Author Topic: What to do about a new car when traveling >500 miles/week?  (Read 7035 times)

erc24

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What to do about a new car when traveling >500 miles/week?
« on: April 17, 2013, 07:31:13 AM »
Hi all - I am new today to the forum.  My significant other and I are trying to get to a more mustachian way of life slowly but surely.  One question that we both can't seem to figure out the answer to is my SO's car situation:

He is in outside sales in New England and drives over 500 miles a week to see clients.  He is currently driving a ford explorer (his stupid mistake years ago) that has about 120k miles on it and gets pretty poor gas mileage.  He also receives a car payment from his employer of ~$500/month & gets reimbursed for mileage at a rate where he just about breaks even.  He has about 10k saved that he could use in cash for a new car, but we are unsure that will be enough to purchase a high efficiency/hybrid car and it would also clear out his contingency fund.  At 120k miles, this isn't a dire situation, we can wait a while longer, but, he will soon need new brakes and tires.  I can't stomach taking a car loan but we are both really unsure of what to do here.  The one thing we know for sure is that (unfortunately) a car is 100% necessary for his job.  Any tips/advice would be greatly appreciated!   

Thank you!

RadicalPersonalFinance

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Re: What to do about a new car when traveling >500 miles/week?
« Reply #1 on: April 17, 2013, 07:48:54 AM »
What is the value of his existing vehicle?  What year?

Does he owe money on it?

Think about how he could do a straight swap into a more fuel efficient car.  This will depend on the values of the vehicle. 

For sake of example, let's say the Explorer is worth $8,000.  He could sell it and buy a 2005 Prius with equivalent miles for $8,000.  He will immediately start saving money.

That's the best scenario. 

If he would have to buy a more expensive car to save on gas money, we have to do the calculations to see if it's worth it and how quickly it's worth it.

Here's the info we need to do the calculations:

1-Value of his current car.
2-Price of newer, more fuel efficient car being considered.
3-MPG of current car.
4-MPG of newer, more fuel efficient car being considered.
5-Additional monthly savings / expenses because of the swap (lower maintenance costs/tires etc. / higher insurance costs, etc.)
6-Number of miles driven per month total.
7-Cost of fuel in your area / expected cost of fuel.

If you will provide that info, we can help with calculations.

Finally, does his employer require a certain type or year of car for him to drive as a sales rep?  If so, we need to know that.

the fixer

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Re: What to do about a new car when traveling >500 miles/week?
« Reply #2 on: April 17, 2013, 08:24:33 AM »
You don't need a hybrid to save money on gas. For instance, instead of looking at a Prius/Insight, take a look at the Toyota Yaris. Its highway mileage is comparable to what the Prius gets, but it will be much cheaper to buy. Also look at the Honda Fit, but because this is a newer model it will be more expensive.

daverobev

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Re: What to do about a new car when traveling >500 miles/week?
« Reply #3 on: April 17, 2013, 08:49:23 AM »
Or a diesel, Jetta would be better than a Prius assuming most of the driving is highway.

Obviously he has to drive something decent looking.

ketchup

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Re: What to do about a new car when traveling >500 miles/week?
« Reply #4 on: April 17, 2013, 08:49:55 AM »
Finally, does his employer require a certain type or year of car for him to drive as a sales rep?  If so, we need to know that.
This is the real key. If there is no requirement here, something as old and cheap as a $1000 1995 Geo Metro would do the job and cost nothing to drive and maintain.  If say, a car 10 years old or newer is required, then perhaps something like a Toyota Echo or Yaris, both of which are solid, cheap, and efficient.  Traveling that much just to meet clients I am assuming means transporting just him without any real cargo or passengers. As such, any decent small car will be a gigantic step up from the Explorer.

bogart

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Re: What to do about a new car when traveling >500 miles/week?
« Reply #5 on: April 17, 2013, 09:03:07 AM »
He also receives a car payment from his employer of ~$500/month ...


Unless I'm misreading that -- $500/month is a huge car payment (in my world) and while I know debt is BAD BAD BAD, if he has good credit there are any number of really low rate loans available at the moment (that is, borrowing is cheap).

Personally with that mileage to cover I'd be inclined to go with something Japanese (Toyota or Mazda) in the $7K to $15K range, meaning not tremendously high mileage  and pretty reliable.  My stickshift 2wd Vibe (which is mostly a Toyota Matrix, though was sold by Pontiac) gets mileage in the 30-35 mpg range which isn't wildly excellent but not dreadful, either.  In New England I'd also probably spring for AWD or 4WD which could push in favor of a Subaru.

This could be one of those times when taking out a car loan to cover part of the cost of the purchase (while keeping some EF in the bank) makes sense (again, assuming he qualifies for the great rates), provided that it's not a big enough loan that if he loses his job after buying, he's up a creek.

erc24

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Re: What to do about a new car when traveling >500 miles/week?
« Reply #6 on: April 17, 2013, 12:49:45 PM »
thanks for all the tips! 

@7years I'll have to get the specific mpg and other numbers to do a calc tonight... there is no one car in particular he is looking to replace the explorer with at this point, as he's looking to get the most of the current car (although I can see the argument for switching sooner than driving this car into the ground). 

@ketchup My qualm about getting a car that is 10+ years old is simply the mileage accompanying that aged car.  Before I confirm the numbers tonight, it's my estimate that he drives easily 500 miles/week (based in greater Boston.. going to outer reaches of Maine and southern points of RI); but maybe I am just ignorant and there are older cars with really low mileage. 
some cargo space is needed, actually, since he will bring samples from their warehouse... and then our dog goes with him from time to time, but he's not a HUGE breed, ~75 lbs.  So some, but not a ton of space is necessary. 

I can't confirm/deny that he needs a specific standard of car, but will find out.  Didn't even think of it (I am clearly NOT in sales!). 

@ fixer I did happen to leave out that he's over 6'3 and will sooner move out of our house to live in a gutter than drive a yaris/prism every day.  Although, I do agree a hybrid is not necessary. 

@bogart... yes, the payment is generous, and its north of 500.  However, right now he's taking that as add'l income each month (since he has no car payment) so in my mind, the more of that which can stay as (non taxed) cash in his pocket, the better

thank you!!

the fixer

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Re: What to do about a new car when traveling >500 miles/week?
« Reply #7 on: April 17, 2013, 02:01:58 PM »
@ fixer I did happen to leave out that he's over 6'3 and will sooner move out of our house to live in a gutter than drive a yaris/prism every day.  Although, I do agree a hybrid is not necessary. 
Makes sense to me! I drive a Scion xA (basically the same car as a Yaris). I'm 5'11", and I move the seat all the way back to be comfortable. Those cars are definitely designed around Japanese-sized people.

bogart

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Re: What to do about a new car when traveling >500 miles/week?
« Reply #8 on: April 17, 2013, 07:53:19 PM »

@bogart... yes, the payment is generous, and its north of 500.  However, right now he's taking that as add'l income each month (since he has no car payment) so in my mind, the more of that which can stay as (non taxed) cash in his pocket, the better


... oh right, silly me.  Though I suspect it should be taxed and that he could get in trouble if it's not reported/paid up as mandated (not to mention the issue of, you know, doing what's fair).  But, right -- if he can keep the money, then it's silly to say he should just spend it, obviously.

icefr

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Re: What to do about a new car when traveling >500 miles/week?
« Reply #9 on: April 17, 2013, 09:25:15 PM »
@ fixer I did happen to leave out that he's over 6'3 and will sooner move out of our house to live in a gutter than drive a yaris/prism every day.  Although, I do agree a hybrid is not necessary. 

I test drove a Nissan Versa when I was looking for a car a few years ago. It was quite roomy - maybe it wouldn't be bad for someone who is 6'3"?

MountainFlower

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Re: What to do about a new car when traveling >500 miles/week?
« Reply #10 on: April 17, 2013, 09:40:28 PM »
You really have to try different cars when it comes to tall people.  My husband is 6'4" but it's all in his torso.  So many cars don't fit him.  However, we had a tiny 1984 accord for a while that was just fine.  We also had an old camry that worked. 

I'm intrigued with the Nissan Juke.  It looks like it has a lot of head room and it's AWD.  Maybe too expensive.  Gas mileage is 30mpg highway, so not great compared to other cars, but it's AWD if that's a must have (which it is for me).   

erc24

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Re: What to do about a new car when traveling >500 miles/week?
« Reply #11 on: April 18, 2013, 06:03:17 AM »

... oh right, silly me.  Though I suspect it should be taxed and that he could get in trouble if it's not reported/paid up as mandated (not to mention the issue of, you know, doing what's fair).  But, right -- if he can keep the money, then it's silly to say he should just spend it, obviously.
[/quote]

@fixer... I'm with you.  I just assume its not taxed since it doesn't go through his paycheck, but I could be wrong.  Let's just say he works for probably the only people in Massachusetts who voted for Mitt :)

 

Wow, a phone plan for fifteen bucks!