So the following morning I’m driving my car to work when I start hearing some clunking coming from my front right tire, my car is pulling right, and my brake lights are coming on. I keep driving to work but the clunking, pulling, etc keeps coming back. The car was overdue for an oil change so I figured I’d suck it up and take it to the shop and see what was wrong. Well long story short – turns out I need two new drive shafts, a bunch of exhaust leaks fixed, something about a resonator pipe, clutch, air filter, you name it. Grand total would be about twice what I paid for the car (I paid $700)

In theory I think I would only *need* to fix the two drive shafts which would come to $387, but when you only pay $700 for a car you never really plan on doing much maintenance work on the car (at least that’s my opinion). SO right now I’m in the market for a new car (in the frugal sense of new car). If I can’t find anything in the short term I may end up biting the bullet on the drive shafts, but unfortunately it looks like I’m probably better off rolling the dice with a new beater.

So was this car a total failure and proves that you can’t consistently spend less than $1000 on a reliable car? To be honest I think my off the top of the head goal is to have the car last more than a year. If I can spend less than $1000 a year in car costs I think I’m doing ok. This is by far the shortest I have owned a car before something major happened, but I still owned the car for almost a year, only paid $700 for it and will get at least $100 back when I take it to the scrap yard. So $600 for 10 months of reliable service still isn’t the worst problem to have. The best part is I am in no way tied to my cars if something bad happens. I am in no way obligated to have to fix them and if something bad like this happens I can just laugh it off – although I really did enjoy this car and am upset that we will be parting ways so quickly.

What do you think? Am I an idiot? Should I be spending more on my cars? I only use my car to drive to work and run errands, my wife has a relatively newer/nicer car (99 Accord).

Tip 1 – Don’t rent your car from locations at the airport.
This was one of the biggest money saving items for us when we were renting our vehicle. Often when you do a search on hotwire, travelocity, orbitz, etc. they tend to show you rates of rental cars through the big auto rental chains, but the location tends to be at the local airport. The problem with renting from say Enterprise at the airport is that most rental agencies located at airports get levied an airport surcharge fee that they happily pass onto you the customer. So the initial rate before taxes sounds good, but in my experience the airport surcharge fee can add anywhere from 10-20% onto the cost of your rental. What we did was found a great deal on the internet and instead called the Enterprise location 1 mile from the airport and it saved us nearly $50 in extra fees,taxes, and surcharges (they had the same base rate).

Tip 2 – If you are taking a long trip find a place that will get you unlimited miles
In my experience nearly none of the major rental agencies websites will let you choose unlimited miles. You usually get 200 miles a day or 1400 miles a week and then each additional mile is a certain fee (20-50 cents a mile) – which can add up really fast. The only way I have found to get unlimited miles is to search using a discount search site like hotwire, orbitz, travelocity, etc. Also a sort of an unique tip. In my experience hotwire the first time you search for a certain vehicle/date combination will show you 1400 miles per week, if you simply then change the pickup time by say a half hour and search again your 2nd and each consecutive search will give you unlimited miles for the same price. I know call me crazy but it worked like charm every time. Once you have an unlimited package that suits your needs call the company directly and they will almost always match it and might even give you more perks for going directly through them so that they don’t have to pay the 3rd party vendor for booking the car.

Tip 3 – When booking unlimited miles make sure of the terms
Many rental agencies have unlimited miles, but there are stipulations like you have to stay within 400 miles of the rental agency or can’t take the vehicle outside of any of the bordering states. About half the places I called had stipulations like this so if you plan on going further it is worth your while to ask as if you go outside of the specified area you will get charged the standard mile rate for every mile of your trip. Like I said its 50/50 so be sure to ask.

Tip 4 – Do your homework before getting rental insurance from the rental car company
In many cases if you have comprehensive auto insurance on your primary vehicle it will give you the same coverage when you are renting a car, so the rental car insurance is redundant and a waste of money. Call your insurance agent before hand to see if this is the case. If your insurance only covers part of your liability or loss or none at all – option #2 is to call your credit card company. Many credit card companies offer insurance for free to their card holders if they make the purchase with their credit card. This can save you loads of money as rental insurance can cost nearly as much as the rental itself.
Note: My Chase Visa gives me Collission/Loss/Theft insurance for free as long as I decline the auto rental insurance and charge the rental on their card

Tip 5 – If booking online look around for promo codes.
This should be common sense, but there are absolutely tons of them out there and some of them are great deals. My wife found a 20% off web coupon that saved us $80 up front and the physical location when we called them had to problem taking it. Also there are many programs set up with major companies. Most rental car agencies let you enter in a contract code and will give you special discounted pricing, free insurance, etc. My company does have a deal with National rental, but in the end I could find better rates on my own. If you scour forums you will often see other people post other companies contract #s which will work if you punch them in, be careful though as you may be asked to show proof of employment and even if you are not asked if you get free insurance through the deal and crash the car you most likely won’t be covered. My word of advice on entering contract codes into websites is only use ones that you are rightly entitled to.

Purchased
1990 Ford Escort
Purchase Date: 10/2004
Mileage: 90,000
Cost $1000
Sales Tax $50
Repairs: $463 (tie-rods, timing belt)
Maintenance (oil-changes) – $100 (5)
Insurance Costs: $575 ($115 every 6 months)
Total Expenses= $2288

Sold
Sold: 04/2007
Mileage 129,000
Money Received – ($125)

Stats
Total Cost – $2163
Total Miles driven: 39,000
Total Months owned: 30
Cost per mile: 5.5 cents per mile
Cost per month: $72.10
Cost per year: $865.20

Things not included: vehicle registration fees (same regardless of car so not included). Also gas, because it’s too hard to keep track of, but my car did get over 30mpg.

Now I have never done this for a car before so I’m not sure how great these stats actually are, but my guess is if most people did the same calculations with their cars they would probably incur higher costs than I did. Overall I was not horribly satisfied with the results I got from this car as I got rid of it way before I wanted to (I was hoping to get at least 150,000 miles out of it. Like I said the car still ran and I could have repaired it, but I came across a good deal in my Corolla and decided to pull the plug on the Escort.

I will keep similar records with my new car and hopefully after a few cars I will have a good idea of what is a good cost per month/year/mile for a vehicle. My guess is that the above stats for my car over a 30 month period are probably less than the average person’s cost after only a few months, especially if you buy a new car. Heck the sales tax, insurance, and monthly payments would probably exceed my total costs after only 2 or 3 months.

Anyway I think that from a purely financial standpoint, buying a sub $1000 car after doing your homework is by far the best way to minimize your vehicle expenses. I’ll be totally honest with all of my repairs and costs as I own my vehicles and I can be your guinea pig to see if this actually works. Granted my new car might blow up tomorrow and I would have to eat crow, but I still only have $750 invested in it, I know I can get at least $100 for it at the junk yard, so I’d be outu $687.50 (sales tax included). That’s not a really big hit, so when you drive vehicles like this you are sort of diversifying your risk. Instead of putting $10,000-$30,000 in one vehicle which could just as likely blow up. Not to mention the depreciation difference in the vehicles. My car can only possibly depreciate $650 from the purchase price

I guess really the only big downer for some people to driving a car like this is that it doesn’t look pretty and new. For me I purposely seek out vehicles with rust problems because I know that it has no negative effect on the car’s performance, but it will greatly reduce the cars purchase price. I put no value in cosmetics, but Kelly Blue Book and most other people put a great deal into the cosmetic appearance which is good news for me. That being said, you can still find a good cheap older car with no rust and a good body. Just know that you will be paying extra for those attributes.

1. The old car still runs and if I needed to I could drive it to work every day for quite a while
2. I bought the old car 2 1/2 years ago for $1000 and the only repair work I had done on the vehicle in two years was replacing the timing belt and a broken tie-rod. I’ll do another post figure out the total cost of ownership per year for my Ford Escort later.

The only reason I decided to replace it was that a few months ago my car started releasing a gas/exhaust smell from the engine. The car’s exhaust is completely fine as it was replaced shortly before I bought the car, but I decided that I did not want to take it in to get looked at or repaired and that I would start to look for a new car. My dad said I got a leaky gasket (I know nothing about cars) and I don’t know how much that costs to fix, but I figured since I got a new job I could splurge and get myself a new car.

The new hot rod
So I’ve been keeping an eye on the classified ads for a replacement car. I like to buy directly from individual people, because then I don’t have to pay the huge dealer markup. Buying anything from a dealer, pretty much means you are throwing money away. So last weekend I happened across a vehicle that interested me and gave the owner a call. The owner I believe was from India or some other middle eastern country so I couldn’t really understand much over the phone, but he mentioned that it had a new radiator, new exhaust, ran great, and had a little rust under the door (perfect!!). So despite it being pretty late on a Friday night I wanted to go check the vehicle out because used Toyota’s tend to go fast.

By the time I got to the car it was relatively dark out. The car is a 1992 Toyota Corolla 4 door manual transmission with 196,000 miles. I could see visible rust on the underside of the driver side door. I actually get really excited when I see rust, dents, scrapes on a car because that is going to lower the resale value considerably. Seeing as how the only thing I care about is mechanical stability rust is a welcome site. Sort of like when you are looking for a fixer-upper house to flip you should be looking for pet urine stains on the carpet, horrible paint jobs, and other stuff the lowers the value much more than it costs to fix.

Not only did this car have some rust, it has some other pretty unique properties that helped lower the asking price for me. One – the driver and passenger side door handles were broken off completely on the inside. The owner said that in the cold frozen winters of Wisconsin the plastic had froze and he ended up snapping them off. Ok no big deal I thought the General Lee was cool and it didn’t have door handles, besides you can simple roll down the window and let yourself out right? Wrong the driver’s side and passenger side windows were also defective and would not go down more than 1/2 inch and then trying to get them back up in the track was nearly impossible. So to get out of this vehicle you actually had to reach into the back seat and roll down the back seat window, reach your arm out the window and open the driver’s door from the outside. Ok maybe not the safest or most convenient thing in the world.

The other things that made testing the car out unique was that it had no plates and the owner wouldn’t let me drive it on the road, so I could only drive it within the apartment complex parking lot. It’s a manual transmission (which I love) and the clutch (at least the first 2 gears) seemed in tip-top shape and the car drove very smooth. I just tested out some basic things in the car (blinkers, hazards, break lights, head lights, high beams, steering, breaking, alignment). The interior of the car was spotless and all of the accessories worked superbly (radio, heater, AC, speedometer, etc). While driving the car with the individual he received two other calls to look at the car that night (probably his buddies ) so I decided to go ahead and give him is asking price for the car right there. I’m a horribly negotiator and have paid the asking price on all of my cars and taken the first offer on all of my jobs. Needless to say I thought I saw a good bargain and my guess is I’ll get my money out of the car even with poor negotiating skills.

Kelly Blue Book on the car has the car listed at $1350 in fair condition (yeah I know it might be below fair, but all the things wrong with it have no affect on my value of the car). The guy was asking $750/obo and I paid $750 for it. It was 9pm on a Friday night and the owner was smart and wouldn’t take a check. So I had to go to the ATM machine to see how much money I could get out of the ATM machine. I’ve actually never used an ATM machine before so I had no idea if I could get that much money out. Turns out I could only get $500 per day out. However $500 cash, a check for $250, and an ATM receipt showing the $500 withdrawal and over $5000 still left in the checking account was good enough to seal the deal.

Eye Candy

So here she is. The next morning I realized there was a little more rust than I had originally thought and that the back tires were bald, but no sweat off my back. I actually lucked out and it had the exact same tires as my Ford Escort and my Ford Escort tires had lots of tread on them. So I simply swapped tires. Then I decided to take the door handles from the back a seat and put them in the front. This was a piece of cake and worked great. I never have anyone in my back seat and even then what could be better child safety locks . While taking the panel off the door to fix the inside handles I noticed that the bolts that align the window were loose. I simple moved them back to where the “worn” spot was on the inside of the door and tightened them up and the windows work great now too. So in an hour or two of work I fixed just about every detail that was wrong with the car (minus the rust and back seat handles) and it cost me no $$$. In fact had the guy simple spent the half hour to fix the door and windows I’m sure he could have easily gotten over $1000 for the car. I may attack some of the rust spots next weekend, but for now I am thrilled.

Window problem so easy my 1 year old son can fix it

Most people want to drive a car that portrays their image and I think this car fit’s me a to a tee. It may not be the most flamboyant car in the world, but I think it was a great value, meets my needs perfectly, and slowly but surely contributes to my net worth instead of decreasing my true net worth like most people’s cars do. I dunno if it’s just because Toyota’s are so much higher quality than most of the domestic cars I have ever driven, but this car drives like silk and I’m very excited I made the swap. As for my old car, I don’t know if I want to go through the trouble trying to sell it to another person who values cars the same way I do, so I am probably going to take it to the local salvage yard and try to get a couple hundred $$$ for it. This will lower the total cost of ownership for the car and make my decision to buy sub $1000 cars even better.

Anyway seeing as how my first post on my car was so popular I figured it was my duty to keep you informed with my car change decision. I will run the numbers on my old car for total cost including oil changes, repairs, etc. and will keep a running total with my Toyota. What I think you will see is that from a purely financial standpoint you will not even come close to the value you get from buying cars like this.

Anyway glad to be back in the blogging flow of things, my phone lines magically started working yesterday and buying a new DSL modem fixed all my problems, so you can expect to start getting at least daily posts from me during the week again.

These are the same people will drive 10 miles to the gas station going 75 mph on the free-way in their gas guzzling SUV to save 10 cents a gallon on their gas and while they are there will pick up a $5 cappuccino, a pack of cigs, $10 worth of lottery tickets, and put the whole thing on their credit card which is at 28% interest and will make the minimum payment when the bill comes next month. People make the absolute worst money decisions in the world and essentially throw away thousands of dollars away on useless things, but when it comes to gasoline prices (something relatively minimal in the grand scheme of things) they act like they are the most frugal person that has ever walked the face of the planet.

Take for example this recent article on Yahoo about how gas prices are on the rise again. You know the same thing that happens every spring as we approach the “driving season” and well you know the oil and gas companies never seem to be able to prepare for this cyclical part of the year and there will inevitably be a gas shortage and gas price increases and it’s going to be damn near impossible for people to survive again. People will be spending all their money on gas and so they won’t shop and the economy will go into a tailspin, companies will go out of business, people will lose their jobs, and stocks will crash. Ok I’m being over dramatic but in one way or another this is what the media portrays every time gas is going to jump 10 or 15%. Maybe it’s because this is one issue that really grabs peoples attention (justifiable or not), but in the end gas prices do rise and nothing happens other than people and the media complaining about it.

If gas prices were actually a significant issue and people really cared that much about it you would see some action to help offset this unbearable burden, but people complain and life goes on as usual. Take this exerpt from the yahoo article as a prime example. What is wrong with this picture?

“”It kills me,” said Gloria Nunez, 53, as she filled her Ford Explorer SUV at a San Jose gas station. Nunez, a clerk for a communications company, has started working a couple hours of overtime each week to help soften the blow. “All of a sudden you kind of have to watch your pennies,” she said.”

Couple observations

She’s driving a Ford Explorer SUV
If gas prices really were that unbearable maybe she’d think about driving something that gets more than 16 mpg. I don’t know her situation, but I’d bet its fair to say that a vast majority of SUV owners, don’t need an SUV. I’ve never been to San Jose, from google maps it looks like there are some mountains and maybe Gloria’s communications company is located high atop the mountains to get better reception, but I doubt that is the case. If I had to guess I’d also bet that a majority of Gloria’s travel is done with only her in the car so the extra cargo/passenger room isn’t really an issue, but I’m sure social status is and what she drives is an issue.

Heck just by switching to a Toyota Camry she could save over $1000 a year with gas at $2.51 according to the EPA. Every fillup she would save $10 and could get an extra 142 miles before she had to fill up again. This is with a family sedan I didn’t even compare it to a small car such as a Corolla. Also add in the fact that she probably paid about $8,000 more for her Explorer vs. the Camry if she bought it new. Also add in the fact that the above calcs assume $2.51 gas, Gloria lives in San Jose where the current average gas price is $3.03 so the extra cost of an SUV is magnified even more.

“..started working a couple hours of overtime each week to help soften the blow”
Now because I don’t know which gas price increase officially put Gloria’s expenses over the edge, lets go ahead and say that gas was $2.75 in San Jose a few months ago, this $3.00 stuff is killing her, and God forbid gas jumps up to $3.25 this summer. A 50 cent increase!! This is going to cost her $9 a week, which I understand is not chump change and does eat into your pocket book, especially if you drive an SUV, but it’s not like she’s going to have to work much more than an extra hour a week to recoup her gas prices. In fact if she just switched to a Toyota Camry she would be saving $23.42 a week now. If gas jumped to $4 a gallon a $1.25 increase from the original $2.75 starting point it would cost her $22.53 extra a week which still is more than it’s currently costing her to drive an SUV versus a family sedan. Gas price increases are pretty insignificant when put into perspective to other costs.

Maybe I don’t get it but to me gas prices are very insignificant. If gas is going up 25 cents tomorrow I’m not going to grab all our vehicles and rush them to the gas station to top them off and save a couple bucks (and I’m about as cheap and frugal as they come). People have no control over gas prices so for me I don’t worry about it and I’ve never felt a tightening of my pocket book because of gas prices. Granted I drive a car that gets 30+ mpg and I live relatively close to work now, but I’d take $5 a gallon gasoline hands down over a lot of things when it comes to dollars and cents (credit card debt, smoking, driving an SUV, etc).

I’m all for saving money wherever you can, so if you want to scour online for the lowest gas prices, and fly to the gas station when you got insider information about a 5 cent gas hike tomorrow all the more power to you, but don’t act like it’s the end of the world financially, especially if you drive an SUV and have other bad financial habits that are going to be much more expensive than $3 gasoline.