Car debate
We have a car. It gets excellent gas mileage (35+ MPG), is very reliable and we got it really cheap. Natalie will be using it as she starts her new job next week to commute from NE Portland to Hillsboro. In a few months, she will likely be using it to drive to doctors offices and the like to help marketing. The problem is that the car looks like crap, as it has a dent on the front left side, duct tape holding on the back ride side of the bumper, a couple rust spots, and even more duct tape on the driver side rear-door.
So it's not exactly the kind of car that instills confidence in your current and future clients.
In the next few months we will be looking to buy a car that looks a little more professional. This goes against many fibers of my being, as I don't usually care what others think about my car, but as it will be used in a marketing/sales capacity, it really does need to be at least respectable.
What we want in a car is as follows:
- Good gas mileage
- Professional looking
- Early 2000's at the oldest
- Air conditioning
- Lower mileage
We had generally been looking at Toyotas and Hondas because we've seen firsthand how reliable they are, and we had hoped to spend about $5,000.
Fat chance! says craigslist.
$5,000 will buy you a car matching our requirements above from ~1998 or earlier. That's an 11 year old car! How much are newer cars? Well, a 2002 Honda Civic (7 years old) will set you back $8-10k. Compare that to a *new* Civic, that includes a warranty, has no miles, will hold it's value longer and has not been potentially abused by a previous owner, and costs ~$16k.
This becomes a slippery slope. Certainly a 2002 or so year car would be perfectly adequate for our needs. But is it worth $8-10k? If I spend just a little more, I can get a better, new car. But then I'm spending closer to $20k on a car, which is WAY more than I'd like to spend (4x my original budget).
The crazy thing is that insurance is virtually the same on a 2008 car vs a 1998 car. It was only about a $20 difference a month. So increased insurance prices aren't really a factor.
Then there's the issue of financing. We of course wouldn't do financing through the car place. I'd probably go through my bank, or zopa or something. Or do you just pay cash? That's a huge loss of liquidity at a time in our life when we may actually need the money.
A number of you have recently bought new cars. What are your thoughts on these issues?
...
Hertz gave me the Yaris this week - you can test-drive it if you want to at game night, but I definitely don't like it. The odometer is in the middle of the dashboard - there's no driver view in front of the steering wheel! From what I've seen the Fit is much better designed for the money.
Yeah
The more we see of the Yaris, the less we like. It's kind of bubbly looking. That speedometer thing being in the middle of the dash is a characteristic of the [Toyota] Scions too, which is really annoying (we used to zipcar Scions all thee time when we lived in Boston). Not that it really mattered in Boston though, as there we just drive whatever speed we feel like.
My thoughts
I understand the rationalization for getting a new car. Those used cars are more expensive than I thought they would be (maybe that's because they are reliable brands), plus with a new car you shouldn't have to get brakes, tires, or anything but oil changed for a few years.
It sounds like you will be keeping the old Civic, and a new car might provide some assurance in case the old one broke down (it would be less likely that both a new and old car would be broken at the same time).
I'm not sure about cash vs. financing. I would typcially advise against financing a car unless you have to. But it would be nice to have the liquidity in these strange times. I've always assumed I would pay cash for my next car, but with things as they are I would consider riding the bus for as long as possible if my car was totaled.
As long as you feel comfortable with your decision, I think it will turn out fine.
Find a ding?
What about looking for a car with a blemish, such as a door or hood or something like that you know you could replace cheap?
The Forester I just bought came with a dinged door. It's Kelly Blue Book for a private party is 7,350 for fair to 8,890 for excellent (sans the door it wasn't too far from excellent). I got it for 5,500.
If just one door were dinged I'm sure you could find a replacement in excellent condition (even if you have to paint it/have it painted) and save a couple grand while spending a few hundred to repair.
After all, you rebuilt Bolo and you have a little while before you need it.
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As for considerations:
- Will Nat be transporting boxes of samples? If so you might want to look at a more Wagonny/Rav4ish vehicle.
- I would focus more on reliability, functionality, and appearance than MPG. I know you want high MPG, but your current vehicle is your trip/shopping/errand/etc vehicle. This is a work vehicle and backup everything else. MPG should not be one of your tier-1 concerns, it should be a tie breaker.
- Along the same note, you're really only going to be concerned about City MPG, aren't you?
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As for financing - do you qualify for any credit unions? They're typically the best. Financing a house would be risky right now (anyone seen the spector of stag of inflation, with high commodity prices and a weakening economy?), but I don't think you have too much to worry about for this level, especially if you look at used, or if new you're thinking financing for new only, you'd be able to put a good chunk down if you were going to buy used out of pocket, which would help a lot.
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Final note, to repeat... I know it goes against everything you usually preach, but remember why you're looking to buy the car in the first place... This isn't a personal vehicle, this is a business vehicle... Prioritize your needs based on business need, not personal philosophy :-D
Yeah
I like the ding idea. We actually used that idea in order to get our current car so cheaply, as it had (has) a dent in the front left above the wheel. It also had some rust, but that is not uncommon for Boston cars.
You had some good things to consider. There wouldn't be a lot of box transporting, but there may be some so that kind of eliminates the Smart Car. For reliability and functionality, the only cars I really think of as reliable are Toyotas and Hondas. Subarus to a slightly lesser extent. Toyotas and Hondas also tend to get the best gas mileage, so in this case I'm not sure we'd need to make a trade off of reliability for MPG, which is nice because I really want a gas miser.
But overall, I'm not sure how much we can separate our personal car philosophy from our business car needs. Obviously we need a more presentable car, but any new car we get would also be our everyday car, and when our current car dies the new car would become our primary vehicle. I completely agree with your points if this was a business only car, but since this will be only partly a business car (I didn't make this very clear in my original post), and will cost us a decent amount of money, we would like it to meet our criteria.
The decision for new vs used is so difficult. Used is about 50% cheaper, but doesn't come with a warranty and loses its resale value much faster. However, if I'm saving $8-10k, why would I need a warranty? And Nat and I tend to drive cars until they absolutely drop dead, so resale value shouldn't really be a big concern. I think I'm just pissed that the used cars I want cost such ridiculous amounts of money.
And maybe this isn't even an issue. Natalie said yesterday that she can just park around the block from the clients she visits!
New Cars
Hey,
If you get a new car, definitely go through a credit union for financing and make sure you get a rate that is lower than your high yield checking account (you have one of those right? You should!). That way, you're doing better with your money in the bank than by paying your car off early. It's easier to rationalize that way at least.
Second, see what the lowest cost you can get your new car for is through an auto-broker. With that price in hand, go to a dealer and see if they will beat that price for the exact (no really, get a VIN) same vehicle. If not, go with the auto-broker.
These are my tips for if you buy a new car.
I also wanted to say that all the Subaru's I've known have been very reliable. My friend's is about to hit 250k and runs like a dream.
Best of luck,
Aang
ah, the joys...
sorry for the late reply, i've been out of town.
having gone through this exact same situation just two months ago, i can give you a rundown on what i ended up doing.
The used car situation for Hondas, Toyotas and Subarurs in this part of the country is insane. I've heard those types have more reasonable resale prices in other parts of the country, but who has the time to go pick a car up in Kansas? When I started seeing slightly used 07 Hondas listed on Craigs List for HIGHER than the dealers prices for new ones, I decided that the used car thing was just not going to happen this time around since I did want one of the more durable (and popular brands). I justified buying my new Subarur Forrester with this- I drive cars until the wheels fall off. So yes, it does suck to have to pay for a new car right now but I have no doubt that I will get my money out of this car. I also selected a car that is very versitile (it can fit groceries, camping gear, xcountry skies, my bf, carseats, small children, a dog, etc, etc) so that I'll hopefully be able to handle most of what life may throw me in the next decade. And so far I'm very very happy with my decision. I love the car and I like knowing that it has been and will always be maintained the way that I want it to be.
As far as financing, I actually went with the dealer financing because their interest rate was lower than even my credit union. I have no idea what the rates are now, but I got 3% which is almost as low as my student loan. In my case, I wanted to keep my liquid funds liquid cause of the house so going with the monthly payment option was an easy decision. I'd also just paid off one of my school loans, so I simply redirected that payment towards a car and my monthly finances didn't change a bit. I set the payments up with an automatic deduction that is higher than the monthly bill, so the car will be paid off before the full term of the loan. Its does make me cry a little each month to make the payment, but I love the car enough that I definitely have no regrets.
The other tip I have is that I bought the '08 model even though the '09 model was out. Since the dealers wanted to move the older models, they were much more willing to negotiate so I ended up walking away with a price that was way below msrp. I assume most car have 09 models out now, so its probably a good time to be looking.
car shopping sucks. you have my sympathies. good luck
Thanks
This mirrors my own research. I also just spoke with a friend in Boston who had to buy a car and went through the exact same thing. He said the loan he got for the car was 0% for the first three years, and then increases to 3%. That's insane!
PS
If we were to buy a new car, we are considering the following:
- Smart Car (probably wouldn't work, too long of a wait time)
- Toyota Yaris
- Honda Fit
- Scion xD
- Toyota Corolla
- Honda Civic (though we'd prefer to get a different car, since we already have a civic)
- Subaru Impreza
- Mini Cooper
These are sorted roughly in order from cheapest to most expensive.