The Debt-Free Car Project Chapter 8: Wrap-Up
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The Debt-Free Car Project Chapter 8: Wrap-Up
In this concluding chapter, we take care of some final repairs on our 1996 Lexus ES 300, sell the car and judge the success of our project.
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I often use the figure of half of what the monthly payment would be on a newer model over the period of a year as a rule of resonable expense. Most customers agree, others decide that the security and sanity of a new, or newer car is worth making monthly payments. Again, nice artlicle.
3 years ago we bought our daughter a 2005 Kia Optima with 76k miles for $5000 from a standard used car dealer out the door. It has never left her stranded. Even with a new set of tires and a $400 worth of O2 sensor repair, she's right under $1500 in maintenance.
While I know that is above your budgeted amount, I'd suggest something of similar vintage and mileage, or to befriend a mechanic who can help with auction cars or private owner cars to knock another $1000 or so off of that kind of pricing.
Even then, the key is to narrow your search and give yourself ample time to search and get a great understanding of market pricing for the 3-4 car models you are interested in looking at. Interesting article.
As you guys stated yourself, considering you had given this car new tires (most would have gone slightly used or the cheapest of the cheap), bushings (this item especially since it's the big ticket suspension maintenance item and usually most expensive), rotors (most would have done fronts only), battery, and fixed a ton of minor issues, you would have needed at least 3 years to leverage all of the repairs that you have done; else if it was only for a year of ownership you would have continued rolling on with most of the issues you've had.
My conclusion: If you're looking for a second/third car or a beater or you work in the auto industry, a 20 year old Lexus may make sense. But if you need one car to get you and your family where you need to go every single day you need to find something a bit newer.
A new Civic LX for $300 month for the first five years and then no car payments for the next 12 years. That's the way to go.
Cheers, nf
PS The cheapest car is always the one you're driving now.
It will be more fuel efficient reliable and cheaper to run, sure it doesn't have a LEXUS badge, but this thing is beat to crap anyways.
Point being for someone non mechanically inclined there are other ways to save money on cars than taking a risk on a used luxury car.
It's been a few months now and I have definitely recouped the money. I have more cash to spend on my daily life and so far the most expensive repair on my car was an oil change and the money needed to buy all of the tools and stuff to complete it. I now have a savings with each month without a car payment. While the fuel from going TDI back to Gas/petrol is gone, the car still gets great mileage.
I personally would recommend this type of project to anyone that wants to break the debt cycle. This project ends for me when I have money saved to buy something new cash and not a moment before.
I think (as others have mentioned) that if you're going to do the whole old-car thing, the key is to avoid putting any major money into it. There's risk of being stranded and car not starting and scary noises and such, but you just have to keep it until the first major problem and then junk it and start again. If you can buy at auction, you can probably have really cheap monthly expenses.