I want to give good advice to someone but would like to read your expert opinions before doing so.
A friend is going to retire within 3 years. He is thinking long term when it comes to money management and he actually asked for my advice!
He has a 10 year old truck that runs well and has no mechanical problems but is thinking of buying a new 2013 truck before he retires. His reasoning is that it could be the last vehicle he ever buys and a new one is more likely to last him the rest of his life than his older one. He says that buying it now would be financially easier on he and his wife than it would be after retirement.
He has never bought a used car and will not consider that option.
I think there is some logic to his idea and I’m inclined to advise him to go ahead and buy a new truck.
The idea is interesting to me because I could be faced with the same type of choice some day (I also have a 10 yr old truck and any good advice might also apply to me in the long run).
Why not? I mean you work your whole life so why not get something nice at retirement time? I still haven’t decided what I want to drive when I finally retire.
@JoeGuy if your friend is financially comfortable, I would advise him to get that new truck.
While I have a ways to go before I retire, I would hope to have an almost new car in my golden years. Retirees should be going on trips (NOT CRUISES) and having fun with their grandkids, not worrying about keeping a junky old car going.
I would agree with db4690. A year before I retired, I bought a new vehicle. At the time, my son needed a better vehicle, so we sold him, at family discount price, our 2006 Chevrolet Uplander. I had had good luck with the Uplander, so I thought I would buy used GM minivan that was a 2007 or 2008. My wife didn’t like the idea and she and the mechanic at our independent shop talked me into buying a new vehicle. Our mechanic recommended a Toyota Sienna and after driving one, that is what we bought. Both my wife and our mechanic said that I earned one.
The only part of the OP that I disagree with is “. . .a new one is more likely to last him the rest of his life. . .” Well, I hope that the 2011 Sienna that I now own won’t be my last vehicle and I am 71. I have a minivan because I frequently carry my fellow musicians and their instruments. When I am no longer doing this, I’ll swap the Sienna for something else.
Both my wife and I grew up in homes where money was tight. We both worked hard. We don’t waste money, but she has finally convinced me that there is nothing wrong with buying things we enjoy.
On a side note, I enjoy raising a garden. Several years ago I bought a roto-tiller with a two stroke engine. It’s been a pain to start. I just saw a new small tiller with a 4 stroke engine that has an optional kit so it can be started with an electric drill. I know that I could buy a lot of vegetables at the store for the price of that new tiller, but I think I’ll have one before planting season.
Ya know that reminds me of fishing, I mean people spend umpteen dollars on a fancy boat and fish finders etc., sure I can catch great fish with a casting rod off the dock, and sure I love the 1950 crestliner boat with a 7 hp motor, and sure I love even better the lund with a 90 hp, for skiing, tubing and fishing, but man to justify all that expense for a stupid fish, I’ll buy fresh at the fish store, sure $5 or $8 a lb for fresh walleye seems expensive, but REALLY?
I would say to run the old truck for as long as it lasts. I would recommend many other things as well: Sell the house and move into a retirement community. Maybe not, but if the friend has plans to change lifestyles, he could get the truck stuff done and buy a Toyota Avalon, Camry or Impala to use for retirement tripping. Try not to even need a truck.
I plan to move to the Southern Central Coast of Ca. In Lompoc, I don’t need air conditioning and I have piped in gas to heat the house, operate the water heater and use the stove. A cold January used to cost me $80 for gas. The city bills you for water, sewer and trash removal as well as electric on one bill. The prices were so low it was funny. You might pay a little more for the house but oil bills in Maine can be over $500 a month. That would pay for a lot of dining out. I’m talking breakfast here and we all know I’m full of it!
Ignore everything I just wrote. It takes a lot of thinking and planning for post-retirement life. We all know that the truck is a small part of the whole. From Lompoc, I can drive to Nordstrom’s in Santa Barbara, have lunch, coffee and a great piece of carrot cake while sitting on an outdoor balcony with hundreds of red tile roofs to look at. I’ve been totally retired for over six years now and it’s better to keep working until you just can’t stand it any more. I am still sitting in Santa Barbara in my imagination. As soon as the great granddaughter gives me permission, I’m moving!
I appreciate all of the input. I’m inclined to advise the guy to buy the new truck as a gift to himself for retirement. He can afford it but doesn’t like to waste money. The reason he thinks it will last him the rest of his life is that he knows he won’t be driving nearly as much as he does now and has owned other vehicles for over 20 years because he takes good care of them (kinda like me). And he wants a truck. There’s no talking him out of that.
It makes sense to buy a new vehicle, but one has to make sure it’s the right one. My wife’s new car is a Hatchback since she does not want to be bothered with a roof rack anymore.
Most retired people have hobbies and do gardening. So I would not necessarily recommend a truck, but certainly a station wagon, hatchback or minivan. A collegue has both; a Toyota Sienna minivan and Passat for long holiday trips.
Yes, and no. Yes he should have a new truck when he retires. No, he should not buy it now. If he gets it now it is 3 years old when he retires, has 40K miles on it, the warranty will by just about up, it will need new tires, etc.
Rather he should start making loan payments to himself now - as if he had bought the truck. $600 a month X 36 = $21,600 for example. A new high end truck might mean a $800 a month payment, whatever it is start making the payments to himself. Buy the truck for cash upon retirement and enjoy it.
The current 10 year old truck won’t depreciate much more over the next 3 years and seems viable to hold up without major repair. So run the current truck and save for a new one.
It depends on what his income will be when he retires. If it is substantially less, then some time in the next 3 years is better than when he has less income. Your friend should decide what he wants (he probably has already). If he wants a diesel, half ton trucks will have them by 2014 (Ram). He should check that out if it appeals to him. Otherwise, 2013 is a good model year.