Coffee heat rising

w00t! New Car SCORED!

Ford_Escape_XLSMy son’s, that is. Over the weekend, M’hijito drove up to Wickenburg, a small tourist trap about 55 miles from town, and bought himself a Ford Escape. And yesh, I was amazed that he went for an American car, since his tribe has been burned enough times by the things to make us all leery.

However, it’s a beautiful car, and he got an incredible deal, making it possible to afford a passel of bells and whistles, including leather upholstery(!). And I have to admit that Ford and Chevrolet are getting much better reviews than they used to — Edmunds and the other big reviewers do like the Escape.

Amazingly, he managed to wangle a 0%, no-money-down loan on the thing!

The beauty of this is that he’s been setting aside the equivalent of a car payment for the past few years, hoping to accrue enough to buy a vehicle in cash before his clunk craps out. Said kitty is invested in a Vanguard fund. What this means is that he’ll be able to withdraw just enough to pay the tab each month, while the balance of his car savings continues to earn interest.

This will allow him to continue investing that amount out of his cash flow. By the time the car is paid for, he’ll have at least as much in hand and probably more.

Probably more, because this is type of guy who’s likely to use whatever windfalls that come along to prepay principal, thereby accelerating the loan payoff.

Okay, that’s good, eh?

Well, it gets even more amazing.

With a printout of the Kelly Blue Book valuation, he actually managed to make money on the clunk!

Said clunk was falling apart and needed $1700 worth of repairs just to keep it running. Its previous owner wrecked it not once, but twice; owner’s dad and insurance company had it repaired, but still… 🙄

Its paint was pocked in the hailstorm we had a couple years ago and never repaired. M’hijito collected from the insurance company and pocketed the money…or, more likely, stashed the money in the car purchase fund.

It had something else happen to it — can’t remember what — for which M’hijito pocketed another insurance payment.

The car came to him through one of his dad’s law partners, whose son drove it through high school and then left it behind when he went off to college. Dad’s Partner wanted the unsightly thing gone from his driveway and so practically gave it away.

The dealer, of course, tried to lowball him on the trade-in. But when M’hijito waved the Kelly Blue Book printout in the air, voilĂ ! To get him to drive that Escape off the lot, they offered him top dollar for the clunk!

So he figures that, in balance, he made about $2000 on the thing over the altogether too many years he’s been driving it.

And what about my own schemes to buy a new car?

Oh…I don’t know…and of course, when in doubt, don’t.

The Dog Chariot is still running well. Chuck the Wonder-Mechanic thinks it will go at least another 30,000 to 80,000 miles, relatively trouble-free. It’s so old, the registration gouge is now practically nil, and insurance premiums are also very low. It has a six-banger under the hood that goes a long way toward keeping me marginally safe on the homicidal streets of Phoenix, and the mileage said six-banger gets is not significantly worse than any other cross-over’s, even the now ubiquitous four-bangers.

All of these factoids make my craving for a new crossover or pickup look a lot more like a want than a need.

But given that I can afford a “want” — and if I could wangle a 0% loan myself, I could more than afford it — that Escape is pretty attractive.

The Honda CR-V, whose interior is even nicer and which really is a very pleasant vehicle, comes only with a four-banger. No upgrade is available, and a little four-cylinder engine…well. Not around here, thanks. KJG’s daughter and son-in-law, both of whom are engineers, bought one of the things and then thought better of it. They both have to commute on the freeways, and they found the CR-V underpowered for the purpose. They traded it in on a vehicle that would give them a fighting chance in the traffic.

I’m a fairly assertive driver, even in my old age, and I do not like being shoved around by the SOBs who populate the local roads. A car has gotta have enough power to give me some action when I need it.

The Escape also comes equipped with a four-cylinder engine. However, Ford has two turbo-charged versions that, according to Edmunds, provide acceptable power — one will crank out 240 hp — with little damage to the mileage ratings.  Price is comparable to the fancified versions of the Honda.

So that makes the vehicle a lot more attractive.

The only thing, really, that takes away from it are the letters F-O-R-D:





 1967 Ford Lemon
The Car of My Nightmares

Prius Batteries: Yikes!

A couple on the choir drives a Prius around town. They live on the west side—in Sun City West, which is quite a ways to the west—and so to get to the activities they enjoy in their retirement, they have to do a substantial amount of driving.

Yesterday evening at choir they reported that the Prius’s batteries died, to the tune of thirty-three hundred dollars! Yes. That’s $3,300 for new Prius batteries. The batteries were warranteed for five years, and our friends have had the car a few months longer than that.

Wow! That about made up my mind about the Prius. I don’t think these are wealthy folks—before they retired, she was a teacher and he a minister. From things she’s said, I gather they live frugally.

I sure couldn’t afford $3,300 to replace a car’s batteries, and I’ll bet it’s a stretch for them, too. At least they have two Social Security checks coming in…but they also have to buy food, clothing, and meds for two.

We’re told that, other than the batteries, the Prius is cheaper to maintain than a conventional gasoline-operated vehicle. Let’s think that through.

If it gets 40 mpg, it achieves approximately twice the mileage my Sienna does. I’m now paying about $110 a month for gas, or $1,320 a year. Because a Prius is a hybrid with a gasoline engine as well as the electrical component, the cost of routine maintenance is about the same. Some insurers will give Prius owners a little discount; others charge more—so we could call that a draw, too.

So, all told, if the mileage is twice as good as a fairly clunky gasoline-only vehicle, one would pay about $660/year for a modest amount of driving (I average about 10,000 miles a year).

Meanwhile, since few of us have $3,300 sitting around the house waiting to be spent on a new battery pack, the average frugalist suffering from a chronic aversion to debt would want to self-escrow enough to cover the cost when, after about five years, it comes up. How much would that come to? Well, $3,300 Ă· 5 years = $660 a year.

Yes. Exactly the gas savings engendered by owning a hybrid vehicle.

In other words, every penny the car saves you in gasoline will have to be set aside to pay for new batteries! Unless, of course, you buy into the idea that you should get a new car about every three years. Calculating that cost is more than my feeble brain can contemplate.

Image: 2004-2008 Toyota Prius. IFCAR. Public domain.

This post was featured in the April 27, 2011 Festival of Frugality at Consumer Boomer.

Want to buy that car? Don’t test-drive it!

Our friend Cary Lockwood, the automotive guru and local radio show personality, was chatting over the phone the other day when I happened to mention that I might soon be in the market for a new (or less old) car. He made a startling—and IMHO startlingly brilliant—suggestion: once you’ve narrowed choices down to two or three cars that you could be serious about buying, don’t test-drive them. Instead, rent them.

He pointed out that, in the first place, a ten-minute spin around the block and up the freeway is no way to determine whether the car fits your needs or to become familiar with its handling characteristics. And second, it’s hard to evaluate a vehicle with a salesman hanging over your shoulder pitching the thing. The test drive is one of several tools car sellers use to pressure you into buying. Even when you know this, most people easily succumb to the emotional appeal of a shiny new vehicle.

Cary observes that today’s vehicles are built to run, relatively trouble-free, for ten years or more, if you take care of them. The smart frugalist figures that the longer you can drive a car, the less it costs over the long run. I, for one, plan to drive a car for ten years or until it falls apart, whichever comes last. Because it’s a big investment and you’ll have to live with it for a long time, doesn’t it make sense to invest a few extra dollars and some time to be sure you’re making the right decision?

Rental costs for a Prius run around $40 a day—maybe less with a coupon or corporate account. The New York Times calls hybrid rental prices “excessive,” but it’s hard to assess the truth of this. Car rental companies play coy about pricing; I haven’t found one that will quote a price unless you sign up to reserve a vehicle. A survey of various sites suggests rental rates in general run  from around $38 to $150 a day. Forty or fifty bucks for an entire day of test-driving time looks reasonable when you intend to hang onto a vehicle for upwards of a decade.

Cary suggests that you take plenty of time to test the air-conditioning, the seating capacity and comfort, the gasoline mileage, and the car’s handling characteristics. You might even consider renting it for a three-day weekend, giving time to drive it under different conditions and maybe take it on the open road for a day trip. Here are a few things to check out:

• How quickly and effectively does the air-conditioning cool the car?
• If you have kids, does the interior accommodate your car seats? Don’t guess: install the car seats and observe how they fit and how difficult it is to get the car seat and the child in and out of the vehicle.
• Does the trunk or storage area hold a week’s worth of groceries? How about your golf clubs or skis?
• Can all the drivers in your family see the speedometer and other dials clearly when the driver’s seat is adjusted to fit them?
• Get in and out of the drivers’ and the passengers’ seats several times. How easy (or difficult) is it to get in and out of the vehicle?
• How responsive is the steering?
• How well does the vehicle take curves?
• Does the car accelerate fast enough to enter a freeway safely?
• With the car moving at the legal speed limit, brake hard. Observe the time it takes to bring the car to a halt and the car’s performance during braking.
• Make a U-turn. How large is the vehicle’s turning radius?
• Find a bumpy stretch of road. How’s the comfort factor on a rough surface?
• If you decide to drive the car out of town, how does the comfort in the driver’s and the passengers’ seats hold up over the long haul?
• What, really, is the gasoline mileage?

While many of these tests can be done during a standard car dealer’s test drive, several require time and the absence of a pesky salesman. Renting the model you’d like to buy is a smart way to go.

Buying a car? Watch out for rips

Speaking of the GM bankruptcy,  as individual dealerships crash and burn, some of them are taking customers with them. CBS MarketWatch reports that car dealers are failing to pay off loans on traded-in cars and often are not sending in payments for registration and taxes. This is usually not done with criminal intent but happens because the dealer’s creditors freeze its funds as its cash flow stops. Understandable, but it doesn’t change the fact that consumers are left holding the bag.

If you’re buying a car through a dealership, you need to be careful. A few things to consider:

• Don’t buy a car now unless you absolutely must. If the purchase is in any way optional, delay it until the chaos afflicting the industry settles out.

• If you still owe on your present car, sell it privately rather than trading it in. This will allow you to pay off the loan yourself. Also, private sales usually bring a better price than trade-ins.

• Try to get the dealer to let you send payments for the taxes, title, and registration yourself.

• Purchase only the most reliable vehicle brands, such as Honda and Toyota. There’s some question whether state lemon laws will apply after a dealer closes, making purchases of less reliable vehicles even riskier.

•  Be aware that when a used car dealer buys new vehicles wholesale, the warranty starts running at the time the dealer buys the car, not at the time you buy it. Thus even though you’re the first owner, you’re still buying a “used” car without the full warranty.

• If you’re buying used, consider spending a little extra to go through a private sale. This will at least assure that you can pay the taxes, registration, and title yourself.

What a pain! My Sienna is ten years old. I’d planned to trade it in this year, but with my job ending in December, obviously I can’t do that. I never pay for cars on time, but sure can’t afford to pay in cash now…or any time in the predictable future. As a practical matter, I may never be able to afford another car, certainly not new. My plan now is to drive the gas-guzzler for at least another five years; ten if it’ll last that long.

After that? Well…in five years, the light rail will come right past my neighborhood. Maybe I won’t need a car after this one gives up the ghost.

Copyright © 2009 Funny about Money 

Time to buy a new car?

With $5.00-a-gallon gasoline staring us in the face, I’m wondering if it’s time to trade the Dog Chariot, a 2000 Sienna, for a more gas-efficient vehicle, even though it looks like careful driving will yield almost 26 miles a gallon.

I know I should be looking at used cars. However, I don’t know enough about cars to tell whether I’m getting ripped off, and around here not a single car dealer can be trusted. Toyota dealerships are especially obnoxious for their high-pressure tactics. I don’t own a male voice-studies have shown that women consistently get worse deals from car dealers than do men-and so I buy through a broker. The guy I’ve used in the past will negotiate only for new cars, so if I’m to have a man front for me, I’ll have to buy new.

I’d planned to drive the Sienna for 10 years and then get something smaller and, preferably, much jazzier. However, with gas prices soaring, the value of large vehicles is crashing. Right now the Kelly Blue Book value of the little tank is $5,610, precious little compared to the price of a new vehicle. I have about $15,000 in savings to buy the next vehicle, which I expected would be the last or second-to-last car purchase of my lifetime. If I buy a new car now, that will guarantee I’ll have to buy another one before I die-meaning I have to pinch still more pennies to stash another 20 or 30 grand for that purpose, just as I’m about to retire. Whee!

So, what’s out there?

The Prius gets 48 mpg in town and 45 mpg on the highway. The lowest-priced model, the “standard” hatchback, costs $22,870, slightly more cash than I have in hand, assuming I actually get the Blue Book value for the Sienna. That mileage is very nice, but

a) I’m suspicious about the long-term reliability of the new technology; and
b) that’s really more than I want to pay.

The Camry hybrid gets 33 mpg in town and 34 mpg on the highway. Its price tag is $24,740, more than the Prius. Its gas mileage is not all that much more than the 26 mpg I’m getting right now…certainly not almost 25 grand worth!

The Toyota Corolla gets 26 mpg in town and 35 on the highway. The cheapest model costs $15,166. Uh huh. I should pay 15 grand for a roller skate that gets the same mileage as a paid-for vehicle that can actually carry some cargo? Even if hypermiling extracts a few more mpg, I don’t think so.

Even as gasoline reaches the exorbitant level, the cost of a new vehicle is so much more exorbitant—and such a black hole into which to throw money, because depreciation converts what ought to be an asset into a distinct liability—that it’s not worth trading in a functional though relatively low-mileage vehicle.

We need to drive less and drive smarter.