Author Topic: inefficient paid-off car(s) vs newer car  (Read 5007 times)

StashOnTheInside

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inefficient paid-off car(s) vs newer car
« on: May 02, 2012, 02:32:45 PM »
Hi all, quick question I couldn't find an answer for.

Right now I have two Camaros, one is a 91 and one is a 97. Both have ~115k miles, but the 91 is in pretty bad shape. They are both gas guzzlers too. Thankfully, they're both paid off. I'm only driving ~15 miles per day for work round trip, but still spending ~350 a month on gas. I live with my unemployed wife and we have no kids. The wife drives around a bit for errands and whatever, and we're considering having kids in a year or two, once my student loans are paid off. We're in the midwest suburbs with 0 public transportation.

I'm a novice mechanic with basic tools. I can do basic maintenance, but recently got hit with bad brake lines and a cracked master cylinder job which cost me almost $1200. The cars are getting old and if I get hit with more major repairs like this, I'll be in trouble.

Cash flow is ~+600 / month of 3500 income (still have 20k in student loans, I'm working at getting this fixed).

From my estimates I could get $7000 and $2500 for the 97 and 91 respectively.

What should I do in this case? Wait and see if something else breaks? Buy a used car in a terrible market? Buy a new car and set my mustache on fire? Buy a bike, get in shape, and hope we get a few cool/dry summers?

smedleyb

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Re: inefficient paid-off car(s) vs newer car
« Reply #1 on: May 02, 2012, 02:40:13 PM »
If your goal is to do the most economical thing, sell the Camaros for 9K and buy a cheap, 4 cylinder 7-8 year domestic for 2-3K.  Apply the difference to the student loan,  and really start kicking financial ass. 

gooki

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Re: inefficient paid-off car(s) vs newer car
« Reply #2 on: May 02, 2012, 03:11:17 PM »
Or bike to work, and sell both vehicles and buy one cheap, 4 cylinder 7-8 year domestic for 2-3K.

the fixer

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Re: inefficient paid-off car(s) vs newer car
« Reply #3 on: May 02, 2012, 03:49:53 PM »
I second biking to work. Cars usually don't break if you're not driving them, so try biking as much as possible and driving as little as possible. Get a bike trailer (maybe a kid version instead of just cargo?) for the errands if it makes sense. If you have to drive, try to combine as many trips as you can into one. Wean yourself off the car addiction by setting goals for how long you can go without filling up the gas tank, then see if you achieve them (stay positive: if you get close but still fall short, focus on how well you did and don't worry about the goal as much). You will get immediate benefits to your budget and health with no financial risk (except possibly the cost of some used bikes on Craigslist which you could resell).

Once you're confident you no longer need two cars, sell both and replace them with one cheap used as others have suggested, but keep up the habit of driving as little as possible.

I don't like doing the cold turkey method of downsizing the cars first, it can cause more stress than its worth. Frugality is supposed to be FUN!

James

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Re: inefficient paid-off car(s) vs newer car
« Reply #4 on: May 02, 2012, 04:21:19 PM »
Another vote for selling both and buying something from MMM's list of suggested cars.  Sell the 97 first to finance the new vehicle.  Don't spend all $7000, and how much below that you go tells everyone how badass you are planning to be in your new lifestyle.  Then sell the 91 and put all the remaining cash plus the cash you save every month into the student loans.


Good luck and make sure you report back with how it goes!

PS  The biking is absolutely the way to go, but it doesn't sound to me like going without a vehicle was an option you were considering.

menorman

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Re: inefficient paid-off car(s) vs newer car
« Reply #5 on: May 02, 2012, 06:15:22 PM »
Another vote for selling both and buying something from MMM's list of suggested cars.  Sell the 97 first to finance the new vehicle.  Don't spend all $7000, and how much below that you go tells everyone how badass you are planning to be in your new lifestyle.  Then sell the 91 and put all the remaining cash plus the cash you save every month into the student loans.


Good luck and make sure you report back with how it goes!

PS  The biking is absolutely the way to go, but it doesn't sound to me like going without a vehicle was an option you were considering.
What this guy said, and you can use part of what you get from the car sale to finance the bike and accessories if you don't already own one. (Although your $600/mo free cash flow really should already easily cover that--no need to go high end for a commuter bike.)

StashOnTheInside

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Re: inefficient paid-off car(s) vs newer car
« Reply #6 on: May 03, 2012, 08:02:28 AM »
I spent some time yesterday checking out the used car market. It's bad. Like $4000 for a 03' Chevy Cavalier with 130k on the clock bad (and this is from some shady sellers). The tried and true "old not-so-beater" method seems a little broken these days. It seems like cars in the range of < 100k miles and < 8 years old start around 5500! Whats the point in selling a beater I like, to break even on a beater I don't like? On the plus side, maybe I could get more for my cars.

I like the idea of biking to work when weather permits at least some of the time. Ween myself off two cars. I need to get in shape first, but it's definitely a possibility.

I'll look around some more, but where are you guys seeing $2-3k cars that look like they'll actually make it home from the lot? Autotrader doesn't look good...


grantmeaname

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Re: inefficient paid-off car(s) vs newer car
« Reply #7 on: May 03, 2012, 08:17:36 AM »
Craigslist seems to be a favorite around here. Where are you located? How is the used market there typically?

StashOnTheInside

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Re: inefficient paid-off car(s) vs newer car
« Reply #8 on: May 03, 2012, 08:22:20 AM »
Chicagoland (updated profile for that).

I used Autotrader for my last car and got a good deal. That was in 2006 though, and I remember more private sales going on there. It's mostly dealers now.

I haven't checked craigslist yet, but I don't use craigslist often, and I've never used it for big purchases like a car. Any tips to avoid getting scammed?

James

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Re: inefficient paid-off car(s) vs newer car
« Reply #9 on: May 03, 2012, 08:28:12 AM »
There are a number of post here talking about it, this might get you started:

http://www.mrmoneymustache.com/forum/do-it-yourself-forum!/private-vehicle-sale/msg4510/#msg4510

James

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Re: inefficient paid-off car(s) vs newer car
« Reply #10 on: May 03, 2012, 10:00:27 AM »
Chicagoland (updated profile for that).

I used Autotrader for my last car and got a good deal. That was in 2006 though, and I remember more private sales going on there. It's mostly dealers now.

I haven't checked craigslist yet, but I don't use craigslist often, and I've never used it for big purchases like a car. Any tips to avoid getting scammed?


I have more time to respond now....


I assume the private sales are still out there that you saw on autotrader, they are just mostly moved to craigs list since it's free. 


The $2-3k cars are private party, I agree that you won't find anything decent on a dealer lot for that kind of money.  You might end up at $3-5k on craigs list if you want something nicer, but that still puts some cash toward your loan if you sell your other two vehicles, not to mention the gas savings each month.  Do lots of reading regarding buying and selling on craigs list, it does take a little more work than a dealer but you are being well paid to do that work.

zweipersona

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Re: inefficient paid-off car(s) vs newer car
« Reply #11 on: May 03, 2012, 10:20:57 AM »
First, I agree with the general sentiment of selling at least one of your cars.  No need to have two (other than the obvious fun factor :P)

Second, I recommend you get an app for your phone, or go to fuelly.com and track your mpg.  350/month on gas is excessive.  If your trips were only compromised of going back and forth from work, it should sit at roughly 160/month.  (Using an estimated 15 mpg)  It COULD be the car, but it's likely your driving habits and making trips that might not be necessary.

Whether or not you sell the camaro you kept will be up to you.  I would make that judgement after checking your mpg.  If you're looking for an extremely cheap, reliable, and relatively new (for the price) vehicle, I would try to find hyundai  or kia makes.  There's some others I'm sure.  They'll be closer to the average mpg, and your insurance will be cheaper than with a camaro.

menorman

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Re: inefficient paid-off car(s) vs newer car
« Reply #12 on: May 03, 2012, 04:42:39 PM »
I spent some time yesterday checking out the used car market. It's bad. Like $4000 for a 03' Chevy Cavalier with 130k on the clock bad (and this is from some shady sellers). The tried and true "old not-so-beater" method seems a little broken these days. It seems like cars in the range of < 100k miles and < 8 years old start around 5500! Whats the point in selling a beater I like, to break even on a beater I don't like? On the plus side, maybe I could get more for my cars.

I like the idea of biking to work when weather permits at least some of the time. Ween myself off two cars. I need to get in shape first, but it's definitely a possibility.

I'll look around some more, but where are you guys seeing $2-3k cars that look like they'll actually make it home from the lot? Autotrader doesn't look good...
The sooner you start biking, the sooner you'll be able to get in shape.

gooki

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Re: inefficient paid-off car(s) vs newer car
« Reply #13 on: May 03, 2012, 04:44:30 PM »
I like the idea of biking to work when weather permits at least some of the time. Ween myself off two cars. I need to get in shape first, but it's definitely a possibility.

Even more reason to start. Biking to work is the only real exercise I do, and it's fucking great. Even start doing it twice a week, you'll quickly find biking to work more relaxing than driving every could be.

PS from my experience it takes 2 weeks of biking to work to get over the sore ass syndrome. So in your case I'd trial it for at least a month (twice a week) before making a conclusion if it is for you or not.
« Last Edit: May 03, 2012, 04:46:08 PM by gooki »

BenDarDunDat

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Re: inefficient paid-off car(s) vs newer car
« Reply #14 on: May 04, 2012, 07:45:15 AM »
Hi all, quick question I couldn't find an answer for.

Right now I have two Camaros, one is a 91 and one is a 97. Both have ~115k miles, but the 91 is in pretty bad shape. They are both gas guzzlers too. Thankfully, they're both paid off. I'm only driving ~15 miles per day for work round trip, but still spending ~350 a month on gas. I live with my unemployed wife and we have no kids. The wife drives around a bit for errands and whatever, and we're considering having kids in a year or two, once my student loans are paid off. We're in the midwest suburbs with 0 public transportation.

I'm a novice mechanic with basic tools. I can do basic maintenance, but recently got hit with bad brake lines and a cracked master cylinder job which cost me almost $1200. The cars are getting old and if I get hit with more major repairs like this, I'll be in trouble.

Cash flow is ~+600 / month of 3500 income (still have 20k in student loans, I'm working at getting this fixed).

From my estimates I could get $7000 and $2500 for the 97 and 91 respectively.

What should I do in this case? Wait and see if something else breaks? Buy a used car in a terrible market? Buy a new car and set my mustache on fire? Buy a bike, get in shape, and hope we get a few cool/dry summers?

You are paying $350 per month on gas.

Cars are always difficult. I figure you'd save $1400 per year if you sold a car and bought a 32mpg gas sipper.