I recently sold my original pimp ride so I figured it would be good to break down the costs of the vehicle.
1990 Ford Escort
Purchase Date: 10/2004
Sales Tax $50
Repairs: $463 (tie-rods, timing belt)
Maintenance (oil-changes) – $100 (5)
Insurance Costs: $575 ($115 every 6 months)
Total Expenses= $2288
Money Received – ($125)
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.