In Praise of the $500 Car

“Wooden Shoe Rather Be Dutch?” Sigh. Bumper sticker humor aside, the Subaru Legacy had 140k miles on the clock and a well-maintained powertrain (records in the glovebox). The hardback book about Abraham Lincoln under the driver’s seat gave me hope that the owner was equally conservative with his driving. After a bit of tire kicking, I slowly concluded that the old girl had plenty of life left. Fortunately, the kicked-in driver’s door and smelly interior made the other dealers turn-up their nose when the Subie went across the block. For $500, the Legacy became mine… all mine. BWAHAHAHHA!!!!

Welcome to the wonderful world of the $500 car. From public auctions to impound lots to private sales and eBay, they’re there for the taking. We’re talking old Fords that hardly ever fail, to mondo mileage minivans with the interiors to match. The cost of today’s ‘affordable’ commuter has rapidly sunk to the point where it’s nearly equal to the price of a new scooter. Even better, as the old saying goes, “They ain’t building em’ like they used too.” They’re building them better.

Thanks to huge advances in mechanical engineering, materials and manufacturing, the average vehicle has a remarkable ability to sustain itself well in six figures on the clock and double decades on the calendar– given the right owner and proper maintenance.

In my daily work as a dealer, I see the results of this every day: old Camrys old enough to drink in all fifty states that run as well as a twenty-year-old sewing machine; old Volvo wagons that you can’t kill with a stick, SUVs built for durability instead of bling that can still climb every mountain, conventional family sedans that have watched an entire generation grow up and head off to college, ready for grandchild duty.

For a true indication of the average car’s added endurance, look no further than Canada. Our neighbors in the Great White North recently reported that the number of 15-year-old vehicles on their roads had skyrocketed from just 800k in 1990 to 2.8m today. They’re not hanging onto to their vehicles longer because they’re poor. They’re doing it because they can. And the money saved is phenomenal. But the $500 car? How can that be a good deal?

First of all, understand this: the $500 car always has something wrong with it. Examples: the Subaru had a foul odor and a severely dented door. A $100 door and a $50 detail brought it back to its rightful glory. A 1989 Toyota Camry and a 1993 Eagle Vision I bought for $500 apiece needed nothing more than a $190 paint job (called a “scuff and shoot”). Two 1989 Volvo 240 Wagons, a 1988 Isuzu Trooper and a 1991 Ford Explorer Sport needed… well… nothing actually. They were just unpopular and ‘old’. Finally, a 1977 Mercedes 350SE bought for $250 needed a/c, new tires, and an alignment.

That old Merc was a freakish, right place/right time deal. But all the others had dozens of eyes on them and nary an interested buyer in sight. But why did all these sell so cheaply? Most car shoppers (and dealers) judge a book by its cover. Fashion rules. A damaged door or other body panel, peeling paint or lack of functional air conditioning stops most buyers in their tracks.

In time though, most folks pretty much just treat their cars as appliances. If it breaks a little bit, but it still works, they figure why bother even fixing it? Car buyers prefer to trade-in or sell their problems instead of fixing them, predominantly because they believe the repair cost is simply too much to bear.

That’s where the challenge and opportunity lies. Paint is cheap, parts at the local recycling yard (check car-part.com) or parts store are a fraction of dealer prices, and the time spent calling a few shops to get a direct quote for the labor on a specific repair costs you absolutely nothing. Enthusiast sites for specific cars are great at telling you the weak spots of any particular model, and what to look for during the test drive. Again this costs nothing but time and the willingness to learn.

For those of us who buy for the long haul, or just want a good cheap car to play with for a while, my advice is to look at the ‘scratch and dent’ side of the market. There are a lot of cheap old cars out there that had owners who did the maintenance, but not the cosmetics or the seemingly big repair. A little homework and a good independent mechanic can truly give you a ‘keeper’. It will also stave off the five figured financial scourges of depreciation, higher ad valorem taxes, and insurance while keeping your car hobby affordable and fun.