Replacement Car Countdown has begun (51 days)

[pastymage]

Howdy, all.

Feel free to mock me for my lack of badassery...but I've never been in a position to buy a real car with cash before, nor have I ever bought a used car for more than $700 (1982 Caddy, the "non-real" car referred to earlier in the sentence) - I've owned three "real" cars, and they were all bought new, albeit rabidly cheaply (Geo Prizm, Geo Prizm, Kia Rio).  So I need some advice and/or hand-holding.

Current car: 2003 Kia Rio, 120k miles.  The PA inspection is up at the end of May, but I took it in early, and lo and behold, it needs at least ~$1500 of work to make it pass, plus some weird wiring issues (involving the reverse lights) that would require various lengthy disassembling just to diagnose, apparently.  My main use for it is my work commute - 9.5 miles each way, plus various "going out" driving - movies/eating/etc.  I put a lot of miles on it early on, but these days it's about 10-12k/yr.

Now I know I *should* be biking to work, and I'm actually in the process of building a recumbent, but I'm not convinced it'll be practical - my route to work is not terribly bike-friendly (lots of pot-holes on the shoulders, 55mph in places).  So I'm looking at replacement car options just in case.  In that sense, MMM's recent top-10-cars post came at the right time!

But I find myself a bit apprehensive.  I'd become used to having no car payments...now, ~$7500 is a lot of money!  Yes, I'm saving interest, but what if I get it inspected like a responsible mustachian, but it still goes south, and this old, used car turns into a doorstop?  Weirdly, I feel more comfortable looking at *very* old cars with extremely low mileage but very low cost (~$2500), thinking, 'well, if it completely falls apart, at least I'm only out $2500'.  Or getting a Volt lease for $350/mo - woo, shiny, buy no gas, get no oil changes, warranty coverage, and the total lease payments are only a bit more than the up-front plus depreciation on one of the used gems...

Anyway, I'm looking at all these used car prices and edmund's TCO thing (for the models they actually have it for...), and I'm filled with ennui.

Snap me out of it?

-Dave

[velocistar237]

Could you move closer to work?
Could you find a different bike route?

If you can shop around for another opinion and a better rate, you might be better off keeping the car. You might be better off keeping it anyway.

If you still want to buy, I'm with you on the old, low-mileage car, just not *very* old. A while back, I bought an 8 year old car with 40K miles for $4K. Maybe get something more reliable like a Chevy Prizm, Toyota Corolla, or Honda Civic.

The Volt lease is a bad idea.

[tannybrown]

$1500 is less than you'd be paying for a car, so unless your ongoing repair costs are significant, I'd say you'd come out ahead with the repair.

[pastymage]

We're not in a good position to move - we only bought two years ago, and the value has reduced by nearly as much as the principle, so our equity is essentially nil.  I've been trying to work from home more often, but I don't think I can get much above 60%, practically.

Looking at the roads, I might be able to find a less-precarious bike route, though it would probably nearly double the length.  I'm definitely going to try, either way, though.

And re: the Volt, so I assumed, though I really wonder when you factor in all the TCO stuff.  And it's *so shiny*...

Anyway, both comments about the repair reminded me of another question I wanted to ask but forgot: how much exactly *is* too much for a repair?  I really do not care what the car looks or sounds like - if it's cheaper overall to keep it on life-support, that's a win for me, despite my wife's unreasoning hatred for the Rio.

[tannybrown]

You'll have to make some assumptions but I'd just create a simple CBA comparing the ongoing costs of both cars, including repairs, insurance, gas, initial purchase price, etc.

[pastymage]

The trick is those assumptions...

Edmunds doesn't have repair TCO info very far back model-year wise, so I don't have any info on the 03 Rio...and I don't know enough about cars to say "well, this and this are *going* to happen within X miles, and this and this *might* happen" and so on to make a reasonable estimate.

I suppose I could ask the 2nd opinion mechanic those questions, but I'm not sure how reliable the answers are - the last time I had $500+ work done, the (STS) guy told me I probably shouldn't put any more money into the car, but that was two years ago and he didn't go into much detail.  Maybe I can find some Rio-specific forum and ask people there...

[tannybrown]

I'd use your previous years' repairs (including this $1500) to create a trend and assume the future costs will be the same.  Not perfect, but past performance is pretty good data.  If you've owned the car sine 2003, you have a 9 years of which you could average.  You could even just take more recent history (3 years) and say that's the more indicative cost per year.

Making assumptions is needed for any of the paths you move down. Even the car you buy will have some sort of ongoing repair costs, used or new...

The other figure to consider is when you'd be replacing the two cars.  Every car has a timeframe, but if you stretch out your use of a car, you can end up getting additional savings simply by buying fewer cards over a lifetime.  I'm not saying that you should do a 60 year CBA, but rather to make it long enough to factor in the costs of a car replacement purchase (or possibly two) in both scenarios.  That is to say, keeping your current car can look artificially beneficial if you don't factor in the inevitable replacement costs of that Kia.

[sowantere]

Yeah I wouldn't move over a 9 mile commute but neither would I spend a bunch of money on a car for one either.  There are plenty of good used cars on craigslist that hopefully you could pay cash for and not have a car payment.  350 a month is a lot to pay for a 9 mile commute.  Thats not counting insurance etc.  I did the same thing in 2005 I bought a 350z roadster as a gift to myself for graduating college.  I too had never had a "nice shiny car". I paid cash.  So why not.  I sold it 2 years later and got 5500 less than what I paid for.  That was when it hit me that a car really is a bad investment.  It was a hell of a lot of fun though.  It depends where you are at in life.  If you are here then hopefully you are past the blowing money stage and on to the savings and investing for freedom to actually live in more than spurts.  If I would of kept that 350z it would now be worth about 40% of what I paid for it.

SowantERE. 

[pastymage]

Update:

After bunch of back-and-forth with people at the kia forum and taking it to STS, and I managed to get it past inspection for ~$600.  If I really want to keep it for another year, I'll have to get the timing belt replaced, which is ~$200-300, but I'll finish my bike first and see if I can handle the commute that way.

So, the up-shot is, car-buying averted, for the moment!  Hopefully I can increase my badassery before the next crisis hits, and be able to just wave goodbye to it.  Thanks, folks!