posted on Jun, 25 2013 @ 12:48 AM
A reasonably priced new car, say a Honda Civic, costs around $18,000 suggested retail price according to the internet. Hagglers and deal hunters can
probably do better.
I will buy said new car at some point in the next 10 years.
During the years that I am not buying a car, I will be investing my money for an 8% total return. I consider this a fair estimate.
The new car will not require any major maintenance over the first 10 years.
For each year over the 10 year period before I buy a new car, I can invest $16,000 at 8% total return. I must spend about $2,000 per year in
maintenance and repairs to keep my old car running.
For the year that I do buy a car, I invest $0 (all the money went to the car).
For each year after I buy the new car, I can invest $18,000 since I no longer have to pay for maintenance.
All purchases are done in cash. I don’t take on consumer debt.
Inflation is ignored.
If I buy a car in Year X, then according to the assumptions above, by the end of 10 years, the amount I will have saved is listed below. (Read each
line like this: “If I buy the new car in year 1, then I will have saved $224,776.04 by the end of year 10.”):
2013 MERCEDES BENZ SL-CLASS