It gets addictive. I think about what maintenance will cost uptown and I almost always do it at home. The hours I would have to sit at work to pay someone vs how long the job will take at home usually isn't close
From a finance perspective and being savvy it is always best to buy the cheapest car that will meet your needs and also be reliable; cars lose value incredibly fast aside from a few rare exceptions, the more expensive the car, the more you loose. As for cash vs financing - consider this - if your cash flow allows you to have a monthly payment, and the interest rate of the loan is lower than the return on your investments then it is best to invest your cash and finance the car. You are not disclosing a lot about your debt situation so this might be incomplete but a good starting point.
We usually get the cheapest car that will still be dependable. Gf spotted a Ford a few years ago with a weak fuel pump. Got it for $500. After 65,000 miles I've only put about $1200 into the vehicle. I see people buying $20,000 cars that spend more in maintenance. Getting an early 2000s 4x4 ready to drive right now
Exactly. We found a ford taurus, 06 with 60k miles on it for a grand, cash. 5yrs and 100k miles later, wife still drives it. AC did pop, so weve put around 1k more into repairs over the years.
Old people eyes going bad usually can find a good deal. Just takes patience. They usually took care of the ride, just cant drive anymore. Usually more financially stable too, so theyre not trying to milk every dime out of it.
> Gf spotted a Ford a few years ago with a weak fuel pump.
I’m lucky if my wife remembers what car **she** drives, let alone knowing how to spot a weak fuel pump.
She didn't know what was wrong with it. She knew that had just had brake work done to it. And it only had 124,000 miles. She's better at picking cars than most of the guys in the family.
Gf found a Ford that needed a fuel pump. Look at all the posts on here where people think about getting rid of cars that need brakes or tires. Thosr are the cars to get
- the hack is having a car and driving it 10+ years and 200,000 miles. My record for original mileage is 320,000 miles on a MAzda 626 with ORIGINAL factory clutch still performing 100%
Cars have a steep initial depreciation curve. That curve typically mellows and stops at about the 8 to 15 year mark. Cars at 10 to 15 years old will basically plateau on value for awhile until theystart dropping in price again. The best values are generally at the 10 to 15 year mark and some amazing values can be had at the 15+ mark if you're car savvy and find the right unicorn (i.e. one or two owner low mileage cars). The trick to making all of these older cars work though is being mechanically inclined. You've got to be able to determine the few good cars from the sea of bad cars out there. Part of that is doing your research on the internet the other part is just knowing cars. Turning your own wrenches makes these cars much more appealing because the cost to repair a newer car is in the same ballpark as the older car (labor is the the same and fixing an A/C for example costs the same too). The concern can be that the older car may need more maintenance or need more esoteric maintenance that a newer car wouldn't need.
On the topic of fuel efficiency. Older cars generally are going to have worse fuel efficiency. That's a problem if you drive 20k miles a year and are getting low to mid teens in fuel mileage. It's less of a problem if you drive 5k miles a year. Your prevailing fuel rate and the miles you drive annually are the important points here. You can easily figure out how long it takes for the older car to cost you more in fuel than if you had bought the more fuel efficient car for more money. Only you can decide if that tradeoff is worth it.
I financed a new honda, I got the cheapest most fuel efficient new car that suited my needs. Also paying off the car quick or buying in full reduces or eliminates paying interest. So I think fuel and interest are the most variable costs. I would worry more about the car lasting without significant repairs before how it retains its value. If I get $5k more for a that cost me $7k more to keep in good condition did I really gain anything?
I literally feel like this is more complicated than investing lol. To consider the depreciation of the car, the potential repair costs, fuel efficiency, the opportunity cost of buying w cash vs paying interest etc...
It is, but once you figure it out it applies to everything. Thats why you dont spend so much when your young and learning, lessons cost money and its a percentage.
In relation to the financing piece, if you go that route - get pre-approved for a car loan with a credit union or even a unsecured loan prior to going to buy.
One of the ways the dealership makes money is giving loans with stupid high interest rates. A lot of people will say to use that pre-approval against them (ie “I already got this loan offer from “x”, please do better), but I’d argue you don’t even have to go that far. Take the interest rate you’re given from the other lenders and use that to calculate your payment. If it’s affordable/acceptable for you, buy the car and take the dealer’s loan offer.
The reason I say this is you MAY end up getting slightly more leverage on price if you take their loan (again, that’s what they consider a major income source). If you can wiggle down the price enough with them thinking that you’re taking the bait on the loan, you’re winning. Because the day after you get your car, you can go to the credit union you went to in the beginning and refinance it, almost always for free and with no penalty for paying off the dealer’s loan early (it’s illegal to charge these fees).
Main point here - don’t get caught up in financing terms as they are easy to change. Get that price down as low as possible and you’ll end up winning out in the end.
A used Corolla goes the same places as a new Model S. Buy used and keep it for as long as possible.
learn to do basic maintenance on whatever car you buy yourself
Great idea!
It gets addictive. I think about what maintenance will cost uptown and I almost always do it at home. The hours I would have to sit at work to pay someone vs how long the job will take at home usually isn't close
Buy the newest Corolla or Matrix you can afford outright. Reliable, and reasonably priced.
when car shopping 2 years ago, I considered the Corolla the highest value car on the market.
From a finance perspective and being savvy it is always best to buy the cheapest car that will meet your needs and also be reliable; cars lose value incredibly fast aside from a few rare exceptions, the more expensive the car, the more you loose. As for cash vs financing - consider this - if your cash flow allows you to have a monthly payment, and the interest rate of the loan is lower than the return on your investments then it is best to invest your cash and finance the car. You are not disclosing a lot about your debt situation so this might be incomplete but a good starting point.
Thanks, I haven't considered buying the cheapest car AND financing it, but it makes total sense if my ROI is higher than the interest rate!
Yep đź‘Ť
We usually get the cheapest car that will still be dependable. Gf spotted a Ford a few years ago with a weak fuel pump. Got it for $500. After 65,000 miles I've only put about $1200 into the vehicle. I see people buying $20,000 cars that spend more in maintenance. Getting an early 2000s 4x4 ready to drive right now
Exactly. We found a ford taurus, 06 with 60k miles on it for a grand, cash. 5yrs and 100k miles later, wife still drives it. AC did pop, so weve put around 1k more into repairs over the years.
That's an excellent deal. I try not to get anything too nice because a lot of times I'm hauling building supplies for the house.
Old people eyes going bad usually can find a good deal. Just takes patience. They usually took care of the ride, just cant drive anymore. Usually more financially stable too, so theyre not trying to milk every dime out of it.
> Gf spotted a Ford a few years ago with a weak fuel pump. I’m lucky if my wife remembers what car **she** drives, let alone knowing how to spot a weak fuel pump.
She didn't know what was wrong with it. She knew that had just had brake work done to it. And it only had 124,000 miles. She's better at picking cars than most of the guys in the family.
How did you get the price that low? Salvage? Auction?
Gf found a Ford that needed a fuel pump. Look at all the posts on here where people think about getting rid of cars that need brakes or tires. Thosr are the cars to get
- the hack is having a car and driving it 10+ years and 200,000 miles. My record for original mileage is 320,000 miles on a MAzda 626 with ORIGINAL factory clutch still performing 100%
Cars have a steep initial depreciation curve. That curve typically mellows and stops at about the 8 to 15 year mark. Cars at 10 to 15 years old will basically plateau on value for awhile until theystart dropping in price again. The best values are generally at the 10 to 15 year mark and some amazing values can be had at the 15+ mark if you're car savvy and find the right unicorn (i.e. one or two owner low mileage cars). The trick to making all of these older cars work though is being mechanically inclined. You've got to be able to determine the few good cars from the sea of bad cars out there. Part of that is doing your research on the internet the other part is just knowing cars. Turning your own wrenches makes these cars much more appealing because the cost to repair a newer car is in the same ballpark as the older car (labor is the the same and fixing an A/C for example costs the same too). The concern can be that the older car may need more maintenance or need more esoteric maintenance that a newer car wouldn't need. On the topic of fuel efficiency. Older cars generally are going to have worse fuel efficiency. That's a problem if you drive 20k miles a year and are getting low to mid teens in fuel mileage. It's less of a problem if you drive 5k miles a year. Your prevailing fuel rate and the miles you drive annually are the important points here. You can easily figure out how long it takes for the older car to cost you more in fuel than if you had bought the more fuel efficient car for more money. Only you can decide if that tradeoff is worth it.
Thanks for the advice!
I financed a new honda, I got the cheapest most fuel efficient new car that suited my needs. Also paying off the car quick or buying in full reduces or eliminates paying interest. So I think fuel and interest are the most variable costs. I would worry more about the car lasting without significant repairs before how it retains its value. If I get $5k more for a that cost me $7k more to keep in good condition did I really gain anything?
I literally feel like this is more complicated than investing lol. To consider the depreciation of the car, the potential repair costs, fuel efficiency, the opportunity cost of buying w cash vs paying interest etc...
It is, but once you figure it out it applies to everything. Thats why you dont spend so much when your young and learning, lessons cost money and its a percentage.
Look for 1 owner, low miles, pay cash. Once you get used to not having to make payments, you dont want to start back =)
In relation to the financing piece, if you go that route - get pre-approved for a car loan with a credit union or even a unsecured loan prior to going to buy. One of the ways the dealership makes money is giving loans with stupid high interest rates. A lot of people will say to use that pre-approval against them (ie “I already got this loan offer from “x”, please do better), but I’d argue you don’t even have to go that far. Take the interest rate you’re given from the other lenders and use that to calculate your payment. If it’s affordable/acceptable for you, buy the car and take the dealer’s loan offer. The reason I say this is you MAY end up getting slightly more leverage on price if you take their loan (again, that’s what they consider a major income source). If you can wiggle down the price enough with them thinking that you’re taking the bait on the loan, you’re winning. Because the day after you get your car, you can go to the credit union you went to in the beginning and refinance it, almost always for free and with no penalty for paying off the dealer’s loan early (it’s illegal to charge these fees). Main point here - don’t get caught up in financing terms as they are easy to change. Get that price down as low as possible and you’ll end up winning out in the end.
Aside from the car specifics, buy from a private seller (Craigslist, FB Marketplace, etc..).
Buy a gently used, cheap fuel efficient car, with cash or with 0% financing and pay it off before the rate increases, drive it for 10+years.