Is purchasing a newer van a good investment?

[OneManWolfpack]

Hello everyone.<br><br>I recently was approved for a loan&nbsp;for a 2012 Ford E250 Van with less than 6,000 miles for around $18,000.00 which would make my loan payments at around $476.00 per month after a $2,000 down payment.<br><br>I'm currently employed full time and make around $1,800 per month (net)&nbsp;and have a second part time job lined up that will bring in another $1,000 per month. My only bills would be the van, car insurance, cell phone, and gym membership. After going over the numbers I would have the van paid off in 7-10 months.<br><br>I was wondering if you all think this would be a better investment instead of buying a cheaper older van? I'm not good with repairing vehicles so I was figuring the newer/more reliable the better.

 

[bobbert]

<p>-In my opinion, I'd say get <strong>AS&nbsp;</strong>new as possible...</p><p>Plus you have a warranty...-can't go wrong with that.<br><br>I mean, what's the point of living life having to work on a crappy old vehicle all the time, when you can be enjoying life &amp; etc.?</p><p>Do you wanna really spend your free time working on a van that someone pawned off, knowing that they were unloading a beater???</p><p>Even if the warranty ran out, with the money that you're earning right now, it would be easy to repair (because you've already saved money).</p><p>Furthermore, you know that you didn't abuse it during the time you had it since it was relatively new.</p><p>Just because some members on here claim that they've been vandwelling for a while doesn't make them an authority. They're only basing their opinion on THEIR own experience &amp; not taking consideration of EVERYONE'S experience...</p><p>-oh, and the price for that particular van you had in mind... that seems like a good price.</p><p>Nothing available around here in Northern Ohio in that price range-<br><br>Now, if you lost your job in the meantime, then you'd be screwed...</p><p>&nbsp;</p><p>&nbsp;</p><p>&nbsp;</p>

 

[BamaDuke]

Hi Wolfie,<br><br>18k sounds like a good price on 2012,&nbsp;Congrats!&nbsp; I would spend the $150 or so to have a mechanic YOU hire to give it a good look see.&nbsp; Even with a warranty, you don't want to move in then have to pay for a hotel for a week if something goes wrong.&nbsp; The Fords are pretty solid, and I bet you get many miles out of her.<br><br>I am a pretty good wrench, but I chose to buy a newer rig, rather than something old.&nbsp; I, too, work full time, and did not want to HAVE to spend every off hour working on my home.&nbsp; One word of advice, though.&nbsp; The value of the van to someone else (only a concern if you decide you don't like the lifestyle) will be impacted by all of the modifications that you do.&nbsp; Were I in your shoes, I would not make irreversible changes to the van until I had lived in it a year.&nbsp; If something were to happen and you had to sell the van, the value will be highest if the new owner does not have to remove or repair significant changes that you made.<br><br>Good Luck!!<br><br>Bama

 

[OneManWolfpack]

<p>Thanks for the responses!<br><br>The van comes with a 6 year or 150,000 mile warranty and I thought it was a decent price. My plan is to pay it off as soon as possible and then save up a bulk amount of money and go traveling across the US and save up money for a home/retirement when I get too old for it.<br><br>Yeah at first&nbsp;I just planned on buying a twin sized mattress from Sam's and tossing it in there and then install some side shelving that can easily be removed and won't be permanent. I wont be doing a kitchen/bathroom set up. I work in an office so I can use my desk for food/snack storage, the refrigerator for perishable foods, and worst case scenario....we have two cafeterias where I get a good discount and I have&nbsp;a gym membership so showers and bathrooms etc are easy to come by.<br><br></p>

 

[caseyc]

Buy as new as possible that you can afford without going over your head in debt. I only spent $3,000 on a used 1995 Ford E150 conversion van. I spent about double that amount on various repairs. In hindsight, I should have paid more for a later model used van. But at the time, I didn't know how far I was going to go with my van purchase, so I didn't want to spend too much. &nbsp;I should have spent more from the get-go for a newer model van. &nbsp;As the saying goes, hindsight is always 20-20. Oh well, things could have been better, but things could have been worse too. This was my first van purchase, so everything was new to me at the time.

 

[ZOFCHAK]

<br>&nbsp;&nbsp; I'm assuming you're looking at one of the off lease Uhaul vans?&nbsp;&nbsp; If so, IMO those are a great deal with the factory Ford warranty and are pretty much fully loaded.&nbsp;&nbsp; They have the 4.6 v8 so the gas mileage won't be stellar, but it'll be better than a lot of other full size vans that have the larger engines.&nbsp; One thing you may want to consider is ditching the heavy galvanized running boards they come with.&nbsp; They are nice, but they weigh about 200lbs for the pair! <img src="/images/boards/smilies/eek.gif" class="emoticon bbc_img">&nbsp;&nbsp; If you're going to be doing a lot of driving that weight will add up to less MPG over time.&nbsp; <br><br>&nbsp;&nbsp; <br><br>

 

[vagari]

Buying a used van for $4,000 versus a new one for $18,000 would leave you with $14,000 to do any repairs on the older van. The newer van will depreciate $1,200 per year where as the older van maybe only $300 per year. So there's a savings of $900 per year for repairs on the older van if needed. An older van only needs liability insurance but a newer van needs full coverage. That's another savings of $500 per year for repairs on the older van if needed. A loan on the newer van will cost you $500 per year in interest.<br><br>So with an older used van you have an upfront savings of $14,000 and an additional $9,500 savings over 5 years. But there is the hassle and stress of repairs on the older van. How much hassle and stress can you deal with over 5 years to save $23,500? I try to stay out of any debt whenever possible. Debt destroys lives.<br><br>The used van may even have a high top if you wanted.

 

[idn88]

I think it boils down to how much you drive, how critical it is that your not broken down or stuck somewhere, and how mechanically inclined you are. &nbsp;I have figured out over the years that a vehicle cost about 20 cents a mile just for wear and tear (some less, some more) - but generally if you buy a new vehicle the money goes to payments, for an old vehicle the money goes to repairs. &nbsp;If you can't or don't want to do repairs yourself, newer is a very good option.<br><br>The thought on insurance is a good one. &nbsp;Full coverage can be expensive depending on your driving record. &nbsp;In my case it only adds about 400 extra per year with a higher deductible. &nbsp;You can't ge much repaired for 400 bucks, but you should at least check how much it will cost you before you buy the vehicle. &nbsp;<br><br>I never thought I would buy a new vehicle until a few years. &nbsp;In 2008 when the economy tanked and no one wanted a vehicle that got poor mileage I found a new vehicle for a really good deal. &nbsp;I have never regretted buying it. &nbsp;I plan to keep it just about forever - since I know it has never been abused and properly maintained - which is worth it to me.

 

[MrNoodly]

The reasons a one year old van with low milage would be for sale are <em>usually</em> less suspicious than the reasons a older, higher mileage van is for sale. <br><br>With the newer van, the reasons are more likely to be the previous owner couldn't make the payments, is down-sizing or went out of business, or the van didn't serve his needs. In other words, it's about the owner, not the van.<br><br>With an older van, you have some of those same reasons, but the far more likely one is that the van needs or is about to need expensive repairs.<br><br>As my father used to say, "I don't want to buy someone else's problems.<br><br>So if it works for you financially, go for it.

 

[offroad]

agreeing with VAGARI please use math to make your decision.&nbsp; Not passion of newness, not potential of catastrophic repairs (get it inspected).

 

[Van-Tramp]

I am a big proponent to never taking on any debt and paying for everything with only the cash you have on hand. Since it sounds like if you buy this van today for $18,000, you will not be doing a heck of a lot with the van prior to paying it off ($500 per month payment + the extra insurance cost for having it on a loan is a LOT of money), having a van that is not used it just throwing money down the drain (aka 'banks'). <br><br>There are two other options:<br>1) Save up that amount of money each month, and in 7-10 months (going by your time frame) you have a large lump sum to pay for your van in cash (significantly cheaper then to take on a loan). <br>2) Purchase an older van now (for cash) and take the 7-10 months to get it just as, if not more, reliable than a new van. You can have the van on hand now, without taking on a huge debt.<br><br>As I've said in previous forum posts; <strong>a new cars does NOT necessarily equate to a more-reliable car</strong>. Hundreds of thousands of 'new' cars are recalled every year... some for some very major defects. My Wife's 2002 trail blazer was a lemon spending the first 3 years back and forth to the dealership. Then it blew out it's transmission last month after only 150,000 miles ($4000 repair bill for a vehicle that is valued today at just over $4000). My Mothers Mini Cooper was traded in after only 50,000 miles because of constant and major engine problems (the dealership never could find a reason why TWO OF THE FOUR cylinders were misfiring for years). <br>In contrast, my <strong>1989</strong> Dodge van has cost me $3000 to buy, and less than $1000 in repairs (including tires and oil changes) in the past 3 years and 50,000 miles traveled. My daily driver is a <strong>1978</strong> Datsun 280z bought in 2002 and has cost me less then $1000 in repairs as well (11 years owned). Old cars are easy to work on yourself and cheap to find parts. Newer cars are not as easy to do your own work and parts are significantly more expensive.<br><br>Buying an "older" vehicle and spending the money saved into repairs of that older vehicle is significantly less expensive than buying a "newer" vehicle. But, if money is not a concern to you, the banks (the only folks benefiting from a new-car purchase) would love to have your $18,000 + interest.<br><br>

 

[yesican]

$18,000 ball and chain!&nbsp; Some can carry the weight, some cannot.&nbsp;&nbsp;Financial wizzards will tell you&nbsp;that all your vehicles combined worth should not be more than 25% of your income because they depreciate in value.&nbsp;&nbsp; You also have to consider the increased cost for insurance.&nbsp; Any home is much more pleasant and enjoyable to live in and any vehicle you drive is more fun when its not owned by the bank. If you lost your job, you've lost your home.&nbsp;&nbsp; This may be a mechanically savvy thing to do, but it is not a financially savvy thing to do.&nbsp; It is up to you if you want to wear irons for several years to come or if you want to be free and live in something more in your price range.&nbsp; <br><br>Sorry to act like a mother, (my kids never liked the lectures either), but you asked!<br><br>Rae

 

[OneManWolfpack]

I can understand not going into this with debt. With my given situation being between homes and this past week my car being totaled from the Oklahoma tornado's/flood damage I have to get a loan for a vehicle anyways and it needs to be dependable as I work on a schedule and need to make it to my full time and part time jobs and the gym.<br><br>As I mentioned&nbsp;on my original post&nbsp;I plan on paying the van off within 7-10 months. The van is currently $18,000, I'm putting down a $2,000 down payment making it $16,000 which will make my monthly payment $476.00 per month thus making my total monthly budget $866.00 which includes the van payment/insurance/cellphone/gasoline/groceries and my gym membership for showers. With this being said I will have an extra $1,934.00 to put towards the van each month....with the already included&nbsp;monthly payment it equals a total of $2,410.00 being put towards the van each month, which also means it would be paid off by the end of this year. Which leaves next year for me to save a bulk amount of money with a paid off newer van with a 6 year warranty.<br><br>I did an excel spreadsheet between getting a van or getting a car and living in an apartment and the van option is the cheapest by far...even if I got a $5,000 car and a cheap $525.00 per month apartment...the $426.00 per month van is the cheapest option. <br><br>

 

[James AKA Lynx]

Check the vehicle report such as Car fax. <br><br>I would say no to buying. Save your money and buy with cash and a little older. These commercial vans will last over 250000 miles. Buy new or near new may not pay. The extended warranty may not be any good. All that you need to is to go over oil change mileage by 25 miles (or not take in for something they say you should but not tell you) and the extended warranty is gone.<br><br>I suggest that you do not go in debt. Buy one out of dealer warranty. save your money and learn how to fix. <br><br>Mine is a 97 with only 118000 miles. I can buy a new engine for 1300 and I need to put in with help. When I need to. I expect to get another 100000 miles if I can make the body last.<br><br>Your choice. <br><br>Use the extra money to leave early or go longer.<br><br>James AKA Lynx<br><br>

 

[idn88]

Search this forum for all the people who bought old vehicles that were lemons and spent heaps of money and time trying to get them fixed. &nbsp;Buy close to new, pay it off, and take care of it. &nbsp; Its not just a car, its your home. &nbsp;You may not need another for 15 or more years. &nbsp;<br><br>Not saying used is a bad idea either, but I think people generically say a newer vehicle is a poor investment, which may or may not be depending on your situation and use.

 

[David]

That warranty is pretty nice.. However 400+ with added insurance is the cost of an apartment to in some places..<br><br>It's a tough decision but I personally wouldn't put off traveling to pay it off. It' real easy to put off doing what you want to do, until it's too late. If it came down to buying new van or traveling now.. I'd buy a cheaper van.<br><br>I'm almost in the same boat.. I have a older class B that I'm scared to take very far, so I'm having to not travel at the moment until I buy something newer. I'm looking for something in the 13k or under ball park as &nbsp;I can trade in my truck and get a payment under $200 that way.

 

[Van-Tramp]

Reality is rarely the exact amounts you budget. A budget is just a plan, not set in stone, and life will always find ways to destroy that plan (take your recent tornado for example). <br><br>You know what my monthly budget consists of? Storage, gym, cell phone, food... that's it.. less than $300 if I do not gas up the van. You know how much I <strong>actually</strong> still spend each month? between $1000-1200. If you drive you will spend more than your budget. If you eat you will spend more. Haircuts, flat tires, pets(?), medical emergencies... there are more things that will break your budget than I can imagine up. (check out the link about my finances in my sig below)<br><br>Plus - it is always cheaper to repair then to buy-new. I can replace my entire engine and transmission with brand-new for a quarter (or less even) of what you are looking to pay for your used van.<br><br>If you must take on debt... Go open an account with your local Credit Union. Apply for a car loan with them (better rates, and more honest banking). They will tell you how much you can get based on your income, debt, etc. <strong>Then, cut it in half</strong>! Go find a used 'older' vehicle off Craig's List (have a mechanic check it first of course) that you can purchase with that amount of money (or less) and spend the time over the next year tinkering away at the little repairs that you will do on any vehicle no matter how old it is. It sounds like you earn more than enough to take care of the little things that will pop up on a used vehicle. Put money aside for those big expenses (I promise, a new car will have big expenses too. Even "bumper to bumper" warranties do NOT cover everything) and enjoy the lower-debt life.<br><br>Take it from the people that have gone through it. I promise you will be tons happier with low or no debt.

 

[user 423]

Pros and cons both ways. One thing about the '12 van is the 6 year warranty. Manufacturer's warranties are usually only 3 years and 36K. So who is offering the extended warranty? And are you paying more for it? Some of those warranties turn out to be worthless with high deductibles and repairs that aren't covered. Just something to think about.

 

[Ziggy Moon]

Buy Older/Cheaper! Because Love/Hate Relationships are So Much More Exciting! <img src="/images/boards/smilies/biggrin.gif" class="emoticon bbc_img">

 

[Kevin H]

<div>The excitement of a new van is intoxicating. &nbsp;I do have some questions about the deal you were offered; primarily a 6 yr/150k mile warranty. &nbsp;I have never heard of a warranty with that mileage or time. &nbsp;I guarantee a warranty like that is big bucks that no matter what the dealer says, YOU are paying for.</div><div>&nbsp;</div><div>I suspect that a lot of the $18k is to pay for that. &nbsp;I suggest you ask how much the van would be without a warranty. &nbsp;That will give you a better idea of the actual cost of the van.</div><div>&nbsp;</div><div>Also, consider the very realistic probability that you will not own this van for 6 years. &nbsp;A term that long will most likely be worthless within a few years. &nbsp;It would be interesting to hear how long the members of this group keep their vans. &nbsp;Not many people keep vehicles that long.</div><div>&nbsp;</div><div>Ask for a copy of the warranty prior to the purchase. &nbsp;It will be tedious and boring reading but read through it and see what is excluded. &nbsp;You will be surprised. &nbsp;Also, look at exactly what the steps are for filing a claim. &nbsp;If you miss one of those steps you will be denied with no recourse.</div><div>&nbsp;</div><div><span style="font-size: 13px;">Also, you have one job right how and the other is "lined up". &nbsp;I have no reason to suspect it will not work out but I would hate to make a huge monetary commitment on a job that is not actually in place. &nbsp;What if it does not work out? &nbsp;That $476 payment is due no matter what.</span></div><div>&nbsp;</div><div>You are apparently somewhere in the Dallas/Ft.Worth area. &nbsp;That region, plus the I-35 corridor to Waco, Austin, or even San Antonio has a LOT of vans available.</div><div>&nbsp;</div><div>I bet within a short time you could come up with a very good van a few years older that is in good shape for around $5k. With $2k down and only a $3k note, if the numbers you quoted work you could pay it off in 2 months.</div><div>&nbsp;</div><div>If the older van lasts for a year you could amass more than the $18k and maybe not even need it. &nbsp;Trust me, you will feel a whole bunch better with the money in the bank than in a van.</div><div>&nbsp;</div><div>One of the greatest draws to the van lifestyle is less cost. &nbsp;This deal is setting you up for exactly the opposite. &nbsp;High bills equal high stress - not a great way to start out.</div><div>&nbsp;</div><div>I strongly recommend you reconsider.</div><div>&nbsp;</div><div>Good Luck and let us know what happens.</div>