Author Topic: Our Accidental Car Costs Cut  (Read 13081 times)

Retired To Win

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Our Accidental Car Costs Cut
« on: October 31, 2014, 11:50:39 AM »
Dumping the monthly payment on a late-model fancy-schamnzy car has to be one of the most important steps in anyone’s journey to financial independence.  Ten years ago, we took that step, literally, by accident.

In the year 2000, we bought a two-year-old 1998 Subaru Forester on payments.  In 2003, with the car finally paid off, we were just starting to feel and enjoy freedom from those payments when the car got totaled in a freak accident.  With the insurance settlement check in hand, it was time to buy another car.  And so we asked ourselves: what should we do?

Should we again buy a two-year-old (2001) car and re-obligate ourselves to monthly payments?  Or, since we were earning more than we were in 2000, should we actually upgrade our choice or age of car (and thereby also "upgrade" our car payment)?  We could have.  But we chose not to.

The fact is, NOT having a monthly car payment felt too good to give up.  Both my wife and I felt the same way.  Why go back to car payments?  Before the accident, we were perfectly satisfied with our five-year-old Subaru Forester.  What had changed?  Nothing!  We agreed: we would still be perfectly happy with a five-year-old Subaru Forester.  And so we took that insurance settlement check and bought one for cash.

After we bought that second 1998 Subaru, every month thereafter we patted ourselves on the back as we used the freed-up cash from not having a car payment to knock down our other installment debt at an accelerated pace.  And THAT made us feel good -- which compounded the positive reinforcement from our "buy an older car" decision.

Two years later, when changed circumstances demanded that we each have a separate vehicle, we did not have to ask ourselves how to proceed.  We knew.  With proper maintenance, that second 1998 Subaru -- at that point 7 years old -- had performed like a champ.  Driving an older vehicle DID work.  So the 1998 Subaru became my wife’s car and I acquired a 1996 Dodge Dakota pickup truck.  And, again, no car payment required.

Now, it is 2014 and we STILL drive those two vehicles.  My 1996 Dodge Dakota has just over 138,700 miles on the odometer.  My wife's 1998 Subaru Forester has just under 237,700 miles on its odometer.  They both STILL perform like champs.  With continued proper maintenance, I can't see why/when this will change.  And those vehicles have saved us a boatload of money in car payments, insurance premiums, and maintenance costs.  Not to mention that the last of our installment debt got paid off almost 2 years ago, thanks in great part to our no-car-payments, drive-an-older-car lesson that we learned following that one-car freak accident eleven years ago.

Needless (?!) to say, driving older cars has made a monumental  difference in our journey to financial independence.  Even at a modestly estimated $800 a month to cover the loans and higher operating costs of 2 late-model cars, having -- and replacing -- 2 such cars periodically would have forced us to amass an additional $240,000 before we could declare financial independence.  And that would have meant waiting 5 or 6 more years before becoming financially independent.  But we did not have to.

What about you?  Are you reaping the benefits of driving a paid-off, older model vehicle?  Or is a monthly car payment still holding you back from attaining financial independence?
« Last Edit: November 16, 2014, 05:44:17 AM by Retired To Win »

gimp

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Re: Our Accidental Car Costs Cut
« Reply #1 on: October 31, 2014, 12:26:28 PM »
2000 model. Gonna drive it till the wheels fall off, then put them back on. It's 15 or so years old but it still feels quite like new - taking care of the inside helps.

It does cost a bit in maintenance. Parts aren't super common anymore and it's a finicky beast that needs more servicing than your average econobox.

But it's a common refrain here. Everybody seems to do the same.

ImCheap

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Re: Our Accidental Car Costs Cut
« Reply #2 on: October 31, 2014, 12:33:25 PM »
I think its better to talk about miles rather than years old, not all the time but most of the time all I care about is miles. I'm lucky to get 10 years out of a car do to the shear amount of miles we put on.

But I agree its nice to not have payments of any kind, I also like a tad older car just because the price of the tags/insurance/etc. Have not had a car payment or house payment for a number of years, its good to be king!

shotgunwilly

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Re: Our Accidental Car Costs Cut
« Reply #3 on: October 31, 2014, 12:41:50 PM »
I've put 167,000 miles on my 2006 vehicle in 8.5 years.  Still running like a champ.

thd7t

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Re: Our Accidental Car Costs Cut
« Reply #4 on: October 31, 2014, 12:51:11 PM »
Been driving a 1993 Subaru Loyale for a little over 10 years.  As it's aged, I've driven it less, to be conservative, which lowers costs even further.  Just another 3 years of payments to go! (Joking about the payments-bought cash.  Don't kill me!)

Gone Fishing

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Re: Our Accidental Car Costs Cut
« Reply #5 on: October 31, 2014, 01:18:58 PM »
My paid for '97 Civic (bought in 2003) was hit around 2008 causing $1,700 in cosmetic, but not mechanical damage.  I took the check, bought a $5 can of spray paint and a $30 headlight and Vanguard index funds with the rest. 

The way I figured it was,  I "partially sold" my car before I was done with it.  I paid $6600 for the car in 2003, got $1665 for it in 2008, and $800 for it (not running) in 2010 so my total cost was $4135 for a car that I drove for 7 years and put 127k on with virtually no repairs other than wear items.

I can guarantee I wouldn't have been able to $2500 out of it when I sold it if it hadn't been hit.  So I guess I "accidentally" saved $1000-$1500 or so on my car when it was hit.  That stock I bought with the insurance money is probably worth around $3000+ now. 

Louisville

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Re: Our Accidental Car Costs Cut
« Reply #6 on: October 31, 2014, 01:29:45 PM »
I cannot comprehend why someone would buy a car on credit in the first place.

frugalnacho

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Re: Our Accidental Car Costs Cut
« Reply #7 on: October 31, 2014, 01:32:00 PM »
My car is paid off.  My wife leased a car before we got married, and didn't put a lot of miles on it.  So when the lease was finally up she only had 22k of the allowable 36k in mileage, and the price was already built into the lease contract.  Since she already paid for those additional 14k miles with lease payments, the car was a sweet deal to purchase (we got it for $3-4k less than if we had purchased the exact same used car from a dealership).  We had the cash to buy it outright, but our credit union offered us a loan at 1.7%*, so we opted to invest the money and put the $169 car payment on auto pilot.

*It's either 1.7 or 1.9%...I can't remember.  Whatever the exact number is is irrelevant.

frugalnacho

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Re: Our Accidental Car Costs Cut
« Reply #8 on: October 31, 2014, 01:37:00 PM »
I cannot comprehend why someone would buy a car on credit in the first place.

People are told and encouraged to.  I was actually advised that I should be spending a certain percentage of my income on car payments when I was younger.  Thankfully I was smart enough to think for myself, but many aren't/don't.

Many people also don't plan ahead and save money.  If they have any excess money they spend it on something, and when their car inevitably shits out they have $0 set aside for a new car.  My coworker just had his '97 ranger take a shit on him, and had to take a loan out to buy a new car.  Of course a slew of questions came to my mind: You were driving 17 year old truck with 200+k miles on it, and you DIDN'T set aside money for a new car? Did you think this one would last forever?  Where have all those overtime checks gone to?  Why have you been buying beer and weed, but not setting aside money for a new car?  etc.

RelaxedGal

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Re: Our Accidental Car Costs Cut
« Reply #9 on: October 31, 2014, 01:42:10 PM »
It’s now 11 years later, and we STILL have that now-15-year-old car.  It has performed like a champ.  We are still really happy with it.  And it has saved us a boatload of money in car payments, insurance premiums, and maintenance costs.

What about you?  Are you reaping the benefits of driving a paid-off, older model vehicle?  Or is a monthly car payment still holding you back?

I'm driving a 2005 Scion xA, manufactured in October 2004 (Happy 10th birthday!) with 132,000 miles.  I bought her brand new after totaling my 1996 Eagle Talon at 120,500 miles and 9 years old.  The xA has been paid off for 5 years. 

Would I go back to payments?  Only if the interest is low so I can invest the cash.

What I'm having a harder time with (and have been meaning to start a thread on) is the psychology of owning a 10 year old, 100,000+ mile car.  The rear floor rusted out this summer, thanks to some leakage around the windshield.  I'm not sure I buy that reasoning, so I keep waiting for the other shoe to drop and more rust to reveal itself.  I haven't driven a 10+ year old car since I got a desk job shortly after college.  All of those previous 10+ year old/150,000+ mile cars died on me in unpleasant ways (except for the 1983 Buick Century, it refused to die but I sold it because the paint got too ugly).  How do you trust an older car? 

orbix

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Re: Our Accidental Car Costs Cut
« Reply #10 on: October 31, 2014, 02:11:31 PM »
What I'm having a harder time with (and have been meaning to start a thread on) is the psychology of owning a 10 year old, 100,000+ mile car.  The rear floor rusted out this summer, thanks to some leakage around the windshield.  I'm not sure I buy that reasoning, so I keep waiting for the other shoe to drop and more rust to reveal itself.  I haven't driven a 10+ year old car since I got a desk job shortly after college.  All of those previous 10+ year old/150,000+ mile cars died on me in unpleasant ways (except for the 1983 Buick Century, it refused to die but I sold it because the paint got too ugly).  How do you trust an older car?

It depends entirely on the car. It sounds like you may or may not have stayed up on repairs as they came up, based on a floor rusting out. That's not something that happens overnight. We own a 2003 VW Golf TDi with 198k on it that's been an absolute champ- only a handful of repairs that weren't normal maintenance (maybe $500, if that?) over the life of the car. By paying attention to the car when doing the preventative stuff, my wife and I feel completely confident taking the car for cross-country road trips at this point.

Having a garage (or similar protected storage) can make a huge difference, as can the area in which you live. If you have a lot of snow and ice (and thus salt on the roads), that can take a toll *much* faster than any amount of mileage. It really seems to come down to the particular car and how vigilant you are with preventative maintenance. The better you treat it (within reason, obviously), the longer it'll last.

Gone Fishing

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Re: Our Accidental Car Costs Cut
« Reply #11 on: October 31, 2014, 02:35:31 PM »
What I'm having a harder time with (and have been meaning to start a thread on) is the psychology of owning a 10 year old, 100,000+ mile car.  The rear floor rusted out this summer, thanks to some leakage around the windshield.  I'm not sure I buy that reasoning, so I keep waiting for the other shoe to drop and more rust to reveal itself.  I haven't driven a 10+ year old car since I got a desk job shortly after college.  All of those previous 10+ year old/150,000+ mile cars died on me in unpleasant ways (except for the 1983 Buick Century, it refused to die but I sold it because the paint got too ugly).  How do you trust an older car?

It depends entirely on the car. It sounds like you may or may not have stayed up on repairs as they came up, based on a floor rusting out. That's not something that happens overnight. We own a 2003 VW Golf TDi with 198k on it that's been an absolute champ- only a handful of repairs that weren't normal maintenance (maybe $500, if that?) over the life of the car. By paying attention to the car when doing the preventative stuff, my wife and I feel completely confident taking the car for cross-country road trips at this point.

Having a garage (or similar protected storage) can make a huge difference, as can the area in which you live. If you have a lot of snow and ice (and thus salt on the roads), that can take a toll *much* faster than any amount of mileage. It really seems to come down to the particular car and how vigilant you are with preventative maintenance. The better you treat it (within reason, obviously), the longer it'll last.

We are not in salt country, but around here you can reasonably expect a Honda or Toyota to give you 150k or around 10 years with only basic maintainance (oil, tires, maybe a battery). A few things tend to pop up around 150k-200k range and the big stuff starts to hit around 200k+.  The cars seem to do a bit better than vans/suvs. We have two Toyotas at the moment and I am hoping to get 250k+ out of each of them before the repairs start to exceed the value of the vehicle (usually when I call it quits), but I figure I am doing good if I can get past 200k. 300k+ is certainly doable but is probably going to cost.  This is all assuming you put on 15-20k a year.  If you are a good mustachian and only drive 1-5k a year the years will get you before the miles do.  We had a '94 Ford Taurus in the early days that joined the fix or repair daily club before it ever even hit 100k mile/7 year mark.

Glenstache

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Re: Our Accidental Car Costs Cut
« Reply #12 on: October 31, 2014, 03:33:13 PM »
My subaru more or less died recently (car lasted much less time than I wanted, and ended up being a POS. Total cost of ownership ended up around 40 cents a mile). I splurged on a 2001 Rav4 with 148k miles. Feels like a new car to me and I should have it for quite some time. The $6k purchase price was paid cash on hand. I hope to get the cost per mile on this one into the low 30-cents.

alsoknownasDean

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Re: Our Accidental Car Costs Cut
« Reply #13 on: October 31, 2014, 05:55:00 PM »
I don't think I've owned a car with less than 90,000 miles on it (well one of my cars I bought at 144,000km, so that's about 90,000miles). :)

If I do end up buying anytime soon, I'll be looking at ten or more years old. I figure a car's typically good for 250-300,000km, and I used to drive about 14000km a year. If I buy something with 200,000km on it, it still has probably four or five years left. Might see a few things pop up around the 200k mark though.

I still see 90s cars around here fairly regularly.

Retired To Win

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Re: Our Accidental Car Costs Cut
« Reply #14 on: November 03, 2014, 04:06:41 PM »
... I agree its nice to not have payments of any kind, I also like a tad older car just because of the price of the tags/insurance/etc. Have not had a car payment or house payment for a number of years, its good to be king!


You are so right about how nice it is not to have to make monthly car payments.

We drive a 1998 Subaru Forester (hers) and a 1996 Dodge Dakota (mine).  And they STILL perform like champs.

Needless (?!) to say, driving those older cars has made a monumental  difference in our journey to financial independence.  Even at a modestly estimated $800 a month to cover the loans and higher operating costs of 2 late-model cars, having -- and replacing -- 2 such cars periodically would have forced us to amass an additional $240,000 before we could declare financial independence.  And that would have meant waiting 5 or 6 more years before becoming financially independent.  But we did not have to.

What about you?  Is your car ownership strategy helping you reach financial independence... or is it standing in your way?
« Last Edit: November 11, 2014, 06:10:57 AM by Retired To Win »

Glenstache

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Re: Our Accidental Car Costs Cut
« Reply #15 on: November 03, 2014, 05:34:47 PM »

What about you?  Is your car ownership strategy helping you reach financial independence... or is it standing in your way?

This. Once I started thinking of things in this way, the facepunches were unbearable every time I looked at the expensive late-model pickup I was driving at the time. I got rid of it post-haste, started on the old-car path and haven't looked back.

2Birds1Stone

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Re: Our Accidental Car Costs Cut
« Reply #16 on: November 03, 2014, 09:08:57 PM »
I purchased a new to me 2004 Nissan Sentra in march 2011 with only 13,000 miles on it for $7,600 cash. So far its been oil changes and 2 tires. This month she needs 2 more tires and an O2 sensor and a Mass Airflow Sensor to pass inspection, all in all its been a great purchase.

clevelandc

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Re: Our Accidental Car Costs Cut
« Reply #17 on: November 04, 2014, 06:52:52 AM »
I cannot comprehend why someone would buy a car on credit in the first place.

My cousin is a financial planner, and she doesn't think her clients could ever not have a car payment. In fact, one of her biggest complaints about Dave Ramsey is that he says to not have a car payment, she doesn't think it is reasonable. That makes me cry a little inside.

rubybeth

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Re: Our Accidental Car Costs Cut
« Reply #18 on: November 04, 2014, 07:11:05 AM »
Absolutely, not having car payments is a huge benefit. My DH works with young people, both as clients and co-workers, and the number one piece of financial wisdom he attempts to share with all of them is NO CAR PAYMENTS, EVER.

DH and I both grew up in families where cars were bought with cash, so when we got married and it came time to replace unsafe vehicles, our budget was what was in the savings account and we shopped with help of Consumer Reports ratings.

We also barely drive (we put less than 5,000 miles on each vehicle each year) but two cars are kind of a necessity in our climate (Minnesota) with our opposite schedules, so gas is also a pretty low expense each month (like one tank per vehicle) and driving used cars keeps our insurance really low, as well. We have a 2005 Ford Focus and a 2001 Acura TL--neither of them look all that old, but the Ford is 10 years old and the Acura is 15. These cars are much nicer than we really need, but they are safe and do well in the snow/ice we experience in the winter.


tmac

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Re: Our Accidental Car Costs Cut
« Reply #19 on: November 04, 2014, 07:18:05 AM »
Absolutely, not having car payments is a huge benefit. My DH works with young people, both as clients and co-workers, and the number one piece of financial wisdom he attempts to share with all of them is NO CAR PAYMENTS, EVER.

My parents have never had a car loan, and have always had used cars (with the exception of their current Prius). My grandmother never even had a car -- she only took public transportation. I wish I'd followed suit.

As of this morning, for the first time in my adult life I don't have a car payment. Never again.

guitar_stitch

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Re: Our Accidental Car Costs Cut
« Reply #20 on: November 04, 2014, 07:35:41 AM »
The thought of car payments...  all that wasted money on interest....  for something that is depreciating... ugh.

The last vehicle I bought on credit was my 2006 Honda Element (which is still running strong at 175,000 miles).
I paid cash for my 1984 Dodge D150 (For pulling the band trailer.  It makes me money.)
My backup vehicle is a car I just bought.. 1996 Saturn SL2 with 171,000 miles.  A little maintenance and I'm loving it.

mxer54

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Re: Our Accidental Car Costs Cut
« Reply #21 on: November 04, 2014, 08:07:09 AM »
We have and need two cars...Both are paid off.  One is a Honda and will run forever, the other is a Ford which wont, but I just replaced the engine in it, so thats going to last a good long time too...I never want another car payment.

RWD

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Re: Our Accidental Car Costs Cut
« Reply #22 on: November 04, 2014, 09:00:16 AM »
I never had a car payment until last year. The dealer offered us an interest rate significantly below our mortgage rate. So we took the financing offer and dumped the purchase price into our mortgage instead.

powersuitrecall

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Re: Our Accidental Car Costs Cut
« Reply #23 on: November 04, 2014, 11:40:35 AM »
I took a $5000 loan for my very first car (93 civic Si - what a great car that was!).  I paid that loan off as early as I could. Although I've had many cars since, I haven't once opted for financing.  I just can't do it.

I have a friend, however, that has had a car payment since I purchased that '93 civic way back in 1995.  He just keeps on trading in cars and hopes that his payment won't go up too much.  Yikes!

Retired To Win

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Re: Our Accidental Car Costs Cut
« Reply #24 on: November 08, 2014, 06:20:07 AM »
2000 model. Gonna drive it till the wheels fall off, then put them back on. It's 15 or so years old but it still feels quite like new - taking care of the inside helps.

It does cost a bit in maintenance. Parts aren't super common anymore and it's a finicky beast that needs more servicing than your average econobox...


Maybe we have been lucky, or maybe we're reaping the rewards of really, really consistent maintenance on our 1998 Subaru Forester and 1996 Dodge Dakota.  Either way, our maintenance and repair costs have been very reasonable so far.  I budget $100 a month into my basic living expenses for my Dodge Dakota, and I find that I don't get to spend the $1200 a year that allows me.

Knock on wood!

What do other older-car drivers have to say about their maintenance and repair costs?

falcondisruptor

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Re: Our Accidental Car Costs Cut
« Reply #25 on: November 08, 2014, 05:02:02 PM »
Absolutely, not having car payments is a huge benefit. My DH works with young people, both as clients and co-workers, and the number one piece of financial wisdom he attempts to share with all of them is NO CAR PAYMENTS, EVER.

My parents have never had a car loan, and have always had used cars (with the exception of their current Prius). My grandmother never even had a car -- she only took public transportation. I wish I'd followed suit.

As of this morning, for the first time in my adult life I don't have a car payment. Never again.

Congrats on no car payment!

We were recently gifted a car from my in-laws, but we had bought our car that we're selling now cash (well, cash from pockets and maxing out our debit card daily limits, we were like a $1.50 short, but they laughingly let it slide ).  We still have a car payment, but it's one that we pay to ourselves.

Retired To Win

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Re: Our Accidental Car Costs Cut
« Reply #26 on: November 12, 2014, 05:59:44 AM »
I think it's better to talk about miles rather than years old; not all the time but most of the time all I care about is miles. I'm lucky to get 10 years out of a car due to the sheer amount of miles we put on...

The number of miles driven does (may?) make a difference as far as the frequency of maintenance and repair expenses go on a car.  But I am not convinced that there is an actual mechanical utility endpoint to a properly maintained vehicle.  Even before I tuned into vehicle frugality (or, better said, vehicle rationality), I once found it more financially advantageous to pay for the rebuilding/replacing of a badly neglected car engine rather than replacing the car itself.

My 1996 Dodge Dakota has just over 138,700 miles on the odometer.  My wife's 1998 Subaru Forester has just under 237,700 miles on its odometer.  And, as I stated earlier in this thread, both vehicles continue to perform like champs.  With continued proper maintenance, I can't see why/when this will change.  (All hail, Jiffy Lube!)

In your experience, how long (miles or years) have your past vehicles lasted?  What exactly led you to replace them?

RWD

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Re: Our Accidental Car Costs Cut
« Reply #27 on: November 12, 2014, 08:17:23 AM »
I think it's better to talk about miles rather than years old; not all the time but most of the time all I care about is miles. I'm lucky to get 10 years out of a car due to the sheer amount of miles we put on...

My 1996 Dodge Dakota has just over 138,700 miles on the odometer.  My wife's 1998 Subaru Forester has just under 237,700 miles on its odometer.  And, as I stated earlier in this thread, both vehicles continue to perform like champs.  With continued proper maintenance, I can't see why/when this will change.  (All hail, Jiffy Lube!)

In your experience, how long (miles or years) have your past vehicles lasted?  What exactly led you to replace them?

I'm impressed your vehicles lasted that long going to Jiffy Lube. Just a few reasons to never go to Jiffy Lube:
http://carbuying.jalopnik.com/dont-gamble-with-your-oil-change-1607699514
http://www.scpr.org/news/2013/05/13/37244/investigation-7-out-of-11-jiffy-lubes-scam-custome/
http://www.reddit.com/r/Justrolledintotheshop/comments/21nl6k/fuck_jiffy_lube/
http://www.reddit.com/r/Justrolledintotheshop/comments/221gzq/goddammit_jiffy_lube/


I have never sold a vehicle that was younger than 10 years old. Reasons I have sold my various vehicles:
 - accident
 - planned temporary use
 - rod knock repair cost would exceed value of vehicle
 - 22-years old vehicle, just desired higher reliability and fuel economy

Retired To Win

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Re: Our Accidental Car Costs Cut
« Reply #28 on: November 16, 2014, 05:37:05 AM »
My paid for '97 Civic (bought in 2003) was hit around 2008 causing $1,700 in cosmetic, but not mechanical damage.  I took the check, bought a $5 can of spray paint and a $30 headlight and Vanguard index funds with the rest...

Heh, heh... I love that.

In our case, it's been a spray can of white paint for the Dodge Dakota, a color-matched little bottle of touch-up paint for the Subaru, a piece of color-complemented duct tape to reaffix the Subaru's right hand side mirror, and so on.

None of it bothers us.  We've been laughing all the way to the bank for years.

Any other tales out there of whimsical money-saving "repairs"?

Glenstache

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Re: Our Accidental Car Costs Cut
« Reply #29 on: November 17, 2014, 01:22:11 PM »

Any other tales out there of whimsical money-saving "repairs"?

The last repair I did on my Subaru before it died was fixing a leaky windshield with Gorilla tape. Used a hose to identify the leaky spot (water made it to the passenger footwell in just a few seconds). Then put a 12 inch tape along the seal above that spot. Worked like a charm.

benjenn

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Re: Our Accidental Car Costs Cut
« Reply #30 on: November 17, 2014, 03:23:38 PM »
We decided just over 2 years ago, when we were $711,000 in debt, that we wanted to retire and move to the beach (where we have a beautiful condo - which was part of that debt!).  We set 6 years as our goal - a date of June 2018.  At the time, we had a really cool 2012 Nissan Leaf - 100% electric vehicle.  Loved that car.  However, the payments were ridiculous.  We knew things had to change.  Since then, we have sold 2 houses, paid of a 401K loan and a HELOC and sold the Leaf.  Since we had paid off the Leaf with the proceeds from one of the houses, we purchased a 2013 Prius and paid cash.  That was before we knew the Mustachian way.  This past summer, we traded the Prius for a 2001 Honda Civic that cost $20,000 less.  Then we traded that for a 2001 Acura that cost $4,000 more but only had 28,000 miles on it and was in perfect condition.  Just recently, we sold the Acura for $2,500 more than we paid for it and bought a 1998 VW Cabrio convertible with a 100,000 miles for $1,600.  It will be the perfect beach car.  And oh yeah, our new retirement date is December 30, 2015 - 2 1/2 years earlier than we first planned on.  :)  We will be 51 and 52 years old. 

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Re: Our Accidental Car Costs Cut
« Reply #31 on: November 23, 2014, 06:13:38 AM »
I cannot comprehend why someone would buy a car on credit in the first place.


How about ignorance for a reason?  Back then, we were ignorant!  When we bought the "original" Subaru Forester, we were coming right off the sale of a house that had netted us tens of thousands in profit.  And we could have bought that car for cash, no problem.  But we just didn't know any better.

At least, we learned our lesson.

So... are you saying that you have never bought a car on credit?

(Well, if you are, then good for you!)

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Re: Our Accidental Car Costs Cut
« Reply #32 on: February 01, 2015, 08:36:40 AM »
... we purchased a 2013 Prius and paid cash.  That was before we knew the Mustachian way.  This past summer, we traded the Prius for a 2001 Honda Civic that cost $20,000 less.  Then we traded that for a 2001 Acura that cost $4,000 more but only had 28,000 miles on it and was in perfect condition.  Just recently, we sold the Acura for $2,500 more than we paid for it and bought a 1998 VW Cabrio convertible with a 100,000 miles for $1,600.  It will be the perfect beach car.  And oh yeah, our new retirement date is December 30, 2015 - 2 1/2 years earlier than we first planned on.  :)  We will be 51 and 52 years old.

That's what I'm talking about!  An older car = freedom much sooner.

Good, good job!

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Re: Our Accidental Car Costs Cut
« Reply #33 on: February 01, 2015, 08:47:12 AM »
Not interested in clicking through to the promoted blog, but the higher cost of ownership of trucks vs cars makes them a poor choice for most people. Unless there's a true (and frequent) need for a truck, a small car is a better bet.

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Re: Our Accidental Car Costs Cut
« Reply #34 on: February 01, 2015, 09:18:50 AM »
Haven't had a car payment in about 10 years. Currently own a 2000 Volvo sedan with 188k miles and a 2005 Ford Focus hatchback with 139k. Worth about $6,500 combined. We'll go back to one car once I leave full-time work in 4-5 years.

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Re: Our Accidental Car Costs Cut
« Reply #35 on: February 01, 2015, 10:42:50 AM »
...the higher cost of ownership of trucks vs cars makes them a poor choice for most people. Unless there's a true (and frequent) need for a truck, a small car is a better bet.

Well, we DO have a true and frequent need for a pickup truck, since we do a lot of DIY requiring large-sized materials (think lots of 2x4x8s or sheets of plywood) that need to be brought from 30 miles away.  And we've found it's a real messy bummer to transport bales of hay or straw -- or loads of bricks, or even live geese or chickens -- in the back of our other vehicle, which is a 1998 Subaru Forester.

Also, realize that older pick up trucks are not the over-engineered, maximum-engine monsters of today.  I get 20 mpg or better with my 1996 Dodge Dakota, which btw is very economical to service.  Of course, the Subaru Forester does much better.

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Re: Our Accidental Car Costs Cut
« Reply #36 on: February 02, 2015, 10:38:21 AM »
I never had a car payment until last year. The dealer offered us an interest rate significantly below our mortgage rate. So we took the financing offer and dumped the purchase price into our mortgage instead.

Interesting thought. Almost every "car loan interest rate vs investment rate" discussion I've read focuses on a known rate (auto loan) vs an uncertain rate (market/real estate investment). The risk involved drives most folks to pay cash. It would be interesting to know what choice people would make if they were comparing a known rate (auto loan) with another known rate (mortgage). The risk of having to pay car payments as well as mortgage payments while in financial hardship would still exist. However, I would assume one could just include that in their emergency fund planning.

Our family car (only have one) was bought with cash, and the amount wouldn't have made a significant dent in our mortgage (which is likely true for most who buy older used cars). But this is a different twist that I just haven't seen in earlier discussions.

Bob W

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Re: Our Accidental Car Costs Cut
« Reply #37 on: February 04, 2015, 08:52:23 AM »
I passed on our 395K 2001 Toyota Camry to our daughter several months ago.  It is ugly!   The insurance is cheap.  It leaks a quart of oil per week.   When she is done with it in a year or so I will reserve it for my now 13 year old daughter for her first car. (I'll  make her pay me $500 for it).   I have dreams of 600K on this car.   Hell,  if we play it right and it isn't wrecked by the 16 year old daughter it might even be the 7 year olds learner car when he turns 15?   

Oh that, and the car I replaced the Toyota with is a 1999 Mountaineer with 285K on it.   Runs like a champ.  Terrible gas mileage.  Great insurance rate.  Doesn't burn oil.  Tows 3K,  hauls 4 kayaks and a weeks worth of camping stuff.   Paid 3K cash 2 years ago.   Tires have about 30K left on them, so this baby is mandatory to go at least 315 with hopes of 500K and keeping it until the day I die and passing it on.   Or at least being the trainer for one of the kids. 

So keep rocking the Subaru.   It might be the last car you ever buy!

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Re: Our Accidental Car Costs Cut
« Reply #38 on: February 04, 2015, 09:55:03 AM »
I passed on our 395K 2001 Toyota Camry to our daughter several months ago.  It is ugly!   The insurance is cheap.  It leaks a quart of oil per week.   When she is done with it in a year or so I will reserve it for my now 13 year old daughter for her first car. (I'll  make her pay me $500 for it).   I have dreams of 600K on this car.   Hell,  if we play it right and it isn't wrecked by the 16 year old daughter it might even be the 7 year olds learner car when he turns 15?   

Oh that, and the car I replaced the Toyota with is a 1999 Mountaineer with 285K on it.   Runs like a champ.  Terrible gas mileage.  Great insurance rate.  Doesn't burn oil.  Tows 3K,  hauls 4 kayaks and a weeks worth of camping stuff.   Paid 3K cash 2 years ago.   Tires have about 30K left on them, so this baby is mandatory to go at least 315 with hopes of 500K and keeping it until the day I die and passing it on.   Or at least being the trainer for one of the kids. 

So keep rocking the Subaru.   It might be the last car you ever buy!

Nice job keeping the 'yota on the road for that long. But a quart a week of oil out of the camry? That is worth fixing. At that leakage rate you may as well be changing your oil by letting it empty into the nearest storm drain.

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Re: Our Accidental Car Costs Cut
« Reply #39 on: March 12, 2015, 06:43:54 PM »
I passed on our 395K 2001 Toyota Camry to our daughter several months ago.  It is ugly!   The insurance is cheap.  It leaks a quart of oil per week.   When she is done with it in a year or so I will reserve it for my now 13 year old daughter for her first car. (I'll  make her pay me $500 for it).   I have dreams of 600K on this car.   Hell,  if we play it right and it isn't wrecked by the 16 year old daughter it might even be the 7 year olds learner car when he turns 15?   

Oh that, and the car I replaced the Toyota with is a 1999 Mountaineer with 285K on it.   Runs like a champ.  Terrible gas mileage.  Great insurance rate.  Doesn't burn oil.  Tows 3K,  hauls 4 kayaks and a weeks worth of camping stuff.   Paid 3K cash 2 years ago.   Tires have about 30K left on them, so this baby is mandatory to go at least 315 with hopes of 500K and keeping it until the day I die and passing it on.   Or at least being the trainer for one of the kids. 

So keep rocking the Subaru.   It might be the last car you ever buy!


I AM keeping my fingers crossed that our two 1996 and 1998 vehicles are the last ones we ever buy.  Not counting on it, but hoping.  And why not??

I just have to roll my eyes at the people that roll their eyes when I talk about making my vehicles last.  These are the "yahoos" that think a car is shot and gone to hell if it's 5 years old or has more than 50,000 miles on it.  They're probably also people who expect to never be done with their car loans (since they seem to immediately trade for a newer car the minute they get done paying for their current one).

You don't get to FI that way!

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Re: Our Accidental Car Costs Cut
« Reply #40 on: March 12, 2015, 07:18:51 PM »
I recently sold my Civic and went back to driving my 510K+ mile Toyota Pick Up.       People think I'm crazy but i know its one of the best decision Ive ever made

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Re: Our Accidental Car Costs Cut
« Reply #41 on: March 12, 2015, 07:22:19 PM »
They're probably also people who expect to never be done with their car loans (since they seem to immediately trade for a newer car the minute they get done paying for their current one).

What? You can wait until your car is paid off before buying a new one? I thought you had to trade it in before you had any positive equity, otherwise people will think you're poor!

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Re: Our Accidental Car Costs Cut
« Reply #42 on: March 12, 2015, 07:26:50 PM »
I never had a car payment until last year. The dealer offered us an interest rate significantly below our mortgage rate. So we took the financing offer and dumped the purchase price into our mortgage instead.

Interesting thought. Almost every "car loan interest rate vs investment rate" discussion I've read focuses on a known rate (auto loan) vs an uncertain rate (market/real estate investment). The risk involved drives most folks to pay cash. It would be interesting to know what choice people would make if they were comparing a known rate (auto loan) with another known rate (mortgage). The risk of having to pay car payments as well as mortgage payments while in financial hardship would still exist. However, I would assume one could just include that in their emergency fund planning.

Our family car (only have one) was bought with cash, and the amount wouldn't have made a significant dent in our mortgage (which is likely true for most who buy older used cars). But this is a different twist that I just haven't seen in earlier discussions.

Sorry, I didn't see think last month when you posted it. In my case my emergency fund plus liquid investments are more than enough to pay off my car loan if the need arises. And I did in fact pay down my mortgage by approximately the amount of the car loan.

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Re: Our Accidental Car Costs Cut
« Reply #43 on: March 13, 2015, 04:44:57 AM »
What is this "car payments" thing you speak of?

My wife and I never buy a car on "payments."  If we can't afford to pay cash for it, we don't buy it.

Actually, that's not 100% true.  We will "buy on credit" if they offer a 0% rate or if they offer a huge discount if we "buy on credit."  Got an additional $2500 off my wife's BMW for "buying on credit" (after I had already negotiated a very low cost).  We took he "loan" and paid it off a week later.  Total interest charges were something like 38 cents.

The only thing you should ever, maybe, buy on credit is a house. 

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Re: Our Accidental Car Costs Cut
« Reply #44 on: March 13, 2015, 06:54:18 AM »
What is this "car payments" thing you speak of?

My wife and I never buy a car on "payments."  If we can't afford to pay cash for it, we don't buy it.

Actually, that's not 100% true.  We will "buy on credit" if they offer a 0% rate or if they offer a huge discount if we "buy on credit."  Got an additional $2500 off my wife's BMW for "buying on credit" (after I had already negotiated a very low cost).  We took he "loan" and paid it off a week later.  Total interest charges were something like 38 cents.

The only thing you should ever, maybe, buy on credit is a house.
There are reasonable occasions where buying education on credit is reasonable.  There are lots of unreasonable ones, as well, but a house shouldn't be the only one.  Also, I'm curious whether you view leverage and credit in the same way (not arguing on this, just curious).

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Re: Our Accidental Car Costs Cut
« Reply #45 on: March 13, 2015, 08:21:46 AM »
I have a car loan - at 0% interest I had other uses for my money.  But hey, I am at only 185,000 Km on a 2010 Mazda3 hatchback, and my annual mileage is a lot less in retirement, so I should be able to get at least another 5 years out of it.  It runs well, suits my needs, why would I trade it in?

I have to admit, well down the road, when the dog has gone to the Rainbow Bridge and I have moved to a place with no yard, I can see a Mazda 2 or Miata in my future.  But that is at least 7 years away.