I have a friend who is very hardheaded-he views cars simply as transportation, and has no interest in them otherwise. Since he is a penny pincher, he never buys a new car-he always winds up buying 8-10 year old cars. he generally comes out paying $500-$1000 for them, and drives them for 1-2 years , or until they develop very serious problems (expensive things like major engine repairs, failed transmissions, etc.), if this happens he scraps them and buys another sh*tbox.
He seems to do alright with this philosophy, and since the cars are so nearly worthless, he buys minimal insurance(no collision for him), and pays minamal taxes on these crapcars.
My question, is this a cheap way to have good transportation? Seems to me that this is a much cheaper way than buying a new car, and watching half the value disappear in the first 4 years.
Of course, he does wind up spending a lot of time looking at cars-anybody ever done this?
How has it worked out for you?
It’s a cheap way to have transportation. It’s not a way to have reliable transportation. In all other ways, the theory is good.
Cars lose a tremendous amount of value the moment they are driven off the lot, so buying a secondhand car is almost always a better idea than buying one new. If you don’t take it to your friend’s extremes and buy a 2 or 3 year old car, you can get very reliable transportation at a good price.
I always heard that cars lost value hard when you drove them off of the lot but I bought and totaled (42 days later) a Dodge Neon in 1995 and I only “lost” $280.00 (or so) it had 4019 miles on it when the insurance guy looked at it, except for the injuries I did well, (try to rent a new car for 42 days).
Back to the OP, my friend Fred is a pilot and he buys “throwdown” cars to leave lying around airports that he frequents, if it runs and is (mostly) road legal Fred will buy it if it’s cheap enough and when they break, he just walks away, I have seen him forget (until reminded) that he has a car at several different airports, in 20 plus years I have never seen him transfer a title (the cars generally do not last long enough).
unclviny
My friend really likes the fact that he doesn’t give a damn about minor accidents! He can park his car in a store parking lot, and insn’t fazed at all if some kids bang up his doors! I get a laugh when I see those obsessive car owners, who park at the far end of the lot, in an effort to protect their precious phallic symbol from dents and scratches! My friend laughs when faced with a game of “chicken”-his philosophy: “come on, hit me!, I don’t give a damn!”
His last car was egged last Halloween by some localpunks-he nevr wasked the egg white off, and it wound up permanently glued to his paint-he doesn’t care!
I have what’s call waiver of depreciation from my insurance. Basically, for the next 3 years, if my car is destroyed I get all the money back of what the car was worth when I drove it off the lot.
In the end, driving an old crappy car will save you money. About the only thing that might happen is older cars (I had a 88 bonnevilly I got free from a friend) have no safety systems. Maybe 10 years is ok (my 92 plymoth voyager came with driver airbags only). My new Matrix comes with everything and then some. About the only thing it doesn’t do is fly and cook dinner.
You could save a lot with used battered cars. My insurance alone is a car payment ($316 a month! I’m 24) but since I keep my cars until they die, I don’t care about it’s value. I figure the Matrix will last me 10-14 years, figure that I’ll be 25 in 22 days (and my insurance will fall like a stone on jupiter) after I finish the finance on this car (and my extended warrenty ends in 7 years to boot) I’ll be able to afford any repairs needed. I think in the long run it’s about the same either way (my bonneville needed $200-400 a month repairs at the end of it’s life).