The frugal/green/smart way to buy a car

[godusjourney]

I know, cars and frugal/green are polar opposites. But we need a new one desperately! We're rural, so no-car is not an option. But I don't know the first thing about buying a car, grew up with my mom always getting cars that she shouldn't (and so has dh, so he's no help with this either), and honestly we're both sick of bummer cars that spend way too much time in the shop.

Any tips? I know a lot of self-made millionaires (including the ones we know) recommend buying cars new for a great deal (of course paying cash). But we have debt, are in the middle of short selling our home, and while we can afford a car payment after the house is gone...I'm not sure it's all that smart. On the other hand, a used car would be fine, but I'd rather buy a car we can keep for 10 years, and most used cars I've looked at (good brands) are either low miles and nearly the new cost, or high miles and pretty affordable.

How do you go about buying cars smartly?

TIA!

[dogmom327]

Normally I'd say buy used but if you need a car to last for 10 years, you are probably better off buying a new Honda Civic or Fit or something similar. They last forever and you can get them fairly inexpensively. They also hold their resale value so I know we found buying used didn't save us much at all.

What about a shorter term goal...buy a used car for cheap (something that gets great mileage) and plan on replacing it (or major components on it) in 5 years?

[godusjourney]

Thanks! We've thought about both options a lot. We have a friend with a Honda Accord (94) she just bought, and decided she wanted a different car. She's replacing a few things on it, but says that it runs really well, from what she can tell. It's in excellent shape, too - looks great. It's only going to be $2,000 or less. But the kicker is it has 225,000 miles on it. Worth it until we get through this financial weirdness and can get a better car? I don't know.

What do you think? Would you buy something like a Honda with such high miles?

[Logan's Mom]

Originally Posted by godusjourney

What do you think? Would you buy something like a Honda with such high miles?

I wouldn't. The absolute best way to buy is to pick a vehicle a year or 2 old with low miles. You can get the vehicle history so you will know if there were any repairs done. Try to get info on the maintanance of the vehicle as well. This way the person who owned it previously will take the hardest hit on depreciation and you still have a realitively new vehicle that will last quite some time.

Your decision could be made for you if you are unable to obtain financing. If you have poor credit, then you might have to go with a high mileage used vehicle if that is all you can afford.

On another note, I know there are 0% financing on vehicles going on right now, so that would be a great option if you could qualify. The interest free financing coupled with the right off on sales tax of a new vehicle would be a smart way to go.

Of course, make sure you are getting a vehicle that gets good gas mileage. That will help your day to day budget.

Food for thought: newer vehicles have longer mileage intervals before oil changes (ie 7,500 miles vs 3,000 miles) so that would save you money in the long run as well.


ummm..yeah, its an oxy moron that I try to be green and work for a car manufacturer.....

[EFmom]

Personally, we've always bought new Toyotas without a lot of frills (although that's becoming nearly impossible to do as the frills are now standard) and have driven them into the ground. We currently have a 93 Corolla with 200K miles that needs replacing. The car has been great, but it's getting to a point where it needs major repairs with some frequency. No matter how good a car it is, they all eventually get to that point.

I also worry about saftey--it doesn't have many of the safety features that are standard on new cars. I wouldn't buy a car that old with that many miles, so I wouldn't go for the Accord.

As for buying a car that's a year or two old with low miles, it sort of depends on the model you are looking at. We will replace our Corolla most likely with either another Corolla or a Honda FIT. The slightly used Corollas and FITs are almost no cheaper than buying new, maybe $700 tops. So in my case, there's no point in going for a used car. If I were buying an American car or a bigger car, maybe it would make more sense.

[SeekingJoy]

Look at the total cost of ownership, and get the smallest, safest car that works for you.

Edmunds (http://www.edmunds.com/help/about/pr...6/article.html) gives these cars as the top ones with the lowest total cost of ownership over the first 5 years (here are top 5 of 10):

1# 2006 Chevrolet Aveo - TCO: $27,021
2# 2006 Scion xA - TCO: $28,623
3# 2006 Scion xB - TCO: $29,993
4# 2006 Toyota Corolla - TCO: $30,050
5# 2006 Honda Civic - TCO: $30,068

For comparison, here is the list from 2007.
http://www.bankrate.com/brm/news/aut...1.asp?caret=5e

I think (as does the US Army Corp of Engineers, among others) that we have already hit world-wide peak oil production, which will eventually result in higher gas prices if not rationing and supply line disruption. Keep thst in mind even though gas prices are relatively low right now.

As food for thought, here are some articles and blog posts about car buying.

http://www.thesimpledollar.com/2008/...chasing-a-car/
http://www.consumerreports.org/cro/c...need/index.htm
http://www.getrichslowly.org/blog/20...car-ownership/

[mightymoo]

Originally Posted by EFmom

As for buying a car that's a year or two old with low miles, it sort of depends on the model you are looking at. We will replace our Corolla most likely with either another Corolla or a Honda FIT. The slightly used Corollas and FITs are almost no cheaper than buying new, maybe $700 tops. So in my case, there's no point in going for a used car. If I were buying an American car or a bigger car, maybe it would make more sense.

I have been researching a bit on this and was surprised to find this too. I am thinking we'll replace DH's car (eventually) with a Honda Civic, I looked at the civics and the depreciation isn't terribly far from a straight line - they actually depreciate more from year 3 to 4, 4 to 5, etc than from new to 1, 1 to 2, 2 to 3 years. I found it surprising, since the convention wisdom is 'A car loses half its value when you drive it off the lot' - it is probably true of some cars, but I think there are ones that hold their value well.

[Juvysen]

Toyotas and Hondas don't lose value nearly as fast as american brands. Dh just bought a Toyota Yaris (2 door) and looked into buying used, but first, there were very few, and second, the ones he found used actually COST MORE than buying new. He only uses it for commuting, pretty much (although we use it for daytrips occasionally), and he LOVES it. it gets great gas mileage and he seems to think it's pretty good in the snow. We've had great, GREAT experience with Toyotas, so we're sticking with them. My dad had a honda and thinks they've gone downhill in the past few years, so I guess I'd probably go for an older honda, but not a newer one. :

American cars, I'd only buy used, because they depreciate so much as soon as you drive them off the lot if they're new.

[p1gg1e]

Originally Posted by godusjourney

Thanks! We've thought about both options a lot. We have a friend with a Honda Accord (94) she just bought, and decided she wanted a different car. She's replacing a few things on it, but says that it runs really well, from what she can tell. It's in excellent shape, too - looks great. It's only going to be $2,000 or less. But the kicker is it has 225,000 miles on it. Worth it until we get through this financial weirdness and can get a better car? I don't know.

What do you think? Would you buy something like a Honda with such high miles?

Actully Id buy it. They are great cars. How many miles will you be putting on the car every year? If you can squeeze 2 good years out of it it would be worth it IMO ...its payment free right?

[EFmom]

Originally Posted by SeekingJoy

Look at the total cost of ownership, and get the smallest, safest car that works for you.

Edmunds (http://www.edmunds.com/help/about/pr...6/article.html) gives these cars as the top ones with the lowest total cost of ownership over the first 5 years (here are top 5 of 10):

1# 2006 Chevrolet Aveo - TCO: $27,021
2# 2006 Scion xA - TCO: $28,623
3# 2006 Scion xB - TCO: $29,993
4# 2006 Toyota Corolla - TCO: $30,050
5# 2006 Honda Civic - TCO: $30,068

For comparison, here is the list from 2007.
http://www.bankrate.com/brm/news/aut...1.asp?caret=5e

I think (as does the US Army Corp of Engineers, among others) that we have already hit world-wide peak oil production, which will eventually result in higher gas prices if not rationing and supply line disruption. Keep thst in mind even though gas prices are relatively low right now.

As food for thought, here are some articles and blog posts about car buying.

http://www.thesimpledollar.com/2008/...chasing-a-car/
http://www.consumerreports.org/cro/c...need/index.htm
http://www.getrichslowly.org/blog/20...car-ownership/

I'm looking at the Edmunds data and am seeing something else as the cheapest cars to own.

1 Honda Civic DX-VP 4dr Sedan (1.8L 4cyl 5M) $30,062 $0.40
2 Honda Fit 4dr Hatchback (1.5L 4cyl 5M) $30,513 $0.41
3 Hyundai Accent GS 2dr Hatchback (1.6L 4cyl 5M) $30,646 $0.41
4 Chevrolet Aveo 5 LS 4dr Hatchback (1.6L 4cyl 5M) $30,894 $0.41
5 Toyota Yaris 2dr Hatchback (1.5L 4cyl 5M) $31,411 $0.42

[SeekingJoy]

EFmom, sorry about that. Not really sure. Edmunds updates their list monthly. For example, the list back in June was topped by the Aveo, Accent, Fit and Yaris.
http://www.edmunds.com/help/about/pr...6/article.html

I will come back to look for a more recent one.

[Pumpkin_Pie]

So, has anyone driven a Fit? I am going to be in the market for a new car next spring and trying to decide what to get. I have a Civic right now, and I love it, but the Fit looks like it would really haul some cargo if I really needed to.

It looks a lot smaller than the Civic though, so I worry about the safety of it. I used to own a Toyota Tercel and hated the thing. I always felt like it was just so tiny that I would get squashed if I ever were in an accident. It finally bit the dust when I was rear ended by someone going about 5MPH while I was sitting at a red light and it nearly totaled my car. I am very scared of tiny cars now.

[EFmom]

My ILs and a good friend both have FITs and love them. I've ridden in them quite a bit, and we'll be looking hard at one as a replacement for a very old car. They are peppy, hold a lot of stuff, are reasonably comfortable, and both the people I know who have them get much better mileage than what's reported. Consumer reports did a piece on them, and they have an extremely high level of owner satisfaction.

You can find crash test info here http://www.motortrend.com/cars/2008/...ngs/index.html

[SeekingJoy]

I have a friend with a Fit, and she LOVES it.

I looked, but can't seem to find the November press release I pulled the top 5 from. Doesn't really matter. They change all teh time. Cars that get better gas mileage shoot up as gas prices go up, cars that retain their value and have low repairs top the list when gas is less expensive. Civics, Corollas, Fit, Yaris keep popping up regardless.

[talk de jour]

I'd look on craigslist. Get a Honda or Toyota in the 100k mi range for around six grand.

[talk de jour]

and -- FYI -- I used to work for Toyota.