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Saturday, October 15, 2005

How Not To Buy A New Car*

Everyone once in a while, when I am driving my car, I have a moment of infidelity. My eye wanders to the shiny new luxury/sports sedan passing me, and I look at my 100,000+ mile odometer, and I wonder if maybe I wouldn't be happier with a different car.

At times like these, I remind myself about how nice it is to not have a car payment. And how relatively cheap the insurance is, because book value has dropped to about $5,000.

Modern cars are fairly well built. If you take care of your car, chances are it will serve you well past 150,000 miles. Chances are you will tire of your car before it actually dies on you. Financially, it almost always makes more sense to fix your old car than buy a new one. Consider: a typical new car payment is around $300-400/month, or $3,600-4,800/year. Here is a list of common repairs that a well used car may need, with ballpark costs:
  • Shocks/struts $350
  • Ball joints $300
  • Tires $400
  • A/C compressor $400
  • Exhaust system $500
  • Clutch $700
  • Brake pads, rotors $400
  • Alternator $200
  • Battery $80
  • Timing belt $350
My point is that any of these repairs, and even a combination of several, are cheaper than several new car payments. Even if you car needs an engine re-build or new transmission ($2,000-$5,000), that is still only between 6 months and 1 year worth of new car payments.

So, here is a list of things you can do to renew your relationship with your trusty old car. I have tried some of these, and they work for me.
  • Clean it up. If it looks more like a new car, you'll get "the feeling" back.
    • Take it to a full-service wash (like Jax in Detroit) and have it cleaned and detailed inside and out. You'll be amazed at how much nicer your car is when it is brand-new clean. ~$130.
    • Have your faded Clinton/Gore bumper sticker removed.
    • Repair the little dings and paint chips that make the car look old. If your seats are ripped, buy a cover, or get them repaired. You may be able to find replacement seats for your car from a dismantler at a reasonable price.
  • Upgrade the ride. Cars get flabby over time as the suspension components wear.
    • Buy a new set of good tires. It's amazing what a new set of grippy, quiet tires can do for a car. ~$500.
    • Buy an upgraded shock/strut package. Tighten up the ride, get back the road feel. ~$500.
    • Get a new set of wheels. I personally like steel wheels on Michigan's nasty roads (they're easier to fix or cheap to replace) but some people really like a nice set of wheels. $600-$1000.
  • Upgrade the engine.
    • Put in a set of platinum spark plugs (long life) and a new set of ignition wires.
    • Put in a high-flow air filter such as K&N.
    • Take it to a tuner and put in an aftermarket supercharger or turbocharger. ~$5,000. Expensive, and somewhat risky, but you will notice a difference!
    • Get high-flow headers and exhaust. Less radical than a turbo, but no reliability problems.
  • Upgrade your interior. The parts you touch have big impact.
    • Get a real leather steering wheel cover and shift boot, such as WheelSkins. These are very nice, and don't cost much. ~$80.
    • Get a new shift knob, like a nice Momo.
    • Replace your worn out floor mats with new ones. ~$50.
    • Get a set of carbon fiber or fake wood trim pieces for your interior. Not my thing, but some people like them. $100.
  • Upgrade the audio. Who needs a new car to get new gadgets?
    • Get an aftermarket stereo head unit, perhaps with MP3 or XM capabilities. $150-$400. It's amazing what good sound can do.
    • Add an aux input for a portable MP3 player. Or an iPod interface. Or a CD changer.
    • Swap out your stock speakers for good aftermarket units. $300-500.
    • Mount a powered sub in your trunk, such as the Bazooka. $250.
The nice thing about driving and older car is that you can customize it gradually over time, without noticing that it is costing you money.

There are some reasons that you may want to spring for a newer car. My main reason would be safety--I would not drive a car older than about 10 years, because I would want more recent crash structures, ABS, airbags, etc. I especially would be careful about driving an older small car, such as a Chevy Canalier. As a car gets much older than 10 years, spare parts get harder to find and more expensive. And some cars are just ugly. If I was driving a rusty Ford Aerostar, for example, I would not keep it!

*What, am I nuts? People buying new cars keep me employed! Interestingly, many automotive engineers drive older cars.


gryhrt said...

That's a good take on the "used vs. new" debate. I'm also an automotive engineer, and I've had nothing but used vehicles. Currently, I have a '99 Miata and an '88 Ranger (in the middle of an engine rebuild on that one) with 116K and 100K miles respectively. No need for a new vehicle any time soon!

Dave said...

Your point about new vs. used is on the money for me as well. However, what I do is occasionally buy something new and keep it forever. I just sold my 7-year-old Olds and 10-year-old S10 so I could get a 4-cyl., AWD Saab 92X.

I wanted the higher MPG and the AWD, and I plan to keep the car past 150K miles. It IS somewhat ironic that we engineers don't do more to chase trends or otherwise support our own professions, but that seems to be a fact here at my employer as well.

The Auto Prophet said...

I think that engineers are a pragmatic tribe. Many of us also have the "I can do it myself" disease, and some of use even enjoy fixing our broken old cars.

Dublin Saab said...

1) Rusty Aerostar is redundant.

2) Clutch? Well done!

3) As an mere engineering student I can't swing fancy $5000 cars. My "good" car is 16 years old with 135k while my "driver", and by driver I'm talking pizza delivery, just turned 20 this month and shows 271k on the clock. I bought my driver 5 years ago for $500 and it took another $1500 to get her up to snuff. Since then just basics, fluids, a starter, a fuel pre-pump, horn, etc and regularly take her down to NC (1400 mile round trip). Sure, when I pull up next to a new 9-3 Aero I feel like I'm flying a bi-plane with tatty canvas but for me that's part of the alure.

4) Safety? I cut the top off an '83 Delta88 sedan and drove it in the summer for a few years, before that I cut the top off a '69 LeSaber sedan and before that a '79 Delta88... So you can see how conserned with safety I am, though I noticed some softening in the brake pedal on my driver, I guess it's time to rebuild the master. $20.

dave said...

"I can do it myself"? - EXACTLY. I've replaced fuel tanks, fuel pumps, loads of brakes, lights, window motors,etc. in exactly that spirit. And I guess I, too, enjoy the free labor - most of the time...

The Auto Prophet said...

Damn straight, clutch.

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Anonymous said...

I'm also an engineer in the auto industry. You should see the parking lot outside our office! Everyone here is proud of their junk. Only the managers drive new cars. Personally I have a $2000 beater that I daily drive, and a $500/mo garage queen / race car. I'd rather put my money towards the weekend drive than my weekday commute. I also share the fix it yourself mentality. Partially because I enjoy, but mostly because I'm cheap.. er frugal! Lucky for me we have a full garage here at work.

Anonymous said...

I enjoyed your post and agree with you regarding the benefits of extending/renewing the life of your current car. However, the one element that has come so far over the years is safety. If I am in an accident, I want more than a lap belt to protect me.

Anonymous said...

Good article. My own car is an 11-year old MAXIMA; made in Japan. So it's got a cassette - I don't listen to tunes anyway. I took to to the outback of Australia for 5 years - no problems. It's got a timing chain, so no worries there, either. I'd have to be cukoo to give it - and the 28 highway mpg - up for anything new. I feed it synthetic oil and ignore the recommended high octane gas. It's good old 87 octane for us. It's only got 141k miles on the clock, and runs like the day I married her!

Anonymous said...

I drive a 1992 Plymouth Duster with the V6 and the stick. I bought it from a guy who modded the thing up and drag raced the car on the amatuer level in Jersey. It will get to 60 in about 6.5 seconds and its best ever quarter mile run was 15 seconds flat. It has a custom LOUD Dynomax exhaust that exits out the side. Its the last Plymouth in a run of family ownership that dates back to my Grandfather's 50 Plymouth. I turned it into a "Shelby Duster" with custom Shelby decals. I also put a massive 70's era "Plymouth" decal on the rear quarters. Right now Im painting a set of original Shelby rims I got off ebay for $175. The best part? It has over 180K on the odometer. It has also toasted a variety of European sports sedans at stop lights.

Ray said...

Go to almost any Third World country and you will get an idea of just how long American cars can last. They may be re-painted, re-upholstered and have a different drive train than original, but 50 years later they are still rolling.

sh said...

Speaking of old cars, here's what we can expect if the dems ever get their Soros-stained hands on the helm again:

Last week, I put a deposit on a Zaporozhets just in case. Don't want to get "left" behind (just kidding).

Anonymous said...

I've one major problem with this perspective. Once a car reaches a certain age, mileage, anything can go wrong at any time and any number of those things may keep the car from being driven.

It is way too much hassle to deal with a dead car in the morning, when one is ready to leave work, leaving the airport, leaving for the airport, etc., etc., etc.

Then you get to deal with that, fixing the car yourself or getting it towed and getting it fixed, being without a car until it's fixed.

I'm game for getting a lot out of a car, but I've gone down the regular-repairs road twice--the first time and the last time. Way too much of a pain in the backside.

The Auto Prophet said...

Let me qualify and say that I like to keep reliable used cars. I would never suggest keeping a junker around that breaks down constantly. Once in a great while is OK (to me).

It should be said...

I spent last week looking for a car around $5,000 in Los Angeles. I wanted a car that won't need frequent repair, so I tried to get one as recent as possible with a low milage, clean history, and complete maintenance record. For fun, I wanted a manual. I noticed Toyotas and Hondas for $5,000 tended to be 1997 models, while I could get a far more recent Saturn. I ended up getting a 2001 Saturn SL for $4,300 with immaculate maintenance records from the dealer, new tires, 64K, manual. This happens to be right on the Kelly Blue Book Private Party value, while a 2001 Toyota Corolla was listed at $6,685 (LA market).

What surprised me is that Autoworld's dealer loan/market prices are skewed the other way around -- a 2001 Saturn SL at $5,600 and a Toyota Corolla at $5,150. Their retail price was skewed even further -- $7,150 for the Saturn and $6,650 for the Toyota.

The person buying from a dealer is saying Saturns are better; those buying from private parties that Toyotas are better. Buying a used 2001 Saturn from a dealer adds around 70% to the price, but saves you money on a Toyota. It's hard to escape the conclusion that somewhere in here there's a dramatic market inefficiency.

Explanations: the popular reputation of used Saturn cars is quite poor (so poor the cars are a steal), but the good reputation of Saturn dealers still manages to squeeze in a premium.

The Auto Prophet said...

Interesting observations.

I personally think the best place to buy a used car is from a like-minded private owner, who has maintained the car and can prove it.

Used car dealers are very greedy, alhtough with hard bargaining you can do OK.

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sexy said...
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