Chevrolet Sonic worth vs KBB?

[Dirkdaddy]

Today GM is trading at about $36 per share while Honda is hovering around $30. GM stock is going up and Honda is going down.

Just chime in here, stock share price means little you want to talk about market cap which = shares outstanding x market share price.

If you want to compare companies for investing you'd use earnings per share. If you want to compare the entire companies as far as bragging rights like you are saying, compare net income...or perhaps stock price growth over the same period of time (you got that part right).

If you buy your cars right, and keep them a reasonable length of time, buying new costs less than buying used.
When you buy a 3 year old used car with 45,000 miles on it to "save" the depreciation - you end up with very little, if any warranty left on many cars. You also need tires in the very near future, your shocks and struts have already served over half of their service life, etc...

You also don't really know how the previous owner took care of the car. They traded the car away - so maybe they had issues with it.

Not sure where you get this info except maybe some personal experience or seat of pants. Since the steep part of the depreciation curve occurs first few years, and since the reliability curve going the opposite direction starts to go up about 5 years in (based on my experience) and the resale valve levels out quite a it after 5 years the "sweet spot" for purchasing for me is somewhere between 2 years or more from new. I have found that modern vehicles are pretty darn reliable, overall if you did your research. I drove two Oldsmobiles (a '98 and 2000) 200,000 miles without what I'd consider abnormal breakage. The 2000 I got used for about $5k @ 90k and sold it many years later for $2k. Replaced struts, belt, tires, brake pads, battery, engine mounts late in this run and AC compressor. I'd say the total cost of ownership on that was pretty low, add in the insurance was liability only as it was a beater and I had no loan to force insuring it. The '98 van was a bit less reliable but still was good and served us well and got good fuel economy, never stranded us.
Our 2012 sonic LTZ I just got recently had 18k on it and remaining warranty & powertrain warranty, paid about $12k. I predict in a few years after driving the crap out of it but doing all my maintenance it would sell for about $6 lets guess, so that's still pretty low cost. I'd compare that against a new Sonic at 18k. Granted used is USED and you have to purchase carefully, but many people just get bored or whatever. My dad just scored a 2014 Cadenza fully loaded with everything for about $25k, the lady who traded supposedly tried it but hard loading kids in so she came back and got a minivan.

Yea, I'm pretty cheap but these are depreciating assets, best to avoid dumping a high % of your earnings in depreciating assets. Invest in a reserve account for job loss, unexpected expenses, then IRA, a house, after all that stuff you have money left over for transportation.

I think the biggest mistake people make when buying a car (new or used) is when they look at the monthly payment as the biggest criteria.

Financing any depreciating item for a period longer than you intend to own it is a mistake. If you only plan to keep the car 24 months, then you need to have it paid for in 24 months or less. Otherwise you can't afford the car.

Agree there. I'd even say a used car for cash can be better than a new car for payments if you don't have financial house in order yet.

 

[mtbrdad]

I paid less for my '06 Torrent brand new than I would have paid for a 3 - 6,000 mile used Torrent back in March of '07. Sticker price was $26,000, but I paid $17,300 after dealer discount, GM credit card cash and rebates and it only had 25 miles on it. Used '06 Torrents with 12,000 miles were selling for $18,000 at the time.

I paid $9,466 for my brand new 2014 Sonic LT Turbo Hatch in September. You can't buy a 2014 Sonic LT Turbo hatch today with 12,000 miles for anywhere near that price.

Like I said - if you buy a new car right - it's cheaper than buying used... And you get the new car "smell"...

Correct me if I'm wrong but the GM credit card cash is income you've earned isn't it, from an accounting standpoint I'm not sure as you can use that as a discount from the actual car cost. I get about $2k cash back every year from a Chase credit card and I count that as income rather than something discounting the purchase price of something I'm buying.

 

[The Champ]

If you want to compare the entire companies as far as bragging rights like you are saying, compare net income...or perhaps stock price growth over the same period of time (you got that part right).

That's why I prefaced the recent stock price with this statement:

GM and Honda stock were both trading near the $40 mark a year ago.

Today GM is trading at about $36 per share while Honda is hovering around $30. GM stock is going up and Honda is going down.

As far as net income - GM had about $500,000,000 more than Honda.

Not sure where you get this info except maybe some personal experience or seat of pants.

Yeah, a lot of personal experience.

I've purchased several brand new cars since 1980 (along with a number of used ones), put an average of over 150,000 miles on them and only had very limited repairs. The Sonic is too new to talk about, but our 'current 06 Torrent has had a grand total of $301.00 in repairs (not counting normal wear items - brakes, oil, filters, tires) in 127,000 miles. That one repair was on the AC system in July of 2013. We will have this one for at least another 18 months.

As far as insurance goes - I just got my renewal in the mail yesterday - the Sonic with full coverage on it is only $181 for 6 months. The comp and collision were about $75.00 of the total (I carry very high liability limits).

I keep my cars for a long time - and that is how I can afford to buy more new cars.

Yea, I'm pretty cheap but these are depreciating assets, best to avoid dumping a high % of your earnings in depreciating assets. Invest in a reserve account for job loss, unexpected expenses, then IRA, a house, after all that stuff you have money left over for transportation.

Bingo... I agree with you. It felt strange borrowing money to buy a car. This is the first car that I took out a loan on since 2002. We paid cash for the Torrent - but as I posted earlier - a 1.39% auto loan made me leave my cash where it was.

I have 6 personal cars for a household of two...

The 2 daily drivers do depreciate - but the other 4 are appreciating assets that I enjoy having.

Agree there. I'd even say a used car for cash can be better than a new car for payments if you don't have financial house in order yet.

Financing a depreciating asset when you don't have your personal finances in order is a bad thing.

 

[The Champ]

Correct me if I'm wrong but the GM credit card cash is income you've earned isn't it, from an accounting standpoint I'm not sure as you can use that as a discount from the actual car cost. I get about $2k cash back every year from a Chase credit card and I count that as income rather than something discounting the purchase price of something I'm buying.

I can see your point.

But I get 5% rewards on that card that are only redeemable towards a new GM vehicle. Most cards only reward you 1 - 2%. I earned it as you say, but I couldn't have earned that much with another card.

We have other cards that we get rewards on also that can be used for other things.

Our bank card automatically redeems our rewards as principal on my home mortgage with that bank. The Delta AMEX helped the 4 of us fly first class to Germany for Christmas a year ago (over $20,000 if we had to pay for it) and we stayed in Hilton properties for free on 7 of the 12 nights with help from the Hilton AMEX.

I like credit card rewards!