I had a discussion with my college son about his desire to invest his virtually his total net worth in a depreciating asset. He eventually saw the wisdom of a very serviceable and economical to maintain hand me down.

IMHO, a few factors enter into the decision.

What are the service needs for the car? Will you be moving in and out of dorms/apartments? Moving around the country for internships/grad school/etc? If so, some hauling capacity is nice, and you will be grateful for fold down rear seats.

Who is paying for the purchase and servicing? Hey, if it is a gift from generous parents, go for it. It it is draining your net worth, have you considered what, say $5k, invested at 12% annual return, and left alone to compound until your retirement would be worth? (42 years later, the 5k that didn't get spent on a fancy ride would be worth $640,000. Putting the same $5k away a mere 6 years later would reduce the value at retirement to $320,000). It is a long window to think about, but give it some thought. I assume part of the reason for going to college is to improve your economic situation in later life. Some other thoughtful decisions might help too! Also, the Mercedes is not an economical car to maintain--service + parts are high end, and you wouldn't want your local "fix 'em all" shop doing the work.

BTW, my college motorized transport thru 4 years of college was a motorcycle. I could only afford 2 wheels, but part of the many charms of my gf was the fact that she had a car.

 

The best college car of all time: the Honda CRX. This car has the best of several worlds needed for college. Honda reliablity, not to expensive for maintence. Has enough hauling capacity in the back for a reasonable amount of dorm room stuff. Great highpoint I wish I had considered in college - being a two seater you never have to be a designated driver. My friend had one and he never drove out partying once. He'd offer but then we'd say, "no you can't fit all of us, and it doesn't make sense to take more than one car." Bugger had it all figured out.

BigB333: I'd consider something that would in general fit in with the types of cars that are going to be at the school. Keeping a low profile can be good. You don't want your TA (who's going home to his Top Ramen dinner) to see you getting into an expensive car - he'll have no mercy come grading time. Also since most schools cram as many cars as possible into the lots (filled with inexperienced drivers) you're going to end up with all kinds of dents. Another thing to consider is that if you live on campus you're probably going to be driving anywhere two or three days out of the week. Why spend a lot of money for payments and insurance when a cheaper vehicle is all that is really necessary.

Good luck, BT

 

the nightmares come flooding back in!!!

TOP RAMEN!!!
(120% of your daily allowance of salt and beef powder!)

*choke choke*

keep it away!!!

 

Why not get an older Benz, if you still want style and looks without worries. The older S class cars have usually been well maintained and are on the market for less than 10k.

Just my 2 cents worth. But then again drive want you want life is to short to worry about it.

 

just curious... is 23 still "young adult" or am I middle-aged already?

 

if 23 is middle aged, i must be an old geezer at 25

someone pass me the leisure suit and garter socks.... i am ready to retire!

 

Can you enlighten me as to why someone wouldn't want to ride in or borrow the coupe?

 

OK, I was trying to find a PC term other than "children." You know, a term that wouldn't offend someone who is young who doesn't feel he's a child anymore. You know how sensitive we have been on the forums, lately about this sort of thing...

At age 50, I'm still one of my mom's children, and I'm pleased to admit it. But that's just me...

 

If they are under 20, they are still "teenagers"
If they are 20-25, "college kids" (grad school and all)
25-30 "young professionals
30+ old farts.

 

just a little correction... 12% is WAY too high. after the effects of inflation, an average investment strategy wil return 7-8%. I shoot for a running 5-year average of 10% for my clients (after inflation). If I accomplish that, then I have succeeded. for less risk-averse persons, you may be able to get 12-15% over 15 years or so... but not very likely.

 

You forgot 20-something BMW drivers = children :p

(You started it)

 

Just take out the "college", and I'd agree with you. I can't wait to get mine back on the road. Go to an autox course, and you'll see tons of them, ready to kick some bmw and porsche ****.

When I moved back up here from New Orleans, I was able to pack most of my apartment into it. Had to leave my records behind - figured that I'd never want to listen to them again. Now, some of those old albums aren't on cd, and I'd like to have 'em back. So, if anyone sees any Wall of Voodoo records in the streets of NO, please send 'em back! It's just an awesome car. And some of the styling cues on the c230 have been stolen from it.

 

crap, I walked right into that one...

win some, loose some... maybe next time.

 

Ouch!! You guys really know how to hurt a guy!

 

I think after so many posts we should be titled as old farts of the forum.

 

actually, at http://forums.vintage-mustang.com there used to be an "old fart" category, but someone complained about it, so they changed it. I was an old-fart over there at age 21. (great information source for mustang project that my dad is in the middle of)

 

I have updated my avatar to reflect being an old fart

 

That disgusting!!

 

hey MB Bob I understand and AGREE with your point completely... its just i dont have what it takes to turn down that car. You cant believe (actually i bet you can) how bad I want a new car. ALL of my friends have new cars lol err i dont think i can say no lol

 

if your gonna go with it, i would go coupe..... hatchbacks have so much more cargo room, and the smaller back seat keeps extraneous passengers out of your car
\

 

BigB333, Yep, I understand your angst. That new car is pretty tempting. I can't blame you one bit if you go for it. Just painting a picture of the alternatives, and happy to know you accept it as constructive.

If you're going to TCU, I got another thought for you (because of the weather we're having today). You must already know we get these huge hailstorms in the Spring (strangest hail I've ever seen, sometimes softball size... can you spell caved-in roof and rain soaked seats?).

I don't imagine you'll have covered parking, even if you do have a reserved spot. So, you may have the weather to think about in addition to your schoolmates...

 

yeah im familiar with Texas, I live in southlake

 

That means you get the hail about 5 minutes before I do. LOL!

I am really amazed at the storms here: Very short, very intense, sometimes very violent.

 

Just to point out, inflation has been dormant and will continue to be so in the near term (1-2 years). With the fed hinting an imminent reversal of rate cuts, we can expect an equities surge in the near future - growth with little inflation. So, hop on for the ride - a 12% return within the next year or so is more than reasonable. And while a risk-averse investor will not get the same returns as those who are risk-neutral or risk-seeking, 15 year yields in even a money market or savings account would be well over 12-15%.

For all this talk about college students not needing an extremely nice car, and how they should not decrease their "net-worth" by indulging themselves in such an extravagance; that's a little too much. College students are still dependents and more than likely don't really have much "net worth" (Unless they have a trust fund, etc.). While I am not knocking down the idea of teaching your children the value of money, if you expect to start when they leave for college then think again of where the parent messed up by not doing so earlier on in their childhood. Try to think back, your kids will have enough trouble their freshmen/sophomore years in college trying to balance their new found autonomy, academics, and adjusting in general, that adding the burden of maintaining volatile investment accounts would not help the cause. If as parents you feel that your kids deserve some sort of reward, do it. Besides, the incentive for driving a dream car when you gratuate should motivate academic performance in school, not the growth of a stock in a rising market. However, I do agree with scoping the college environment for the "car's" safety. While I do often spend frivolously, I hate paying more than I would have to. Just my .02

 

WOAH!..... bull****!
1) if the Fed increases rates... valuations will drop. why? because the "fundamentals" for valuation state that a stocks price is influence by the NPV of its future cash flows... if interest rates go UP, then the denominator in that equation gets larger, creating a smaller quotient (hence pushing prices down).

2) Inflation is predicted at 2.7-3.1% next year.

3) In order to properly plan and invest monies of any sort, a proper perspective must be taken. the past 10 years IS NOT proper perspective. maybe the last 50 or 60 years is a better perspective. and the average return for the equities market over that term is 10%... our economy WILL NOT fully recover for at least another 2 years, no matter what anyone tells you. and we are in a time of war. which creates international instability, which adversely affects market values and creates uncertainty that keeps investors away (lowering demand and lowering equity values)

4) Money market accounts may return decent rates again, but not 12%, 8% MAYBE, but not 12.

I'm curious where you got your information from??