Car Tradeoff

[pianogineer]

Ok, posting here to try and make sure I'm not rationalizing a decision, something I've been known to do in the past :) I'm doing my best to become more Mustachian, something that I have admittedly not been in the past. I'm still working on it in many areas, but here is the question at hand.

I'm on the verge of a new job which, when all is said and done, will end up approximately doubling my commute. (Yes, I know, how very anti-Mustachian of me... but let's just assume that this doubling of commute is not up for discussion at the moment).

I currently drive a 2009 Acura TSX, paid for. I'm looking at down-classing in car due to the increased number of miles I am going to be putting on my car... so looking to save money in depreciation, MPG, service, repairs, etc. Stemmed from MMM's post regarding good vehicles, I'm heavily considering a Honda Fit. I occasionally lug lots of sound gear around (in my TSX currently -- it has impressive cargo space all things considered), so the Fit's cargo space is a huge selling point for me.

I went into the process thinking 100% used all the way. However, as I've gotten deeper, I'm starting to question whether or not new may be the way to go. Ultimately, I'm looking at total cost to own -- I want to make the decision that will minimize this. Due to a seemingly inflated used market, the margin between new and used Fit's is not as large as I thought it would be (this has been discussed before, ie https://forum.mrmoneymustache.com/ask-a-mustachian/new-or-used-honda-fit-and-auto-v-manual-transmission/).

According to Edmund's "True Cost to Own" calculator, the TCO of a 2010 Honda Fit is actually 3% higher than a 2013 Honda Fit (when taking out the finance fees, which I will not be doing). Of course this is based on many assumptions which may or may not apply in my case. But, considering it's that close, and going new gives me the additional benefit of the peace of mind of knowing exactly what has been done to the car and when, it seems like the right way to go.

However, I just wanted to post here to get your guys' thoughts. I'm a guy that likes stuff, especially new stuff. I'm worried that right now I'm in my "blinders on, gotta have it" mode that I notoriously go into, and that I'm just rationalizing the decision to buy a new car. Right now, I can do an effective swap of my '09 TSX for a '13 Fit (price wise). I was hoping to put some additional money in my pocket in the transaction, but again, I'm trying to put TCO at the top of the list in terms of priorities (though admittedly it's not at the very top of the list, as certainly there's lower TCO cars than any year of the Fit).

Additionally, safety is a big factor for me. It was one of the primary rationalizations I used when buying my TSX, as it is known to be one of the safest cars in its class. Obviously, moving to a much smaller car in the Fit will be less safe. Even though I'm looking to save ~$10k over the next 5 years by down-classing my car, the fact that I'm driving a well-running paid for car that is extremely safe and ultimately meets all of my needs, is making me second guess my decision to make any moves at all.

Thoughts?

[Dynasty]

Honestly, now is not the time to be buying a late model used car.

A three year old Fit is probably going to need tires pretty soon, and be over halfway to the point of a 60K mile tuneup, and probably through most of the Honda warranty. Plus you don't know if the previous owner took care of it or not.

Find a VIN of a new fit you would like to purchase, and send it to your insurance agent to get an exact quote on how much insurance is going to be?

Are you gonna do full coverage? Does the TSX have full coverage?

Does your car now require premium? I'd look on Fuely.com to see what type of mileage people are getting in the Fits and plug that into your calculation as well.

Last but not least, I don't think Fits make for comfortable commuting vehicles due to excessive road and wind noise. No idea how comfortable the seats are. I understand the premise of having a cheap vehicle to commute in, but that's a lot like cheaping out on a 99 dollar mattress because you only sleep on it. Commuting is not fun, might as well be somewhat comfortable.

At a minimum, I would do three test drives on a Honda Fit before making the decision. With two of the test drives on the freeway to see if you can live with the road noise. 

A sports sedan to a Fit is a big leap.

Can you show us the numbers of how the Fit would save you 10K over the next five years?

[pianogineer]

Thanks for the reply, and for the thoughts. I'm glad you brought up the comfort/noise. That is one of my primary concerns. I felt anti-mustachian for prioritizing those things, so I'm glad you brought them up so I didn't have to :)

Great idea on the insurance quote... I will most definitely do that. I do have full coverage on the TSX (including a very high liability limit due to a requirement on my umbrella policy... though I don't think the cost of liability will change with the car?) Either way, here are the numbers, conservatively using the same insurance cost for both cars.



Most of the gain is had in fuel, maintenance, and repairs (yes the TSX uses premium fuel, and thanks for the fuelly link... I found the reported TSX number to be accurate, and used the reported 2013 Fit number for this spreadsheet). The depreciation, maintenance, and repair estimates are 5 year estimates pulled from Edmunds.com's TCO (true cost to own) tool. As high as the TSX's numbers seem in maintenance/repairs, I do believe them, as service has always been much more expensive than I ever expected it to be on this car, and it will obviously only increase from here.

I'm assuming an even swap in terms of purchase price, which I think is true +/- $1k.

All this said, I think your questions/concerns about 25k miles/year in a Fit vs a sports sedan are very valid. It's hard for me to put a dollar figure on what these things are worth to me, which is unfortunately exactly what I'm trying to do. Frankly, I've always hated the navigation/radio system in the TSX, so part of me thinks that if I put a nice aftermarket system in the Fit and some nice seat covers on it, I could be just as happy with the Fit. I have done one test drive, but not on a freeway. I was actually thinking of renting one for a weekend to see what it would be like comfort and noise wise for a longer drive, so I may go that route as well.

[DoubleDown]

If moving closer to your new job is not an option, then I think you are correct that there is likely little benefit in buying a relatively new Fit compared to a brand new Fit. That might be a bit of a "false dilemma" though, ruling out other options that would save you far more money.

In general, I think the more "MMM approach" would be to get a considerably older used car (at least 5 - 7 years or older) that is reliable and gives high gas mileage. A car you would not need or want collision or comprehensive coverage for, that you would drive to its eventual death. You might decide you don't want to do that, which is fair, but that would probably be the "MMM" alternative to compare against, that would make your numbers come way down.

I believe your liability coverage could vary based on the car you are driving, but not likely too much given the choices you are considering. I would expect, though, an insurance company to charge more for liability if one is driving a car that is correlated with lots of accidents (e.g., fast cars favored by male teenagers) or causing lots of damage or personal injury when accidents occur (large trucks and SUVs for example).

[pianogineer]

In general, I think the more "MMM approach" would be to get a considerably older used car (at least 5 - 7 years or older) that is reliable and gives high gas mileage. A car you would not need or want collision or comprehensive coverage for, that you would drive to its eventual death. You might decide you don't want to do that, which is fair, but that would probably be the "MMM" alternative to compare against, that would make your numbers come way down.

Agreed. This was probably my going in motivation, but I can see where I've taken several small leaps in logic to the point where I started with the intent of buying a $10,000 used car (where I'm putting several thousand in my pocket on just the exchange of cars), but now I look up and all those small leaps have added up to rationalizing buying a brand new car, putting no money in my pocket in the exchange.

Perhaps it's time to take a step back and re-consider this option. As you said, I may decide against this, but I should keep this in mind (and run the numbers) for this as a baseline case.