Author Topic: Is it unmustachian to keep this car?  (Read 6830 times)

Sonorous Epithet

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Is it unmustachian to keep this car?
« on: April 08, 2014, 01:42:24 PM »
Hi all, first post.

My last car, a 2001 Honda Civic, died in 2012 due to critical transmission failure. It was in good repair, so its death after 11 years was quite unexpected.

I bought a 2011 Mazda3 hatchback in Dec 2012. It was a 1 year old former lease vehicle with full kit (big speakers! sunroof! And a bunch of useless upgrades!) selling a fair amount below the KBB value of a stock model. My plan at the time was to drive this one for at least another decade. I put $5k cash down and financed the remaining $11k or so.

At the time I was debt free, so I went in treating this like a "hair on fire" emergency, for which I would put off goals like adding to my IRA. But when the financing came through, I got a 2% loan. back of the envelope said that I'd be shelling out a measly $220 per year in interest at its worst. I decided to actually get the longest term I could and financed for 5 years. The $207/mo payment is not very painful. (Monthly income is $2,800, monthly expenses are $1,800.)

Last month I discovered MMM. Suddenly my frugal and sensible purchase seems like a total waste. I take the plunge and start biking to work. (I'm only 3 miles away, why the hell did I wait so long?) Now I'm saving a bit of gas, and having a lot of fun, and I guess even getting exercise, although it barely feels like it.

I considered even ditching my car and getting a clunker, and saving myself the remaining loan principle. But even after reading everything anti-car on MMM, I still want to keep my current vehicle. Here's my reasoning:

I have about $5k of equity in the car. A $5k car will be appx 10 years old have 100-150k miles on it. (I'll stick with 130k to make the math easier.)

Even if I pay off the loan and wait long enough, my car will become a 130k mi, 10-year old clunker. So what I'm paying for is the span between now and the point when my car is the same as our 10-year old hoopty. We can assume that other costs, such as insurance premiums, mileage, and maintenance are the same (if anything they are in the favor of the newer car, except maybe mileage).

Here's my math:

Cost of paying off the loan (including $350 of interest expense): $9,500

Current mileage: 30k mi
Mileage of potential replacement car: 130k mi
Reliable miles between ooh-shiny and hoopyville: 100k mi

Maginal cost per mile: 9.5 cents

That seems pretty reasonable, doesn't it? Am I off-base here? According to this I would expect financing and depreciation to cost the average sukka 28.2 cents per mile.

Mileage estimates:

Total was 10k miles.
Commuting to work (6 mi round trip x 5 days/week x 50 weeks) = 1500 mi <-- replaced with bike travel
Commuting to school (10 mi round trip x 2 days/week x 46 weeks) = 920 mi <-- working up to bike travel
Big-ass Road trips = 2300 mi
That leaves 3,720 miles of mixed local shopping, errands, and inter-ish city travel that I can't split out. Maybe half (1,860 mi) could be replaced with biking?

So as a mature mustachian I'd maximize at about 4,000 mi of bike travel. (12 miles every single day? That seems like a lot...) And I'd expect to put 6k miles per year on my car. So when my car is 10 years old it would only have 72,000 miles on it. The 100k miles of value I'm paying for would last over 15 years with 6k annual miles of travel.

A note on the girlfriend: My girlfriend is also 3 miles from work and I think I've convinced her to buy a bike and try bicycle commuting herself. Her car is a 15-year old, 150k miles, gas guzzling American tank that are sold to old ladies (mid-90's Oldsmobile 98). It breaks down pretty often and we don't consider it reliable at all. She wants to replace it and has been considering a scooter. Her budget is tight.

Conclusion: It feels like a mustachian look at the numbers points to not ditching my car and replacing as many miles I can with bike travel as a responsible course of action. Am I crazy?

jordanread

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Re: Is it unmustachian to keep this car?
« Reply #1 on: April 08, 2014, 02:15:28 PM »
Don't forget to calculate cost per mile. It's around here somewhere, but I can't find it right now. Personally, with the exception of the fact that you borrowed to get it, I've always thought the Mazda Hatchbacks were pretty Mustachian, plus they are way fun to drive.

Forcus

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Re: Is it unmustachian to keep this car?
« Reply #2 on: April 08, 2014, 02:21:01 PM »
Couple things that may affect your decision.

I would not expect 130k miles to be when it starts to fall apart (I'm assuming you mean you would plan on getting rid of the 3 when it has that many miles and also if you downgrade, what kind of miles you'd be looking at). My experience is newer, well maintained, simple cars can crest 200k with ease. I just sold a relatively complicated car, an 05 Volvo S40 T5 with 180k miles. Original engine, trans, injectors, turbo, etc. Only thing I ever replaced was a sensor, brakes, shocks, and tires.

The new 2014 Mazda 3 just came out. I've seen a lot (LOT) of 2013's languishing on dealer lots, prices on new ones are dropping and they can't give them away. I would expect this to depress used prices as well, so if you decided to sell you may have to figure on taking more of a bath than you expected, which MAY influence your decision.

Also you may be able to justify keeping it if you get rid of her tank and she uses it when she can't ride a bike. Might be a nice trade off - dumping the old car, and having to bike (sometimes) but when not biking, getting a much nicer / newer car to travel in.

Thegoblinchief

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Re: Is it unmustachian to keep this car?
« Reply #3 on: April 08, 2014, 02:57:29 PM »
I'd keep the Mazda and talk with the GF about whether you need two cars at all. You're in a great position to drop to a single car, most days not needing a car at all.

CarDude

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Re: Is it unmustachian to keep this car?
« Reply #4 on: April 08, 2014, 05:17:31 PM »
The 2011 Mazda 3 is a much safer car than the 2001 Civic. Side airbags, ESC, and good side and roof scores. Now I'm not saying there isn't a safe and more economical car you could get, but I'm definitely saying that you shouldn't go all the way back to an '01 Civic. It was involved in the only T-bone case I've studied so far where the driver in the car that did the T-boning was the one who died, and the main reason that happened was because of how light the car was. The car has a good front crash score, but 2500 lbs stacks the odds significantly against you compared to most vehicles on the road. There are several other 13-year old cars that will take care of you and your GF better.
« Last Edit: April 08, 2014, 05:27:00 PM by CarSafetyGuy »

m8547

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Re: Is it unmustachian to keep this car?
« Reply #5 on: April 08, 2014, 08:44:14 PM »
I would keep it unless you can go with no car at all. If you sell it and buy something else, you'll lose a lot on either end unless you sell it yourself and buy from a private party. But that can be a hassle. The spread between trade-in value and the price the dealer sells it for later may be a few thousand. You can free up some cash by buying a cheaper used car, but you'll still lose some value on the buy-sell spread even if you net money out of the deal.

horsepoor

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Re: Is it unmustachian to keep this car?
« Reply #6 on: April 08, 2014, 08:54:17 PM »
I'd also say keep it.  It's a fairly economical car at a great interest rate and not keeping you in a debt emergency.  Since you won't be driving it tons of miles, it should last you a LONG time and you don't have to roll the dice on buying an older car that may have unknown issues.  Of course, I'm biased because I'm paying off my 2012 Honda CR-Z at just a slightly higher interest rate, and have no intention of selling it off to buy a clunker.

jordanread

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Re: Is it unmustachian to keep this car?
« Reply #7 on: April 08, 2014, 09:31:39 PM »
I'd also say keep it.  It's a fairly economical car at a great interest rate and not keeping you in a debt emergency.  Since you won't be driving it tons of miles, it should last you a LONG time and you don't have to roll the dice on buying an older car that may have unknown issues.  Of course, I'm biased because I'm paying off my 2012 Honda CR-Z at just a slightly higher interest rate, and have no intention of selling it off to buy a clunker.

But you have a horse?? Even a clunker would be 1 HP if you hooked it up right. :P

Sorry, I've been waiting for a while to provide that little drunken gem. :-D

Sonorous Epithet

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Re: Is it unmustachian to keep this car?
« Reply #8 on: April 09, 2014, 07:47:52 AM »
Thanks all for the perspectives. To be honest, I was expecting a chorus of good-humored beratement. But it's nice to know I have mustachian approval :)

The new 2014 Mazda 3 just came out. I've seen a lot (LOT) of 2013's languishing on dealer lots, prices on new ones are dropping and they can't give them away. I would expect this to depress used prices as well, so if you decided to sell you may have to figure on taking more of a bath than you expected, which MAY influence your decision.

I think a contributing reason why the the 2011 was so cheap was that beginning with the 2012 model year Mazda introduced SkyActiv, their variable speed transmission system, which improved fuel efficiency quite a bit. My car gets a combined ~24 mpg vs ~32 mpg with the newer transmission. But I did the math and the breakeven point for the savings on gas at $3.50/gal at 10k mi/yr versus the premium for a new stock car without the bells and whistles was like, 15 years. So I stuck with the "gas guzzler."

I'd keep the Mazda and talk with the GF about whether you need two cars at all. You're in a great position to drop to a single car, most days not needing a car at all.

Building up to it. We've been dating nearly 2 years, and she just moved in this month. I am super eager to combine finances as I think it will improve both our lives, but one can't rush these things right? ;)

I think going from a home fleet of Bike-Grannytank-Mazda3 to Bike-bike-scooter-Mazda3 would be pretty sweet, and pretty mustachian.

skunkfunk

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Re: Is it unmustachian to keep this car?
« Reply #9 on: April 09, 2014, 09:21:34 AM »
Pay off that loan and dump the full coverage if you have to keep it. If you are barely driving it, and when you do drive it you work on getting the best mpg possible, you probably won't have an at-fault accident.

Forcus

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Re: Is it unmustachian to keep this car?
« Reply #10 on: April 09, 2014, 11:50:16 AM »
But it's nice to know I have mustachian approval :)

Well, I wouldn't go that far. I would say to be truly MMM is to downgrade to the least costly yet acceptable scenario, e.g. walking, public transport, biking, and only "upgrade" out of true necessity. To be truthful I don't think MMM hisself would agree with the majority here (myself included), and I think the majority here are probably not as extreme in the MMM practice, but do reap the majority of the MMM benefit.

Just a small thought. I wouldn't change my answer though :)

RetiredAt63

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Re: Is it unmustachian to keep this car?
« Reply #11 on: April 09, 2014, 04:13:54 PM »
I have the 2010 Mazda3 Sport, they are good cars.  You can get a lot in them when the back seats are down, and the way the back hatch is built lets you get fairly wide things in.  I have 9 pallets sitting in my yard (for compost bins this spring) that came home 2 at a time in my Mazda.  And yes, the hatch was shut, they were not hanging out the back.

Re gas, hold it to 100 km/h (60 mph) and you will get much better mileage than at slightly higher speeds.

Mine has 165,000 km and going strong.

Sure there may be more Mustachian cars, but you have it, you are using it well, and it should last you a long time.

Sonorous Epithet

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Re: Is it unmustachian to keep this car?
« Reply #12 on: April 10, 2014, 07:14:45 AM »
DH's Mazda3 was rated at like 23mpg or some shit like that and he consistantly gets ~32mpg out of it. You might want to read up on hypermilling. He definitely doesn't get crazy about it (actually never heard the term until recently despite years of doing it) but he does much better than it's rated at

That's my combined mileage for probably 90% city driving (I don't have to take the highway to work or school). For road trips and the like I usually get ~30-32 mpg. Biking more will reduce my city driving and should also raise my fuel economy.

I'm aware of hypermiling, and I sort of half-ass do it. These days I usually drive like a little old lady, but it's not out of frugality. I admit that when I'm driving I usually like to find at least one spot where I can give it a bootful without annoying my fellow motorists (e.g., highway onramp) and really feel the zoom-zoom. I go immediately back into old-lady mode but I have a feeling of luxury that lasts the rest of the drive.

I did the math: if I could change my driving habits to get 32 mpg average I would save a maximum of $360.

10,000 miles/year divided by 24 mpg = 416 gals/year
10,000 miles/year divided by 32 mpg = 312 gals/year
Gals/year saved = 416 - 312 = 104 gallons x $3.50/gal = $360/year.

That's honestly more than I thought it would be.

jnik

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Re: Is it unmustachian to keep this car?
« Reply #13 on: April 10, 2014, 07:47:00 AM »
DH's Mazda3 was rated at like 23mpg or some shit like that and he consistantly gets ~32mpg out of it.
My experience with the 3 (and the 6) is that if you breath on the gas pedal the thing downshifts and starts throwing dollar bills out the tailpipe. I hate it for that reason*. If you manage to train your foot just right, you should be able to keep it in higher gear / lower revs and get a lot better mileage.

*Also because the top of my head is about half an inch above the top of the car, so whenever I draw one of the damn things as a rental I have to undergo some serious spinal compression. Oddly enough the 2 doesn't have this problem and I kind of like it. Go figure.

Forcus

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Re: Is it unmustachian to keep this car?
« Reply #14 on: April 10, 2014, 08:39:31 AM »

*Also because the top of my head is about half an inch above the top of the car, so whenever I draw one of the damn things as a rental I have to undergo some serious spinal compression. Oddly enough the 2 doesn't have this problem and I kind of like it. Go figure.

Check next time and see if the seats are height adjustable. Might be a crank looking thing under the seat or one of the power controls. Don't know if they all have them but I was under the impression that at least some do.

golfer44

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Re: Is it unmustachian to keep this car?
« Reply #15 on: April 10, 2014, 09:21:26 AM »
Also....theres a shit ton of head room...not sure why you have problems.



This much?

Sonorous Epithet

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Re: Is it unmustachian to keep this car?
« Reply #16 on: April 10, 2014, 10:03:12 AM »
+1 for the reference.

DH's Mazda3 was rated at like 23mpg or some shit like that and he consistantly gets ~32mpg out of it.
My experience with the 3 (and the 6) is that if you breath on the gas pedal the thing downshifts and starts throwing dollar bills out the tailpipe. I hate it for that reason*. If you manage to train your foot just right, you should be able to keep it in higher gear / lower revs and get a lot better mileage.

*Also because the top of my head is about half an inch above the top of the car, so whenever I draw one of the damn things as a rental I have to undergo some serious spinal compression. Oddly enough the 2 doesn't have this problem and I kind of like it. Go figure.
DH's is a manual so not a problem there. Also....theres a shit ton of head room...not sure why you have problems. That's one of the reasons he loves his because his hair doesn't rub on the roof. Maybe because it's a hatchback? Though I wouldn't think that would make that big of a difference on roof height compared to a sedan

I'm 6'2", wear my hear kind of spiky, and have a fairly upright driving position, and I've never had any issues with dome clearance on my Mazda3. Are you secretly a giraffe? (Remember, on the Internet, no one knows you're a giraffe!)

When I was car shopping I rented a Ford Focus for two weeks. It was a decent little thing aside from the bockety-as-fuck transmission that make rattly-can noises whenever it shifted from 2nd to 3rd, but the real dealbreaker for me was the center console hard a sharp corner that cut into my knees. Granted, I drive with a Larry Craig-style wide stance. But it was the only compact car I've ever driven where I felt like I was actually being compacted.

Forcus

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Re: Is it unmustachian to keep this car?
« Reply #17 on: April 11, 2014, 10:48:41 AM »
When I was car shopping I rented a Ford Focus for two weeks. It was a decent little thing aside from the bockety-as-fuck transmission that make rattly-can noises whenever it shifted from 2nd to 3rd, but the real dealbreaker for me was the center console hard a sharp corner that cut into my knees. Granted, I drive with a Larry Craig-style wide stance. But it was the only compact car I've ever driven where I felt like I was actually being compacted.

I rode once in a 2012 Focus with that horrible transmission. I don't think I could even stand it as a rental. Supposedly some software fixes have been made but I just don't understand why anyone would pick it over a stick (well I do understand why but don't agree). The manual transmission transforms it in to a decent little car. The other thing I hated is the center stack. Too many buttons, distracting, vents can't be aimed properly due to the design. Some of them come with tilt and telescoping wheels which can help with the stance thing. Even my s-box '02 has tilt / telescoping but they eliminated it a few years later with cost cutting.