How to buy a car.

My response to Shannon’s thinking about buying a car:

Congratulations saving so much money by avoiding car ownership for so long.

Here is my feedback:

  • Forget the concept of a car retaining its “value”. A car is a liability not an asset. If a car runs and operates it has value. The only time the car’s “value” will matter is if it gets totaled in an accident.
  • Don’t bother buying a new car. Its a stupid waste of money. Let the other poor sucker buy the shiny new object. Unless you are trying to impress some bimbo girlfriend, forget it.
  • Forget the used car guides, they talk about general trends – not your specific car.
  • Figure out how much money you want to flush down the car toilet. Double that number (maintenance, license, etc.) While you are figuring out what you want to buy set that money aside to make sure you can really do without it (the money that is).
  • How many times can you rent a car with the above cash? Do you still need that car?

Now that you have decided that you really must discard your cash this way. Buy your car this way:

  • Find out what your minimum monthly payment would be buying a car from a dealership. (Lets say $400/month)
  • Decide what your hassle tolerance is. Your hassle tolerance is how long in months the car must run with only oil changes or other routine maintenance before you get pissed off with it. Note this is a minimum – not a as-long-as-possible value. Lets say 10 months – so after 10 months you wake up and discover that the car had been crushed by a semi you wouldn’t care.
  • Hassle-tolerance * monthly payment = maximum to spend. Yes – maximum. In our example, that is 10*$400 = $4000. If you don’t mind buying a new-to-you car every 10 months, then if the car lasts 20 months – the last 10 months were ‘free’
  • Look on craigslist. Buy the third car that passes a basic driving test and an inspection by a trusted mechanic (or at least a mechanic that you can beat the shit out of if he screws up). Why the third car? Because you should give yourself the opportunity to get a good deal but you should not agonize and ditter yourself into indecision. If you can’t decide by the third car then you don’t really need a car – its not urgent. Update: Note that I am not saying the third car period – but rather the third car in decent shape where “decent shape” = able to run at highway speeds and your mechanic doesn’t ask if he can share in the life insurance payout. The car is decent if it is ugly or has cigarette burns in the seats.
  • Buy a car that you would never want to both getting comprehensive insurance on. If you don’t care if the car is destroyed in a collision, stolen, explodes, etc. — then you will not care if it is a ‘lemon’. Even a lemon will likely last ~10 months.

As a result, you will buy a car that:

  • you will not have an emotional attachment to — save emotional attachments for people not things.
  • you will be indifferent to. You will not wash the car (saving money, time and clean water).
  • you will not waste time cleaning the car.
  • will not be hard to ditch when confronted with a huge repair bill.
  • you will be able to sell for about what you paid for it – even if it doesn’t run at all you will be able to convert it to a tax deduction.
  • drive it into the ground.

As background, my wife and I between the 2 of us have owned 5 cars: 1 new, 4 used. We never paid more than $4000 for a used car (or van). The car that has lasted the longest is a 1991 Ford Festiva – which gets over 30mpg. We paid $1500 for that car. The other vehicle we own is a 1994 Dodge Caravan – $4000. We have never ended up with a lemon. We have spent a total during our entire combined life span of >80 man-years on vehicle purchases is about ~$35,000. (I think that might be too high actually).

Update ( 9/7/2008) :
Apparently I am not the only one see things this way. Cars: The real reason you are broke.

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