[youtube http://www.youtube.com/watch?v=BKyV8CTHeJ0&w=420&h=345]
I love cars. I think that’s why I’ve owned so many of them. I’m 31 years old and I have literally lost count of how many cars I have owned at one time or another. I remember having three cars at the same time shortly after I moved to Nashville.
The thing is, the total value of all three cars combined was about $5,000. The most expensive vehicle I’ve ever owned was a 1997 C1500 that I paid $14,000 for in 1999. The cheapest vehicle was a 1992 Saturn SC1 my brother got for $300.
Guess which one I lost more money on? The thing about a $300 or even a $3000 car is they’ve pretty much lost all the value they can. I had that truck for three years and got $6000 for it after having it on the market for about 4 months. I bought my 1999 Jeep Cherokee 4×4 with 95k on it for $4000 in 2008 and 50,000 miles later I can probably still get $2700 for it without even trying hard. $3500 if I detailed it. Even if you factor in the small repairs I’ve had to do I come out WAAAY ahead compared to someone who buys a new car.
A lot of times people say they need “nice car” because they are reliable. Well, all cars are reliable until the day they aren’t. If you find yourself in an unreliable $1000 car, go find a reliable $1000 car! You could get a different $1000 car every other month and STILL be ahead of most people since even a non-working car will easily bring $300. (Though I don’t advocate this as a plan. Buying a car is a PITA because of all the government-mandated crap you have to go through.)
One of the things we’ve sacrificed is newer cars. My wife drives an Accord worth probably $2500 and it’s exactly the car she wanted for the money we had at the time. I only pay cash for cars. If I need a new car and only have $1000, I buy an $800 car and then pay sales tax and tags. That car was a 1995 Plymouth Neon affectionately called Barney. I bought Barney in 2007, put 16,000 miles on him, and then sold him with non-working air conditioning for….$800. Barney was never in a shop, either. That was probably the best car deal I will ever get.
I say all that to say this: You should probably sell your car if you ever want to get out of debt. That $500/month payment is just a huge boat anchor around your neck, and that’s not even considering what your insurance cost is. Do you know how much insurance is on an $800 car? Like $18 a month. I think I paid $40/month when I was single and under 25, because all you need is liability.
And I gotta tell you, after driving sub-$3000 cars for almost ten years now, I would be uncomfortable driving a $30,000 SUV.
Do I plan on driving $3000 cars the rest of my life? NO! Hell I’m probably buying a $7,000 car later this year and I’ll be slightly paranoid driving that one! The rule about anything with a motor is that, combined, the total value of all vehicles (including boats, ATVs, motorcycles, etc) should be less than half your household annual income. And you should pay cash.
Will I ever buy a brand new car? YES! ABSOLUTELY! I have promised the wife that when we have a million dollars, she can get a brand new car. Since my retirement goal is somewhere north of $17 million, she’ll get that car eventually.
I usually own $1,000- cars but 3 times I’ve bought new.
The first time I drove that car until it died, an 84 Cougar. It was loaded up, V-8 and bad-ace. I didn’t maintain it very well so the engine was all gunked up after about 10 years and it wasn’t worth fixing.
The second time was an XTerra, and 02 I think. I loved that truck, but I like to drive like a maniac and didn’t like the way I couldn’t drive the way I wanted. I refused to be one of those idiots who drives their SUV like a car. Mostly because I didn’t feel like causing and/or being in an accident.
Then, I had a really good job so I got an 06 Mustang GT conv. new and now it’s paid off.
I’m taking care of this one so I fully expect to either be buried in it or pried out of it.
I don’t see a need to ever buy another car unless I get some ancient Jeep or other 4WD for 4-wheeling. I’ll just fix the Mustang when it needs and otherwise, drive it like it’s stolen.
How much work do you yourself do on your cars? We have absolutely no car-mechanical skills, so we pay cash for new or nearly new. I hate spending the money, but we just don’t have the knowledge to find the “good” used car, nor the ability to do even minor repairs. We do, however, drive our cars into the dirt.
I do some of my own stuff but I know my limitations. I can do basic parts replacement and will do so if the instructions I find on the internet don’t scare me. Like, for instance, if the instructions start off with “remove the engine” I don’t usually do the work myself :D. I do stuff like replacing sensors, spark plugs and wires, and little things like that. The most complicated thing I ever did was replace the intake manifold on a 95 jeep cherokee…and that ended up taking me 3 days. Reached the limit of my ability on that one.
Most of my mechanical ability came from necessity. When I was in college, I literally lived on $600 a month. That’s when I discovered that it’s really, really easy to replace an alternator–it’s like three bolts and two wires.
I have an upcoming post on some of the things I do when shopping for cheap cars.
When buying a used car, see how much work has been done on it.
If it has 40k miles and has a new alternator, starter, clutch…… it usually means it’s a problem car. You look for cars that have just been maintained well and haven’t required tons of work.
Cheapest Car I got was for $20. It didn’t run. Still was a fun car!
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