# Common Car-Buying Mistakes



## Addy (Mar 12, 2010)

Interesting article on vehicle ownership. I particularly like this quote: "A car is never worth more to you than when it's paid off," Wiesenfelder says. "If you pay $1,000 [for repairs] and get another year out of the car, that's a heck of a lot less than $350 a month."


http://autos.yahoo.com/news/common-car-buying-mistakes.html


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## Jon202 (Apr 14, 2009)

Addy said:


> Interesting article on vehicle ownership. I particularly like this quote: "A car is never worth more to you than when it's paid off," Wiesenfelder says. "If you pay $1,000 [for repairs] and get another year out of the car, that's a heck of a lot less than $350 a month."


Absolutely. Sure it sucks spending 600 or 700 on suspension or exhaust on a 7-8 year old car, but as you said, how many months/years does that get you compared to a new car payment?

The real "cost" of a car isn't cash flow, but depreciation. Say you adjust for fuel economy, repairs, etc.. as all being equal:

(purchase price + interest) - resale price / Months of ownership. I'd say it's close to the "true" cost of ownership.

Just because the 4-5 year old car is "paid off" doesn't mean it isn't costing you. Every month it sits in your driveway, being used or not it depreciates. I figured my car to depreciate around $180/month over the life I've owned it (8 years). Obviously depreciation slows down at the tail end of the curve, so starting off with 5-6 year old car is better than a new or 1 year old car.


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## Four Pillars (Apr 5, 2009)

I've bought new and used - they're both a ripoff.


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## brad (May 22, 2009)

The extent to which depreciation matters depends on when you plan to sell your car.

If you're a "buy and hold" kind of person, keeping the car for 10 years or more and selling it for a few hundred bucks when it's no longer reliable, then you've gotten your money's worth out of it and depreciation really isn't an issue.

If you're the kind of person who buys a new car every three years, then depreciation is a concern, because your car will lose a fair amount of value during those three years.

Consumer Reports did an analysis of these two strategies a few years ago and found that the "buy and hold" approach is much more sound from a financial perspective, but of course not everyone wants to keep a car that long.


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## m3s (Apr 3, 2010)

I've always bought my cars in cash. Everytime I buy a nicer car, that I can actually afford today. Then I start saving for the next one immediately and use that pool for repairs. Finacially this means my car funds constantly increase over time, whereas people who finance stay the same unless they spend significantly more. 

I put a fair bit of effort into finding the car, and then I keep it for years. Sure I spend a lot on repairs, but I've actually avoided depreciation somehow and also the cost of changing cars (15% tax burnage!). I also avoid cars with bad demographics, IE it's cheaper to insure a sports car that mostly mid-life crisis men drive than a Honda Civic.

Actually now that I think of it, the way I avoided depreciation was that my model was always sought after and then canceled or watered down/ruined. I did waste money on mods back in the day, and now I just buy a more expensive car and keep it mostly stock.

I could never afford collision insurance as a young male, and now I chose not to pay it. Instead I accept the risk of replacing my car and don't drive like it doesn't matter if I cause a crash (the way most people drive, it must be because they have no perceived financial risk imo). 11 years accident free knock on wood


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## crazyjackcsa (Aug 8, 2010)

brad said:


> The extent to which depreciation matters depends on when you plan to sell your car.
> 
> If you're a "buy and hold" kind of person, keeping the car for 10 years or more and selling it for a few hundred bucks when it's no longer reliable, then you've gotten your money's worth out of it and depreciation really isn't an issue.
> 
> ...


I totally agree, depreciation only matters when you turn cars over quickly. When you run them until the wheels fall off, depreciation isn't near the issue. I don't think of it at all, because when I buy a car, I know I'll be its last owner. My truck is 17 years old, and I figure I've got another 3 years at least.


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## mrbizi (Dec 19, 2009)

Jon202 said:


> The real "cost" of a car isn't cash flow, but depreciation. Say you adjust for fuel economy, repairs, etc.. as all being equal:


For me (for the most part) I just think in terms of cash flow. What will be my cash outlay going forward if I keep the car versus buy a new or old one?


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## Addy (Mar 12, 2010)

crazyjackcsa said:


> My truck is 17 years old, and I figure I've got another 3 years at least.


We have a 1996 Chev Astro (or GMC Safari? I always get them mixed up!) van. It has power everything, cruise, and can tow my husbands utility trailer which he needs for his side-work. It's a great vehicle. I love that we can take out the middle seat and have a big wide area to have a plug-in cooler and some extra supplies for long road trips.

Plus being the vehicle it is, parts are very cheap, and the cost of labour to repair is also pretty inexpensive. Gas is expensive and the van uses a lot of fuel, but we generally only drive it on weekends so in the end I we're ahead as far as the cost of running/maintaining a vehicle goes.

We currently have collision on the vehicle but we're considering dropping it since it's 15 years old and we're planning on buying a newer used vehicle over the next 3-5 years.

I find myself, and my husband finds himself doing this as well, occasionally thinking how nice it would be to have a newer vehicle, but then the cost of the vehicle puts us back in check! We save up for our vehicles and pay cash, and we're planning on paying at the most ~10K for our next vehicle.


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## the-royal-mail (Dec 11, 2009)

The trouble with cars that are more than 8 years old is you get hit with random $500+ random repair bills that cannot be ignored. So if the vehicle is worth $150 and they ask for $500 to fix the power steering pump, it's sort of like throwing good money after bad. You can never recover the cost of repairs. With my last car, the repairs were getting to be frequent enough that I decided one day to instead put that money into a nicer, newer car. The cash outlay is a little more but I have a much nicer car now. 

I've discovered with cars you can't win. Use them until they break or don't meet your needs any longer. 

This is the cycle they want us in, so we'll keep buying new cars and keep them employed. Cars are not built to last.


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## fraser (May 15, 2010)

My 1997 Camry is still going strong. Invested $1500 in suspension and other repairs last year. I hope to get another 5 years out of it. They way I looked at it, even if I only got one year extra it would be worth it given the depreciation cost of a newer vehicle...and the gst. And I really like the car.


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## brad (May 22, 2009)

A car has to be pretty old (or have a lot of kms) to be worth only $150. And if spending $500 will keep it going trouble-free for another year, in my mind it's worth it.

My 1990 Honda Civic wagon, which I drove for 11 years and ~402,000 kilometers, was a good example. Hardly anything major ever went wrong with that car; at around 300,000 km I had to replace the steering rack, which was a big-ticket repair, but nothing went wrong for another 100,000 km after that. I followed the scheduled maintenance religiously and kept it in decent shape although the body was pretty rusty by the time I sold it (for $300, to a family who drove it another 200,000 km before selling it on to someone else). I really got my money's worth out of that vehicle, and I'm hoping that my current car (a 2005 Toyota Matrix) will have comparable reliability -- which so far has been the case, knock on wood.


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## Addy (Mar 12, 2010)

I too find myself tempted by newer vehicles myself sometimes, I think most of us are regardless of what we own.

For us, and similar to what another poster mentioned, we don't expect to get anything from our vehicle after 20 or so years of use, so the value or worth of the vehicle isn't a consideration.

The repairs haven't been an issue really, we've had things go (water pump, alternator), but since (and I researched this before buying!) the cost of parts and labour is so reasonable it's still worth hanging onto the old van. It may have something to do with the fact we don't put a lot of mileage on it, so repairs may be less than others who drive more often.



the-royal-mail said:


> The trouble with cars that are more than 8 years old is you get hit with random $500+ random repair bills that cannot be ignored. So if the vehicle is worth $150 and they ask for $500 to fix the power steering pump, it's sort of like throwing good money after bad. You can never recover the cost of repairs. With my last car, the repairs were getting to be frequent enough that I decided one day to instead put that money into a nicer, newer car. The cash outlay is a little more but I have a much nicer car now.
> 
> I've discovered with cars you can't win. Use them until they break or don't meet your needs any longer.
> 
> This is the cycle they want us in, so we'll keep buying new cars and keep them employed. Cars are not built to last.


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## crazyjackcsa (Aug 8, 2010)

the-royal-mail said:


> The trouble with cars that are more than 8 years old is you get hit with random $500+ random repair bills that cannot be ignored. So if the vehicle is worth $150 and they ask for $500 to fix the power steering pump, it's sort of like throwing good money after bad. You can never recover the cost of repairs. With my last car, the repairs were getting to be frequent enough that I decided one day to instead put that money into a nicer, newer car. The cash outlay is a little more but I have a much nicer car now.
> 
> I've discovered with cars you can't win. Use them until they break or don't meet your needs any longer.
> 
> This is the cycle they want us in, so we'll keep buying new cars and keep them employed. Cars are not built to last.


More like: The trouble with owners is they don't know how to work on their cars. New cars are a lot more high tech than old ones, I will admit, but unless it's engine internal, transmission, or an electrical bug, most things can be fixed by the DIY'er. A power steering pump can be changed by the owner. An alternator can be changed, a starter too. Brakes, brake lines, gas lines, same thing.

One thing people don't realize is that old cars act different than they did when they were new. Old cars develop noises, shakes, vibrations, odd little things, it doesn't mean they are broken, it means they're getting old.

Back on topic, buying too much car is just as bad as buying too little. Also, try to stay away from the first year of any model or redesign. Bugs are always found and fixes in subsequent years.


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## Four Pillars (Apr 5, 2009)

brad said:


> The extent to which depreciation matters depends on when you plan to sell your car.
> 
> If you're a "buy and hold" kind of person, keeping the car for 10 years or more and selling it for a few hundred bucks when it's no longer reliable, then you've gotten your money's worth out of it and depreciation really isn't an issue.
> 
> ...


I don't agree. If you buy a new car and keep it a long time, you are still paying a lot of depreciation.

1) The person who buys a new car every five years will pay the most depreciation.

2) The person who buys a new car every 10 years will pay less depreciation.

3) The person who buys a 5 year old car every five years will pay the least depreciation.

Of course the third person will likely pay more for maintenance and repairs, so they aren't necessarily ahead.


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## brad (May 22, 2009)

Four Pillars said:


> I don't agree. If you buy a new car and keep it a long time, you are still paying a lot of depreciation.


Having gone through a raft of 5-year-old cars, all of which cost me a fortune in repairs (most were Subarus, but this was in the 80s before the quality of Subarus improved), I decided to go the buy new (or almost new) and hold.

I guess the depreciation is worth it to me because I know exactly what was done and wasn't done to my car. With used cars you rarely know how the previous owner treated it, and maybe I'm just too much of a control freak in this area.

My 1990 Civic cost me $12,000, which works out to a little over $1,000 per year for the 11 years I owned it, plus the money I spent on repairs, maintenance, and parts (tires, etc.). 

My 2005 Toyota Matrix cost me about $18,000, and assuming I keep it 10 years that works out to $1,800 per year plus repairs, maintenance, and parts. 

I bought both of these cars with cash, so there was no interest to pay. I don't know if I'd ever buy a new car again, but still when you look at the cost per year it's not very high, and it's worth it to me to know the car's history and to know it's been well cared for.


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## m3s (Apr 3, 2010)

the-royal-mail said:


> I've discovered with cars you can't win.
> 
> Cars are not built to last.


Isn't that the truth. I once kept a car a bit too long and now I know when it's a good time to sell.

It really is a shame the society we live in. I much prefer my 30 year old aircraft that were designed to live through anything and are maintained by honest hard working people. The deception and marketing ploys of the auto industry and mechanics "grinds my gears", especially that I don't have time or space to do my own maintenance anymore.

Heck these new cars are not only built to self distruct, but also so complicated you don't dare touch it yourself. That's reason enough to keep an old simple car.


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## larry81 (Nov 22, 2010)

In case anyone is shopping for a compact sedan:

http://www.motortrend.com/roadtests/sedans/1107_best_selling_compact_sedan_comparison/index.html

Rankings

8th Place: Toyota Corolla LE
7th Place: KIA FORTE EX
6th Place: CHEVROLET CRUZE LTZ RS
5th Place: FORD FOCUS TITANIUM
4th Place: VOLKSWAGEN JETTA TDI
3rd Place: MAZDA3 TOURING
2nd Place: HONDA CIVIC EX
1st Place: HYUNDAI ELANTRA


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## m3s (Apr 3, 2010)

I agree that Hyundai has surpassed Honda. Brad bought his Civic back in their prime, when Honda was building a reputation. I loved '90s Hondas, but they've watered them down for the American market and can also charge a premium now for the reputation. Although I've never owned a Hyundai, I've driven them and watched them improve drastically while the common consumer still perceives them as Korean junk. While Hondas are still ok, Hyundais are amazing bang for the buck right now with amazing warranty (5 year and lifetime on engine?). I've convinced some friends to buy Hyundais and they love them. You can even get a 2.0T direct injection turbo which would keep up with sports cars on the street without revving the engine or guzzling fuel. Kind of how the 90s Hondas were a step ahead. I would also highly recommend a diesel car if you can find one for a reasonable price. In Europe more than half the cars are diesel and the new diesels are amazing. People need to realize that torque is what you use on the street, not HP unless you like to rev out your cars.

For me cars are a great sense of enjoyment. I save money by not buying things I can't afford, but now that it's saved me money I don't mind spending it on things I enjoy. Of course I still avoid spending more for the same enjoyment, but I refuse to limit my quality of life by driving around a 20 year old car wishing I had a nicer one when I can afford it. I still love to buy used though because there are lots of consumers who will take the hit and then want a newer car. There are some good deals buying new from the States but there just aren't too many new cars I could commit to for 10/20 years, they just aren't built to last anymore. My next car will probably be a turbo diesel or turbo hatch back and a trailer as my "truck". Ultimate daily driver setup IMO.


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## Addy (Mar 12, 2010)

We are considering a tdi for our next vehicle, but I am having trouble finding reliable tow weight listed anywhere. We want something powerful enough to pull our 4x8 utility trailer loaded while still being good on fuel when the trailer isn't being towed. And something >15k used preferably.


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## m3s (Apr 3, 2010)

I towed a 4x8 easily with my Honda, but I had the brakes upgraded and the extra fuel burned when hauling was far better than extra fuel all the time! I even pulled a loaded uhaul 1000 kms once, but it was a parachute in the wind. Anything aerodynamic no prob besides maybe stopping on hills. I pulled a Ski doo in winter, so summer is a piece of cake 

TDI should have more torque which is what you need for hauling. That's why trucks and tractors use diesel. In America, everyone thinks you need a SUV to pull a trailer. In Europe trailers on cars is perfectly normal. I saw a TDI pulling a double horse trailer yesterday, though probably within reasonable speed/distance/elevation etc. A little common sense applies.


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## m3s (Apr 3, 2010)

Sorry to answer your question an American hitch would most likely be rated Class 1 1000 lbs for the TDi I would imagine. That's pretty standard for a car. The euro hitches look tougher and designed by the manufacturer, I'll probably try to get one home. 1000 lbs is lots though, the limitation is due to braking and starting on hills etc, again common sense applies


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## crazyjackcsa (Aug 8, 2010)

mode3sour said:


> Isn't that the truth. I once kept a car a bit too long and now I know when it's a good time to sell.
> 
> It really is a shame the society we live in. I much prefer my 30 year old aircraft that were designed to live through anything and are maintained by honest hard working people. The deception and marketing ploys of the auto industry and mechanics "grinds my gears", especially that I don't have time or space to do my own maintenance anymore.
> 
> Heck these new cars are not only built to self distruct, but also so complicated you don't dare touch it yourself. That's reason enough to keep an old simple car.


Did we just compare cars to airplanes? How many hours of work does a plane need per hour of flight? What's the cost of said work? I'd rather maintain a car than a plane thank you very much.


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## hystat (Jun 18, 2010)

the whole discussion about new vs. old cars and repairs all depends on ONE THING:
Access to a technician who knows how to diagnose a problem and fix it correctly.
I don't even care if they're honest with the bill.
But spending $1500 for some repair and then driving away with the same problem is what often sends people scurrying to the dealer to buy a new car. 
There are some great cars headed to the wreckers today with a minor issue that no one has the time or skill to diagnose. 
As cars get more complex with electronic stability, suspension, speed sensitive steering, variable overhead cam timing, and yada yada... they are extremely tough to diagnose correctly, and Canadian dealer labour costs $100/hour+.... so it is hard to invest the time to diagnose correctly

For those not lucky enough to find a good "wrench", this is the new paradigm of automotive reliability:
Get the Koreans or Japanese to design and build one that will make it a few years before some Canadian puts a wrench to it and wrecks it.


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## Zara Mari (May 19, 2011)

Fuel type and how much of it is consumed by a car model are factors that you also need to consider as these entails cost once you already use it.


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## the-royal-mail (Dec 11, 2009)

Check how good the car is for winter driving. My new car kinda sucks at that (they do a terrible job of clearing the snow around here in a timely manner on all the side streets where we live as well as parking lots) but I just bought it and am not really in the mood to buy something a little better for winter. But winter's coming and it'll be another tough one if I don't deal with this now. Tough call.


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