The American Automobile Association recently calculated the average cost of driving a car. News flash: your automobile is devouring your children’s college fund to the tune of 52.2 cents per mile. Multiply that number by 15k miles and decades of driving, and automotive ownership costs make Ivy League tuition seem like a bargain. Thankfully, you can lower your cost of ownership (of the car) with three strategies. Each one will put a nice six figure dent back into your savings account, and a big fat smile on your face whenever you turn the key.
The first strategy is conservation: spending as little money as humanly possible. Automotive conservationists aren’t motivated by performance, comfort or snob appeal. All they want to do is get from Point A to Point B while keeping as much money in their pocket as humanly possible. They want to save in the showroom, at the pump, after service and at trade-in time.
Conservationists are, by their nature, small car aficionados. They're willfully oblivious to the fact that small cars are an SUV’s accidental toe jam. They happily endure cramped quarters, sloth, low status and any of the other so-called downsides of owning a small, "boring" car. They concentrate on their econobox’s purchase price and operating costs.
Conservationists are big fans of Kia, Hyundai, Suzuki, Subaru and, of course, Honda and Toyota. They’re value junkies who scour the value of used cars before they even think about buying a new one.
To become a conservationist, find someone who drives a small, cheap, boring car who can tell you how much they spend on their car per month AND annually. Internet owners’ forums are an invaluable resource. Just register on a site dedicated to an inexpensive small car (“Cheap bastard” ought to do it) and post a thread asking “How much does it cost to run your X?”
The second strategy is endurance.
When most folks think of a car that last forever, they think of an old Volvo or Mercedes. That’s so last century. These days, most every automobile built can crest 100k miles without much trouble. In fact, 150k is the new 100k: the way point that tells an owner that he or she’s found a machine that can go the distance. Which is, let’s face it, one of your cheapest possible ownership options.
Frugal endurers are closet conservationists. They tend to pay cash up front (they consider monthly payments and interest charges an automotive fashion victim’s sin tax) for two-year-old or older cars.
They're looking for vehicles blessed with [documented] factory-approved maintenance that have passed the “is it a lemon?” threshold. They look for unloved, low-spec models. Depending on their dedication, they’ll happily forgo such basic comforts as air conditioning and power door locks.
As endurers aren’t looking to trade in their wheels (i.e. they plan to run the vehicle into the ground), they couldn’t care less about their purchase's short-term residuals. It’s all about keeping the car going, to get to those "cheap miles" at the end of the [hopefully] epic ownership period. And that means fastidious maintenance, extended warranties and celebrating the inevitable wear-and-tear.
To benefit from endurers' sagacity, buy the most reliable car you can and hold it as long as possibly can. Period.
Mule trading is the third money saving strategy.
Mule traders buy from used car auctions. They buy whatever vehicle [they believe] will hold its value in the retail market. Due to a fickle public and sinister depreciation curves, many mule traders skip the way cool late model stuff and go for ‘sleds;’ vehicles that cost $5k or less. They drive em’, fix em’, sell em’, rinse and repeat.
Of course, not all mules are broken down beasts of burden. There are plenty of hot (though inexpensive) used cars available at auction that will protect the mule trader’s money (e.g. the Mini Cooper, Scion Xb, and Honda Fit). After anywhere between six months to 18 months, the traders simply sell the vehicle to a dealer, who uses them as high profit ‘finance fodder.’
The mule trader takes on the depreciation risk on the assumption that today’s hot new car will be tomorrow’s hot used car. The keen-eyed mule trader gets a higher trade-in value for the car, the dealer receives a larger profit off the financed vehicle. Everyone wins– save for the poor bastard with the hot car and large monthly payment.
Whether you reduce your overall automotive operating costs by conserving cash, fixing costs (endurer) or taking advantage of automotive fashions (mule trader), there’s always an opportunity to save a chunk of change on your motoring expenses. The challenge: determining which mindset best suits your budget, skills and time. As Patek Phillipe’s ads used to say, choose once but choose wisely.
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Well, well, we all know this, but, if we lived like this, we wouldn’t be reading your post, we’d be rummaging thru old issues of Consumer Reports to find what car was recommended in 1995.
Gotta go, the grocery store probably has some stuff past their best before-dates they will give away, and I think I probably have to water and weed my back-yard potato patch, too!
I put myself in the first group and I am proud of the fact I have 175K and still going on my jalopy. I keep cars 6-10 years on average and could car less about resale since from my hands they go to the yard.
Steve,
At most auctions if not all, only dealers are allowed to buy vehicles. Adesa, Manheim do not cater to the general public.
If you go to an auction, you would realise that “mules” and “donkeys” sell for more money than “thoroughbreds”. The donkey that comes across as a good deal, ends out being more money that the thoroughbred.
Its fascinating to see how high a mule can reach by bidding it up in $100 increments.
Are you forgetting the manufacturers and new car dealers that take mules, blend them in a cocktail of financial services, extended warranties, upholstery protection, and turn them out in a 36 month closed end.
The real fun begins when these mules come back to the barn after their 36 month lease.
Its a worst mule than when it left, but the manufacturer put the residual of a thoroughbred on the mule.
As noted in a previous post, all most people care about is reliability and long life.
Handling? Performance? Driving pleasure?
Who worries about such things in the middle of a traffic jam on the daily commute.
In summary: This is why Toyota is the success that it has become.
Steven: an interesting editorial, but you mention extended warranties as a tool for saving money, and I disagree.
A few words on extended warranties. They serve two functions: as insurance and as a sales tool. They are insurance in the sense that if your car breaks down, and the breakdown is covered by the warranty (it may not be) and you can prove it is not your fault (you may not be able to) then, the warranty company will pay form some work to be done by a mechanic, often of their choosing.
The thing about insurance that people don’t realize is that it is a bet between a consumer with limited knowledge and a large company that does this for a living. You are as likely to come out ahead buying insurance as you are playing craps for the first time at a Harrah’s.
Why do people buy insurance? two reasons: (1) they have to, by law or because their lender forces them to or (2)the insurance covers a loss they cannot sustain. If you can’t handle replacing your house or your earnings, then homeowners and life insurance are something to investigate.
Waranties are another matter. In my book, if you can’t afford to have your car fixed, you probably shouldn’t be driving it. Buy a cheaper car, and put $50 a month in a special account to pay to keep your car on the road, rather than paying a warranty company. If you are lucky and maintain your vehicle well, that $50 a month is your eventual down payment on the next jalopy.
The other function of a warranty is as a sales tool. Inevitably, your warranty will turn out to cover only part of the work the mechanic tells you is necessary. “Oh no, we can’t let you drive out of here with your car in such dangerous shape!” It’s a sales tool.
A long way of saying that buying warranties are for suckers.
Come on, tell me something I can really use! If we were the kind of folk who just wanted a method of PointA to PointB transport, we wouldn’t be reading this.
You get what you pay for, (generally, some deals are out there), a monthly payment is the cost of having a reliable, comfortable, enjoyable vehicle.
Haha! I’m such a CYSLAPPER. Proud owner of a ‘97 Camry-with-a-maintenance-fund-bank-account-set-up-for-it!
I’m probably one of the greatest Cheap Bastards you’ll ever meet and I read this site religiously. And I’m a car guy. The two are not mutually exclusive.
Paid $3K for a 1995 Mazda 626 with 120K miles on it 5 years ago this month. It now has 240K miles on it and only normal maintenance in the meantime – tires, brakes, exhaust, timing belts, and I had to put a $120 radiator in it at 190K. 33 MPG at 80 MPH and 35 MPG at 70 MPG. Operating costs (depreciation, fuel, maintenance, insurance) come out to be around 15 cents/mile beating the hell out of the AAA/IRS number.
As a poster above mentioned – how much fun is your WRX at 5 MPH in a construction zone. Or similarly at 80 MPH in a straight line on I-75. Not to mention getting pelted by stones off of trucks, etc.
But having a daliy beater taking the bullet day in and day out allows me to enjoy my RX7, Mustang and BMW motorcyle on the weekends.
And another upside is I have cash in the bank to drop on a just about any new car I want whenever I want. But I hate depreciation….
Yeah I guess I’m a number 2 guy[I,ve been called worse]
Any way I figure you buy the car you want new, or gently used.
Try and get the balance of factory waranty.I agree with the other posters extended warrantys are a scam.They are a way to get you back to the dealer.
You gotta set up a car repair account and stay on top of maintenance.
Then you drive em until they are not worth fixing and that can be a hard call to make.
Note to married guys with two or more cars.Let wifey use the best and most reliable.
Once a week wash em, do tire preasure check, fluids!look for leaks.
You can get amazing service out of the modern automobile
and save tons of money and at the same time drive the car you want.Yeah the number 2 guy is the way to go
Most people here, like me, probably want to have their cake and eat it too. The TTAC Top 10 lists didn’t feature a single car that was not fun to drive. With that in mind, most of us who don’t want to sell our first child to own a car do the following:
1) buy a 1-2 yr old car: depreciation is highest in the 1st yr and second highest in the next yr. Depreciation rates tend to smooth out beginning in yr 3.
2) focus on cars with high depreciation rates: sort of follows from 1.
3) drive whatever you buy as long as you can and don’t worry about subsequent depreciation. Cars aren’t appreciating assets in general so the longer you drive the car, the more value you get.
So where do these rules leave a car lover? Here are some examples:
Mazdaspeed 6: In my area, you can get a MS6 loaded with virtually no miles (under 100 miles) for as little as $25k. Non-loaded models with low miles (under 10K) are available for low twenties.
CTS-V: Wait one yr and your $53K rocket can be had with virtually no miles (again under 100 miles) for around $40K. Wait another yr and the car can be had with less than 10K miles for low thirties. Wait for the 2008 CTS to hit the market and watch older versions plummit further.
VW Phaeton: Probably THE biggest used car luxury bargain of them all.
You have to be flexible and you have to watch the market, but you can get relatively good value without breaking the bank. Perhaps TTAC next vote should be for the best used car values for piston heads, with a limit that the car can be no more than 3 yrs old. I bet all 3 of the cars I named would be on the list.
My dad’s a textbook example of a frugal endurer. In his 30 year driving history, he’s owned 5 Volvos and 1 Benz, all purchased used, all with the intention to drive them into the ground (literally…his job takes him on construction sites…he considers the Volvo 240 a Jeep in a sedan suit). His creed: If there’s under 200k on the dash, they’re worth maintaining.
His driveway currenlty features a ‘86 S-Class Benz (the daily driver) and a ‘90 Volvo 740 (the beater). I admire the tenacity, both my father’s and the cars’…but after years of being chauffered in fossils, I’m more likely to become a mule trader.
I am a number 2 guy as well. I bought a 1985 olds and drove it for 17 years. While my friends kept buying a new car every few years and making fun of me for my old beater, I bought condo’s and rented them out. I now own 18 houses and a 65 foot yacht. As BMWs and Mercedes pass me in my 8 year old Crown Vic, or my 9 year old F250, I can’t help but wonder which one of us has a better understanding of the true cost of a car.
If you can fix stuff yourself it’s helpful. Auto parts (apparently due to severe competition and sourcing in China) are incredibly cheap these days. (Ex: new brake rotors are cheaper than machining your old ones). A lot of stuff I get from Autozone like brake pads has a lifetime guarantee and they’re great with honoring it. Add free labor and you have a formula for real low cost transport. I like Saturn coupes due to the plastic body staying nice, an attractive style, and good handling and gas mileage.
Here’s another way of looking at it.
The funding limit on a personal IRA have gone up to $4,000 and will be $5,000 next year.
$5,000 per year translates to about $400 per month.
That’s about what I was paying (payment/insurance/registration) for my 2004 Mazda 3.
Instead, I’m going to drive my 1996 Toyota Tacoma until it falls apart and have my car payment partially fund my retirement.
And yes, I’m a ‘car guy’. But if the choice is expensive hobby or secure retirement, there is only one option.
I’m the exact opposite of everything this editorial is about. The rise of Toyota and the mentality of the majority of drivers who view a vehicle as a dishwasher on wheels is why I think that 99 out of 100 people born 10 years from now will have no idea that a car can be a means of enjoyment.
Preaching to the choir. 18 months ago my ‘87 Suburban died (235k miles). I needed a car ASAP and picked up a 2001 Rav4 w/ 54k miles for about $14k. I hope to add at least 150,000 miles to the odometer. I am not sure I will ever be able to justify the cost of a new car.
So yes, I care about longevity, build quality, etc., but it’d be silly to think that I’d forego comfort. I need A/C (I live in Texas), and how the car fits and feels is important. I passed on some other makes/models (Hondas, Toyotas, and others) because they didn’t feel right, or lacked comparatively minor features.
I want what I want. Build quality, which nicely translates into safety and reliability) is most important, but that does mean I’ll sacrifice everything on that altar.
M
Steve_S
I always encourage my tenants to buy new cars and big screen TV’s. It ensures they will remain my tenants for years to come.
We have had considerable success buying quality new cars we can live with for a dozen or more years and that do not require an expensive extended warranty.
In our experience timely inspections by a local garage, careful attention to fluid changes, correction of minor issues before they become major repairs and a weekly car wash yield peace of mind and cost effective ownership.
We recently sold our excellent 1995 Toyota Camry with 90,000-miles to a happy purchaser and received 20-percent of its cost new.
Gerry T for the win here. For anyone but the wealthiest 1%, the car is the second-largest expense after housing in our life. Merciless scrimping on autos is one, often the only, way to have money to spend on housing. You can love driving and still choose to drive a used Corolla if there are other important things in your life.
I’d love to see more detail on all three of the approaches in your taxonomy of cheapskates, maybe even a step-by-step article-length advice piece for each one. I identify myself as strategy #2, happy to pay a little more cash up front for a late-model used car I can ride for the next 15 years. But I’d love to hear how a mule-trader makes this apparently bad strategy pay off financially.
You spend a significant percentage of your life in a car. I think that justifies getting something nice and fun. Save money on the shit you don’t need. Why punish yourself with some crappy econobox with no ac? In order of priority, I would say you should splurge on house, food, and car.
Ditto Steve_S – this article exposes automobile enthusiast blasphemy! May all you “point A to point B’ers” be banished to a lifetime of cavaliers and corollas!
I’m with Gerry T. While all my friends are dropping $30k on new cars I’m driving an Escort. All the cash I save goes to my rental properties, home, and maxing out my 401(k).
I bought the 96 Escort 3.5 years ago with 110k for $500 with some minor cosmetic issues. It now has 175k and the only non wear item that I’ve replaced has been the alternator. It still gets 30 mpg. If I “need” a truck I borrow or rent.
My normal strategy is to find a motivated private seller and low ball him. Then I drive the car for a year or so, clean it up nice, sell for the same price that I paid, and repeat. The ’scort was just such a good deal I’ve kept it a little longer.
Oh, and I am a car guy. They are not mutually exclusive.
I think you might have missed a phenotype and I’m not sure what to call it. How about the “Crud Flipper?” The Crud Flipper buys the first driveable car (Crudmobile) that comes along for the absolute minimum possible price (think low $hundreds) and discards (or sells!) it at the first sign of trouble. The Crud Flipper may even have a small stable of Crudmobiles on hand, for backup when the inevitable happens. Minimum registration fees and zero expense on comprehensive and collision help keep costs low.
I’ve Crud Flipped myself, buying for $850 and selling for $350 after three years.
There’s another variant of this, too, the Crud Daddy / Crud Kiddy. That’s a parent (Crud Daddy) who believes that serious insurance $$$ can be saved by assigning the child(ren) (Crud Kiddy) to a Crudmobile as primary operators.
I’m guilty of that, too.
More often, of course, the genesis of the Crud Daddy (or Crud Kiddy) is simply to retain an old car that the Crud Daddy would otherwise unload for very little.
Guilty again.
foobar
For what it is worth, here is how I did it.
I went to the local technical school here in Calgary at night for 3 years. I learned everything I could about how cars work and more importantly about the people who fix them… which in my case was the students in the room with me.
At the end, I knew how to fix almost anything on a car, and equally that taking a car to a “mechanic” is an option of last resort.
In the last 30 years, and to this day I do virtually all the work on my cars.
Secondly, I have subscribed to Consumer Reports for years. Not just cars, but everything I buy is based on their recommendations.
I have never owned a new car in my life and probably never will.
Gerry T:
I didn’t mind Consumer Reports until they had the temerity to remove the Crown Victoria from the “Recommended” list because they felt that the Five Hundred was a better large car.
Speaking of the Crown Vic, now there’s an excellent choice for a low-cost (besides fuel) option for the cheapskate route alluded to in this article. As I write this today I am going to look at a 92 CV with 152,000 kms and a leather interior with an asking price of $3500 CDN. I wouldn’t anticipate any problems getting another 152,000 kms out of it if I so desired, and parts are cheap and plentiful.
In a way, I love gas spikes (we recently reached $1.259/L) because it always coughs up a few creampuffs for me to go and mull over.
My father would most likely fit into the crud-flipper category only he sometimes makes a profit on his crud. He once bought a 72 4-door Chevelle for $200, painted it for $50 by himself, got hit twice in minor accidents for a gain of $600, them sold the car for $500 after three years of bagging on it. This was in the mid 90’s and I found it absolutely mind-boggling. He also has cars that he loves but uses the crud as a day mule.
Come to think of it, you missed another phenotype – the Avoider. I do happen to know a couple people who use the bus routinely and for all of their commuting and I know a couple people who don’t own cars at all. And I live where mass transit is bad and pedestrian paths are poor to nonexistent. They have a couple different strategies:
First, some Avoiders are in the subcategory of Bicyclists. Yep, even in winter. All of the people I know in this subcategory of the Avoider actually work at bike shops.
Second, they try to pick a home to maximize use of public transportation, such as it is.
Third, they tend to live close to wherever they work.
With the introduction of services offering “Car by the Hour”, we might see more Avoiders in the near future.
The Avoider is probably not entirely in keeping with The Spirit of TTAC but worth mentioning, nonetheless.
Gerry T that was classic. I also have rental properties and yes I have had some tenants drive nicer cars than me. I have a friend who bought a new Nissan Z Car when I asked how much he paid he told me a monthly payment amount. I don’t remember how much it ws but I remember telling him that wasn’t too bad for a 5 year loan, my friend corrected me and told me it was a 7 year loan.
Steve_S You make the same mistake that many make in assuming that your tastes and your experiences are what others experience and enjoy. I gurantee you that I love driving and I love my car even if you hate my car.
Sounds like we need to clarify the definition of “car guy”. In my mind I hadnt pictured someone rollin’ in a ‘96 Escort.
The other advantage of being a used car buyer is that you don’t have to endure the agony of watching your car slowly (or not so slowly) get despoiled. I purchased my first new (non-company car) a couple of years ago and, in 50,000km, have been hit three times (in all three cases the car was parked, and in two cases the people left) and been subjected to numerous indignities, such as people using it as a temporary perch for their groceries. Next time, I am reverting to being a cheap bastard and go find myself a nice used orphan car.
Cool article. So much to comment on. I wish I could be a conservationist, but I guess I’m too weak. I like nice cars – preferably with neato-keen options too. Plus, many smaller, older cars make me nervous about safety since I have a little kid.
However, I also view it/rationalize it like this: Most of my coworkers and buddies have some hobby or interest on which they spend their money – fly fishing equipment and Idaho fishing trips, cruises and travel, green fees and expensive putters and drivers, ski/fishing boats, pool tables, the newest audio/visual gadgetry, computers and gaming systems, wine collections, skiing/snowboarding, women and clubs, dining out, putting in a pool with a cool rock fountain, sports/concert tickets.
I try to limit those purchases; yes, I lack most of the cool material toys most of my friends have and that probably makes me a little boring – but my cars are always maintained, always clean, always nicer than what people expect from someone like me, (also always slightly used and paid for with cash).
Like a lot of people who read this site, I like cars, so they take a higher priority in my personal finances. I allow for it, and I can still invest monthly. I also read a lot and do gardening – not very cool I admit, but cheap. Luckily, my friends are pretty generous with their toys – and I’m always willing to be the designated driver/beer run guy – I want a reason to drive. It is a win/win deal.
It all comes down to what you value. For many, I hazard to say most a car is an appliance. It should be comfortable, reliable and safe and if possible cheap.
For me it’s moderation. I wouldn’t rent a house or lease a car as I see it as a waste of money (perhaps not on a car lease depending on how often you change cars but then I don’t know much about car leasing) but just like some people are willing to spend more on clothing than others it just depends on what you value. Driving to me is a form of entertainment, it’s not a task or a chore (sometimes it can be of course) but it’s fun and personal. It’s why I don’t mind driving 60+ miles a day and why I wouldn’t want a 5 minute commute if you offered it to me.
A car is an extension of who you are. It is as much of a telltale sign about you as the clothes you choose to wear or your body language. It’s a look into what you value. Case in point, I have a friend at work who I have know for years. By the 10 year old 180k mile Oldsmobile he drives and his manner of dress I could tell from the day I met him that Frugality is his watchword (he just recently got a cell phone this year but only because he could get on to his father’s family plan where it costs $10 a month. He also just traded in his dialup internet but that was due to his wife’s urging I think). While some don’t always fit into first impressions I think I’m fairly spot on when I say the following: A WRX owner is someone who values performance over styling and luxury, a Prius owner is someone who wants to do their part for the environment while letting everyone else they are green, while the TDI Jetta owner wants decent transportation with really good MPG.
Carpe diem people. 911 and Katrina have taught me this. Life is precarious and do not put off for tomorrow what you enjoy. Some will squirrel away money hoping to retire at age 45. While I find this noble I for one will exercise moderation and work another 20 years so I can enjoy the fruits of my labor today instead of waiting for a future that may never come.
26theone – Apparently we do need to clarify the definition of a “car guy.” I thought someone who stays relatively well informed about the auto industry, drives a lot of new cars, does all his own (and others’) repairs and maintenance, modifies and races cars as a hobby, but drives a beater for a daily driver would be considered a “car guy.” Care to enlighten me on what a real “car guy” is?
A lot of people are assuming that the cost-savers aren’t car people. Sid Vicious hit the nail on the head…for many of us, the cheapo A-B cost-saving car we have is just the daily hack to endure the work commute. Though my Camry is in excellent mechanical condition, it’s missing a couple hubcaps, has dings and dents and scratches, and just generally looks quite horrible – and I don’t care. It’s saving me money and living the “grind” so that I can afford to run an as-yet-unacquired toy on the weekends and evenings!
Steve_S: Don’t forget that regret later in life is not merely I wish I had done this or experienced that, Regret can also come in the form of “I wish I didn’t shit it all away when I was young”
It just might be possible that you wish to be financially secure sometime later in your life.
Steve s I coudn’t agree more with your post.Your vehicle speaks volumes about who you are,and what your about.
I couldn,t bring myself to drive a Corrola or for that matter a four door Sunfire.
I also wouldn’t dream of going to work in dirty raggedy clothes.even though I’m a factory worker my blue collar is allways clean and ironed.
I could search the internet today and find 5 or6 used cars that I
would consider buying and about 5 hundred I wouldn’t touch with a ten foot pole.
Thats why I speak of moderation. I live in a moderately sized home which I don’t rent, I put in moderate amounts of money into 401k and the children’s education.
Again it all comes back to what you value. Cars for me are an expense like vacations abroad are for others and so forth and I budget appropriately. As long as you are not at either end of the spectrum as in pissing it all away or hoarding it I think there is a happy middle ground.
There are as many different types of car people as there are cars. You don’t have to spend tons of money to be a car guy, and you don’t have to be Joe Frugal to be a car guy, and you don’t have to go to the track to be a car guy. In fact, you don’t even need a set of testicles to be a car guy; I know plenty of women who love their cars. To me, you just have to show some interest in cars – my friend who drives a beater Corolla and views it as an appliance – not a car guy. It is easier to define a “non-car-person” than a car person.
“having the daily beater take the bullet day in day out allows me to enjoy….” Sid Vicious.
This is an extremely accurate comment, and a strategy I have considered myself for some time. I’m thinking weekday beater, weekend used Lotus Elise.
Speaking of beaters, a pretty good website is Beater Review. I am in no way affiliated with it, by I recommend it.
Here are a couple other cost-saving options that I don’t think have been mentioned yet.
Buying older low-milage cars and buying them privately if possible. Even better, buying them from old people who were anal about maintaining them.
Looking for used cars that have a history of having something big and expensive fail on them, and buying one where the previous owner already paid to have that repair done. Again, buying privately is the best way to go on this one. It’s a lot easier to verify that the repair was done since the owner will often have the paperwork on hand to prove it.
My wife bought our VW golf before we met, and got the cheapest she could find. Her argument: little things break, and it was still a nice car even without options. We have crank windows (which I don’t mind), but there’s A/C, autolocks, a nice interiorr, and a great little car overall. Despite its reputation for bad reliability, I’ve just had the change a few cables here and there, as well as the tires.
The only bad thing (both from a reliability and a hoonery perspectives) is the automatic. I’ve already warned my wife that she’d better learn to drive stick for when we’ll unload the golf (’02, 75,000 miles, and still worth $8k!! Not bad for a car bought for $15k)
Kind of leads me to suggest my version of what “The Truth About Cars” is.
In 1997 you could buy a nice car for $25,000. In the same year you could buy a nice condo in Calgary for about $70,000 with a (healthy) downpayment of $25000.
In 2007, that $25,000 car is probably worth $2,500. That $70,000 condo is now worth over $300,000. The best part is “car guy’s” monthly rents paid for all my properties.
Speaking of beaters, a pretty good website is Beater Review. I am in no way affiliated with it, by I recommend it.
Hey, my 92 Crown Vic is on there! Although, I do have concerns about buying this vehicle, what with all the various power/electric doo-dads that could/did fail.
jfsvo – Reread your initial post. You said all the cash you save from driving a beater goes into your investments, home and 401ks. Not modding, racing cars, etc.
You have to be careful with the “depreciation” thing. Buyers will seldom find a “deal” at a new or used car dealership. Individuals have an inflated sense of a vehicle’s worth unless they are “distressed”. Even banks and credit unions hire pros to sell their repos. Many auto auctions are open to public occasionally, but the rules are different. Have any of you had any luck buying through ebay?
Buy the car you want that meets your needs. Splurge a bit on what you want. But make sure you can afford it. Meticulously maintain it. Regular oil changes and tune-ups and fix as required. Regularly check your tire pressures. Keep your car clean.
Avoid extended warranties. If you end up having to fix something after the warranty expires, it wasn’t a very good car and avoid buying another one from that manufacturer (hence I am no longer a GM customer due to my Buick).
Keep your car and USE IT for at least 10 years (get your money’s worth out of it) and repeat.
All my cars, I’ve kept until they were over 10 years old. Currently, I have a Buick (lemon and will go as soon as hit 10 years), a Pontiac V6 Fiero (owned for 23 years and counting…most reliable car I’ve ever owned inspite of GM dealers attempts to make it otherwise), and a MINI Cooper S (absolutely no issues except the dealer service says they miss me as I only see them once a year for its oil changes).
Here’s one-buy a car (new) with zero depreciation.
In August 2005, I bought (new, at full MSRP due to the no-haggle bit) a 2006 Scion xA for 15 grand and change.
I could now sell the car for 13 grand and change-very good depreciation for a car that’s approaching two years old. And for that, I get to drive a brand new car with air conditioning and power windows and locks and a good stereo and ABS and side airbags for two years for basically two grand plus gas and insurance. The fact that one can still buy the exact same car (2006 Scion xA) at most dealers up until a month ago (there is no 2007 model, so they overbuilt 2006s) helped there a bit.
Of course, I actually plan on keeping this car for many years, so I’m not actually going to do this.
Another car where you could pull this trick on (and then some) was the Prius, where, for awhile, the cost of used Priuses was actually more than the cost of a new one, due to the extremely long waiting lists. This no longer applies since Toyota has recently dramaticly boosted production of the Prius.
26theone -
My comment was accurate… I don't put the money I save on transportation into other cars. And it is possible to be a car enthusiast without putting loads of money into them. I was simply responding to your implication that one who drives a beater is automatically less of a "car guy."
I second the Crown Vic as the ultimate ‘cheap bastard’ car. It gets relatively good mileage (up to 28mpg on the highway with A/C on) comes with tons of standard features, amazing A/C, comfort and excellent reliability. And they are cheap – it’s not uncommon to find an ex-police Crown Vic only a couple years old for well under $8000. And they will last as long as they are maintained – it’s also not uncommon for cab drivers to get up to 500,000 miles out of a Crown Vic with proper maintenance.
I suppose the ‘cheap bastard’ is ultimately looking for most bang more the least buck, and I think the Crown Vic is that cheap bastard holy grail.
My auto expenses for the past 12 years have averaged 3500 per, including traffic violations. That gave me an AE86 and now an S13, so I can’t complain…. well, maybe I can.
When my 240 dies, what is out there on the horizon for me to plunder and pillage? There are no entry-level, practical RWD sporty cars anymore, and I’m pretty sure nobody cares too.
One additional way of saving money on your car is to forego the collision insurance – NOT the liability insurance. Invest the savings so you have a fund just in case. Now, I don’t do this with my MB in the first few years, but on an older s-box absolutely. Then again I drive conservatively and am prepared emotionally and financially to pay for my own mistakes, dings and crashes.