By on July 19, 2011

 

Too Uptown?

 

Christian writes:

Hey Sajeev and Steve,

So my girlfriend is in the process of getting a new car. We’re graduating college in May and she was lucky enough to have her Mom offer to buy her a car as a graduation present. Thats pretty much perfect timing because her 1996 Jeep Cherokee Country is on its last legs. She loves her Jeep but it has almost 300,000 miles on it and it hasn’t been the most reliable thing in the world over the past year

Originally, this whole process was supposed to be pretty easy. Her Mom offered to buy her a car worth up to $8000, and loving Jeeps she pretty much had her heart set on a TJ Wrangler, which (correct me if I’m wrong) would probably be pushing her budget.

However, her Mom has now said that she’d be willing to take on a car payment of no more then $300 a month and so my girlfriend is now torn on getting a pretty-much base new automatic Mini Cooper, (rather then a Cooper S which is what she really wants) and an older Wrangler.

That all being said, would there be anything you’d recommend over the base Mini Cooper or a used TJ Wrangler in her price range thats cool but a little girly at the same time? She’s got no need for AWD and living in Northern California means she’ll probably be spending a lot of time on the highways. The only other cars she’s really thought about is a VW New Beetle (her best friend has one so thats out) and a Mustang Convertible (I drive a GT Coupe though so thats out too.)

Steve Answers:

You need to get off the fashionista circuit.

Virtually every car you described will have a strong price premium in today’s market… and not because they are so ‘awesome’. The Mini Cooper you described will definitely have over 100k if the MIL wants to reconsider an $8k cash purchase. If financed new, it will likely be close to a $400/month rate. Late model Wranglers also finance at a very healthy rate. Well above the $300 ‘field of dreams’ level. Beetles are usually rolling cases of leprosy as it replies to reliability. As for the ‘me-too’ Mustang? 

I like them best out of all the ones you mentioned. But the idea of going on the monthly payment treadmill right after college is a dangerous one. Yes your potential future mother-in-law is happy to offer some Economic Outpatient Care for now. Good parents always want to smooth out the bumps of getting established. But my fear is that your wonderful girlfriend may find herself acclimated to the monthly payment idea and budget the rest of her life accordingly.

 

This is a tough call. But I will call it in my all too unpopular way.The Jeep should continue to be maintained until a major component (engine, transmission, electrical issue) kicks the bucket. In the meantime your girlfriend should save her money for something that can be bought with cash.<p>

Does she have a job lined up yet? If so, congrats! She is in the extreme minority and she should build her savings ASAP. Once she saves up enough money for a down payment she should be fine. But who knows? Maybe she may be able to buy a good runabout for cash. I would save $2k. Sell the Jeep. Then use the proceeds to buy a well kept ‘dealer queen’ that will let her focus on her career.

If she does not have a job lined up don’t do anything at all. Thank the MIL for her love and support, and continue being a good steward of the Jeep. I do give kudos for your girlfriend having a car that has almost 300k on it. Hopefully this experience will help her eventually become a wealthy ‘keeper’ instead of an indebted fashionista. Anything’s possible. Good luck!

Sajeev Answers:

So you will be buying both a used Jeep and a new MINI?  Misreading be damned, that’s what I was reading between the lines. As our man Lang mentioned over the last few weeks, this is a bad time to buy a used car.  While its more true for automotive staples like the Camry and F150, I expect the same is true for Jeeps of all shapes and sizes.  So let’s table the Jeep, she can buy whatever she wants as a toy and focus on the new car in her life.

The MINI is one of those great values on paper, until you see their chronic hit-or-miss reliability (bad timing chains anyone?) and somewhat disappointing fuel economy on the premium go-go juice.  Who knows if the new models are any better than history implies. I am far from optimistic. But like a Spike Lee movie once suggested, “She’s Gotta Have It.”

I’m not here to dissuade her on the MINI, provided she knows there are better values on the market.  Maybe a Turbo Nissan Juke to console her on her Cooper S daydreams?  Or the SNYC-alicious nature of the universally applauded Ford Focus? I suggest you guys go out on “car dates” to test drive a few of the MINI’s competitors, do lunch, and make a fun outing out of the whole scenario.

Need help with a car buying conundrum? Email your particulars to sajeev@thetruthaboutcars.com , and let TTAC’s collective wisdom make the decision easier… or possibly much, much harder.

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46 Comments on “New or Used: College Grads on the Fashionista Circuit?...”


  • avatar

    What’s the lease payment on a Cinquecento for you Yanks? That’s probably yer high-style / lo-cost watermark.

  • avatar
    Educator(of teachers)Dan

    Miata perhaps? (Used of course.)

  • avatar
    The Comedian

    Based on Mr. Lang’s recent articles about the used car market, now seems like an awful time to be shopping for a used car in the up to $8K range.

    +1 on running the Jeep a bit longer, unless and until its lack of reliability might impinge on your (actual, not theoretical) employ-ability.

  • avatar
    Domestic Hearse

    Is Mom rich? And I mean in a blue blood, old money, no worries kind of affluent? (A $300 payment or $8000 price cap limit suggests…no.)

    Or is Mom a work-a-day, nine-to-five middle-class, two-missed-paychecks-and-I’m-scared kind of mom?

    Cuz as college grads, this is where you stop and do a few grown-up things: A) Check your ability to make the payments if Mom is suddenly unable to, B) Leave campus for a minute and take a look at the economy of the real world, C) Look at those unemployment numbers, and tell me if any one of those statistics expected to be on that unfortunate list.

    Maybe it’s best to thank Mom for the offer. Tell her you’ll take a rain check. Make do with what you have for now. Get your own financial feet under yourselves. See how this whole not-a-double-dip-but-one-big-giant-dip recession/depression plays out.

    Mom’s a good egg for the offer, but unless the payments are nothing more than her walking-around money, ask for a hug and give her a kiss. Then buy a Chiltons for that old Jeep.

    • 0 avatar

      Great advice.

    • 0 avatar
      gessvt

      This.

      If the lovebirds are 22ish in age, then Mom’s probably at least 10 years from retirement. Tell her to keep the $8,000 and go get a J-O-B.

    • 0 avatar
      DenverInfidel

      Absolutely spot-on advice.

      Thank Mom for her generous offer, then get a job and some stability. When able, put a chunk of cash down and buy something for little or no payment. As Steve points out, her selection of cars gives the impression there is a lot of concern with image here.

      Taking on more debt right out of school, especially in this job market is not wise. Saddling a not-so-flush, albeit loving, parent with that debt is an even worse idea. As well as just amoral. This is of course assuming her Mom’s financial position.

      • 0 avatar
        Domestic Hearse

        And, kids, I’m wondering…

        Did Mom kick in some of her own money already for that fine college education?

        If so, she’s already given quite a gift. She’s proud, and wants to give more. But this is where you guys say, “You’ve given enough for now. Thanks and love you.”

  • avatar
    jmo

    But the idea of going on the monthly payment treadmill right after college is a dangerous one.

    With used prices as high as they are, it certainly seems possible that $8k down on a new Civic and a $136 payment (and keeping the Civic for 10 or 15 years) would be a better deal than buying something used.

    I’d certainly figure that used Wranglers are almost as bad a WRXs in terms of being hooned by the young and stupid.

    Obviously, it depends if she’s a C/S major from Stanford or a creative writing major from Chico State.

    • 0 avatar
      ciddyguy

      I like this idea if you must replace the aging Wrangler due to issues, of which you didn’t disclose other than it’s been nickling and diming in the past year with it’s decreasing reliability, but until something serious happens (like say, 2 $600 or more repairs in one year and are on major components with others being flaky) then it’s time to part with the Wrangler.

      And using the $8 grand to make a HUGE down payment on a new car up to $20K, assuming you can swing the now sub $200 payments, then by all means, go for the new car (or used to lower things even more if you can find a good deal on one a few years old).

      Otherwise, keep the Jeep running if it’s doing OK for now and get a job and save up.

      Good luck!

  • avatar

    Anything you can do to minimize debt right out of college (or anytime in your life) is the best thing to do. Even though you are not taking on the payments, you may be obliged to do so if your Moms fall on hard times.

    If your Mom can easily part with the $8000 then thank her profusely and let her know that you’ll put it aside in a Money Market account as an emergency fund and wait until Jeep breathes its last breath.

    As much as I love cars, the best cars are the ones that are paid for. My requirements for a vehicle purchase are; does it run, is it fun, is it something I can write a check for.

    • 0 avatar
      Anonymous Coward

      Normally, I’d agree with the gist of your post, but I’ll make an exception for the gainfully employed recent college grad buying a new car. If she’s got a real job, I’d recommend buying something new and paying it off. Since the car payment is already part of her budget, she can continue making payments *to herself* until the wheels fall off. If she executes this plan, she’ll finance her first vehicle and pay cash for everything after that.

      Note: this was my experience. I was gainfully employed as an electrical engineer and bought a new Jeep shortly after graduation. 10 years later, the Jeep’s got just over 100K on it, and we’ve got $15k in the car fund (left over after buying a Jaguar with 37k on the clock a year ago). We still make a payment to ourselves every month and the bank pays us every month, too!

  • avatar
    Zackman

    I don’t know all the personals already asked, so here’s my answer: The “Cockroach(es) of the Road”© Cavalier or the future “CotR” Cobalt and pocket the savings!

    ©geozinger

    • 0 avatar
      geozinger

      @Zackman: You read my mind!

      However, having a daughter about to graduate soon, I’m in a similar state of mind, minimize your expenses. My kid is OK as she has a presentable driver (Ecotec Sunfire, the updated cockroach), but I’m telling her to cram down any spending and to squirrel money away. I think this recession is going to hang around a while and cash is king!

      Long post short: Keep the Jeep until it’s a real liability, and then get a presentable but inexpensive runabout until the OP can knock down some big bux in their chosen profession. Unless of course they want to be a graphic designer, well then, hang on to the runabout.

  • avatar
    talkstoanimals

    Honda Element.

  • avatar
    Prado

    First Generation TSX. In white of course…because that’s what the cute girls drive.

  • avatar
    Russycle

    Sajeev, do you have a source regarding bad timing chains on the MINI? The S models have had issues with the timing chain tensioner, but I haven’t heard of any problems with chains on the base model. Regardless, I agree it’s a bit spendy for their budget, I’d look at a 500 or Juke, maybe a Mazda 2. You can get them well optioned for the price of a stripped Mini.

    • 0 avatar

      Ya know, I thought it was all models, but all the links I pulled up were for the “S” like you said. My mistake, but the point is, they are extending their budget for a vehicle with a proven hit-or-miss reliability record since day one.

  • avatar

    I’d recommend either a later E46 BMW 3-Series (http://studentwheels.wordpress.com/2010/06/17/bmw330xi/ — for the fun-to-drive factor) or a new-ish Saab 9-3 SportCombi (http://studentwheels.wordpress.com/2010/08/10/the-swedes-unite-in-sensible-sauveness/ — fun and useful.) Neither car is un-stylish. Neither will be hugely expensive (to buy at least), and will provide lots of driving enjoyment. What about a Volvo C30?

    • 0 avatar
      steeringwithmyknees

      Say what??? BMW and Saab not expensive? We are talking about recent college grads here. Sure they are fun to drive, but even the simple maintenance can be pretty pricey–let alone when something needs repair. And buying one that is still under any kind of warranty negates the “not hugely expensive” purchase price.

      the BMW that $8,000 will buy is not going to be one that provides any extended time of low maintenance driving.

      • 0 avatar

        This is true. They’d be a little finicky. However, Saabs can hold up well though, if you find the right one and know what you’re doing (we’ve had excellent luck with our 9000, 900 and 9-5 Sport Combi.) BMW I can’t speak for quite as much.

      • 0 avatar

        Except for, with all due respect, when that 9-5 needs a hugely expensive stereo repair, or when that 900 needs $1500 in suspension repair, or when the keyfob costs a bajillion dollars to replace, or when the locking system fails and prevents one from filling up the gas tank, or when the rear wiper goes and gets a quote of $700 because the parts have to be shipped from Sweden, or when the side power window goes and you have to either tear the thing apart or pay princely sums to the dealer for repair. The basics may stand up well, but the other stuff can nickle and dime (if you consider $500 a dime) a low-budget car owner to death, amripley.

      • 0 avatar
        CJinSD

        “If you find the right one and know what you’re doing.” Those are two phrases that should exclude any car from being recommended to someone who is asking for advice. Asking for advice implies two things. The first thing it shows is they’re not drowning in expertise. They don’t know how to find a good example of a hit or miss car and they don’t know how to keep one up on the cheap. The second thing is that they want to buy a car that won’t wreck them financially. Ergo, don’t recommend a car that only a marque expert with a good deal of luck will do well with.

      • 0 avatar
        vento97

        BMW = “Break My Wallet”

  • avatar
    ajla

    The Jeep Patriot looks like a Jeep, is about the same size as her Cherokee, gets okay fuel economy, has better on road driveability than a Wrangler, and offers nice utility.

    If she never goes offroad, she can get a new FWD version for under 300/month. However, I don’t know if anyone will ever consider a FWD Patriot “cool”.
    _______________

    There’s also a new Scion tC, which should be available for close to $300/month. I think it fits the “in her price range thats cool but a little girly at the same time” idea pretty well. Scion is even offering a $1000 rebate for recent graduates.

  • avatar
    Scott_314

    God, seems like every one of these posts turns into a “don’t do it, be smart, invest!” Can you all just assume that an 8K car or $300 per month actually is reasonable given that it is exactly what was requested and you know, is reasonable?

    Forget your canned “run it till it dies” response. You do realize that 22 year old girls go out at night, run their smartphones out of batteries, and do not want to literally run it till it dies on the side of an expressway or refuses to start outside of the lounge downtown at midnight?

    And 8K is cheap these days. It isn’t 1994 Joe!

    I say used Civic coupe, possibly a used Civic SiR (the old hatch style), a bit more reliable than a high-mileage mini but still fun.

    • 0 avatar
      johnhowington

      i can think of countless instances where said person who *thinks* that 300 a month is reasonable, and in fact does not have the ability to pay or commit to 5 years. People give advice here for a reason, not because they dont care. Also if you think 8K is not alot of money, well thanks for the voiced opinion.

  • avatar
    NotFast

    Keep the Jeep. Spend $2000 on parts and mechanic classes at local community college.

  • avatar
    Quentin

    I know that MINIs do horribly on the surveys, but my wife’s 2005 MCS, 6MT, LSD, moonroof, bonnet stripes, and driving lights (essentially a base model) has been a great car for 59k miles so far. We’ve had one issue… the seat recline lever stuck. We drove it 8hr to Philly and back last week, in fact. The drive was perfect other than some savage that hit the bumper in a poor attempt at parallel parking. Grrrr. That’ll be $400 to repair.

    Anyway, it really is a charming little car. 6 years later, she still get positive comments from strangers about it. She bought it new and the only reason she’s looking to get a new DD (we’ll keep the MINI) is because we’re (hopefully) starting a family. There definitely is value in buying a car you are completely in love with. She won’t be asking to trade-in a few years later and you can keep the car on the road for a lot less than a new car payment. They aren’t that bad to work on, either. There is loads of info out there for repairs and maintenance and the basic maintenance is easy DYI. Find a good mechanic and avoid the dealer for the more difficult stuff and it won’t break you in maintenance cost.

  • avatar
    DC Bruce

    How much time has she actually spent driving a Wrangler? There was a young lady of my acquaintance who owned one as a fashionista — but quickly tired of getting beat to death on highways. Neither proposed choice is a model of reliability (although I assume that the Jeep, unlike the Mini, is fairly cheap to repair).

    My personal view, having had experience in buying first cars for two of my daughters upon college graduation, is that $8K does not get you out of the “dubious category.” That is, the category, where if you are extremely knowledgeable — and somewhat lucky — you don’t end up owning something where the cash purchase price just turns out to be a down payment. The reason I say that, is that, with any used car, you are buying the previous owner(s)’ maintenance habits . . . which are likely unknown to you unless you do a private party deal with the original owner who has saved his/her records. My view is that “escape velocity” to get out of that category is more like $12-$14K. When you have no income — or just a very modest income — what you don’t want is unpleasant surprises — like unexpected repair bills.

    Keeping the current car might make sense — unless it’s just totally unreliable or is facing a big repair of something major.

  • avatar
    HiFlite999

    Another unanswered question remains: Where does she stand with student loans? As presently constructed, student loans are like a grenade with the pin pulled – let them out of hand and they will destroy you. Get by for cheap until those are under control.

  • avatar
    bodayguy

    Lots of great advice in here.

    My thought is that’s NOT the time in life when you want your mom making your car payment for years.

    And, as others have said, something in the story suggests mom can’t really afford this. Not to turn into Suze Orman, but tell mom you want her saving for her own needs. If she can outright afford a nice cash gift of a few thousand $$, great, tell mom that will help with a down payment or will go into a savings account until it’s time for a new car.

  • avatar
    Pch101

    It’s nice of Mom to offer up a car payment. But it’s inconsiderate to see that as a license to get crazy on her dime.

    A freshly unemployed graduate should be focused on reliability, fuel economy, low insurance rates and good residuals. We know what that means — buy a good quality compact, and use the money that you saved to maintain it properly.

  • avatar
    JMII

    I’m seeing a used Scion TC or xB in your future. Or maybe a Kia Soul? (love those hamsters!). I’d feel bad about taking the full $8K from mom, so take half and use as a down payment on a clean 3 year old used ride. With enough cash down payments should be small enough to handle with your first out-of-college job experience, letting you build some credit.

    Wranglers? Great as second vehicle, but not something you want to drive on a highway every day. Minis? They hold their value amazingly well thus pushing it out of your (or mom’s) budget. A Cherokee with 300K on it? Unlike the rest the folks posting here I’d be looking to off load such a ride ASAP, its clearly reaching the point where the next repair bill will cost double what its worth. Fine for a DYIer but not a girl friend approved ride at all.

    • 0 avatar
      Russycle

      At today’s used car prices, a new car with low financing and possibly cash on the hood is often a better deal than a late model used car. YMMV, of course.

  • avatar
    Mr. K

    Go to the Mini site – 199 amonth lease on a NEW cooper not s
    with sunroof dual zone air and kick ass radio to make it n easy sell when the lease is over…

    or 0.9 % finance.

    Round here Jeep has some decent deals :
    http://www.jeep.com/en/incentives/

    Mitsu has some outlander deals

    Subie has an outback lease for 299, outlander for 249

    CR V lease 280 a month…

    Ford has some sweet deals on the escape

    Hyundai Tuscon ~260…

    Ya just gotta look now is a decent time to buy new!

    BTW get out of SUVdom and prices are a C lower

    Or buy a great panther for 10K and lug all your college friends around for a few years!

  • avatar
    Wheeljack

    Clean Wranglers with reasonable miles will far exceed $8K. Why not find another (perhaps a 1997+ with the improved interior) Cherokee with lower miles to run for a while?

  • avatar
    Sam P

    Instead of the Mini a couple more sane Asian choices come to mind:

    - Scion tC

    - Hyundai Tiburon V6 (surprisingly fun to drive, I had one as a rental last year)

    - Acura RSX


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