I love NPR. Today on Car Talk, they had a caller who had a dilemma about the car he drives. (It’s Call 4 on the link provided)
Leland is recently married and his two teen stepdaughters don’t like his dusty old pick up. He’s trying to get a Mazda Miata with a dent on the right door panel and a check engine light that comes on. He’s wondering if it’s worth fixing it up and getting it for himself and the approval of his style-conscious kids.
The priceless thing about the call was his philosophy on acquiring cars. He likes to take a drive in the country, find something by the side of the road, buy it for $500 cash and have it last for 3 years! I love it!
My Altima is going to die in my parking lot. I am not going to get rid of it. I can’t. I’m trying to squeeze out every last dime of value on the thing. My baby turned 7 years old yesterday. She shares a birthday with the US Marine Corps!
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{ 12 comments… read them below or add one }
That’d be a nice way of getting cars. When I get one I’m going to try to go inexpensive without being too cheap–it’ll probably depend what kind of fixes it’d need. I know we plan to drive our current car into the ground.
Compared to most personal finance bloggers (who extol the virtues of paying cash for late-model used cars), the amount my wife and I pay for transportation is really tiny, because we just fix whatever goes wrong with our 1992 Ford Escort. The capital costs are fairly negligible (since we didn’t pay much to begin with), the finance charges non-existent (since we paid cash), and the insurance costs are very small (about $25 per month for collision, even though we have more coverage than is legally required). The only costs are repair costs which, granted, are highly variable. On average, the sum total (including depreciation, repair costs, and insurance, but not including registration fees) has come to $122 per month for the last six years and the car’s still going strong.
Partly, by the way, the reason people recommend late-model used is because they’re behind the times. Had our car been built even five or ten years earlier than it was, the body would have rusted out by now. And once that happens, the car is done. However, about the early ’90s, car manufacturers started building with rust-resistant materials and treating the cars with a rust-proofing agent at the factory. (Never get dealer-applied rust-proofing nowadays. It’s likely unnecessary and probably does more harm than good.) Cars have much more extended lifespans than they used to have so old saws about getting rid of a car past 100,000 miles or never spending more to repair a car than the car is worth are no longer true. (Don’t get me wrong. If you actually can buy the same car as yours in perfect working order for less than you’d spend to repair yours, by all means you should do so. However, this is never actually the case.)
Good luck with your Altima. I hope you’re still driving it ten years from now.
I totally agree with you. I just received the title on my Camry. There’s nothing like holding that title in your hands!
Ride on Mapgirl! Ride on!
My Civic sedan will last for a long time… but if it ever starts costing more to drive than it would to get a new(er) car, I’ll be moving along to something new(er).
Andrew – That’s great, but for most people, the acquisition of a vehicle is the greatest cost. There’s very little getting around that. You’re lucky to have gotten a car for so cheap. Thanks for the analysis of your servicing cost over a period of years, vs a single year. I think that makes a huge difference. (see my comment reply to Flexo) The trick with me is that I got my car as a lease brand-new, bought out the lease when I realized I was going over on mileage and buying and keeping was the best way of amortizing the whole cost of the car. For the first 4 years, nothing major happened to the car, and then I needed things like new tires, new clutch, engine mounts, etc. I am sure my per month servicing cost over 7 yrs is also very low. (Thanks for the new idea!)
Flexo – I have to ask, what is that threshold in terms of dollars for you? Do you mean costing you more in a single year? Often, that is the metric people use, i.e. the cost of car payments in a year vs the amount of repairs in a year.
For instance, I sank $6K into my car last year to replace the clutch and do some brake work. It was worth the money, but it was well over what I would have paid for a $350/mo car payment. However, a clutch is a clutch and now I won’t have to worry about one for another 5 years. Just curious.
$6K for a clutch and brake work????? geez, you got ripped off. Should have bought another car for that kind of maintenance cost!!
Rick – There was a lot more work involved. If you want to read all about it, hit the Automobile category on the right. That includes absolutely everything like my oil changes, etc.
Sorry, mapgirl. I don’t understand your response so I probably didn’t make myself clear. I am advocating paying cash for early model used cars instead of late model used. The Escort was 10 years old when we bought it which is why the total costs have been so cheap. I am basically trading depreciation and financing costs for repair costs, which are highly variable but on average much lower. (But then I wouldn’t put $6000 in repairs into this car; I’ve never had a repair bill anything like that.)
However, most people probably derive more psychic value from owning a newer car than I do, and they’re welcome to keep buying newer. More used cars for me to choose from.
Hi Andrew – Ok. I didn’t make myself very clear either. That’s ok. I get what you are saying now.
Another thing is that you didn’t seem to factor in the time spent on maintenance. For me, running my car around and dropping it off to be serviced has been a pain my neck. Waking up super earlyl to drop the car off, loaner cars that smell, etc. Cannot stand it. I’d rather have the depreciation hit of a on a late model used car that only needs an oil change because, I have discovered with the repair work of the last two years as stuff goes out of warranty, hits the 100k mi mark, I hate waiting around for my car to be ready. That to me is wasted time, and the little garage across the street from my house is useless for real repairs.
Oh, but this is my first car I purchased and I definitely don’t think I’ll buy a new car ever again. It makes amortization a pain the wazoo.
I do factor in the time spent on maintenance which is why I recommend buying older reliable cars with a proven track record. The 1992 Escort, for example, has given us very little trouble, far less than the trouble you’ve had with your car. However, I am relatively insensitive to such things. My work ID functions as a free bus pass and I like taking the bus home and my wife does all the driving anyway. Obviously, some people are more sensitive to such things and almost everybody seems to have more ego wrapped up in their car than I do (which is none at all), so I certainly sympathize with anybody who buys newer vehicles. As long as they don’t claim it’s a financial decision.
Andrew – My car has not given me any trouble. The costs I’ve been spending have been on maintenance or repairs because I’ve ignored maintenance. Clutches aren’t cheap but they do wear out. It’s a fact of life, my car is out of warranty and at the point where everything needs replacing. That’s ok.
I have an Altima, too! It’s a 96 with 185K miles on it. I hope to drive it at least another 3 years while I finish school!