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Cars - A Basic Calculation
Old 12-11-2004, 10:21 AM   #1
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Cars - A Basic Calculation

I'm in the fifth year of a 99 Amigo. *I paid about $16,000 and it's been a great car - almost no repair bills. *So to keep the warranty going, I've probably spent $1,500 and will probably spend another $500 by 2006 when I'll sell it. *That's $18,000 in seven years or an average of about $2,500/year.

However, I think it's possible to buy a $14,000 low end Toyota, etc. and spend maybe $3,000 in 10 years and, if you keep it ten years, average only $1,700/year.

Now here's my question for all those of you who have purchased used cars (which I haven't done for awhile):

Can you beat $1,700-$2,500/year with a beater or even a car that's a few years old? *

I know a lot of you keep detailed records. *My experience in the past - and this is based on gut feel- is that you can't beat the above with a used car when you add up all the costs. *I'd love to hear from people who have some experience with this though.

Also, *what's the best average cost you could hope to achieve and what's your strategy.

Note: *I tried to go to Edmunds per the previous thread but got hit with a virus! *Somebody apparently hacked them...
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Re: Cars - A Basic Calculation
Old 12-11-2004, 10:40 AM   #2
 
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Re: Cars - A Basic Calculation

Good question and I don't know the answer. My records
are not good enough to check. However, doesn't it
depend to a large extent on how much driving you do?
I once thought my annual mileage in ER would go way down. If anything it is up.

JG
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Re: Cars - A Basic Calculation
Old 12-11-2004, 10:43 AM   #3
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Re: Cars - A Basic Calculation

Quote:
Good question and I don't know the answer. *My records
are not good enough to check. *However, doesn't it
depend to a large extent on how much driving you do?
I once thought my annual mileage in ER would go way down. *If anything it is up.

JG
Good point. *I've got 86,000 miles in a little over 5 years or about 16,000/year. *However, these are mostly freeway as I commute on the freeways...
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Re: Cars - A Basic Calculation
Old 12-11-2004, 10:51 AM   #4
 
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Re: Cars - A Basic Calculation

Quote:
Can you beat $1,700-$2,500/year with a beater or even a car that's a few years old?
On average very easily, but I'd be driving a pos.

It's certainly possible to buy used and achieve a low cost of ownership, but the risks are higher. I agree with your analysis, that's why I buy new and drive the same car for a long time.
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Re: Cars - A Basic Calculation
Old 12-11-2004, 10:54 AM   #5
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Re: Cars - A Basic Calculation

My first car was a 95 ford Mustang which I bought it in 2000 for $7200. I NEVER had any problems with the thing, despite an accident (which I fixed, and pocketed the $1200 from the insurance company), and an incident where I hydroplaned into a ditch.

When I got my first job in 2002, I had to move across the state to Yakima, so I needed something that wasn't RWD. I sold my Mustang to some 16 year old girl for ~$4500, and bought a 1992 Mitsubishi Expo AWD "van" (I was never sure if it was a van, or a wagon) for $1500. That sucker went through about a qt of oil every 3 weeks, but it never had a single problem. For some reason the AC stopped working (I later found out that the AC compressor belt had broken), and driving to work in 115 degrees just wasn't cutting it anymore...Since the car was so cheap, I sold it, and bought a new Subaru Forester XT...This new car is a love hate relationship...I LOVE to drive it (0-60 in 5.3s), but I hate paying for it. I haven't ever had a car payment before, and I have sworn that I never will again.

So to answer your question regarding the reliability of used cars- in my experience, they can be very reliable, as long as you do your homework on the car before you buy it. Check with carfax, research the reliability of the model, and see if the previous owner kept service records.

Mustang:
-$7200 *+$1200 +$4500 = $1500/2 years = $750 year = $62.50/mo

Mitsu Expo
-$1500 + $750 -$100 (oil) = $850/1.5 years = $566/year = $47/mo

Subaru Forester
~$450/mo


Edit: It's amazing after reading the bit about the Ford that I have a clean driving record, and low insurance rates.
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Re: Cars - A Basic Calculation
Old 12-11-2004, 11:01 AM   #6
 
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Re: Cars - A Basic Calculation

Couple of tips from my experience. I always buy used,
but almost never buy before I pay someone to check it out.
The only exception is if the dealer threw in a decent
warranty. I have a very sharp, very cheap one-man-
shop mechanic 7 miles from my door. I would guess
in just the last 3 years he has saved me $1000 per year
minimum, against what I would have paid at a dealership.

JG
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Re: Cars - A Basic Calculation
Old 12-11-2004, 12:06 PM   #7
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Re: Cars - A Basic Calculation

Quote:
Now here's my question for all those of you who have purchased used cars (which I haven't done for awhile):

Can you beat $1,700-$2,500/year with a beater or even a car that's a few years old?
Easily. Unfortunately I don't keep records so can't give a good estimate. Plus my last 2 cars I've bought buying newer cars and paid more.

To be fair, 3 of my 8 (historically--if I recall them all) cars were bought from family at good prices and with known history. 3 were shopped for carefully and with serveral models under consideration. One was a 1-year old truck that was my most expensive vehicle to own. One was a cute shiny fun car buy that ran for 6 months out of the 3 years I owned it (but damn it was fun to drive, and I sold it for as much as I paid for it).

My current car is a 1997 Lumina sedan I bought from my granddad after my grandmother passed away in 2001. I paid $6k for it and have had about $600 or so in 'big' repairs...guess about $1k including smaller repairs, towing and routine maintenance. So I'm under $2500 per year if the car blows up when I hit submit and the insurance company refuses to pay me due to a clause invovling submit buttons on the internet. Otherwise it looks like it's worth between $2k and $3k today; maybe more depending on the market and how well it cleans up.

Before 2001 I lived near family and did most mechanical work myself. I was also able to avoid towing and rental costs since family could push me back home and loan me a car or give me a ride. After 2001 I've had to use tow trucks and mechanics, but I think my experience working on cars myself lets me judge better whether or not I have a good mechanic. I don't break down much, especially in the past few cars. I don't remember the last time I changed a flat tire, but I did get stranded and needed a tow truck in September of this year when my fuel pump went out.

Also, I'm a big man and don't worry much about personal safety if/when I break down.

Another thing: On all cars besides my truck and my current car I paid liability insurance only. That reminds me I've been meaning to check into the savings of dropping full coverage on my Lumina.

I'm not sure if I'm really lucky or really good or what. But I seem to pay less for cars than anyone else I know. I'm sure I can beat your costs, but I don't know if everyone can.

EDIT: Correction: My cute red shiny convertible fun car actually ran the entire 3 years but had a broken crossmember for all but 6 months of the 3 years I owned it. When I finally got around to paying somebody to weld it I was surprised how cheap it was. D'oh! I also replaced the top and the head gasket and some ignition components. Overall a cheap car still.

In addition to my cheap driving costs I have never had an accident that's my fault but have had a few that I got settlements on and pocketed the money and drove a dented car. I think I made a profit on my first car that way.

EDIT 2: The Lumina didn't blow up.
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Re: Cars - A Basic Calculation
Old 12-11-2004, 12:26 PM   #8
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Re: Cars - A Basic Calculation

I bought my Lumina used nearly two years ago for $6000 and have put $850 in repairs. I drive more than twice what you do so if I bought a new car it would be dead in six years at about 170,000 miles. I tend to buy larger common cars that havea good reputation for reliability.

I am currently $3425 per year and the car should be good for another year or two.

My previous car was a Fifth Avenue that I bought for $2200 and drove for two years with about $500 in repairs. *It was a beater.

Before that was an experiemnt in fuel economy that turned expensive. I figure it cost me $5500 to drive a Jetta Diesel for a year. *

MY cousin has a little 86 Buick with a 2.5 in it that is unkillable. He has had it for six years and paid $500 for it. Costs little to maintain Real Beater.


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Re: Cars - A Basic Calculation
Old 12-11-2004, 12:46 PM   #9
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Re: Cars - A Basic Calculation

Quote:
However, I think it's possible to buy a $14,000 low end Toyota, etc. and spend maybe $3,000 in 10 years and, if you keep it ten years, average only $1,700/year.
This is more or less what I have done and am doing.

I purchased a new 1995 Toyota Corolla on 2/14/1995 for $15,570. I have put only $300 in repairs into it (bad starter contacts, refurbished the starter). Round numbers I have it worth $4,460 today. That means a net cost of $11,410 over 9.82 years, or $1161.51 per year.

The car is still in perfectly good shape, has ~94K miles on it, and will probably go another 10 years easily. My strategy is to keep the car for a long long time.

The above does exclude other costs, such as maintenance (batteries, tires, brakes, windshield wipers, oil changes), insurance (liability only now, but used to have comp/coll), interest costs on the car loan (I had a 4 year loan), taxes (tags, registration, emissions tests, etc.), and gas.

malakito
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Re: Cars - A Basic Calculation
Old 12-11-2004, 04:01 PM   #10
 
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Re: Cars - A Basic Calculation

If my sense of style would permit it, we would drive "beaters" until they died and then buy
more "beaters". Can't do it.

JG
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Re: Cars - A Basic Calculation
Old 12-11-2004, 06:56 PM   #11
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Re: Cars - A Basic Calculation

Thx for all the replies guys. You all have given me a ton of motivation and saved me a lot of money. You've all got me thinking...

One thing I'm thinking is: why sell the Amigo in two years
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Re: Cars - A Basic Calculation
Old 12-11-2004, 06:56 PM   #12
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Re: Cars - A Basic Calculation

Thx for all the replies guys. You all have given me a ton of motivation and saved me a lot of money. You've all got me thinking...

One thing I'm thinking is: why sell the Amigo in two years
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Re: Cars - A Basic Calculation
Old 12-12-2004, 12:34 AM   #13
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Re: Cars - A Basic Calculation

Interesting thread. I haven't researched your numbers, but I'd say for someone who is not mechanical and drives a lot, your numbers are probably reasonable. As for getting better numbers, as has been said, it's not a problem. Most of my cars have been quite a bit older, but all of them were presentable (no or little rust, except 1) and ran well. Disclaimer again is that I do all of my own work, and swapping/rebuilding engines/transmissions/etc is not an issue with me, and has saved me tons. One of my more recent cars was an older Chrysler 5th ave from florida. No rust, a newer paint job, and only 30k miles on it (1988, RWD). I paid about $1500 for the car if memory serves correctly, drove it for about 3 years, put tires on it ($250 for all 4 !!! love those 14" tires !) and not much else. Did some work to fix some basic stuff like power windows, but that was my time, not money. Drove it about 50k miles, and sold it for $500 to a friend of the family who needed his first car. I've had several others like this. The cars aren't flashy, they are always rather old, but they are presentable and get the job done. Of course, these are only my daily drivers, I have a musclecar convertible to feed my male ego......!!!

-Pan-
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Re: Cars - A Basic Calculation
Old 12-12-2004, 04:29 AM   #14
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Re: Cars - A Basic Calculation

Are you including the cost of insurance, registration and gas in the above calculations? or just repairs and maintenance?

I don't have good records on car maintenance expenses so I can't add any real data to the thread. A quick estimate:

Used 92 Taurus Wagon in 1996: $8,000
Oil changes, tune ups and tires, average: $300 to $400 per year
Major repairs, total: $3,000? (maybe less than that).

Annual expenses: about $1700 per year

This does not include gas or interest expense. We have put about 100,000 miles on it, mostly back when I used to commute, plus a few cross country trips.

If I needed the car to commute, it would not be reliable enough or presentable enough due to paint peeling and rust (it was a very nice car until about 2002). I walk or bicycle to work. The car is very handy to have for shopping and running errands.

My strategy at this time is to continue to drive it until I think it will have major problems and then junk it. It was up for sale last summer and no one even looked at it. Eventually there will have to be a replacement and I will have to go through the difficult process of choosing another vehicle.

I would like to buy a new Scion xA and drive it for a long time, but I also need to be able to tow a small boat and utility trailer, and I'm not sure the Scion can handle it.
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Re: Cars - A Basic Calculation
Old 12-12-2004, 04:57 AM   #15
 
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Re: Cars - A Basic Calculation

Slightly off topic, but still on vehicles.

I have been thinking for about a year that I might replace one of our vehicles. We have a 1991 Jeep
Cherokee purchased in 1998 for $8,000 (now at
206,000 miles) and a 1997 Dodge Ram pick up
purchased in 2003 for $6,500 (now at 148,000 miles).

The truck looks good but the Jeep is starting to show its age. Aside from not wanting to part with the cash
(and go through the hassle of buying something)
these vehicles work well for us. The Jeep is great in
bad weather and a pick up truck is real handy.
Mine has a monster V-8. Lousy on gas, but I could tow
the house. Whenever I think about not having a pick
up it's hard to imagine doing without, for hauling and
towing. For trips with the dogs or a bunch of luggage
we use the Jeep, but I don't trust it for long trips any more. Bottom line is this combination seems to be about
right for us now. I never was a big Jeep/Chrysler fan
before. I am now.

JG
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Re: Cars - A Basic Calculation
Old 12-12-2004, 06:24 AM   #16
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Re: Cars - A Basic Calculation

Quote:
Are you including the cost of insurance, registration and gas in the above calculations? or just repairs and maintenance?

I don't have good records on car maintenance expenses so I can't add any real data to the thread. A quick estimate:

Used 92 Taurus Wagon in 1996: $8,000
Oil changes, tune ups and tires, average: $300 to $400 per year
Major repairs, total: $3,000? (maybe less than that).

Annual expenses: about $1700 per year

This does not include gas or interest expense. *We have put about 100,000 miles on it, mostly back when I used to commute, plus a few cross country trips.

If I needed the car to commute, it would not be reliable enough or presentable enough due to paint peeling and rust *(it was a very nice car until about 2002). *I walk or bicycle to work. *The car is very handy to have for shopping and running errands. *

My strategy at this time is to continue to drive it until I think it will have major problems and then junk it. *It was up for sale last summer and no one even looked at it. *Eventually there will have to be a replacement and I will have to go through the difficult process of choosing another vehicle.

I would like to buy a new Scion xA and drive it for a long time, but I also need to be able to tow a small boat and utility trailer, and I'm not sure the Scion can handle it.
I wasn't including insurance or registration. Of course, you'll save a little with the older cars with this...
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Re: Cars - A Basic Calculation
Old 12-12-2004, 06:29 AM   #17
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Re: Cars - A Basic Calculation

If I had a house, one strategy I'd enjoy doing is buying two older classic cars - I've owned two 66 Mustangs - and do all the work myself. *If I owned these for 10 + years, which I would enjoy doing in the case of a Mustang, I wouldn't mind doing all the work. *These kind of cars are actually fun to work on. *I can't stand trying to do anything on the modern cars - you always have to fight through 5 layers of emissions crap just to get to the engine! *(I wouldn't do engine block work but I'm not afraid of most other things.)

Why two classics? *Cuzz you can't get parts often and have to wait two weeks or search junk yards or order from CA, etc.

But I think if I owned these for 15/20 years I could come close to the Toyota estimate (or something like Marshac's) above which I would guess would come out the lowest...
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Re: Cars - A Basic Calculation
Old 12-12-2004, 06:36 AM   #18
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Re: Cars - A Basic Calculation

Quote:
My first car was a 95 ford Mustang which I bought it in 2000 for $7200. I NEVER had any problems with the thing, despite an accident (which I fixed, and pocketed the $1200 from the insurance company), and an incident where I hydroplaned into a ditch.

When I got my first job in 2002, I had to move across the state to Yakima, so I needed something that wasn't RWD. I sold my Mustang to some 16 year old girl for ~$4500, and bought a 1992 Mitsubishi Expo AWD "van" (I was never sure if it was a van, or a wagon) for $1500. That sucker went through about a qt of oil every 3 weeks, but it never had a single problem. For some reason the AC stopped working (I later found out that the AC compressor belt had broken), and driving to work in 115 degrees just wasn't cutting it anymore...Since the car was so cheap, I sold it, and bought a new Subaru Forester XT...This new car is a love hate relationship...I LOVE to drive it (0-60 in 5.3s), but I hate paying for it. I haven't ever had a car payment before, and I have sworn that I never will again.

So to answer your question regarding the reliability of used cars- in my experience, they can be very reliable, as long as you do your homework on the car before you buy it. Check with carfax, research the reliability of the model, and see if the previous owner kept service records.

Mustang:
-$7200 *+$1200 +$4500 = $1500/2 years = $750 year = $62.50/mo

Mitsu Expo
-$1500 + $750 -$100 (oil) = $850/1.5 years = $566/year = $47/mo

Subaru Forester
~$450/mo


Edit: It's amazing after reading the bit about the Ford that I have a clean driving record, and low insurance rates.
Are Mustangs known for being that reliable? Or were you just on one side of the bell curve?
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Re: Cars - A Basic Calculation
Old 12-13-2004, 11:16 AM   #19
 
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Re: Cars - A Basic Calculation

I could get the cost down easily but do you really want to drive a beater? I don't but my kids are thrilled that we provide them with beater cars. The big savings for us was in insurance cost not just the car payment. We had two teen drivers and because of fender benders we were put on in a high-risk group. The old cars really were beaters.

We bought two used cars 5 years ago when my dd started driving. One a 89 Honda Accord for $3400 and the other a 90 Toyota Camery for $3300; both cars had about 130,000 miles.

I do not have accurate records because we sold the cars but - the Honda had about $1500 worth of repairs -timing belt, axils, try at fixing the AC. My dh does the breaks so we are not paying a machanic for that repair. We drove it for 4.5 years so it cost about $85 a month but did not have AC the last 2 years - but it was my ds by then and he was just lucky to have a car. We sold this car to a nephew last year for $300 (it was worth more) and he is still driving it.

The Toyota has a very similar story since we put a timing belt in it last month for $500 it brought the repairs up to about $1500 it still needs it axils replaced but we tried to fix the AC on it twice. My dd drove it for 5.5 years (4 without AC) and we sold it to a neice for $300 yesterday (it was worth more). The cost to us was $68 about month.

We replaced the Accord with a $5000, 98 Honda civic with 105,000 miles. We feel it should last at least 7 years until my ds gets out of college. We replaced the Camery with a $4400, 97 corolla with 81,000. It should last for 6 years until my dd graduates law school and pays her loans back. The price of both "newer" cars should also be less than $100 a month.
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Re: Cars - A Basic Calculation
Old 12-13-2004, 03:48 PM   #20
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Re: Cars - A Basic Calculation

Interesting thread.

My approach to cars is to find a one or two year used car, preferebly with about half the original warranty still left on it, and shop for "out of favor" but still fairly reliable vehicles. This means shopping for a minivan as they can be had for much less than something that looks like an SUV (not to mention that most SUV's would be a downsize from a minivan, less passengers, less cargo, much more gas).

Up until this past year, I always had a beater of a pickup, but sold it before we moved this summer. Sure miss it.

RE2boys
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