Author Topic: What is a reasonable amount to spend on a car?  (Read 2870 times)

rdaneel0

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What is a reasonable amount to spend on a car?
« on: June 12, 2017, 01:06:57 PM »
Hello Mustaches!

I'm a longtime reader and longtime saver/cheapskate. I have never owned a car despite being in my 30s, however, I may have to move for work to a place/job that will require me to have a car. I know some of you will say "just bike everywhere" but please take my word for it that I have done the research and will actually need one non-bike vehicle. That said...

I won't be driving daily or super far, but I also know nothing about cars or how to fix them so I'm nervous about buying a "beater". I've never purchased a car so I have no idea what a reasonable price is and I'm a bit confused on that point. I see some people here say they buy cars for less than $1k while MMM seems to recommend cars more in the $7k-$12k range. I don't care about looks at all and would be in a moderate climate so no crazy snow capabilities would be necessary.

Any recommendations on price range and even makes/models would be extremely helpful. I would prefer to spend a bit more up front and be able to keep this car for several years rather than have to exchange really old cars annually. Thank you in advance!

MarioMario

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Re: What is a reasonable amount to spend on a car?
« Reply #1 on: June 12, 2017, 01:10:17 PM »
You can get a reliable Toyota or Honda for $2k-$4k

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Optimiser

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Re: What is a reasonable amount to spend on a car?
« Reply #2 on: June 12, 2017, 04:51:33 PM »
I like to keep the value of all of my vehicles at <10% of my annual income.

also, read all of these if you haven't http://www.mrmoneymustache.com/tag/cars/

FIRE 20/20

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Re: What is a reasonable amount to spend on a car?
« Reply #3 on: June 12, 2017, 05:19:20 PM »
IMHO, the absolute maximum that you could in any way justify for basic transportation would be somewhere around $10k.  You can get a pretty nice, 4 year old car that's in very good condition with about 50k miles.  I'm partial to the Mazda3 hatchback myself because they generally are a little more fun to drive than the equivalent Honda or Toyota and have poor resale value because people aren't as familiar with them.  Have a pre-purchase inspection done, and you should be good to go. 
However, $10k should really be an upper limit for a mustachian.  Sure, if you have $500k saved up and are coasting in to retirement then spending $10k on a car is fine, but at that level you're spending more for an illusion of reliability.  Starting somewhere in the late 90s to 2000s, quality really improved dramatically across the board.  If you buy something with under 100,000 miles on it and it's less than 7-10 years old you should be fine as long as a good mechanic checks it out.  In addition to helping you avoid buying a car that has issues that aren't obvious, a good pre-purchase inspection will give you a list of things that you can use to knock down the price.  I don't remember what I paid for my most recent PPI (maybe $100-150?), but it came back excellent but there were a few minor things they found that I didn't - one key fob didn't work, the battery was going to need to be replaced soon, the wiper blades were bad, and one or two other very small things.  I was able to take the report to the place I was buying the car and get them down an extra $500.

FIRE 20/20

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Re: What is a reasonable amount to spend on a car?
« Reply #4 on: June 12, 2017, 05:24:17 PM »
Two other things - do you mind saying what state you're in (if you're in the US)?  Also, is your surname for your handle Olivaw?  If so, excellent choice!

lbmustache

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Re: What is a reasonable amount to spend on a car?
« Reply #5 on: June 13, 2017, 05:47:35 PM »
IMHO, the absolute maximum that you could in any way justify for basic transportation would be somewhere around $10k.  You can get a pretty nice, 4 year old car that's in very good condition with about 50k miles.  I'm partial to the Mazda3 hatchback myself because they generally are a little more fun to drive than the equivalent Honda or Toyota and have poor resale value because people aren't as familiar with them.  Have a pre-purchase inspection done, and you should be good to go. 
However, $10k should really be an upper limit for a mustachian.  Sure, if you have $500k saved up and are coasting in to retirement then spending $10k on a car is fine, but at that level you're spending more for an illusion of reliability.  Starting somewhere in the late 90s to 2000s, quality really improved dramatically across the board.  If you buy something with under 100,000 miles on it and it's less than 7-10 years old you should be fine as long as a good mechanic checks it out.  In addition to helping you avoid buying a car that has issues that aren't obvious, a good pre-purchase inspection will give you a list of things that you can use to knock down the price.  I don't remember what I paid for my most recent PPI (maybe $100-150?), but it came back excellent but there were a few minor things they found that I didn't - one key fob didn't work, the battery was going to need to be replaced soon, the wiper blades were bad, and one or two other very small things.  I was able to take the report to the place I was buying the car and get them down an extra $500.

I agree. You can get a 2012 or so Civic or Corolla or Camry for $10k, if you are worried about reliability. I personally would not buy a "beater" for safety reasons, thus I think a budget of $7k-$10k is a great price point. Now if you have a ton of debt, low income, or other issues, then you should probably aim lower.

Some other decent cars are Hyundai Accent or Elantra, Kia Soul, Kia Forte.

rdaneel0

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Re: What is a reasonable amount to spend on a car?
« Reply #6 on: June 15, 2017, 05:56:41 PM »
Two other things - do you mind saying what state you're in (if you're in the US)?  Also, is your surname for your handle Olivaw?  If so, excellent choice!

Awesome! I've been waiting for someone to pick up on my r daneel reference :) you made my day. I may be moving to Pennsylvania, which is where I would purchase the vehicle.

rdaneel0

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Re: What is a reasonable amount to spend on a car?
« Reply #7 on: June 15, 2017, 05:59:11 PM »
Thanks all for the advice, this helps a lot. For reference I don't have any debt, been 'staching for a while. So it sounds like $7k ish will do it. I was looking at small Toyota sedans since they're mentioned a lot and it looks like I can score one with around 50k to 75k miles on it for around $7k. Thanks again!


SeaEhm

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Re: What is a reasonable amount to spend on a car?
« Reply #8 on: June 15, 2017, 08:21:42 PM »
Get a Honda Fit from $5,000 to $19,000.  Go test drive the various models and see what "fits" you best.  Keep it for 10+ years and enjoy.

Reasonable amount to spend is relative to your expectations in life.   Asking a site like this is like asking a lizard and polar bear which outfit works best.

EconDiva

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Re: What is a reasonable amount to spend on a car?
« Reply #9 on: June 16, 2017, 05:11:14 AM »
IMHO, the absolute maximum that you could in any way justify for basic transportation would be somewhere around $10k.  You can get a pretty nice, 4 year old car that's in very good condition with about 50k miles.  I'm partial to the Mazda3 hatchback myself because they generally are a little more fun to drive than the equivalent Honda or Toyota and have poor resale value because people aren't as familiar with them.  Have a pre-purchase inspection done, and you should be good to go. 
However, $10k should really be an upper limit for a mustachian.  Sure, if you have $500k saved up and are coasting in to retirement then spending $10k on a car is fine, but at that level you're spending more for an illusion of reliability.  Starting somewhere in the late 90s to 2000s, quality really improved dramatically across the board.  If you buy something with under 100,000 miles on it and it's less than 7-10 years old you should be fine as long as a good mechanic checks it out.  In addition to helping you avoid buying a car that has issues that aren't obvious, a good pre-purchase inspection will give you a list of things that you can use to knock down the price.  I don't remember what I paid for my most recent PPI (maybe $100-150?), but it came back excellent but there were a few minor things they found that I didn't - one key fob didn't work, the battery was going to need to be replaced soon, the wiper blades were bad, and one or two other very small things.  I was able to take the report to the place I was buying the car and get them down an extra $500.

I agree. You can get a 2012 or so Civic or Corolla or Camry for $10k, if you are worried about reliability. I personally would not buy a "beater" for safety reasons, thus I think a budget of $7k-$10k is a great price point. Now if you have a ton of debt, low income, or other issues, then you should probably aim lower.

Some other decent cars are Hyundai Accent or Elantra, Kia Soul, Kia Forte.

Agree RE: the bolded.

If/when I do purchase another car I will also be looking in the $7-$10k range but before making the purchase I'll need to do some homework on what is the safest car around this price point.  I've been in enough car accidents in the high traffic car-centric city that I live in and have made it out of all of them okay but can't imagine if any of them had been much worse so I need the safest car possible for the lowest amount possible.

Previously, up until this point I have purchased all beater cars but at this point don't own one at all.

rdaneel0

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Re: What is a reasonable amount to spend on a car?
« Reply #10 on: June 26, 2017, 05:27:43 PM »
Looks like I jumped the gun! Just found out my work will be sending me somewhere totally different (in a different role) where I won't need a car at all. WIN!!!! Thanks though to all of you for your great advice, I will certainly come back and ask more questions if I need a car at some point in the future. For now I'm happy with another decade (hopefully) of car-free living.