Author Topic: Should we accept a free car?  (Read 1744 times)

Optimiser

  • Pencil Stache
  • ****
  • Posts: 556
  • Age: 36
  • Location: PNW
Should we accept a free car?
« on: October 26, 2018, 10:46:16 AM »
Ive got a car question that I want to ask for some help thinking through.  My wife and I currently own 2 cars. A 1990 Mazda Miata with about 150,000 miles, and a 2003 Honda Civic Hybrid with about 120,000 miles. Both cars are paid for and run well.

We have three kids, the oldest is 13 and with us half the time, a 2 year old, and a 3 month old. We have discussed getting a bigger car, because the Civic is pretty cramped with all 5 of us in there at the same time, and the trunk is pretty small because the hybrid battery is back there.

So far we have decided to stick with what we have. My wife says she would be too sad to see me sell my Miata (it would be hard for me too, but Id get over it). Replacing the Civic with a minivan (Mazda5) or station wagon (V70) would take us from 40+mpg to 25mpg. I estimate this would cost us about $50/month.

Yesterday I got a text message from my dad saying that they are going to get a new car for my mom and asking if we would like to have her 2007 Honda Accord. I dont know the mileage, but Id guess its in the 120,000 range. The car is in good condition.

My first thought was duh obviously we will take a free item worth thousands of dollars. But, then I started thinking about it. I decided that there are 4 potential scenarios:

A)   Keep all three cars I would commute in the Civic and park the Miata for all but the nicest of days. Wife would drive the Accord.
Increased fuel cost $25/mo
Increased insurance $20/mo
Total increase $45/mo

B)   Sell Civic I would continue to commute in the Miata, wife would drive the Accord
Increased fuel cost $38/mo
Increased insurance $5/mo
Total increase $43/mo
Money from selling Civic 2-3k


C)   Sell Miata I would commute in Civic, wife would drive the Accord
Increased fuel cost $25/mo
Increased insurance $8/mo
Total increase $33/mo
Money from selling Miata 3-4k


D)   Sell the Accord or just ask my parents to give me the cash value of the car. Is this socially acceptable?
How should I think through this decision? I think everyone would be happiest with option A (except me every time I look at our budget). Option C (or D) make the most financial sense, but could upset some people.

Other possibly relevant info:
We have put 7,000 miles on the Miata and 11,500 on the Civic in the last year. I try to bike instead of drive as much as I can.
The Miata is worth more than I paid for it 10 years ago and I believe it will continue to slowly appreciate.
I get 35 MPG in the Miata and I think I could get close to 50 MPG if I drive the Civic. Wife gets 41 MPG in Civic. Accord would get about 27 MPG.
We have 80k in student loans and a 155k mortgage with no other debt.
We dont save as much as Id like to, but I also feel like my wife is a saint for tolerating my frugality.

TL;DR: We got offered a bigger nicer car for free. It would be really nice to have but it will increase our monthly expenses.

Tester

  • Stubble
  • **
  • Posts: 204
Re: Should we accept a free car?
« Reply #1 on: October 26, 2018, 10:53:38 AM »
Sell civic and use accord.
Or sell civic and get the wagon/minivan.

I love my 2009 honda odyssey bought this year.
Being able to change kids diapers/clothes while almost standing up is a very important part of life right now.

Gas is kind of killing as it only gets 15 mpg but I can tell you it is worth it for me and especially my wife who does not break her back getting the baby with the car seat in and out.

ketchup

  • Magnum Stache
  • ******
  • Posts: 3947
  • Age: 28
Re: Should we accept a free car?
« Reply #2 on: October 26, 2018, 10:59:17 AM »
I know Option D would be a no-go with my mom.  One time as a teenager I complained about driving her car and she asked what I would do if she gave it to me.  "I'd sell it and buy something I like." was the WRONG answer.

Car turned out to be a POS with transmission issues at 50,000 and she sold it for a song at ~105,000.  But I was presumably still being an ungrateful ass of a teenager.  And that car's visibility was still awful and dangerous, especially for an idiot teenage driver.

Tester

  • Stubble
  • **
  • Posts: 204
Re: Should we accept a free car?
« Reply #3 on: October 26, 2018, 11:03:11 AM »
Ok, about option D I would not do it either.
So only accept the car if you keep it.
If not tell your parents to trade it in.

GuitarStv

  • Senior Mustachian
  • ********
  • Posts: 13746
  • Age: 38
  • Location: Toronto, Ontario, Canada
Re: Should we accept a free car?
« Reply #4 on: October 26, 2018, 11:12:30 AM »
Five years ago I was offered a year old SUV by my father in law because he was leaving the country and didn't need it any more.  At the time we had a five year old Corolla.  The SUV got worse gas mileage, and historically had a worse repair record than our car. . . but was bigger (we have a small dog and were expecting a son at the time, but didn't really need the extra room.  And still don't now that our son is almost five.).  I turned it down.  My father in law sold the car.  I still believe it was the right decision.

Radagast

  • Handlebar Stache
  • *****
  • Posts: 1515
  • Location: West of the Mountains, East of the Sea
  • One does not simply work into Mordor
Re: Should we accept a free car?
« Reply #5 on: October 26, 2018, 11:25:24 AM »
I'm thinking A or C are the best options. For a commuter, it would not make sense to sell the best commuter vehicle so nix B. After you have kept the Accord for three years or so it would become socially acceptable to sell, so I see A being more of a break even decision than a loss and I'd go for that. The Miata is simply not practical, even though it is now a classic so from a practical perspective that is the one to ditch if you limit yourself to two.

If B, dibs on the Civic.

frugaliknowit

  • Handlebar Stache
  • *****
  • Posts: 1662
Re: Should we accept a free car?
« Reply #6 on: October 26, 2018, 11:28:20 AM »
My $0.02

What's the Miata worth?  Miata's are cute, but they are impractical (more like a toy).  You've got SL's.  There's no room for toys when you've got SL's.

Have a mechanic look at the Accord before doing anything.  Your parents (possibly without knowing it) may be unloading a POS headache/money pit on you. 


robartsd

  • Handlebar Stache
  • *****
  • Posts: 2342
  • Location: Sacramento, CA
Re: Should we accept a free car?
« Reply #7 on: October 26, 2018, 01:14:50 PM »
I calculated the break even point for options B and C using 6% interest for the time value of money (I suppose the marginal rate on your student loans would be a better calculation).

Option B: Sell for $2000, increase monthly expense by $43; break even in about 4.5 years.
Option C: Sell for $3000, increase monthly expense by $33; break even in more than 10 years.

The increase in monthly expenses for your free car seem to be pretty well offset by the value of the car you choose to replace. If you can get 4k for the Miata, you could be ahead for more than 15 years!

nessness

  • Bristles
  • ***
  • Posts: 392
Re: Should we accept a free car?
« Reply #8 on: October 26, 2018, 02:36:04 PM »
From a practical standpoint, it seems like it would make the most sense to sell the Miata and have two cars that you're  capable of transporting the kids in - for example, you might need to take one kid somewhere while your wife takes the other kid somewhere else. But I'm not emotionally attached to your Miata while it sounds like you are, so it's hard for me to know how much weight to give that factor.

I'm a red panda

  • Walrus Stache
  • *******
  • Posts: 8009
  • Location: United States
Re: Should we accept a free car?
« Reply #9 on: October 26, 2018, 02:43:08 PM »
If the problem is the Civic is cramped, I don't think an Accord fixes it. I've had both. You don't gain much space with an Accord. (I had a Civic coupe so much Accord did have more doors, which is good for kids.)

So in this case, I would not accept it

daverobev

  • Magnum Stache
  • ******
  • Posts: 3337
  • Location: UK
Re: Should we accept a free car?
« Reply #10 on: October 26, 2018, 02:58:55 PM »
If the problem is the Civic is cramped, I don't think an Accord fixes it. I've had both. You don't gain much space with an Accord. (I had a Civic coupe so much Accord did have more doors, which is good for kids.)

So in this case, I would not accept it

Remember cars get bigger generation to generation. We had a 2004 Civic then, briefly, a 2002 Accord - which was certainly slightly larger. An 07 will be quite a bit more spacious, but not crazy big either.

OP, I'd say take the Accord, sell the Civic, give the money to the parents. You won't have to maintain the Civic (timing belts, yay). You get the larger car with bigger luggage space.

I'm a red panda

  • Walrus Stache
  • *******
  • Posts: 8009
  • Location: United States
Re: Should we accept a free car?
« Reply #11 on: October 26, 2018, 03:01:51 PM »
I had a 2004 Civic and a 2010 Accord, so that's what I'm comparing.

I felt like the Accord was bigger to drive, but not that much more spacious for backseat passengers.

Yes, the Accord is bigger, but it isn't going to solve the problem. And it sounds a bit like an obligation. How long do they have to keep it before it's "ok" to trade it, for instance? It sounds like OPs parents might hold a grudge if they got rid of it.
« Last Edit: October 26, 2018, 03:05:20 PM by I'm a red panda »

daverobev

  • Magnum Stache
  • ******
  • Posts: 3337
  • Location: UK
Re: Should we accept a free car?
« Reply #12 on: October 26, 2018, 08:00:31 PM »
I had a 2004 Civic and a 2010 Accord, so that's what I'm comparing.

I felt like the Accord was bigger to drive, but not that much more spacious for backseat passengers.

Yes, the Accord is bigger, but it isn't going to solve the problem. And it sounds a bit like an obligation. How long do they have to keep it before it's "ok" to trade it, for instance? It sounds like OPs parents might hold a grudge if they got rid of it.

Really? I'm surprised.

The Civic being a hybrid certainly cuts down on boot space, though.

Huh - 0.8 inches extra in the rear. Crazy.

http://owners.honda.com/vehicles/information/2007/Accord-Sedan/specs#mid^CM5517EXW

http://owners.honda.com/vehicles/information/2004/Civic-Sedan/specs#mid^ES1514PW


FIFoFum

  • Handlebar Stache
  • *****
  • Posts: 1842
    • Captain's Log - Mission to Puppy Waystation on Puppy Island
Re: Should we accept a free car?
« Reply #13 on: October 26, 2018, 08:29:14 PM »
Option C is the most practical, since it saves the most money while still meeting the need for a larger vehicle for when you are transporting the family of 5.

My question would be - do you think selling the Miata would be a + or - for your wife on the path toward frugality? If she would see it as you choosing the family's financial health over your own personal pleasure of driving Miata sometimes, it could be a positive nudge in her path to embracing your frugality or maybe even joining you. When we bear the personal "cost" of frugality, it can inspire some spouses. I also think it's healthy in moving past emotional attachments to objects (it's ok to have loved your Miata and still not keep it indefinitely). On the other hand, if your wife would see it as you depriving yourself & use it to justify another spend (after all, you got the $ for the Miata!), then I can see this as not actually netting the expected benefit AND turning into a source of frustration (if you're not keeping the savings, how would you feel about giving up the Miata?).

Optimiser

  • Pencil Stache
  • ****
  • Posts: 556
  • Age: 36
  • Location: PNW
Re: Should we accept a free car?
« Reply #14 on: October 28, 2018, 06:34:56 PM »
First of all thank you to everyone with the thoughtful comments.

My $0.02

What's the Miata worth?  Miata's are cute, but they are impractical (more like a toy).  You've got SL's.  There's no room for toys when you've got SL's.

Have a mechanic look at the Accord before doing anything.  Your parents (possibly without knowing it) may be unloading a POS headache/money pit on you.
The Miata is worth $3,000-4,000.

I'll push back a little on the impractical comment. For 90% of my driving, I am the only person in the car, so having extra seats doesn't really increase the practicality. To me what makes a practical commuter car is, good gas mileage, cheap replacement parts, easy repairs, and comfortable quite ride. The Miata checks off 3 out of 4 of those. It also has the added benefit of having reached the bottom of it's depreciation curve and starting to increase in value which means it is hundreds of dollars per year cheaper to own than almost anything else.

It's actually surprisingly useful for transporting stuff too if the weather is decent. I've moved bikes, lumber, and a christmas tree in the passenger seat.

But point taken, the Miata probably makes the least sense for a family of five, and I appreciate everyone who has pointed that out.

From a practical standpoint, it seems like it would make the most sense to sell the Miata and have two cars that you're  capable of transporting the kids in - for example, you might need to take one kid somewhere while your wife takes the other kid somewhere else. But I'm not emotionally attached to your Miata while it sounds like you are, so it's hard for me to know how much weight to give that factor.

In a situation where one kid needs to go one place and the other kid(s) need to go somewhere else, the Miata is fine because it has a passenger seat (with no airbag).

I calculated the break even point for options B and C using 6% interest for the time value of money (I suppose the marginal rate on your student loans would be a better calculation).

Option B: Sell for $2000, increase monthly expense by $43; break even in about 4.5 years.
Option C: Sell for $3000, increase monthly expense by $33; break even in more than 10 years.

The increase in monthly expenses for your free car seem to be pretty well offset by the value of the car you choose to replace. If you can get 4k for the Miata, you could be ahead for more than 15 years!

Thank you. This is a really helpful way for me to think about it.

If the problem is the Civic is cramped, I don't think an Accord fixes it. I've had both. You don't gain much space with an Accord. (I had a Civic coupe so much Accord did have more doors, which is good for kids.)

So in this case, I would not accept it

You are right that Accord isn't actually that much bigger than the Civic. However the two main issues that we have with the Civic is rear hip room, and trunk space. The Accord has 3.7" more rear hip width and a 40% larger trunk. This would go a long way in terms of making it more comfortable to fit three in the back seat and make it much easier to transport strollers and kid stuff.

And it sounds a bit like an obligation. How long do they have to keep it before it's "ok" to trade it, for instance? It sounds like OPs parents might hold a grudge if they got rid of it.

My parents are really laid back about stuff like that. Asking for money instead of the car or selling it immediately would probably push them too far. But, if we didn't feel like it wasn't working out and we wanted to sell it after a year, I don't think they would be mad.

My question would be - do you think selling the Miata would be a + or - for your wife on the path toward frugality? If she would see it as you choosing the family's financial health over your own personal pleasure of driving Miata sometimes, it could be a positive nudge in her path to embracing your frugality or maybe even joining you. When we bear the personal "cost" of frugality, it can inspire some spouses. I also think it's healthy in moving past emotional attachments to objects (it's ok to have loved your Miata and still not keep it indefinitely). On the other hand, if your wife would see it as you depriving yourself & use it to justify another spend (after all, you got the $ for the Miata!), then I can see this as not actually netting the expected benefit AND turning into a source of frustration (if you're not keeping the savings, how would you feel about giving up the Miata?).

I've brought up selling the Miata quite a few times in the last few years and she always says she would be too sad if I sold it. This is in spite of the fact that she hates driving it and hasn't ridden in the passenger seat since our 2 year old was born. I've driven the car since before we met and she sees it as an important part of my identity. FWIW, my 13 year old hates the idea of getting rid of the car even more.

As far as her seeing me choosing my family's financial health over my personal pleasure. She already thinks I do this too much.

If I sold it would she use it to justify another spend? Probably not. She does a pretty good job of sticking to the budget, she just isn't interested sacrificing her own personal pleasure to nearly the extent I am.

Sell civic and use accord.
Or sell civic and get the wagon/minivan.

I love my 2009 honda odyssey bought this year.
Being able to change kids diapers/clothes while almost standing up is a very important part of life right now.

Gas is kind of killing as it only gets 15 mpg but I can tell you it is worth it for me and especially my wife who does not break her back getting the baby with the car seat in and out.

15mpg Ouch! At our 11,000 miles per year that is an extra $124 in gas a month compared to our current car. I'll gladly take my kid to the nearest restroom to change a diaper for that kind of money.
« Last Edit: October 28, 2018, 06:39:10 PM by Optimiser »

lhamo

  • Walrus Stache
  • *******
  • Posts: 9616
  • Location: Seattle
Re: Should we accept a free car?
« Reply #15 on: October 28, 2018, 07:51:59 PM »
Does your DW commute to a job?  11k miles/year seems like an awful lot of driving absent a commute....

Villanelle

  • Magnum Stache
  • ******
  • Posts: 2797
Re: Should we accept a free car?
« Reply #16 on: October 29, 2018, 05:56:38 AM »
Would your wife be sad on your behalf to sell the Miata--because she knows you love it and doesn't want to see you have to make that sacrifice?  or would she actually be sad not to won it anymore?

If it's the former, then I think you just assure her that you are fine with it.  If its the latter, talk it out, but emotions seem like a pretty silly reason to keep a car.  (And maybe a down right ridiculous reason, depending on your finances.)

C seems like the best option.   And the thing it seems you aren't accounting for when you list the numbers for each option is that if it has 30k fewer miles on if (assuming that's a correct guess), then you are also trading up for an addition ~3 years of driving (depending on how many miles you drive per year).  There is definitely value there.  The Accord can almost certainly be relied upon to last at least as many miles as a Miata, if if not more.  (Of course, this is a gamble, but you never know.  Either car could die tomorrow.)

elliha

  • Bristles
  • ***
  • Posts: 408
Re: Should we accept a free car?
« Reply #17 on: October 29, 2018, 07:01:34 AM »
If you can afford it and have room for it I would try three cars for six months or a year and then make an assessment about which car needs to go. Try to keep track of which car you use when and the one that is used the least should really go. If I would go for selling one now I would sell the civic, it really does seem that the new car fits your needs better and you definitely need to have a bigger car and you do use your miata for other things than fun.

Optimiser

  • Pencil Stache
  • ****
  • Posts: 556
  • Age: 36
  • Location: PNW
Re: Should we accept a free car?
« Reply #18 on: October 29, 2018, 10:43:23 AM »
Does your DW commute to a job?  11k miles/year seems like an awful lot of driving absent a commute....

No, she is a stay at home mom right now. So her miles are trips to the store, library, parks, etc. Also any driving we do during the weekend like visiting family. I completely agree that it seems like an awful lot of driving. So far I haven't been had much luck with encouraging her to reduce it.

Would your wife be sad on your behalf to sell the Miata--because she knows you love it and doesn't want to see you have to make that sacrifice?  or would she actually be sad not to won it anymore?

If it's the former, then I think you just assure her that you are fine with it.  If its the latter, talk it out, but emotions seem like a pretty silly reason to keep a car.  (And maybe a down right ridiculous reason, depending on your finances.)

I think it is the first rather than the second.

C seems like the best option.   And the thing it seems you aren't accounting for when you list the numbers for each option is that if it has 30k fewer miles on if (assuming that's a correct guess), then you are also trading up for an addition ~3 years of driving (depending on how many miles you drive per year).  There is definitely value there.  The Accord can almost certainly be relied upon to last at least as many miles as a Miata, if if not more.  (Of course, this is a gamble, but you never know.  Either car could die tomorrow.)

I talked to my dad about the car and it has 150,000 miles, so about the same as the Miata. I think the Miata will last as many or more miles as the Accord. I see a lot of them in excess of 225,000 miles, which of course is not unheard of for an Accord either. The Miata has a manual trans which tend to last longer, and I feel much more confident in my ability to replace anything that needs fixing on the Miata, up to and including the entire powertrain, of which replacements are cheap.

If you can afford it and have room for it I would try three cars for six months or a year and then make an assessment about which car needs to go. Try to keep track of which car you use when and the one that is used the least should really go. If I would go for selling one now I would sell the civic, it really does seem that the new car fits your needs better and you definitely need to have a bigger car and you do use your miata for other things than fun.

I'm leaning in the direction of C, which means selling the Miata. The price of Miata's fluctuates seasonally, so if I sell it, Spring would be the best time to do so. This will give me more time to think about it, assess how our driving usage changes, and decide how much extra expense and hassle having 3 cars is.

Dr.Jeckyl

  • Stubble
  • **
  • Posts: 143
Re: Should we accept a free car?
« Reply #19 on: October 29, 2018, 12:13:15 PM »
Bravo for having a Miata and Civic with 3 kids. I have one kid and can't justify a Miata, wish I could. I can't imagine a stroller and other gear fitting very well in that Civic. Vehicles are such a personal thing and you have to do what you want. But people don't own Miatas for practicality. They own them because they are fun. Are you willing to give up your fun car?

Hold onto Miata for beautiful days. The person who shuttles the kids most days gets the Accord and the other drives the Civic.