My Cars and My Life

By Pinyo, on November 12, 2007

This article is part of the M-Network group writing project about cars and what they meant to us. This series will run from November 12th through the 16th, and we welcome you to share your stories with us.

At first, I was going to launch into this long history about how I loved the Transformers cartoon, built cars with LEGO(R) blocks, and learned how to drive when I was 9. But I figured a long blog post would just bore you to death. So, I will just jump right in and tell you my thoughts on car:

• Always Buy Used. My motto used to be “Always Buy Used American, or New Japanese.” I think American cars depreciate a lot during the first 2-3 years so there are plenty of good deals out there. On the other hand, Japanese cars retain their value so well that I would spend the extra money to get a brand new car. However, ever since I started this blog, my stance has shifted to “Always Buy Used.” Buying used has several advantages:
  • You can save 20% or more buying used
  • Slightly used cars still have that new car feel
  • You don’t have to worry about Gap Insurance and being upside down on your car loan — i.e., you owe more than the car is worth.
• Most accessories, options, and add-ons are total rip-offs. I am not Mr. Perfect either, and has fallen for some of these in the past:
  • Paint protection package — this is nothing more than exorbitantly overpriced wax job.
  • Built-in Navigation System — Honda wanted $3,000 for this. No, thanks! I can get a really cool Garmin for about 80% less, and I can use it in other cars.
  • Extended warranty — the juror is still out on this one. I think this may be worth it for American cars, but just an unnecessary expense for its more reliable Japanese counterpart.
• Wash and wax once a month. I am not so fanatical when it comes to washing and waxing my car. Once a month is enough, but I do spot cleaning if needed — i.e., tree sap, bird poop, etc. I think anything more than that is just a waste of money.
• Car maintenance is essential. I always keep up with my maintenance schedule, because I think it will extend the useful life of my car. I always keep my tires properly inflated, and check my oil and other fluids regularly. I also change the engine oil every 3,000-5,000 miles and rotate tires every 6,000-10,000 miles. Honda recommends the high numbers, but I have never been comfortable with them.
• We could live without our cars, but we wouldn’t. We live in New York City, so public transportation is abundant enough that we don’t need a car, much less two. However, it’s a lifestyle that we wouldn’t give up.
  • Currently, I commute to work be cause public transportation would take be about one and a half hour each way; whereas driving can take anywhere between 20 minutes to 40 minutes. Don’t worry, the rest of the family still commute daily using public transportation.
  • My sister lives in Virginia, and we visit her family about once a month. It’s much more convenient to travel by car in this situation.
• The expenses that most people forget. When I talk to younger people who wanted to buy a car, they always seems to conveniently forget about these other expenses. By the way, Edmunds has a nice True Cost to Own (TCO) calculator.
  • Car Insurance - as far as car ownership goes, this is the second most, or the most expensive bill. Right now, I am paying over $2,200 to insure two cars. Fortunately, I just got that lowered to $1,650 — I will blog about it later this week.
  • Depreciation - as mentioned earlier, any car you buy lose some of its value the minute you drive it off the lot. My car lost about 20% since I bought it 2 years ago. This is actually quite good. Some cars depreciate a lot faster than this. This is the hidden cost that not many people recognize.
  • Fuel - with rising gas cost, this can be a significant amount. I drive an average of 11,000 miles per year, so I figure I pay about $1,500 per year (at average price of $2.75 per gallon, and 20 miles per gallon).
  • Maintenance and repair – during the first few years, regular oil change and basic maintenance cost about $100-150 a year; and this number only goes up as the car get older.
  • Other expenses include financing fee, taxes and dealership fees, vehicle registration, inspection fee, parking, highway tolls, and violations.
• Buy as much insurance as you can afford, but keep the deductible high. I recently upgraded my insurance from 100/300/100 to 250/500/100 with a $1 million umbrella of top of it. To keep my premium low, I chose the $1,000 deductible, but with full glass coverage. Why? We live in a litigious society. You never know what will happen and who will file a lawsuit against you. Some examples: (1) my dad and I were sued by someone who ran the red light, and nearly totaled our 1998 Ford Contour, and (2) my dad’s friend rear ended somebody and had to fight a $1 million lawsuit.

Here are other car stories from the M-network and our friends:

• About My Car @ Plonkee Money
• Save money on car depreciation @ ChristianPF
  
• 5 Reasons You Should Buy A New Car @ Gather Little By Little
• Service Beacon: A Free Online Tool to Track Your Car’s Maintenance Schedule and History @ The Dough Roller
• My experience buying a used car with cash @ Being Frugal
  
• My Evolution From the “New” to “Used” Car, That Is @ I’ve Paid For This Twice Already…
• All About Cars and Money @ My Two Dollars
  
• Save Time and Money by Trading in Your Car @ Cash Money Life
• New or Used: That Is The Question @ Earning Our Freedom
  
• New or Used What Kind of Car Do You Buy? @ Budget of Destiny
• How Do They Sleep At Night? @ Are You Going To Be This Way The Rest Of The Time I Know You
• Car Lessons @ Quest For A Million
• In Defense of New Cars @ Suburban Wife’s Daily Dollar Diary
  

Join us — write about your car and get linked by the M-network.

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Pinyo is the brain behind Moolanomy personal finance blog and a few other web sites. If you like this article, please subscribe for free daily email updates.

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1. My Evolution From the “New” to “Used”… Car, That Is | I've Paid For This Twice Already...
2. about my car : plonkee money
3. 5 Reasons You Should Buy A New Car | Gather Little By Little
4. My experience buying a used car with cash. | beingfrugal.net
5. Carnivals, Festivals, and Cars! Oh My!!! | Cash Money Life
6. The Friday Gathering For 11/16/2007 | Gather Little By Little
7. Weekend Roundup - Crazy About Cars Edition | beingfrugal.net
8. Weekly Roundup - Contests and Cars Edition | Cash Money Life