July 18, 2016
You might remember we just spent half the year on dealing with car stuff so when I spotted this comment over at Dad is Cheap it jumped out at me.
After working in the auto industry for 16 years, I’ve seen just about everything. Some of the things I’ve learned: 1) Never buy used from a private party. 2) When you buy used from a dealer, know that they almost always “pack” the car by at least $2k-$3k. In other words, start your negotiations by taking off at least that much and sometimes more depending on the model. 3) If you get a great price, know that the finance department will do their best at charging you high interest (they get a bonus) to make up for the loss. Don’t let them get away with it. Ask for the lowest “buy rate” if you need to finance it.
The commenter went on to explain why:
It’s more or less general rule of mine because I’ve rarely seen private sales work out in the long run. Unless you are car savvy or take it to a trustworthy auto technician to be examined, it can be difficult to detect a maintenance nightmare and unfortunately, I’ve seen far too many private party sales end up in court battles with little or no recourse.
In my personal opinion, an exception to the rule would be if you know the car and where it’s coming from, and you are able to make a determination that the car was maintained properly. Maybe from family member or friend. I most certainly would not take a chance on purchasing a car from an unknown party.
Rules 2-3 are useful, but Rule 1 directly contradicts ours. My first car was new, but since PiC and I joined forces, we have never bought new since and we avoid dealers like the plague. The convenience has never been worth the price padding for us.
PiC’s rules for buying cars (& approved by me)
Rule 1: Always buy used from a private party.
Rule 2: Always buy from an original owner or a 2nd owner.
Rule 3: Always review the owner’s paperwork and maintenance history, making sure that it all matches up. Don’t take their word for it.
Rule 4: Always take it to a reputable mechanic for a PPI (pre-purchase inspection) before making any decisions. You can, and we often do, negotiate a lower priced based on the recommendations from the inspection.
Rule 5: If you have car savvy friends (we do), don’t be too proud to consult them. Our very car savvy friends know certain makes inside and out, and were able to advise us to avoid certain model years due to known maintenance issues.
Together, we’ve purchased three used cars in the past ten years and they have all run smoothly and reliably. We budget for and pay regular maintenance costs every year, and we still spend less than the cost of a new car (financed or paid for in cash) and all the normal maintenance associated. We’ve never broken down due to mechanical issues, though we have had some random unfortunate incidents.
As an aside, this is why my parents insisted that I buy a new car in one of my earliest wastes of money. They didn’t realize that it just takes being more selective, and more legwork to save 50% or more on a used and just as reliable car.
It’s not that we don’t like new cars – we do! But believe it or not, we like cars that are quite expensive. Way too expensive for a family of four, and way too expensive for a family who intends to retire early and do some good in the world. And that stuff is more important to us anyway, so even though we might LIKE the idea of the super shiny techy, we choose not to go that route. Instead we pick cars that fit exactly our needs today, in excellent condition, and keep them that way as long as we can. Which, considering the JuggerBaby, takes a little extra work, but it’s worth the satisfaction of winning another battle against entropy.
And someday, when I hit the bigtime, PiC can have his Porsche. Any kind, any color. 🙂
:: What are your car buying rules? Does “used” make you think of a clunker or someone else’s lemon?
January 22, 2016
We’ve made one decision about the car, at least.
We’re taking the salvage car and title and selling the car for three reasons:
- The buyer said that he would deal with actually getting the salvage title,
- He would deal with the smog check,
- And he came to us to pay for it, saving PiC the trek to the DMV and the shop (hours away)
All of the time PiC had previously spent on the car rental and the evaluation at the shop was a sunk cost up to that point, but now we can consider covered by the $200 over salvage value that the insurance will pay.
The math: the insurance agreed to pay out $5200. They deducted $800 from that value because we’re taking the car. The buyer paid us $1000. After the costs of driving and dealing with all the details were deducted (mentally), we’ll have $5400 in hand.
Meanwhile, we’re temporarily out our $500 deductible and the cost of a replacement car seat until the Other Driver’s insurance coughs up the reimbursements.
On the replacement front: PiC has found a few decent looking options for around $6000 if we’re willing to buy older (we are) and buy a fancy German make (ehhhhh….).
We’re both ambivalent about getting a car that is usually a status symbol even if it’s old and only costs $5000-6000 because we don’t like that the car logo will signal a level of wealth and luxury we don’t aspire to. Wait, that’s the luxury part. I absolutely aspire to the kind of wealth where I could afford a fleet of these, no sweat, but I also absolutely do not want anyone to know that I have it. That might be an odd reason to avoid the purchase in an area where it’s not that unusual to see Porsches and Teslas, who’s gonna give two hics and a hoot?
Still, we’ll have to ruminate on this for a while.
Would that bother you?
And friends with recent (last 5 years) carseat buying experience: What did you use when your kids outgrew the infant size seat? Our current one is rated for up to 30 lbs but if we’re going to replace it, we may as well get a different model that accommodates from 20 lbs and up.
January 18, 2016
That car accident is just the Christmas gift that keeps on giving.
They saw it coming but it was still a shock when The Driver didn’t even tap her brakes. I was looking down at LB when I sensed something terribly wrong and threw myself over LB at the same second That Driver slammed into the passenger door. What I thought I would protect LB from, being on the wrong side to cushion the blow with my mere flesh, I don’t know. Probably it was all instinct since I don’t remember thinking anything but oh $!&(#(
Stunned, everyone verbally checked on everyone else. PiC was slightly panicked asking if we were ok because he couldn’t see us in the dark. I was about to be in serious pain, but it hadn’t registered as I checked LB’s limbs all intact and safe in hir seat, at the point of impact.
Ze had been gnawing on a plastic jar of nuts, hir temporary chew toy and maraca. The impact had thrown it out of hir tiny hands. Ze pulled away from my anxious checking, straining forward against the restraints, concerned only for where those nuts had gone.
Huge, shaky sigh of relief.
All that matters is that everyone was ok, but dammit, what an amazing pain in the everything it is to have someone crush into your car!
We had a plan, dammit
There’s something about humans planning and God laughing, right? (Jerk) Because that applies here. We’d wanted a larger car to accommodate our growing family but decided that we’d make this work for another 2-3 years. I wanted to squirrel away all the cash for a possible down payment.
Now what?
Now we do insurance. Now we do rental cars, and inconveniences, and trips to the shop. We have a very car savvy friend advising us on a few things, but the upshot is that almost everything sucks.
Our car is considered a total loss. It’s still amazing that no one was injured, because That Driver pulverized nearly the whole side of the car and it’ll cost twice the book value to repair everything, maybe more. The frame was damaged, both doors are flattened, and I’m pretty sure that the bumper was half crushed. The shop estimated the work to start at $7000 and that’s before they took anything apart to see the worst of the damage.
But book value puts our poor car at a mere $5500 despite the brand spanking new tires we literally bought the day before, and the other accessories that would normally have meant something to a prospective buyer.
At least That Driver did have insurance and so, even though she’s been MIA for two weeks refusing to respond to their calls, they’ve ruled in our favor that she’s 100% at fault and they’ll pay for everything including our $500 deductible.
That helps a little but not much. Our choices, such as they are:
- The car is a total loss: take the paltry payout from the insurance. Find a new car.
- This sucks because PiC has been scouring Craigslist and his usual used car sales haunts and keeps coming up empty. There’s nothing out there that fits our requirements, not even close, and we’d have to spend $10,000 on a compromise.
- We could take the money and just wait for a while but being a one car family means that I can’t run any errands during the week.
- The car is a total loss: take the paltry payout from the insurance minus several hundred dollars, take the car to be salvaged (complete with a salvage title), pay everything we received and maybe another $2000 to repair it.
- This sucks because though we’d get our car back, which suits our needs, we’d be out of pocket $2000+ for a car with a salvage title so if we were to try to sell it later, it’s not going to tempt any buyer for more than that $2000, likely. If that much.
- But it does give us a working vehicle so we don’t have to scour Craigslist for the next few weeks or months.
- The car is a total loss: take the paltry payout from the insurance minus several hundred dollars, take the car to be salvaged (complete with a salvage title), sell it to a shop for about $1000 which covers the salvage value the insurance deducted and gives us another $200 toward a replacement.
- $200 is a lot of money when you think of just money in hand but is it worth the hassle? Either we have to trek to the DMV to get the salvage title processed, and then take it to the shop to sell the car, or get the insurance to process it which may take weeks while the shop holds the car. The shop has a $100/day storage fee that presumably would be waived but if the buyer at the shop changes his mind after 2 weeks, we’d be out $1400 instead of up $200. Personally, I’m no longer in favor of bothering with this sale – our time sunk into this fiasco is over a dozen hours at this point and it’s much more valuable than $200 to waste at least another day of work on it.
Want to guess what our final decision is?
That Driver’s moment of inattention has cost me weeks of pain, PiC dozens of hours in insurance wrangling frustration and car hunting, and cost us a great working vehicle that will cost more than several thousand dollars to replace. Awesome.
January 4, 2016
Have we been throwing money away on our auto insurance?
I semi-regularly shop around for better rates but totally forgot to reconsider the coverage itself. We tend to select fairly comprehensive (not to be confused with the coverage itself called “comprehensive”) policies, but the recent kerfuffle reminded us that our vehicles are old and not worth much so any real damage wouldn’t call for a repair job, it’d be a total loss so far as the insurance is concerned.
Car #1, the 11 year old that took the hit this Christmas is a great road tripper, with generous space for us and the kids, and relatively good mileage. We love the little amenities that we’d never considered before when buying newer and therefore pricier: seat heaters are pretty awesome. Not necessary but awesome. Unfortunately, for all its utility and functional value to us, the KBB value hovers around a paltry $4000. That’s not even halfway to a used car even the way we shop. It’d be a Major Surprise if insurance will agree to cover the repairs, but we live in hope. Cross your fingers for us while we work on that.
Meanwhile, Car #2, my 12-year-old car that serves my dad has nearly 200K miles, and is (probably generously) BlueBooked at about $3100. It likely only clocks in at that much because they stopped making that model a year later making it a “limited” edition.
And Car #3, my 12-year-old daily driver is worth an astounding $5000 if we were to sell to a private party now. That’s not terrible when you consider we didn’t pay much more than that for it 4 or 5 years ago but it’s still only enough to dent the cost of any replacement on the used private-seller market.
(We’re resolved never to buy new again unless there are such major discounts as to negate the drive off the lot depreciation, so only the used market has any bearing on our decisions.)
Our comprehensive coverage/deductible runs $42/year for Car #3 while Car #2 costs $90/year. That plus the $62/year we were paying on the Crunched Car doesn’t add up to the wildly extravagant waste of money I was imagining when I fired up this train of thought.
We have the savings to replace any of the cars outright if we have to, not that I’d love paying that bill, but we can. Then again, at $200 a year for all cars ranging from $3000-5000, does it make sense to keep our comprehensive coverage? The math suggests we wouldn’t want to pay that for more than five years before that cost and the deductible combined are about half any money we’d get back assuming it’s totaled. Less than that if it’s just a minor thing. (My math may still be iffy, I’m still recovering from holiday horrors.)
What kind of coverage do you carry? For what kinds of cars? Are you happy with your insurer?
May 24, 2015
This isn’t good.
As many as 1 in 7 cars on the road in the US are estimated to have a Takata air bag with a defect.
The National Highway Traffic Safety Administration is updating a list of all vehicles affected by VIN but it’ll take some time so check that list in the next few weeks to see if you should take your car to a dealer.
Please do take a minute to check. The airbag defect involves shrapnel and can cause serious injury!
Update: I checked all our cars and so far they’re showing up with 0 active recalls. I’ll check back again in a few weeks just in case.
March 18, 2011
If you give Revanche a dog,
then PiC must find a new car…
PiC might possibly be taking advantage of the situation, or he might just be reminding me of a few good points that have my head back on the desk. Either way, my nightmare of four years ago is coming back to haunt me.
We currently own my new-to-us car that we purchased in cash last year when I moved up here for a great bargain for the mileage and year. It’s a good old 4-door Acura, with seat warmers and a [crap] GPS [that I refuse to pay $100 to upgrade maps on because I cheap out on stupid things], and will last at least 150K miles. It gets excellent highway mileage, so we’ve mainly used it for our road trips back to Southern California and for my tooling around town occasionally.
He owns a 2-door car, same age, also excellent condition, that gets good gas mileage, better than mine for street driving but worse for highway, and it’s fairly non-descript so we use it to get around the city. We just don’t like driving the “nice” car into the city, it feels too flashy. The kicker here is that it’s a manual transmission which I can’t drive anymore as it causes too much pain. Aggravating as it’s limiting.
The problems are that he doesn’t want the dog in my car: the seats are leather and a dog’s claws would go through that like butter. Most importantly, we both prefer to transport dogs in kennels – it’s safer for them in case of an accident, they would be better protected and less likely to be flung out of the car and that definitely wouldn’t fit in either of our cars.
With those conclusions, he’s decided that the time may have come to sell his trusty vehicle. His choice, not mine. Mine could actually be sold for more than we bought it so I was willing, but he can’t let go of the seat warmers. 😉 Selfishly, I’m glad because I would have done it, but would have been sad to say goodbye.
PiC’s the car guy, so he’s narrowed down the options: not an SUV but it has to be something big enough for both transporting dogs and passengers. [I think… I think he thinks we’re having kids? Or something? Never mind that.] It has to be low enough for a larger dog to get into fairly easily, it has to be easy to clean, it has to be within a certain price range, not that we have actually saved for a car yet —SIGH— and **heartburn**.
He’s narrowed it down to ….. the …… how many of you guessed this?
He’s, after breaking my aesthetic heart a few times with the above, also suggested that perhaps the Pilot might be an option. Le sigh. And sigh again. A new car?
I’m not 100% convinced. While my preference is always to crate a dog in the car, I’ll have to be the first to admit that I’ve not been consistent with that in the past and it’s hard for me to commit to a new-to-us car straightaway based solely on the new dog. Seems heartless but there’s a part of me asking, now wait a minute – is this really totally necessary right now? Just because you’re getting a dog doesn’t mean you need a matching (yes I’m exaggerating about the “matching” part) car.
We’re not in agreement yet, which means I haven’t said yes yet, and he’s not stopped looking yet. It may be time to break out the negotiation dice to set parameters around when this would be reasonable.
————
The Morning After’s Important Details: I forgot to mention (thanks for reminding me Red!) that we’re not actually looking for a real new car. Just a new to us car – we only buy used. I forget to clarify that because in “our language” new = used.
And he’s looking at newer cars model year 2009 for bargains[KBB $22K+, priced at $18K+] which is why I’m so balky. I don’t want to pull that much money out at once, and really don’t want a car loan.
March 17, 2010
I was catching up on my Consumerism Commentary when something Flexo said held my attention: “I believe there are several stages to becoming financially secure or independent. There may be a time where it makes sense to save every cent possible…… I had to survive without a car (relying on friends and public transportation), eliminate cable television, and share an apartment with three roommates. Now that I’m earning more than what I need for basic expenses and long-term saving and investing, I don’t have to be as tight. I willingly give up some income in order to buy myself more convenience.”
Earlier this evening, while discussing the car hunt and the various finds under inspection, a friend asked me, “Do you really need a car? Public transportation won’t cut it?”
My initial answer was a glib “no, public transportation doesn’t quite cut it.” Reading Flexo’s comment above pulled me up short, though. Is that true? Do I really need a car to supplement public transportation or am I taking the easy way out and spending more money I can’t actually afford for convenience? *note: Flexo can afford to expand his spending horizons. I don’t mean to imply that he’s taking the easy way out.*
Since the search began, the budget grew to more than I’d wanted to spend because my requirements haven’t been met. If I’m spending enough to dip into the emergency fund, job or no, the decision has to be sound so I returned to the drawing board to rehash my reasons and evaluate their premises.
Reasons I thought I needed a car
1. Because of the Big Lie and the need to transport my personal effects, I needed a long-term car. A one-way rental is too expensive, a round-trip rental is a waste of time and I’d need to fly back.
— Since relocation was successfully negotiated, I should be able to afford to ship personal effects and fly.
Evaluation: Don’t need a car.
2. Driving would be easier due to potentially abnormal working hours.
— I haven’t experienced rush hour in the metro areas yet so I can’t speak to that, but parking costs between free (minimal street parking) to $20/day depending on the various lots. On average, $7/day, $140/month.
Meanwhile, commuting options exist, though inconvenient. The morning commute would require some combination of two buses and 1 rail system with a minimal amount of walking on both ends ($6.50 – 9.30/day) and travel time of 30 minutes. If the location changes as promised, the new commute requires some combination of two buses and 2-3 rail systems with a minimal amount of walking on both ends ($7-9.30/day) and a travel time of 1.5 hours.
Evaluation: The cost could actually be equal, given the trade-off between commute time/transfers and the wear and tear on the vehicle.
3. I’m choosing to find housing in more suburban areas for more affordability which also lends itself to free parking/no zoned parking.
— If I chose to live in the more urban area, I’d likely be in walking or biking distance of most nearby businesses such as restaurants or groceries, entertainment and shopping. But not #4.
Evaluation: I need more data.
4. My preferences for entertainment are far-flung and while potentially cheap or free, require that I be able to reach them somehow.
— I could always hole up in the room with a stack of books and become a hermit. I’m kind of kidding. The reality is that my preference for entertainment is rarely to go out. I prefer to spend quality time with friends or animals. While that can be low-key, it can only happen if you’re mobile.
Evaluation: At first I thought: I spent several years being a hermit in the name of saving money and paying down debt. But my social network won’t be strong enough to rely on friends for transportation.
5. I need to be independently mobile.
— I need to keep costs to a minimum.
Evaluation: No car.
That last part is really a tosser, though, because I have to be honest – I rated the anti #5 argument higher because I’m afraid to stop being being hardcore, down to the bone, slasher frugal. I’ve lived that way for years. Now that I have two (or 1.5 households) to pay for my instincts scream at me to stay that way.
Meanwhile, a competing sense of self(ishness) says that I’m old enough to be on my own and do what I want, and what I want is to be independently mobile. Is my desire to Stop Sharing so strong that I’d pay the cost of another car?
Let’s face it, a car will cost a lot of money for someone who won’t be making serious bucks.
First, there’s the fixed cost of purchase. Let’s say I go wild and plunk down $10k. A little more than half of that was my tax refund and money saved for two years just in case I had to pay taxes. So a little less than that comes out of the emergency fund.
Then we tack on a conservative $1000 for insurance annually. We also have the costs of maintenance and repairs which are typically budgeted around $1500/year. Remember now, that’s not just for the new car, that’s also for my old car which I remain responsible for. So the insurance and maintenance budget has doubled. Then of course, we have fuel, and since I live in CA we have fuel + $$. Conservatively we’ll call it $100/month, with say, $70/mo for parking assuming I cannot always get parking for free.
Can I afford an annual Convenience Fee of $4540, while replenishing a $5000 hole in the emergency fund?
Probably.
Can I afford an additional expenditure of $4540/year without creating major drag on my savings goals for the year?
Well, unemployment already did a number on them so I honestly haven’t set any, but probably not.
To be fair, let’s compare the cost of public transportation commuting against that annual fee.
On the low end, 20 days a month, 12 months a year at $7/day: $1680 x 2 trips a day = $3360
On the high end, 20 days a month, 12 months a year at $9.30/day: $2232 x 2 trips a day = $4464
I’ll be honest, I didn’t see the math playing out this way. I was pretty sure it’d come very firmly down on the side of public transportation. Tolls (for driving) and fare increases (for commuting) were not factored in as they’re not predictable. In truth, even with the car, I’d likely be doing some pub transportation once I figured out that traffic and parking vagaries so these numbers (and the difference in cost) remain soft. With any luck that would bring the daily amount down on average by half.
At the end of the day, after running the numbers, it’s partly a math and partly an emotional decision. If I’m willing to take the initial $5k+ hit to my net worth on the math side, then my emotional side argues for the buy as well.
I am, in essence, the personification of Newton’s Law. When “at rest,” I tend to stay “at rest.” When I’m limited to sharing a vehicle on someone else’s schedule, I have been categorically a shut-in working on my projects indoors from dusk to dawn and back again, without a break. I leave on the spur of the moment and if that’s not possible then I just don’t bother.
Historically then, my sense of stability and productivity is found in part in my ability to go about my business at will, without wondering if the car’s been taken by the shared individual, without having to cut short my errands or reschedule to accommodate someone else’s schedule. It is, I’ll admit, kind of ridiculous. But that’s how I function and that’s what I have to work around. And it’s kind of more ridiculous to refuse to make a purchase that is mathematically acceptable simply because I don’t want to backslide on my monthly numbers.
Note: the calculations for the car are based purely on the commute numbers, but clearly the car will be handy for longer road trips that are tentatively planned for later in the year. Increased usage would increase cost but it’s the function of the car to be used.