Poverty Prevention: 5 car buying tips

64 Studebaker

’64 Studebaker “Wagonaire.” V8 and a wicked sweet roll back roof.

Snark Meter Sorta Snarky.002

Occasionally I wander off script and into the weeds. This is one of those days…

Automotive industry pitchmen and those who have just dropped big scratch on a new car insist, “An old car will cost you money!” Reality check: New cars are almost always more expensive to own than old ones. A lot more! Let me, a man who has owned far too many cars, make my case by sharing the financial results of my many automotive indiscretions…

Total Ownership Cost (purchase + repairs – sale price)

New (2 years old or less): 5 cars. Loss: $48,000 (avg loss: $9,600 per car)

Old (more than 10 years old): 6 Cars. Loss: $9500 (avg loss: $1580 per car)

Ancient (more than 20 years old): 13 cars. Loss: $1400 (avg loss: $110 per car)

Notice that every additional decade of age cut the cost to own by approximately a factor of 10.

Conclusion: Driving a beater will save you money!

Car buying advice for those on a budget

1) Don’t buy a car you can’t afford. If you can’t pay cash you can’t afford it!

2) Don’t throw away money on depreciation. If you buy a car that is anywhere close to new the depreciation will cost you piles of money.

3) Buy a car that is uncool. If you buy a car that is or ever was a status symbol you will pay too much.

4) Buy a car that was dependable when it was new. An undependable car is always undependable (like Rover or anything made in Europe with that cool engineering). Buy cars made in the right continents…i.e. any continent not named “Europe.” This will save you PILES of money for each part that will continue to break. If all you want is dependability then buy Japanese. However, the cost of Japanese cars on the used car market is relatively high because of their reputation for dependability. If you want cheap and dependable:

5) Look for old American iron that was well cared for. I have driven several hundred thousand miles on old American cars without a major breakdown.

In Summary

Buy a well maintained, fully depreciated car (10 years or older), that no one wants (like a 4 door), and you won’t get hurt financially. If the 1980 Cutlass that you paid $1200 for dies after 2 years of $50 bucks a month worth of repairs who cares! You are only out $2000. If you had bought a new Toyota Matrix (like I did) you would have spent close to $300 per month in payments, watched your car insurance double, paid 10X the $20 per year for tags on a Rambler from the ‘60’s and lost another $5000 in depreciation. Over the first 2 years of owning a Toyota Matrix it cost more than four times what the Rambler cost per mile to drive! Finally,

6) Don’t buy a car from someone who has to make a profit on it (like a car dealer). Oh yeah, and every mistake I have made buying cars was from making the decision too quickly, so…

7) Wait until tomorrow to buy that car you really want. Take a day to think about it. Take it to a mechanic and have them make a grocery list of things that are wrong (so you can negotiate and deduct them from the price). Go home and check online at kbb.com and edmunds.com for the cars value. Mostly, don’t rush and make an expensive decision on emotion. If you do it will cost you. You will buy something way too expensive (like the really nifty VW Passat I once bought) or miss something big (like a rusted out floor pan) or buy something just plain bad (like the’62 Ranchwagon I bought on a whim).

Or you could just do what my cousin did: after spending years driving new European status cars he found a really nice underpriced older Lexus 4 door. He paid $6000 for it. He has driven it for 5 years, made no repairs other than brakes and a battery, and is still in it for less than it’s worth. Now all you have to do is find a clean $6000 Lexus. Good luck with that.

But even if you are still reading, I’ll bet you a tenspot you won’t follow my advice. You will rationalize buying a shiny sporty new thing on the grounds that you will save money on repairs and the improved gas efficiency. You will go out and find a car you can’t afford. You will buy it from a car dealer who will make a fatty of a commission on you, and then even more when you finance this status symbol. Then you will pay thousands more in tax. All so that you can start paying the expensive annual tags and monthly insurance premium increases….but you have all that spare money sitting around, so you can afford the $10 bucks you now owe me.

Pay up.

Some of the Cars I’ve Owned…
61 VW Micro. A great car for youth ministry.

61 VW Micro. A great car for youth ministry. Here it is exploding with YL boys after a bikeathon.

48 Packard. Tons of chrome. The best sounding straight 8 ever.

48 Packard. Tons of chrome. The best sounding straight 8 ever.

A ton of steel and a half ton of chrome. It was illegally exported to Saudi Arabia.

The person who bought it illegally exported it to Saudi Arabia.

61 Rambler 6. I drove four Ramblers at a profit.

61 Rambler 6 with push button tranny. I have owned four Ramblers – all at a profit.

Volvo 1800 ES. Like all Volvos: Lots of electrical problems. Volvo was a mistake I made three times.

Volvo 1800 ES. A great car that I made money on. But like all Volvos: Lots of electrical problems.

68 Rambler Rogue

68 Rambler Rogue

A very nice ride

A very nice ride

Full size Jeep and a 240 Turbo coupe

Full size Jeep and a Volvo 240 Turbo coupe

I didn't own a Model T. Driving one was a birthday gift.

I didn’t own a Model T. Driving one was a birthday gift.

-74 VW Super Beetle. Sunroof & an AC that never worked well (I broke even).
-61 VW Microbus. Bought it in a junkyard. Put 60K on it. (Made $400)
-78 Honda Civic Wagon. Cute, but only a 60k mile engine. (Lost $200).
-88 Suzuki Samarai. They were brand new. A well engineered toy…absolutely no power. One rear ender totaled it. A new car (I lost 6k bucks over 3 years).
-87 Nissan Sentra. Kari’s car. Nearly as underpowered as the Suzuki. Another new car: (lost 8k over 5 years).
-48 Packard. Beautiful. Everything about it screamed quality. The straight 8 might have had the best engine notes ever. (Lost $1500 over 5 years).
-62 Rambler Classic. (pic). Great car. Push button automatic tranny, but no AC. (Made $600 on it)
-63 Rambler Wagon. Had AC. Fred Flintstone could’ve driven it though: I learned about rust when my foot went through the floorboard. (Lost $300).
-63 Ford Ranch Wagon. A terrible car straight from the factory AND worn out. I just wanted to buy a car that day. (Lost $200).
-71 Oldmobile Cutlass sedan. Another bad car. How did GM sell them? And why did I buy it??? (Lost $400).
-64 Rambler Classic. 3 on the tree. Good condition. No AC. It was such a good car I drove it 2 1/2 years anyway. (Made $500).
-64 Studebaker Wagonaire. A very cool car! Installed AC. Drove it 7 years and 70K. Lost $3200 (only about $40 per month!) because of money spent on the paint and AC.
-91 Dodge Spirit. Another Kari Car. Strong 6 cylinder. Went 140k miles before a major repair! (Lost 8k over 5 years: really good for a new car)
-93 Chrysler Grand Caravan. Kari’s kid hauler. A complete lemon. Even found a union statement under the carpet insinuating that employees were sabotaging cars. (Lost 6k over 2 years)
-74 Volve ES. Very cool car. In great condition. Someone offered more than I paid. I should’ve said no. Made $800)
-96 Volvo 850 Turbo Wagon. Great Seats, Great Motor. Loosened my fillings going over man hole covers. Kari’s. (Lost 3k in a year)
-84 Volvo 240 Turbo Coupe. A pretty cool car. AC, sunroof, 5 speed. After 2 yrs of constant repair I gave up on it. I ran into the girl who bought it 2 years later. She hadn’t spent a penny. Terrible AC. (Lost 3k in 2 years)
-87 Jeep Grand Wagoneer. A friend gave it to me for free. A nightmare of vacuum hoses and 10 mpg. I had three fender benders in it: did thousands in damage to each of the other guys. Scratched the paint on me. Mostly Kari’s while I drove the 240T. (Lost $3500 in 2 years)
-2001.5 VW Passat Wagon. V6. Leather. Loaded! Incredible technology. Broke weekly. I learned my lesson on new cars. (Lost $13,000 in 3 years)
-2003 Toyota Matrix. Kari’s car. Needed a rebuild at 170k! (And depreciated $9000 in the first 4 years)
-1998 Chevy Suburban. 4wd. Solid. Holds 8 kids but has power for 20…A gift from a friend!
-1968 Rambler Rogue. 290 V8. AT, PS, AC, power front disc brakes, solex windows, electric wipers/washers. A very nice little car. (I over paid: $5,000, spent about 1200k more and sold it for $6700)
-2000 Ford Expedition. V8, Power everything. Another gift. It has needed $2100 worth of work, but we have put 30,000 miles on it, which isn’t too bad.
-1991 Pontiac Firebird. A base model. Luke’s car. Total invested: $2050. Totaled last week while parked. Settled for $2440.
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4 thoughts on “Poverty Prevention: 5 car buying tips

  1. Thanks for the Studebaker picture. My parents owned four of them when I was growing up (the last one was a red 1961 Lark). My grandmother had a 1950 Champion Starlight Coupe which is still in the family. I’ve visited the National Studebaker Museum in South Bend Indiana.

    • I’ve always wanted to go to the Stude museum. That Wagonaire was a great car. 3 on the tree with overdrive and hill holder. The back seats were higher than the front so the kids could see the world. And the roll back roof was a blast. I still have the owner’s manual and original window sticker to that car.

  2. Good advice. I keep careful records of my car expenses. The biggest factor is the initial purchase price of the car. Even if you drive it until the wheels fall off you will never recoup the initial depreciation. Insurance and taxes also add up. Even at recent high prices the cost of fuel remains a relatively small fraction of the cost if you bought a new car.

    • Agree completely…at least until the Toyota Matrix that we decided to pass down to our daughter with 170k miles and every recommended maintenance done (one of our rare new car purchases-which were actually both gifts). 2 mechanics said, “don’t sell.” We didn’t. Timing chain stripped gears at 173,000. Bit the bullet. Yesterday the computer failed at 176.

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