Why Buying a New Car is Stupid
Once upon a time, WAY back in the days of my youth, my dad asked me if I’d like to go on a short trip to the local convenience store. I of course said yes as these trips usually ended with my dad telling me to pick any candy bar I wanted (as long as it was a Payday bar and I split it with him). I climbed into the vast acreage that was the back seat of our trusty 1972 Chevrolet Impala, that my mother had endearingly named “Fred the Red Sled” for its ability to plow through the harsh Ohio snow.
On this particular trip, my dad told me I could ride up front, although digging the seatbelt out of the crease between the seat and the backrest wasn’t even a consideration. In those days, as children, we just flopped around inside of cars. Child restraints weren’t introduced in my family until a few years later, after I cracked the glove box in my parent’s Buick Estate Wagon, because “We can’t afford to keep fixing the dash!” However, as was proven by the birth of my younger brother “The Prince” they COULD keep replacing their children.
So, off we went to the store. As we pulled out of the driveway, my dad nudged me with his elbow and said “We’re about to hit 100,000! Do you want to watch the odometer turn over?” As far as I was concerned, at that time, he might as well have been speaking Mandarin Chinese, as I had no idea what it was that he had just said. But, he was clearly excited by this odometer thingy and I was simply relieved that his sentence made no mention of birds or bees, so I said “Sure!” He then pointed to a row of numbers on the speedometer. There were 4 nines and a six. “Only four miles to go!” he said proudly. He turned down a long, straight road and we stared, riveted at the odometer. I was SO excited! What was going to happen? Prizes? Money? Would the local news do a story about us?
To my utter disappointment, literally nothing happened. There was no prize, no explosions, no key to the city, no fan-fair of any kind. Just a row of stupid zeros. “Woooow.” I said, apparently too sarcastically for my father’s liking. “Hey! That’s a major accomplishment! It takes a lot of care to keep a car going for 100,000 miles… That’s just over four times around the Earth, at the equator!” (He was right, I checked). I could tell my lack of enthusiasm was disappointing him, so I turned it on. I’m absolutely positive I would have been nominated for no less than 2 academy awards had anyone thought to role film. “Oh! I didn’t know what those numbers meant!” I said in my best Jack Nicholson voice. He smiled and we continued our journey to the convenience store and for the first time in recorded history, bought 2 Payday bars.
In those days, 100,000 miles WAS a big deal. The nearer a car got to that milestone, the nearer it was to its demise. It was almost a sort of “life expectancy” for cars of that era.
That was a simpler time. A time when a family of four could live in a typical engine bay. A time when every part of a car was mechanical and adjusted by humans. Engine timing? Clip on the timing light and rotate the distributor until the hash mark is near a specific number on the scale on the flywheel, or until the engine “sounds” good. Air to fuel mixture? Easy! Turn the two screws on the carburetor in or out, until the engine stops sputtering. That was about the extent of it! Change the oil every 3,000 miles and throw in a new set of plugs and wires every now and then and keep your fingers crossed. Compared to today’s highly computerized cars, it’s a wonder any pre 1990’s cars ever hit the 100,000 milestone.
Cars Are Different Now
As technology has advanced, few things have benefitted as much as the automobile. Today, there are dozens of sensors monitoring every function of the vehicle, making minute adjustments as needed, to keep the car running at optimum performance. Ignition timing is kept perfect to within 1/1000th of a degree. Air to fuel ratio is strictly monitored and properly adjusted by several sensors in the complicated emissions system. All of the engines delicate clearances and tolerances are kept at optimal levels by an onboard computer. These things, in concert with the far superior motor oils of today, have significantly reduced the amount of wear on the engine and improved the life expectancy of cars. Today, it is common to see cars with 200,000 even 300,000 on the now 6 digit odometers. Once upon a time, buying a used car with 75,000 - 85,000 miles, meant you could expect at least a few headaches and might get a few years out of its tired engine. Today, a car with 75,000 miles is still in its adolescence.
Which brings me to my explanation of the title to this article. New car prices have increased dramatically over the last 20 years, due in part to the increased longevity. 20-30 year old cars are commonplace on the road. Plus, all of these computers, sensors, cameras and doo-dads are expensive to produce. What does all of this mean for us frugal folk? It means that we can buy a car that is a few years old for sometimes less than half of what it sold for when it was new. We still benefit from the fancy schmancy computerized gizmos and with proper routine, preventative maintenance, we can still expect to receive several years of trouble free service, far exceeding what a new car buyer in the 70’s could expect. And, if you’re handy with a wrench, you could conceivably own a car for almost nothing. In 2015 I bought myself a 1996 GMC Sonoma pick-up truck with 187,000 miles on the odometer for the whopping price of $400 to use as a second vehicle and a weekend shrub hauler, bike carrier, all around work horse. I wanted something that I wouldn’t care if it got scratched or beat up. I spent another $100 on a new battery, some wiper blades and a sweet set of floor mats. I put another 18,000 miles on it and I spent about $150 on random maintenance, a water pump, brake pads and a set of U-joints. I sold it for $750 2 years later to a guy who is still using it for his landscaping business. I remember my boss remarking how I was going to regret buying that “piece of junk” and that it was only going to “nickel and dime” me. He had just spent $48,000 on a brand new Chevy Silverado with a monthly payment around $600. I’m certainly not comparing my truck to his, but I could afford to replace my truck every month for what he was paying and I’d still have money leftover to buy all the Payday bars my dad could eat. Who was really getting “nickel and dimed” here?
Am I suggesting everyone should run out and buy a $400 car? Of course not, although there are some good ones to be had! The point of this rambling is to shine a light on the sad fact that a new car’s resale value plummets the moment it is driven off of the lot. Let someone else make that initial, inflated payment for the first few years. Then you can swoop in and get yourself a great car with countless trips around the equator left on it.