Best Option for a Car if I Drive Less than 3000 Miles a Year

I think you and rojo would look good on this:

http://jillianharvie.files.wordpress.com/2011/01/scooter.jpg

TLW wrote:

I think you and rojo would look good on this:

http://jillianharvie.files.wordpress.com/2011/01/scooter.jpg

Yeah, I was going to suggest a bicycle (if it's only 2-3 miles per trip), but one of the coaches I work with uses a scooter since he only lives ~4-5 miles from work.

You're a runner so you aren't getting any anyways. End of thread.

Depreciation and insurance will be big hits no matter how few miles you drive - it will be very inefficient for you. Besides, cars don't like only being driven 2-3 miles at a time. (Or so Click and Clack say.)

Do you live in an urban area that has Zipcar or City CarShare or some other car-sharing program?

Depreciation happens based on years and miles. If you must buy, you want a car that is pretty far down its age-depreciation curve - like a 10-year-old Toyota or Honda. Sometimes auto mechanics know of reliable cars for sale by owners who are upgrading.

If you're mainly thinking of financial efficiency, don't get sucked into elaborate estimates of which cars hold their value best. Let's say you get choose a $30,000 used car from a prestigious brand that holds value well, so that over the time you own the car its value only drops by 20%. That's still a drop of $6,000. In comparison, you can get a very good car for $10,000, have it depreciate by 50%, and still come out ahead.

In reality, you can get the best of both worlds: get an inexpensive used car for $10,000 (or less, if you want) that doesn't depreciate too much. But (and I hate to sound like Flagpole here) depreciation is mostly irrelevant if you keep the car for long enough.

Of course, it depends what you're looking for. If the car you drive is a source of prestige and ego to you, then you have to be willing to pay extra for that. For me, the last three cars I've bought have all been small Toyotas, between six and nine years old at purchase, with relatively low mileage on them (~50,000 miles). In every case, I've been thrilled with the purchase, have never once had any mechanical problem, and have been able to sell with minimal depreciation. (The only reason I've had to sell is that I've lived in three different countries during the past decade-plus.)

Bottom line: you can figure out all the angles, but the single most important factor determining the lifetime cost of ownership for the car will be the initial sticker price.

There are lots of good deals on new cars.

What are you going to do with this car? Haul stuff? Carry other people, etc,? I would look at function first.

Since I tend to keep cars for a long time (current one is 12 years old and previous was 10), I do not worry about depreciation.

hold the phone wrote:

If you're mainly thinking of financial efficiency, don't get sucked into elaborate estimates of which cars hold their value best. Let's say you get choose a $30,000 used car from a prestigious brand that holds value well, so that over the time you own the car its value only drops by 20%. That's still a drop of $6,000. In comparison, you can get a very good car for $10,000, have it depreciate by 50%, and still come out ahead.

I'm definitely not thinking of spending $30g to drive a car 2-3 miles max. I may go without.

Thought of a scooter. Have seen street legal golf carts even. If it's 100 + degrees outside however, AC would be nice.

If I go the $10k and under route, what's the best way to make sure I don't get a lemon?

bicycle

Get a used Segway, then you can pimp it like a mall cop.

Seriously though, if you can go without the car that's the best. If you only drive a few miles, why not just use your wife's car when you need to drive?

I used to drive a Mini (bought it new) and it held its value well. I drove it for 3 years and sold it for 3000 Euro less than I paid for it. I knew another guy who bought one new in Germany through military car sales (good deal) who drove it for a couple years and sold it for 2500 more than he bought it for.

wejo wrote:

Thought of a scooter. Have seen street legal golf carts even. If it's 100 + degrees outside however, AC would be nice.

I'd worry more about Ithaca winters. Riding a scooter in February is kind of rough.

If I go the $10k and under route, what's the best way to make sure I don't get a lemon?

Take the car to a reputable independent mechanic and have it checked over prior to purchase. You should also get the Carfax report on the car.

My suggestion would be to buy a solid classic muscle car. Not a show quality car, but one that has been restored to where it can be an everyday driver. Of course most people want the creature comforts and whatnot of a newer vehicle but AC and heater units can be installed relatively cheap on an older car without one.

wejo wrote:

If I go the $10k and under route, what's the best way to make sure I don't get a lemon?

The risk of getting a lemon is priced into the car itself; the "market" has solved the lemon problem, even if you end up stuck with one. The best option is to have a mechanic that you know and trust review the car before you buy. Every used car requires maintenance, but what you want is normal maintenance. Buy a car with more miles on it, and stick to a rock solid model. A lemon has trouble accumulating the miles; some models are perfect.

I drive a Honda Ridgeline (truck) now (easy to fit the carseats) but the best vehicle I've ever owned was a 4-cylinder Toyota Tacoma. I'm not certain you can break that truck.

Weldon. You graduated from one of the finest b-schools in the nation? This is not hard to figure out.

Leasing is just a derivative financial instrument that treats the car as a big pile of cash that has known (time) and unknown (mileage and wear and tear) variables collectively called 'depreciation'. When you lease you pay the depreciation on the asset (er, big freaking pile of cash). The financier knows the time-value on the car, but it doesn't know the depreciation due to wear and tear, so they put mileage and wear and tear riders on the contract. Since your mileage is going to be much less that a typical leasing mileage rider you rightfully have concern that you might be paying too much. I kinda think that the actual mileage premium that you think you might be losing on the 3k vs 12k mileage difference is overstated. I'm pretty sure that if a 'low mileage' rider were available, the value of it would be much less than you would think. But who really knows? Also, I'd speculate that the human variable sets in so that when you actually have access to that car you'd end up driving it much more than your 3k guesstimate.

When you buy, you convert the big freaking pile of cash into a big freaking pile of metal, rubber, plastic and glass. You also pay the depreciation on the big pile of MRP&G, the difference is that you still own the big pile of MRP&G.

'complex analysis' has it right. Time is going to be your biggest depreciation factor, then mileage. While low mileage can be written into an insurance rider, insurance is still going to be a hit.

If you have Zipcar available to you then use that service, or simply use Enterprise when you need a car. Or both. They (Enterprise) will transport you to and from. Even if you rented a car three days a week it will still be cheaper than buying or leasing.

If you insist on buying just get a Dealer or Manufacuter certified Used Car. That will take care of most of the depreciation and still give you some peace of mind.

I second Malmo's suggestion. I use both zipcar and enterprise in Boston. Zipcar is good for 1 or 2 hour trips to the store. After that, you're better off renting for the day.

For an idea out of internet left field - you might be a perfect candidate to take over someone's lease.

The problem with leasing is that while the monthly payments are low, the depreciation is huge. However, there is a way to get the low payments without the huge cost of depreciation:

Taking over a lease.

I did this, so it actually works.

Some poor chump has taken out a lease, paid the depreciation, and can't keep up with the payments. The Wejo family steps in and takes over the payments. As low as $160 per month. In exchange, you get a fairly new, on warranty car for a year or two.

What makes it perfect for you is that you drive very little - some of these cars have only 500 miles per month left on their leases. Not a problem for you.

I did this with a 3 year old BMW - lease was just $350 per month, then I bought the car for $16k at the end. But I could have given it back for nothing.

The only catch is that if it gets scratched up they will charge you when you return your car.

Example: 1 year old Nissan Sentra for $160 per month.

http://www.swapalease.com/lease/details/2011NissanSentra.aspx?salid=736323

I'd recommend you buy a 10-15 year old car with relatively high mileage AND that has had the most common mechanical problems already fixed. That way, you won't take a beating in depreciation or repairs for your 3,000 miles/year. Most people can't tell the difference between a 2000 and a 2012 year vehicle anyway. You should have a lot of choices between $5k and $10k. I've owned over 60 vehicles and all were under $9,000 except for a $10k Dodge Daytona a couple of decades ago. Most were under $7k.

My wife and I currently own four vehicles: 97 Subaru w/188k miles, 2000 Subaru w/128k miles, a 2001 Dodge 3500 diesel with 261k miles, and a 2009 Kawasaki Versys with 37k miles. All are dependable and my total cost was $22k. I would not recommend a Subaru Legacy like mine for you because the gas mileage is awful, but if you live in a snowy area, the AWD can come in handy when two-wheel drive can't get you out of the driveway.

One of my training buddies drives a BMW convertible and a Lexus SUV. You'd think he had $60k tied up in cars, but it's actually less than $20k.

The main thing in buying used is to get the car checked out by a good mechanic AND to make sure that any common problems with that make and model have already occurred and have been repaired. If you follow my suggestions, I'd suggest you stay away from Fords, Chevys, Dodges, and instead look at Lexus, Toyota, etc. The better cars have been more likely to be serviced regularly.

If you're not too picky, I'd suggest you find a used car dealer who will buy a specific model car for you at a dealer's auction and pay him a finder's fee of $500. You'll save one to two grand on a $7k car that you can use to make any unexpected repairs. I've done this maybe 20 times. I'm positive that I've bought more lemons buying from individuals than buying this way.

If you drop down to $2k, I'd suggest an early 90s Saturn (with the timing belt replaced) or an early 90s Lexus... the little ES250, for example. I had one of these and loved it. I sold it for $1,800 and wish I had it back.

fisky wrote:

I'd recommend you buy a 10-15 year old car with relatively high mileage AND that ha

If you drop down to $2k... Saturn... Lexus.

Following up on this earlier post of mine, if you go with a $2k car, insurance will be really low because you don't need to buy collision or comprehensive or you can get it with a $500 deductible pretty cheap. Any fender bender and these old cars will be totaled by the insurance company because the repairs cost more than the car.