - 1st Consideration When Buying a Car: Planning & Research
Austin Wilson:
We're going to talk about five main categories of things you need to consider when you're looking at buying a new or new to you vehicle, right?
Josh Robb:
Yep. Okay.
Austin Wilson:
So the first one is, we're going to talk about things you need to do before you even go shopping, and this is the research and planning step. So it's really important to look into, A, what kind of vehicle you want, look at how much vehicle you can afford. So I prefer to look at this on a dollar total cost basis, not a payment basis, but we're going to get into the financing discussion later.
Josh Robb:
All right.
Austin Wilson:
A lot of people look at it-
Josh Robb:
Both are important.
Austin Wilson:
Yeah. A lot of people look at it the other way, but really you should have a dollar ... Like you can afford a $30,000 car or whatever. That's an easy way to look at it, but that really helps you to be able to filter and search and know what you want. You need to look at your needs, look at your lifestyle and say, "Hey, do I need ... Can I get by with a small little fuel efficient little car? Easy to drive, easy to park, and it's just me." Or do you have a family, like Josh, where you need a school bus?
Josh Robb:
Yes, that's right.
Austin Wilson:
So those are very different scenarios you are going-
Josh Robb:
And one of the vehicles I own do not fit all of my family in it.
Austin Wilson:
Exactly, yeah, the one that you drive every day.
Josh Robb:
Yes.
Austin Wilson:
So yeah, look at your needs, look at your lifestyle, determine what can fit your lifestyle. Then you need to look into expenses that can occur along the way. So are you driving a long way for work?
So maybe you have an hour or an hour and a half commute. A lot of people do that, which I'm sorry for you, and you're sorry for them, Josh, because our commutes are a little shorter than that.
Josh Robb:
I have mixed opinions actually. Way back in the day, I used to drive a lot. I had an area of multiple counties that I was responsible for, one of which was an hour and 15 minutes away. So there was a lot of driving. The plus side to that is, when you're returning, you can separate work from family and get your gear-
Austin Wilson:
Yeah. A break.
Josh Robb:
... changed from one part of your life to another. I also listen to a lot of books and different things along the way. But yeah, short trips are nice. You and I are probably three to five minutes from home-
Austin Wilson:
Yeah.
Josh Robb:
And there's positives to that.
Austin Wilson:
There are.
Josh Robb:
We can go for lunch.
Austin Wilson:
- also the negative. The negative is there's no turnoff.
Josh Robb:
You can't switch-
Austin Wilson:
Wind down.
Josh Robb:
Yes. That is a big deal. I think 10, 15 minutes-
Austin Wilson:
10 or 15 minutes is perfect.
Josh Robb:
... is ideal. I need to move. I just need to move.
Austin Wilson:
I agree.
Josh Robb:
Get farther away.
Austin Wilson:
Yup. So no, I agree. I think that that's kind of ideal. Being three to five, you were about to bring it up, but one of the big perks is I can just pop home for lunch, see my kids.
Josh Robb:
Something happens, need something real quick.
Austin Wilson:
Yup, see my kids.
Josh Robb:
Forget something.
Austin Wilson:
Let my cleaning person in or whatever. I've been home a couple times in the last couple months to let someone do something. That's really handy but there's no wind down time. So anyway-
Josh Robb:
But needs, lifestyle.
Austin Wilson:
... if you are driving a long way, you have a lot of time to listen to The Invested Dads podcast on the road, every Thursday. At least that's one of your days, or one of your commutes.
Josh Robb:
Yes.
Austin Wilson:
But you may want to consider something that is less consuming of gas.
Josh Robb:
Mm-hmm. Fuel efficient.
Austin Wilson:
While fuel costs have come down the last year or so, they're still elevated than prior periods, and that adds up quickly if you're driving a long time.
Josh Robb:
Oh, yeah.
Austin Wilson:
So that may be a consideration that you have to make as well. As well as maintenance costs. Different vehicles, different levels of vehicles, different kinds of vehicles have different levels of maintenance costs over time, so consider those. And then another one that is just easy to overlook is safety features. Newer vehicles generally going to be a little bit safer than older vehicles.
Josh Robb:
Mm-hmm.
Austin Wilson:
They may be more reliable as well, and that's going to, A, keep you safe in the event of an accident. And B, keep you from breaking down on the side of the road.
Josh Robb:
I have a problem with one particular safety feature.
Austin Wilson:
The backup camera.
Josh Robb:
No.
Austin Wilson:
No?
Josh Robb:
Low tire pressure warning.
Austin Wilson:
That's on your Jeep all the time.
Josh Robb:
That drives me nuts and you cannot disable it because it's a safety feature. And I get why it's there, but I also struggle that it's not easy to adjust it when you need to. So for instance, my Jeep has tires that are a different size than the standard, and so it throws off that sensor. Drives me nuts.
Austin Wilson:
We grew up in a time period where vehicles did not have those.
Josh Robb:
No.
Austin Wilson:
So I remember going out-
Josh Robb:
If you hear noise, that's a low tire warning.
Austin Wilson:
I remember, I mean I'd go out periodically. I had an old mid '90s Accord and I would go out and just feel all the tires, kick the tires, make sure they're all looking good, and yeah, it's pretty good.
Now, if you're going for a long drive, you get out the pressure gauge.
Josh Robb:
You might want to check it out. And I always feel like temperature changes. So spring and fall, just check your tires for that next season.
Austin Wilson:
Yeah. And check it all the time in the winter.
Josh Robb:
Yes. That's because of the cold.
Austin Wilson:
Yeah.
Josh Robb:
But going into the winter, if you make sure you're at a good pressure, you're at least going to get a good way through there. But yeah.
Austin Wilson:
Yeah, so-
Josh Robb:
I mean if you're leaning sideways, your tires are low. That's just the easy-
Austin Wilson:
That's it, right.
Josh Robb:
... solution to that. If you're not level, then something's wrong.
Austin Wilson:
You're tired. So yeah, safety features, reliability, things to consider when you're looking at a vehicle. And then how do you do this? Well, nowadays we have information at our fingertips on our computers or our smartphones.
Josh Robb:
Yes.
Austin Wilson:
You can Google reviews of certain cars. You can get on the Facebook pages for people who own these things and see what people think. Those are really insightful. Yeah, there's no shortage of opinions. Really, the best way to do that is going to be go find one and drive it and you're going to learn a lot.
Josh Robb:
Yeah. You want to know the second one?
Austin Wilson:
Yeah, what's that?
Josh Robb:
Talk to car mechanics.
Austin Wilson:
Oh, absolutely.
Josh Robb:
I have a friend of ours that goes to our church and he's a car mechanic. And when we were looking at a car, I asked him a couple of different models I was looking at and he said, "You want to know my thoughts?" I said, "I would love to know your thoughts."
Austin Wilson:
Absolutely.
Josh Robb:
He said, "Of those three models, I see one of them-
Austin Wilson:
All the time.
Josh Robb:
... more than the other ones." And that's not a good thing.
Austin Wilson:
No.
Josh Robb:
In my mind, the more you see a car from his perspective, the less I want to own it.
Austin Wilson:
Yup.
Josh Robb:
And then he said for the other two, they were pretty close and he doesn't see them as much. And so it helped me narrow down. So if you know someone who is a car mechanic, maybe ask them their thoughts. They're the ins and outs of that world, more so than I'm.
Austin Wilson:
Absolutely. That's a great point. Okay, so you've determined step one that you want to buy a new vehicle. You kind of have a timeline.
Josh Robb:
Timeframe. How long do you do this for?
Austin Wilson:
That's a great idea. That's a different consideration. How long do I want to own this vehicle or how long-
Josh Robb:
No. How long do you do research, roughly? If you're looking for a car, where would you put this in?
Austin Wilson:
I would say a couple weeks at least of narrowing the field. I mean, I always have an idea in my mind of what I want next.
Josh Robb:
You're a car guy.
Austin Wilson:
I'm a car guy. I knew that. But I'll shop around. I'm not going to jump on the first thing.
Josh Robb:
No, I mean figuring out what you want.
Austin Wilson:
Yup.
Josh Robb:
I would say a couple weeks to a month getting that list of types of vehicles you've got down.
Austin Wilson:
Right.
Josh Robb:
Then the next step, like you said, is go try them out.
Austin Wilson:
Here's something that I've found is that it is a bad situation to have to go buy a car today.
Josh Robb:
Yeah, you don't want to do that.
Austin Wilson:
You don't want to be in that situation-
Josh Robb:
It'll be rushed.
Austin Wilson:
... because you're going to be rushed and pressured into finding something that might not be checking all the boxes and what might not be right for you. So it's best if you have something that works, you can continue to drive it while you're searching for something else. That's the best case scenario. It's not always possible. The best case scenario. So don't be rushed.
Josh Robb:
Don't be rushed. Yeah.
[8:52] - 2nd Consideration When Buying a Car: Financing Options
Austin Wilson:
If you don't have a choice, don't be rushed. So we've determined we're looking for a car. We understand what kind of car we want and what features we want and all of this stuff, and a budget. We have an idea of that. Now we need to determine how are we going to pay for this thing? So financing. Let's talk about financing of vehicle purchases.
So recent Kelley Blue Book, which is a really great data provider for vehicle values and costs said that new car prices are about $48,500 on average.
Josh Robb:
For a new car? Mm-hmm. Seemed high.
Austin Wilson:
It doesn't seem that far off of what I see-
Josh Robb:
But it makes sense to me, yeah.
Austin Wilson:
But It seems high coming from the world we came from.
Josh Robb:
Yes.
Austin Wilson:
Which these prices are like 20% above pre-COVID levels.
Josh Robb:
Yeah, I was going to say 35 to 40 was where my brain would land, but I could see that.
Austin Wilson:
But the way I see is some things skewed the average up.
Josh Robb:
The new electric vehicles are all more expensive.
Austin Wilson:
Electric vehicles are expensive, or you want to go buy a brand new pickup truck, brand new.
Josh Robb:
$80,000. $.
Austin Wilson:
80,000.
Josh Robb:
Yup.
Austin Wilson:
So I can see how we're getting to these numbers where an average new car is almost 50 Gs.
Josh Robb:
Yeah. If you look at the low end, you're at 20.
Austin Wilson:
Yeah.
Josh Robb:
Right?
Austin Wilson:
Cheapest car you can buy is 20.
Josh Robb:
That's kind of your starting point is 20. And so you're only going up from there. So your average has got to be higher than double that because you got the high end miles too.
Austin Wilson:
I think my dad said that pretty much every car he's purchased has increased like $10,000.
Josh Robb:
Yeah. Makes sense.
Austin Wilson:
It was like $10,000, then it was like $20,000, then it was like 30,000. They're increments. So anyway, average car, $48,000. You can find cars less, you can pay way more obviously. Now, the average used car is like 25 to 30 depending on what you're looking at.
Josh Robb:
Okay.
Austin Wilson:
But 25 to 30 is going to be the average price of used cars. It's a lot more expensive than used cars used to be too.
Josh Robb:
Oh, yeah.
Austin Wilson:
Used cars throughout COVID and since COVID have gone berserk.
Josh Robb:
It's crazy. They're coming down-
Austin Wilson:
So these are-
Josh Robb:
But they're still-
Austin Wilson:
Yeah.
Josh Robb:
... in my opinion little high.
Austin Wilson:
These are things to consider when you're looking at buying a vehicle, is that cars cost a lot more than they used to.
Josh Robb:
Yes.
Austin Wilson:
It's even crazy. I'm a Honda guy. I always judge it by what's a new Honda Accord? It's just a basic car. Normal car.
Josh Robb:
Is the Accord bigger than the Civic?
Austin Wilson:
Yes. Okay. It's the midsize.
Josh Robb:
It's got four doors.
Austin Wilson:
Yeah.
Josh Robb:
Okay.
Austin Wilson:
Civic is a smaller car. Midsize, normal standard car nowadays upper 30s.
Josh Robb:
Oh really? Okay.
Austin Wilson:
Which I'm like that used be-
Josh Robb:
Like standard model. Nothing too fancy.
Austin Wilson:
Yeah. nothing fancy.
Josh Robb:
Okay.
Austin Wilson:
That's where I base everything off of. So say you're going to spend $40,000.
Josh Robb:
Okay.
Austin Wilson:
This is an average car in the United States. How do you fund this?
Josh Robb:
Yeah. Rob a bank.
Austin Wilson:
Two options really come to mind and we're going to talk about a subject that's different later, but you can bake cash for it. So maybe you've done well and you've prepared. You've driven something older for a while and set some money aside. You've got $40,000 sitting in a high yield savings account, earning some interest-
Josh Robb:
Yup. Waiting for you.
Austin Wilson:
But you can go just write a check for this car. That is a great option and honestly would be our preferred option if it's possible. Now, that is a very hard thing to come up with for most people.
Josh Robb:
Now, is it true that you don't get as good a deals when you're paying cash because most dealerships now make a lot of their money on the financing?
Austin Wilson:
I would say-
Josh Robb:
Or you still think you've got pretty good negotiating?
Austin Wilson:
You probably have. If you show up with an envelope of write a check, I would say you're going to get the same price probably. Dealers probably will be more excited to finance a car for you, but they also want to move a car off the inventory. I would say you're okay.
Josh Robb:
You're still okay, yeah.
Austin Wilson:
But I always thought it'd be kind of cool to walk in with a bag of money.
Josh Robb:
Yeah. Like an actual bag of money.
Austin Wilson:
Buy a car with cash.
Josh Robb:
Yeah, this isn't stolen.
Austin Wilson:
This isn't stolen, I promise.
Josh Robb:
Disregard the ink capsule that's in there that'll explode when you open it.
Austin Wilson:
"Here's the slip that I took it out of my bank." So option number one is pay cash. It's a great thing if you can do it, but coming up with, say, $40,000 is a lot of money. So most people in America, and I would assume around the world, but most people specifically in America use auto financing, loans. They take out a loan to buy this car.
Let's understand a little bit of how this works. So according to an article from LendingTree, which we'll link in the show notes, the average car payment was $716.
Josh Robb:
Wow.
Austin Wilson:
That's a lot.
Josh Robb:
I was going to do the math there on my little calculator. $716-
Austin Wilson:
Yes.
Josh Robb:
... times 12 is just 8,500. I'm going to round it.
Austin Wilson:
A year.
Josh Robb:
8,500 a year. And if the average price is $48,000, all right, no interest-
Austin Wilson:
No interest.
Josh Robb:
Because I'm just doing a simple calculation here. That's over five and a half years.
Austin Wilson:
Well, most terms are six to seven to eight years nowadays, which-
Josh Robb:
Not including interest.
Austin Wilson:
Yeah. So that's why you would get to that.
Josh Robb:
Yeah. New car. But I was just doing math in my head. I had to use a calculator because my head's not that good. And $716, because I use the average price of a new car and then the average payments. And you're looking, like you just said, seven, eight years.
Austin Wilson:
Because cars are so expensive to get an affordable payment, you have to have it that long.
Josh Robb:
Longer. You're stretching out.
Austin Wilson:
Yeah. Absolutely.
Josh Robb:
Now do most people own a new car for seven, eight years?
Austin Wilson:
No. Most people sell cars before they pay them off, and that's a whole different thing.
Josh Robb:
Yeah.
Austin Wilson:
So we've understood people are using a loan to pay for the car. We've talked about credit score before. We have a whole episode on it so check that out if you've not done that. But there is a big difference in interest rate based on your credit score. Okay?
Josh Robb:
Yes.
Austin Wilson:
And there's a big difference in interest rate whether you're buying a new or used vehicle because the bank views a used vehicle as more risky because if they have to go take it, it's worth less. There's a chance there's more damage or mileage or whatever to it-
Josh Robb:
Default.
Austin Wilson:
... than a new car. So let's talk about some numbers. Suppose you have great credit. Great.
Josh Robb:
Credit, yes.
Austin Wilson:
Your interest rates today ... So that's a 781 to an 850. You're going to be called super prime.
Josh Robb:
Is 850 the highest score you can get?
Austin Wilson:
I think it is, yeah.
Josh Robb:
Okay.
Austin Wilson:
You can get about 5.18% as of the time we're recording for a new car or 6.79 for a used car.
Josh Robb:
So end of June roughly is where we're at.
Austin Wilson:
Yep.
Josh Robb:
Five to-
Austin Wilson:
Five to seven-
Josh Robb:
6.8.
Austin Wilson:
Yeah.
Josh Robb:
Yeah. Man.
Austin Wilson:
That's a lot more than it was a couple years ago. So then maybe your credit is not quite there. It's 661 to 780 you're about 6.4% for a new vehicle, or 875 for a used vehicle. Notice the spread's getting a little wider.
Josh Robb:
Yup.
Austin Wilson:
Non-prime, 601 to 668, 886 for a new car or 13.28 for a used car. Or subprime, so we're getting less credit worthiness here, getting a little bit more risky for the banks as we're seeing interest rates go up. They want compensated for their risk. 501 to 600 scores, 11.53 for a new car. 18.55 for a used car. And here's the kicker. There's this group, it's called deep subprime, and we would say you probably should not be borrowing to buy a car for really the last few groups. That'd be people with the lowest credit scores possible really is like 300 to 500. You didn't do anything right on a credit basis.
Josh Robb:
Yeah. or brand new.
Austin Wilson:
Or you have no credit.
Josh Robb:
Yeah.
Austin Wilson:
So for a new car with this deep subprime, 300 to 500 score, you're paying 14.08% for a new car, interest, or 21.32. That's like a credit card almost.
Josh Robb:
That is a credit card. You might as well just put it on a credit card.
Austin Wilson:
On a used car. And you know what? There's people doing it every day.
Josh Robb:
Oh my goodness.
Austin Wilson:
People doing it every day.
Josh Robb:
So Maybe you already knew this, but I looked it up. Do you know what the average credit score in the US is?
Austin Wilson:
No.
Josh Robb:
All right, I looked it up because I didn't know either. And there's a variety of different answers I saw. Because again, there's multiple places that pull your credit.
Austin Wilson:
True.
Josh Robb:
They all score differently.
Austin Wilson:
Yup.
Josh Robb:
But I'm going to average these out. I looked at it. This is not an official thing. I just looked at the numbers and used my brain to average it. Right around 700.
Austin Wilson:
Okay.
Josh Robb:
Okay. So that being said, that's right in the prime.
Austin Wilson:
You're prime.
Josh Robb:
So 660 to 780.
Austin Wilson:
Or 640 to 875.
Josh Robb:
Yeah. I'm sorry, I was saying the credit number.
Austin Wilson:
Oh, I was looking at -
Josh Robb:
Yeah, 660 to 780 is the prime credit scores, which gets you, in this case, 6.4% to 8.75%-
Austin Wilson:
For a new car.
Josh Robb:
... for a new car. So man, six and a half to almost nine. That's still, you're paying a penny there for it.
Austin Wilson:
It's a lot of ... And this is annual-
Josh Robb:
Annual.
Austin Wilson:
... based on the outstanding, kind of like your house.
Josh Robb:
Eight to nine years probably.
Austin Wilson:
Right. It's based on the outstanding balance over time. It is an unfortunate thing. So this is why we would say, ideally, you use cash. Now that's crazy. Now there's this other group of ways to, quote, unquote, finance your car and it's not really owning a car at all, but a lot of people talk about leasing. I have opinions on leasing. You probably do too.
Josh Robb:
Yup.
Austin Wilson:
Typically, how it works is it's a new car and you pay a chunk upfront, three to five to seven, depending on what ... thousand dollars. And then you pay a lease payment over time, which is essentially rent because you don't own the car and you have a mileage limit that you are allowed each year and you can pay more to go over it or whatever. But typically, a lot of your maintenance and stuff's covered. You have to have full insurance, collision, liability comp because they own the car. You don't own it anyway. So leasing. A lot of people lease cars. And then you can get a new car every couple of years and do this. This is how it works.
Josh Robb:
So I always viewed this as renting an apartment is you don't own that. You're utilizing it, you're paying for it, and you have the ability to upgrade or move periodically, but you're not responsible for it. You still need insurance on your stuff. And the same with the car. That's how I always picture leasing.
Austin Wilson:
Yeah, it's similar.
Josh Robb:
You're just borrowing something. You're paying somebody to use. It's not yours, but you use it.
Austin Wilson:
And then at the end of the lease term, maybe it's a couple years, you typically have the option to, A, turn it back in and maybe get something else, maybe move on. Who knows what that is. Or B, there will be a reduced price from when it was new, but probably an increased price on what it's worth at the point in time. But an opportunity to buy out-
Josh Robb:
Buy out, yes.
Austin Wilson:
... your lease.
Josh Robb:
And keep your car.
Austin Wilson:
So a lot of times people are doing this. My own opinion is that if you are going to be planning on keeping it for a while, or I even think from a financial standpoint it is in a lot of instances better to own your vehicle. However, I can see certain instances where, one, you just want to try something. Maybe that's an opportunity. You're in a phase of life where you're not very stable. You don't know where you're going to be, what you're going to do. That could be an opportunity.
Another one is I think of really high end cars typically have a lot of expensive maintenance requirements. And typically the expendable income of the people who can afford that is pretty high anyway and they want the newest thing all the time. That's usually a lot of time where you can do leasing.
Personally, I've never leased and don't really plan on it, but it's a way that people get newer vehicles.
Josh Robb:
I'm in the same boat. I've never leased before. Don't have any plans right now to do it. I see it as, again, going back to if people are getting loans for their car, you usually have a lower payment on a lease than you do on the ownership. Because, again, it's a transfer of risk. The dealership maintains that vehicle. They get it back at the end, so they're going to offer a little bit lower of a rate.
But anyway, for people who are just struggling to pay, sometimes the lease reduces your payments and allows you to have a more reliable car because again, every couple of years you're going to potentially renew that lease with something different instead of buying maybe a less reliable car for the monthly price.
Austin Wilson:
You can afford.
Josh Robb:
So I've seen instances that I've all seen on the other, like you said, the high-end cars, you can make them it little more affordable, especially if you don't plan on holding them for a long time. You just want a nice car for a while.
Austin Wilson:
Yeah, I want to drive a Jaguar for a couple months or a year.
Josh Robb:
I don't a thing right now. I had a question though.
Austin Wilson:
Yeah.
Josh Robb:
Let's say I was leasing a car and then I decided to give it to my son to drive and I said, "Hey, you just pay me for the payments.' Would I be re-leasing that car to him?
Austin Wilson:
Re-leasing it? That's not even the dad joke of the week.
Josh Robb:
That's how I go. I just thought of it.
Austin Wilson:
You just came up with it on that spot.
Josh Robb:
Thought it really seemed -
Austin Wilson:
Also, probably don't think you can do that, but there's probably.
Josh Robb:
Oh, don't do that. Please don't. That was a joke.
Austin Wilson:
Yes, don't do that. That's not a recommendation.
Okay, third category.
Josh Robb:
Yes.
Austin Wilson:
So now we've developed what we want to have a car. We've talked about how we're going to pay for it.
Josh Robb:
Paying for it. Yeah.
Austin Wilson:
Let's talk about things going forward.
Josh Robb:
Yes.
[20:42] - 2nd Consideration When Buying a Car: Ownership Costs & Budgeting
Austin Wilson:
So ownership costs of vehicles. Vehicle ownership is not cheap. There are a lot of costs that go into it that you don't even consider sometimes. Number one-
Josh Robb:
Insurance.
Austin Wilson:
You need insurance and there are different levels of insurance depending on what your needs are for your vehicle. So suppose you took out an auto loan to buy a car. That company who owns your car technically until you pay it off, the bank, they are going to make you have complete full coverage, liability, collision, comprehensive, everything because you don't own the car want. They want it protected.
Josh Robb:
They want it protected.
Austin Wilson:
That's the most expensive kind. But suppose you own an older vehicle. This is my boat right now. You own an older vehicle.
Josh Robb:
Your $190,000 vehicle.
Austin Wilson:
190,000 mile. It's not worth a lot of money. If something happened to it tomorrow, you wouldn't be heartbroken. You could go buy something. You don't need collision insurance perhaps. That's the most expensive piece. You could have maybe just liability and comprehensive. And then if you hit a deer or-
Josh Robb:
Because collision protects your car from you.
Austin Wilson:
Yes. Yeah.
Josh Robb:
Liability, all the other ones is if someone hits you or you hit someone.
Austin Wilson:
Yes.
Josh Robb:
That's where those coverage -
Austin Wilson:
Yeah. And comprehensive is the other stuff that's like a deer or a tree.
Josh Robb:
Tree.
Austin Wilson:
Or hail, all that stuff separate.
Josh Robb:
Mailbox.
Austin Wilson:
Yep. Well-
Josh Robb:
Flying mailbox. Kid's baseball from next door.
Austin Wilson:
Yeah, you may tier down your insurance as your vehicle gets worth less and less money and then your insurance costs are a lot cheaper. But insurance is a huge factor of total vehicle ownership cost.
Josh Robb:
By the way, make sure you have some form of insurance please.
Austin Wilson:
It's actually the law.
Josh Robb:
Yes, there are unfortunately times of; and that's additional part of your insurance coverage is-
Austin Wilson:
uninsured motorists.
Josh Robb:
Uninsured motorist coverage. So yeah, don't be driving around without insurance.
Austin Wilson:
So that is one factor and we're going to talk about how to maintain that cost.
Depreciation is another. It's an indirect cost. So when you buy your vehicle, even if you buy a used vehicle, it's going to be increasing in miles and it's going to be getting older every minute. As that mileage goes up, condition probably goes down and time goes on. So it's further from new. The car is worth less. That's called depreciation as opposed to things like homes-
Josh Robb:
Wine.
Austin Wilson:
Wine, fine Rolexes.
Josh Robb:
- with age.
Austin Wilson:
Those go up.
Josh Robb:
Yeah.
Austin Wilson:
However, vehicles typically, unless it's in collector vehicles, but typically daily driver vehicles go down over time in value and that's depreciation. So that's a hidden cost you're not paying, but when you go to sell your car, it's going to be worth less probably than when you bought it.
Other costs that are pretty standard are things like fuel. Talked about that. Maintenance costs, oil changes, brakes, suspension parts, air conditioning. That's one thing my vehicle's... in the next week.
And then you have to think about things can pop up. You can be driving your vehicle-
Josh Robb:
Or pop off.
Austin Wilson:
... and then something pops off and you have an unexpected cost. You need to be-
Josh Robb:
Like a window.
Austin Wilson:
Yeah. Oh that happened to me last week.
Josh Robb:
I told you my story.
Austin Wilson:
Oh yeah, you did. So you got to be ready for those things. So how do you plan for this? And we would say as far as it relates to insurance, you have a pretty good idea. Either you pay monthly or you pay, say, annually or semi-annually or whatever that is. You have an idea of what your cost is going to be.
Josh Robb:
Yup.
Austin Wilson:
It shouldn't be a surprise.
Josh Robb:
Nope.
Austin Wilson:
The way I do this is I know how much roughly it's going to be so I divide it by 12, add all these different chunks up and shove it to a different account that I never see once a month.
Josh Robb:
Sometimes it's cheaper to pay annually. They give you a discount. And then so you just pay monthly into an account-
Austin Wilson:
Then you pay it from that.
Josh Robb:
... and when the bill comes, you pay the bill.
Austin Wilson:
It's also usually cheaper to pay in full than it is to do other options. You could have a separate vehicle fund where you're putting money for parts, repairs, tires. All this stuff aside, that's an option. And the ways to reduce your costs over time, you can totally learn to do some things on your own. So oil changes when I was growing up used to cost 20 bucks. Nowadays, it's like $50, $70, $80 depending on what you're getting and how much oil are you getting. So it's not necessarily cheap, so you can afford to change your own oil. Very basic, very easy. Low risk if you know how to do it. And it takes half an hour tops in your driveway.
Josh Robb:
The biggest thing with that, safely. Safely get under your car.
Austin Wilson:
Yeah. Well yeah. You need to get some good jack stands.
Josh Robb:
Or those ramps.
Austin Wilson:
Or those ramps.
Josh Robb:
Metal, not plastic.
Austin Wilson:
Not plastic. Please don't get plastic ramps.
Josh Robb:
And don't do it on a slope.
Austin Wilson:
Don't do it on a slope. So anyway, you can learn to do that and save a lot of money. Google, YouTube, everything. I've replaced the window regulator in my car.
Josh Robb:
Lights.
Austin Wilson:
Lights, no problem.
Josh Robb:
Headlights. Oh, man.
Austin Wilson:
Yeah, things like that.
Josh Robb:
No problem if you can get to them. I tell you what. Some cars harder than others to get your access.
Austin Wilson:
Oh, you're not wrong.
Josh Robb:
But you're right, maintenance. That's something that, especially like you said with technology nowadays to learn that doing some of those can reduce costs. I have changed oil. I have come to the conclusion the amount of time I struggle through it versus getting it done. I'm not sure if I could do other things at the same time for a better cost.
Austin Wilson:
I'm right with you. Actually I used to do everything I could by myself and now I've gotten to the point where cost versus time works in the favor of handing it to someone else. Now not everyone's in that boat and that's where you can save some money this way.
Josh Robb:
Yup. And I will say sometimes it's fun to learn some of those things about it. Changing brake pads. I've done that. Now I know what needs to happen.
Austin Wilson:
You know you don't want to do it again.
Josh Robb:
Well, but you also know, and so you understand the whole process. So why is my brake squeaking? Well, I've changed them. I've seen everything that goes on with that to know what's going on. Tires. Flat tire. I think everybody should know how to change a flat tire. That's a whole nother story.
Austin Wilson:
I had to do one in the Walmart parking lot here in Finley when I was in college.
Josh Robb:
There you go.
Austin Wilson:
I went into the store, no problem. When I came out of the store flat.
Josh Robb:
Flat.
Austin Wilson:
They had the same tire I needed in stock.
Josh Robb:
Oh, there you go. That's even better if you did it at a spot where there are tires. That's -
Austin Wilson:
Yeah, it was great. And then one final thing on maintenance is track everything you do. I track everything.
Josh Robb:
Track everything.
Austin Wilson:
I track a light bulb. I don't track windshield washer fluid, but I check everything.
Josh Robb:
Windshield wipers.
Austin Wilson:
Windshield wipers.
Josh Robb:
Blades.
Austin Wilson:
I track all that stuff and keep it in a spreadsheet so that if I go-
Josh Robb:
Yeah, that's it.
Austin Wilson:
... when I go to sell this car, spreadsheet at least has the majority of the stuff on it that's done.
Josh Robb:
That's a good idea. I always keep all my receipts in a folder, which is there, but it's not very easy to look through. It's like-
Austin Wilson:
Hey.
Josh Robb:
"Look at all my maintenance," which is something at least.
Austin Wilson:
The mechanic that I go to, which was your recommendation years ago.
Josh Robb:
The mechanic?
Austin Wilson:
Great guy, great company. They keep track of all that for you too.
Josh Robb:
Yeah, that's nice.
Austin Wilson:
That is kind of handy. All right Josh, we've got a couple more, but we're going to take a break.
[27:05] - Dad Joke of the Week
Josh Robb:
Yeah. Take a break. Dad joke of the week. Here we go.
Austin Wilson:
It's car related?
Josh Robb:
It is car related.
Austin Wilson:
I love it.
Josh Robb:
Yes. So let me pull this up. Okay, I got a couple, but let me tell you the first one. My uncle was in a car accident.
Austin Wilson:
I'm sorry.
Josh Robb:
I know right? He lost his left arm and left leg. Now he's all right.
Austin Wilson:
Now he's all right.
Josh Robb:
All right. But here's a question though. Do you know what kind of vehicle a skeleton drives?
Austin Wilson:
Ooh, what?
Josh Robb:
A Zamboni.
Austin Wilson:
A Zamboni.
Josh Robb:
Yes.
Austin Wilson:
I love it.
Josh Robb:
Last question.
Austin Wilson:
Yeah?
Josh Robb:
What has 10 letters and it starts with G-A-S? Automobile.
Austin Wilson:
Starts with gas.
Josh Robb:
That's how it starts. Well, I guess not so much anymore because you've got electric cars.
Austin Wilson:
I know.
Josh Robb:
But it's a good joke.
Austin Wilson:
That's good.
Josh Robb:
All right, that's what I had.
[27:49] - 4th Consideration When Buying a Car: Warranties & Insurance
Austin Wilson:
All right, number four. We've talked about the maintenance costs. We've talked about how much cars cost. We've talked about what to do before you buy one. Let's talk about insurance and things like extended warranties. Very popular discussions. So first of all, Josh, at a high level, what's an extended warranty when you go buy a car? This is typically a used car.
Josh Robb:
There's a warranty for new cars. A lot of car dealerships, manufacturers will say, "Hey, for the first three years, five years, 10 years-
Austin Wilson:
Or miles.
Josh Robb:
... we will cover x amount of things in your car." Usually it's the key components that they cover.
Austin Wilson:
Drivetrain. Yeah.
Josh Robb:
So the extended warranty is taking that warranty and going beyond what the manufacturer is willing to cover. So they're just extending that coverage.
Austin Wilson:
And often or even offer those nowadays with used vehicles.
Josh Robb:
So they're saying, "Hey, this wasn't you that bought this new car. It was purchased 10 years ago. Warranty's over but since we are selling it to you, we'll offer you this warranty for a certain amount of time."
Austin Wilson:
For some certain amount of money.
Josh Robb:
It's not free.
Austin Wilson:
And this is the key that we would like to talk about is that especially when it comes to used vehicles, this is really one of the most profitable business endeavors for a car dealership. In fact, a lot of used car salesmen are compensated based on how much of these policies they sell and they wouldn't sell them if they didn't make money doing them. They're not doing it out of the good of their own heart. It's a business thing.
Now, it's not saying they don't have their uses because there are a lot of things that they will cover during X, Y, Z period. But the math has been done by the business selling it or the insurance company that provided it to say that the chances of you using ... You're going to use less than you're paying, which means they're going to come out money ahead.
Typically, especially when it comes to used vehicles, but I would argue even new vehicles, look at the cost and look at the benefit, but it's usually not a financially smart thing to be paying a bunch of money for extended mortgages.
Josh Robb:
The only one I've considered, and I've not always done it, but I've considered, is that rust undercarriage piece. Where we live a lot of salt on the road in the winter.
Austin Wilson:
A lot of salt.
Josh Robb:
Lot of rust on vehicles. When they have an warranty or extension for covering rust I've always contemplated that one.
Austin Wilson:
Really?
Josh Robb:
Not always got it, but it's always been one of those that triggered a ... Because I've owned enough cars to know-
Austin Wilson:
Oh, there's rust.
Josh Robb:
... every car rusts underneath when you have it here in Ohio for enough years.
Austin Wilson:
So that's actually interesting. It brings me up. I was recently in the boat, which is how this topic came up of considering buying a new car, selling mine and buying something new.
Josh Robb:
I thought you were in a boat. You were starting this story, "I was recently in a boat."
Austin Wilson:
One of the vehicles that I'm really interested in and maybe I still will be in it whenever I decide to buy something, was the 2015 or newer F-150. The F-150 is the number one selling vehicle in America. Since 2015, the bodies have went to aluminum.
Josh Robb:
Aluminum.
Austin Wilson:
You know what you don't get with aluminum?
Josh Robb:
Weight.
Austin Wilson:
And?
Josh Robb:
Oh, yeah. Rust.
Austin Wilson:
And rust.
Josh Robb:
Yes.
Austin Wilson:
So that's something I'm seriously considering when I go to get something new is a 2015 plus F-150. No rust. Anyway-
Josh Robb:
Now, did that change the towing capacity? I didn't spend much time -
Austin Wilson:
Well, the frame still steel and that's where all your strength comes from.
Josh Robb:
Okay. So the aluminum is the outside.
Austin Wilson:
It's just the body.
Josh Robb:
Gotcha.
Austin Wilson:
Anyway, that's something that popped up. So that's extended warranties and then we talked about it a little bit, but insurance is definitely something to consider with your car. You've got three main types of insurance. Liability, which is really if you hit someone or something-
Josh Robb:
If you're liable.
Austin Wilson:
If you are liable, then you have collision, which is if you wreck into something and-
Josh Robb:
Randomly.
Austin Wilson:
... the car's repairable, but it has cosmetic damage, that would fix ... Paint. Ooh, paint's expensive. That would fix all of that. Then you have comprehensive, which is the other stuff like-
Josh Robb:
Everything else.
Austin Wilson:
Storms and hail and deer in our area and stuff like that.
Josh Robb:
I think the uninsured motors falls in there too.
Austin Wilson:
It might. So there are a number of factors that go into calculating your insurance premiums because if Josh and I went to go get the same insurance for the same vehicle, it would probably cost a little bit different amount.
Josh Robb:
Yup.
Austin Wilson:
Couple factors are age.
Josh Robb:
Yup.
Austin Wilson:
Josh is much, much older than me, so-
Josh Robb:
Way older.
Austin Wilson:
His insurance, because he's a less aggressive driver will be much less. But typically, the most hard person to ensure is the 16 to 25 year old-
Josh Robb:
Male.
Austin Wilson:
... single male. They're the most at risk. Getting married lowers your premium.
Josh Robb:
Yeah.
Austin Wilson:
I don't think having kids does but getting married does lower your premium. Males typically have higher premiums than females. They're typically more aggressive drivers potentially.
Josh Robb:
Worse drivers is a good term. Yes.
Austin Wilson:
And then you've got things like age. Typically, as you get older your insurance becomes a little bit cheaper. You're less risk.
Josh Robb:
Until you get really old, I think then they're probably still like, "Well-"
Austin Wilson:
That should go up. And then there are certain companies that you can offer information like tracking, things that plug into your car or your phone. They can track your habits and give you discounts or I guess they don't usually offer that it would go up, but they can give you discounts if you drive at certain times of day, certain miles and stuff like that.
What type of vehicle definitely matters. Newer, nicer vehicles have a lot more insurance costs than older, less expensive vehicles.
Josh Robb:
Because it costs more to replace.
Austin Wilson:
Exactly. So those are a couple different factors for insurance premiums. One tip I would have for car insurance is number one, shop around. A lot of different insurance companies, different providers. Nowadays online you can get quotes really, really easily.
Number two, bundle.
Josh Robb:
Yes.
Austin Wilson:
So if you have a home or rental insurance I guess would count too. If you have-
Josh Robb:
Life insurance.
Austin Wilson:
Get as many as you can-
Josh Robb:
Disability insurance.
Austin Wilson:
... within the same company and they'll give you a lot of breaks.
Josh Robb:
Yes.
Austin Wilson:
So typically, like I have motorcycle home and car insurance and my home all in one and I get a nice discount because I bundle them. So think about bundling if you can. That's a tip there. You know how much those are typically going to cost. Save for it, prepare for it so you're ready for that bill when it comes every whenever.
[33:37] - 5th Consideration When Buying a Car: Resale Value & Long-Term Planning
Austin Wilson:
So number five. The fifth group and topic we're going to talk about is resale value. Thinking long-term about your vehicles. So it's really important to consider your vehicle's resale value when you purchase it because most people don't keep vehicles forever. And typically, you'll want to sell that vehicle to either pay off the one you just bought or to pay for a new one. And there are certain brands and certain types of cars that hold their value better than others and that needs to be considered. So you can look into that and find it online. It's not hard to find. So search that. That's definitely important when you're considering what vehicle you're buying as well.
Things that help your resale value. Regular maintenance, service records, those things are huge. If you show up with a binder full of paperwork, it's Excel, spreadsheet, all these things, that's going to look really good and I would buy a car with that. That's what I look for.
Josh Robb:
Yeah, show that.
Austin Wilson:
Keep your vehicle clean, make sure it's in good shape. Hopefully it doesn't have any major damage, otherwise you're going to take less money for it when it comes to resale.
Josh Robb:
Yeah, I have a dent on my door and it's my fault. I was taking the doors off my Jeep and dropped ... It fell, dropped and hit the sidewalk and so just the corner of my door has a little bend to it, which is not ... That wouldn't be as big a deal but the paint chipped so not ideal.
Austin Wilson:
It's gloss black -
Josh Robb:
Well I did, but you could tell.
Austin Wilson:
Yeah. It's not -
Josh Robb:
Far away, it's not noticeable. You get up there, you see it.
Austin Wilson:
It's cheap. It's supposed to look used.
Josh Robb:
Used is relative, but-
Austin Wilson:
No, those are -
Josh Robb:
But you're right. That matters. That deducts from the price.
Austin Wilson:
Keep it nice. Another thing that is near and dear to my heart is, so I'm a gearhead, right? I like cars, I like loud fast things, I like modifications, but I would not buy a vehicle that's modified extensively. I would seek to go find the granny-driven low mileage-
Josh Robb:
That you can change.
Austin Wilson:
... garage car and then I'll do what I want to. So typically, lower miles, better condition, older people-driven cars with maintenance records are the ones you want. And then you can do what you want with them, right?
Josh Robb:
Yeah.
Austin Wilson:
That's my recommendation.
Josh Robb:
There you go.
Austin Wilson:
Avoid modifications that would negatively affect your resale value. Also, keep in mind that typically when you make modifications to your vehicle, you do not enhance the value. So if you buy a $50,000 pickup truck, which is a cheap one nowadays, and you put $10,000 in wheels and tires on it, big nice wheels and tires, how much is your truck worth?
Josh Robb:
Probably $40,000. Depreciation. Not worth 60.
Austin Wilson:
It's not worth 60, it's worth 50 and then you get bonus wheels and tires when you sell it. So people need to get that through their head, that money does not add up that way. So that's something to think about there.
And then as you're buying these vehicles, think long-term. Your vehicle needs may change over time so this will determine how long you're going to be holding vehicles. Maybe when you're young and single, you can have one kind of vehicle, but once you start having a family, maybe you're getting a minivan. Let me tell you what. We do and we love it.
Josh Robb:
We went minivan for quite a while, now we're back to an SUV.
Austin Wilson:
For now. You wait, Josh.
Josh Robb:
I miss the minivan-
Austin Wilson:
I know.
Josh Robb:
... storage capacity.
Austin Wilson:
Storage.
Josh Robb:
I love the ride. The SUV I have-
Austin Wilson:
Oh, they're great.
Josh Robb:
... drives just like the minivan. I mean they're the same from that standpoint.
Austin Wilson:
The storage is a big difference.
Josh Robb:
But as a result, when you go back to your research, I got one with a tow hitch, which I have now a rack that I could put extra storage on-
Austin Wilson:
Yeah. Just put a box on the back or whatever, yeah.
Josh Robb:
So it's nice. But man.
Austin Wilson:
Man.
Josh Robb:
A lot of storage in there.
Austin Wilson:
Everyone's going to end up there and I do not discourage people -
Josh Robb:
No, and I love them. We only went with the other one because all wheel drive is nice and some minivans have it, but that was the other feature. Again, back in Ohio, weather is always a factor.
Austin Wilson:
And then one thing to consider is what to do with the vehicle when you want to get rid of it, right?
Josh Robb:
Yeah.
Austin Wilson:
Two options really come to mind. Number one-
Josh Robb:
Drive it off the cliff.
Austin Wilson:
... to collect insurance money, right?
Josh Robb:
Yeah.
Austin Wilson:
No, don't do that. That's fraud. One is to sell it outright. You can sell it on your own-
Josh Robb:
On your own personally to somebody else.
Austin Wilson:
You can put it on Facebook marketplace or Craigslist or whatever, and that is the best way to get the most money for it because you can find how much it's roughly worth.
Josh Robb:
There's Kelley Blue book and those type of things.
Austin Wilson:
Yup. NADA, Kelley Blue Book. Those are the ways to do that. Price it, sell it, get the cash. It's great. That's the best way to do it from a value perspective. Then a lot of people do what's called trading in. So you take that used vehicle, you drive it to the lot with the car you want to buy and you use the value of that vehicle as payment towards your new vehicle.
One benefit from this is you are only taxed on the difference of the two values. The downside is that you get a much lower value for the vehicle than you would-
Josh Robb:
Because they're going to have to sell it.
[38:17] - Smart Tips from Josh & Austin: How They Personally Look at Car Purchases & Trade Ins
Austin Wilson:
Yeah, they want the spread; than you would get selling it on the street. Again, typically I would discourage trading in if possible, unless they're going to give you trade-in value of what you can get it on the street. And now in this crazy car market, you're getting pretty close. So generally speaking, I avoid trade-ins, but in this market it's actually not the worst thing in the world. But those are what you do at the end. So those are the five categories of things to consider when you're looking at buying a vehicle.
Now, we're going to conclude this by talking about how we do it personally. So Josh, how do you and your family manage vehicles? Buying vehicles, selling vehicles, driving them, maintaining them?
Josh Robb:
Yeah, maintenance is important. I try to do that. Washing your car, just keeping it clean. That helps with the rust. All that stuff. Just keep it clean. When it comes to purchases using the car, I'm not as much of a car guy as you. I love Jeeps, but not married to them in the sense that that's the only thing I can have.
But that concept for me is I like something that works, I want something reliable. That's the two things. And I want it to be safe for my family. So those are the things that I look for. And other than that, that's about it. I've owned new cars, I've owned used cars. My new car purchases, both times I was looking for used cars and ended up finding a deal that was better than the used cars I was looking for.
Austin Wilson:
Or the spread sometimes is so thing.
Josh Robb:
That's what I mean. It may have cost me more, but what I got in exchange, fewer mileage, maybe warranties that were included. The things that I looked at, it offset the difference in the cost. So I bought a couple new cars in my life, a lot more used cars. Yeah, I don't do super high mileage cars. I'm not an expert in cars. I will admit that I do not know how to fix engines and things like that. So I do avoid when I'm buying used cars, super high mileage cars but I do tend to own my cars up until high mileage before I get rid of them. So that's how I do it.
In the next three years, potentially going to be adding a driver so I'll be learning about the cost of insuring a young driver and deciding on who pays what, what car, who has the car, who owns it, who pays for it, all that fun stuff.
Austin Wilson:
That's fun.
Josh Robb:
So that'll be next for me. We haven't figured that out yet.
Austin Wilson:
There you go. A little - Not much.
Josh Robb:
Two years. So what about you, Austin?
Austin Wilson:
I've never bought a new vehicle. I kind of like to one day, but we've typically driven-
Josh Robb:
I tell you what, that new car smell.
Austin Wilson:
It's good.
Josh Robb:
It's a good smell.
Austin Wilson:
I love it.
Josh Robb:
I remember, this would've been years ago, that one of my younger sisters bought a new car and I sat in her car just for the smell a couple times because I love that smell.
Austin Wilson:
That's so funny.
Josh Robb:
I'm like, "Dude, can you get a little air freshener of this stuff? Because it is good."
Austin Wilson:
Yeah. So typically we've been buying used vehicles. I've gone through a handful of different vehicles over the years based on how my needs have evolved. So I've had pickup trucks, but those didn't have enough seats when we started having kids. And now we have an SUV and a minivan and I would take the minivan any day over my SUV. That being said, I'm a fanboy because I grew up in a Honda world. Just knowing that the build quality of them I liked, the reliability was always good. They held the resale value really good. They still do to this day. So that's what we typically drive.
If we can at all avoid a car payment, we will by paying cash. It's a lot of money to come up with sometimes. So sometimes we'll know that we're going to pay it off really early, so we'll finance a chunk of it and pay it off really, really early. But then we don't have to come up with all of it upfront. Right now we have older vehicles with higher miles, so we have cheaper insurance. We don't have collision on them. We maintain them. I do the small little things myself, but the older I get, the more I'm willing to hand those things off, which has cost a little bit more money, but saved me a lot of headaches and I know it's done right, which is great as well.
I like cars. I really think that it's my goal to have something fun and cool, but in my world right now with having two little girls and being busy, I don't really have the lifestyle to have something cool. So I want something practical.
Josh Robb:
Practical.
Austin Wilson:
I drive a very short commute to work, so I don't need something fancy and I'm okay with that. So you know what? That's where we're at right now. It may change in the future, but right now we're just going to roll with it and enjoy it.
Josh Robb:
The first new car I bought, I was there looking at used cars and they said, well, there was this newer car. It was a smaller model than I was looking at. But they said, "Hey, we have 0% financing.
Austin Wilson:
0%.
Josh Robb:
And I was like-
Austin Wilson:
Can't get that now.
Josh Robb:
Yeah. So for a new car with a warranty, not an extended warranty, just their normal warranty and what I paid, it was the same price as that ... Now, the used car was the more premium higher model. So I got a smaller, lesser model, but same idea as I didn't need anything super fancy and I paid 0%. So I spread that payment out over two years. So I just planned to pay it off after that two years, but I just paid what I needed to for the two years. So for two years I just let it grow my money while I was waiting.
Austin Wilson:
That's crazy.
Josh Robb:
Yeah, that was the fun one. Again, we just talked about interest rates. You don't see that anymore.
Austin Wilson:
In today's world where the Fed's increased interest rates 10 times in the last year in change, you do not get 0% car financing.
Josh Robb:
No.
Austin Wilson:
0% financing is what causes things like inflation.
Josh Robb:
Yes.
Austin Wilson:
Anyway, that's a little bit on cars. I thought that was a fun episode to put together.
Josh Robb:
Yeah, it's good.
Austin Wilson:
I love the technology of newer cars and I cannot wait to have something like that one day myself.
Josh Robb:
I test drove one, had the heads-up display. So everything that's on your dash is projected-
Austin Wilson:
On the windshield.
Josh Robb:
I mean, on the windshield, but it looks like-
Austin Wilson:
You can see it.
Josh Robb:
... you're looking out ... While you're looking at the road, you see your data.
Austin Wilson:
So...
Josh Robb:
And I thought that was the coolest thing and I couldn't justify paying the extra to get it now, but I'm wondering the next car I get. It was pretty cool. So if that's an option, I may end up with it.
Austin Wilson:
Absolutely.
Josh Robb:
Because that was pretty sweet. And then they have the bird's eye view for parking because they use multiple cameras.
Austin Wilson:
That's really cool.
Josh Robb:
And so when you go to reverse, you have reverse camera. Show you what's behind you. Nice. But if you could see everything around you-
Austin Wilson:
Really nice.
Josh Robb:
Really nice.
Austin Wilson:
I tell you what, craziest thing I ever did, and I probably talked about this. I know I did in an episode, but I drove this Tesla Model Y, dual motor, long range. Nice. Blew my mind, A, how fast it was, of course.
Josh Robb:
Yes. Oh, the-
Austin Wilson:
But the technology and just ... It was really, really exceptional.
Josh Robb:
Did you look at the screen while you were driving as it picked up everything? Like the camera picked up everything?
Austin Wilson:
Oh yeah, so I used-
Josh Robb:
Just crazy.
Austin Wilson:
I tried the complete assist whatever, lane, whatever. It wasn't full self-driving but it was pretty darn close. So I was on this road and I let go as much as you can and you watch the thing and it's scanning everything in realtime and moving the wheel for you. Really incredible technology.
Josh Robb:
Yeah. Even my car has lane assist, which keeps you in between and keeps you a safe distance from the car in front of you. That's pretty cool for long trips.
Austin Wilson:
Absolutely.
Josh Robb:
The downside is if you don't pay attention, you end up driving 40 miles an hour because you get stuck behind the slow guy. And if you don't look at your speed, it automatically slows you down and you're like, "Oh man, I've been driving too slow."
Austin Wilson:
That's cool. All right, well thanks for listening today. If you had someone asking about buying a car, hey, send them this episode. Hopefully that will help them out. And as always, email us any ideas you have for new episodes. Say hello@theinvesteddads.com. And until next week, have a great week.
Josh Robb:
Talk to you there.
Austin Wilson:
Bye.
Thank you for listening to the Invested Dads podcast. This episode has ended, but your journey towards a better financial future doesn't have to. Head over to theinvesteddads.com to access all the links and resources mentioned in today's show. If you enjoyed this episode and we had a positive impact on your life, leave us a review, click subscribe and don't miss the next episode.
Josh Robb and Austin Wilson work for Hixon Zuercher Capital Management. All opinions expressed by Josh, Austin or any podcast guests are solely their own opinions and do not reflect the opinions of Hixon Zuercher Capital Management.
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