"Investing" in an econbox

[occupant]

My comparison is against a $3100 2000 Chevy Suburban averaging 14mpg we've had for about three years. We've put about 20,000 miles a year on it. I'm now working two jobs and driving a LOT more, probably looking at 30K per year.

So yes, if I pick out a $3000 car (thinking 05-07, Cobalt, Focus, Sentra, Lancer, and the like) and manage to get a mere 28mpg average, it will pay for itself in about 40K to 42K miles. This should take about 18 months for me. This also takes into account lower oil change costs, lower tire prices, lower tire life (love those Michelin LTX MS2's on the 'Burb), difference in insurance costs (assuming a 2006 Cobalt LS sedan automatic), and how I'd drive the car 20K a year and the truck would get 10K a year.

Cost difference looks to be about $183 to $191 a month overall (the only reason I have two costs, the lower is for full coverage on the Suburban with liability only on the Cobalt, higher is full coverage on both). So a cheaper car can be amortized sooner. A more expensive car would amortize at a later time and mileage. Other variables include the fuel mileage itself. Let's say I pick out a 5-speed 2003 Corolla instead and I'm doing more like 35mpg average. Fuel cost drops, pays for itself sooner. Might be a good reason to look at higher mileage vehicles EVEN if they cost more up front, because they WON'T cost more in the long run.

That's a straight by the numbers look at it. The other bonus of having a second vehicle is the reduction in stress level of trying to figure out the logistics of getting dad A to work at job B while kid C goes to extracurricular activity D without having wife E take off screaming words that begin with other subsequent letters.

 

[HangFire]

Originally Posted By: dlundblad
Say a person was to spend about $250 per month (or $3k per year) in fuel. This is about 450 miles per week, 15 MPG and $2.50 gas. None of these variables are constant and are all rough estimates.. Might be times when more/ less miles are driven. MPG and price of fuel will vary too.

Does it make sense to buy roughly a $5k econbox (and keep the current 15 MPG DD) that is capable of achieving at least 30 MPG? Aside from maintenance, plates and insurance, I am estimating the car would pay for itself in fuel in only 3 years of use.

Thoughts?

I was in this position almost 4 years ago. I made a spreadsheet and crunched the numbers for $3, $3.50 and $4 gallon, 33K miles/year, comparing my 4x4 MPG to cars at 25 through 40 MPG. I got some VIN's from online car shopping and got insurance quotes from my agent. (Don't forget to ask your insurance company if you can pay less for the Jeep once it becomes a very low mileage driver.)

What I found is that once I got to 29-30MPG, further increases in fuel economy are not worth a bigger investment in the car. I tried to swing a used Prius but the much higher initial cost just killed it, no matter how I crunched the numbers. Maybe if I commuted 75K miles per year, but then depreciation is brutal. At 33K/year it would take 8 years for me to amortize a 175K mile used Prius, and that's assuming it would last to 439000 miles with no major repairs. Even if I accepted that, the higher up-front cost still killed that deal. A cheaper, lower mileage used non-hybrid car allowed me to keep more of my money up front and make less of a risky bet on reliability.

My solution was a used 2 y.o. Corolla, I've put almost 100K on it now and it's been as reliable as an anvil. It will be paid off soon. It's like money in the bank, I call it my "freedom machine": freedom from costly repairs, freedom from high gas costs, freedom from lost time under the hood. My commute is shorter now, but still long enough to keep the Corolla. I could trade up at this point, but would rather spend my money on my family and build up the savings.

In your case, you can assume your $5K econobox and your Jeep would both require unspecified repairs in the future, so just call that a wash and focus on gas, insurance, and maintenance costs. Lower annual mileage means lower Jeep maintenance costs, and that counts towards the economy of owning the econobox.

 

[SLCraig]

Originally Posted By: Vern_in_IL
Nissan's Note still comes with a manual transmission, as well as crank windows.


I actually quite like the look of those too.. As for the question, I think all the small econo and base cars from every company you can still get with a true MT.

 

[rjundi]

A $5k econobox rarely runs those 3 years repair free let alone maintenance free especially 23k+/year (450 miles/week).

Add in the fixed costs like insurance, registration, and inspection fees beyond some maintenance and unexpected stuff. My guess a low is about $1000/year average just to own a vehicle that is driven regularly excluding any fuel.

 

[SwampSurvivor]

Originally Posted By: Vern_in_IL
Originally Posted By: dlundblad
Originally Posted By: HerrStig
Do those boxes come with a hair shirt? Life's too short.....


For something that is good on gas?

The goal is to still keep the "fun" vehicle too.


Which is why you want CVT.


CVT is the opposite of fun

 

[dlundblad]

I was thinking that too, but I will continue to let him think otherwise.

 

[HangFire]

Originally Posted By: rjundi
A $5k econobox rarely runs those 3 years repair free let alone maintenance free especially 23k+/year (450 miles/week).

Neither would his current vehicle.
Originally Posted By: rjundi
Add in the fixed costs like insurance, registration, and inspection fees beyond some maintenance and unexpected stuff. My guess a low is about $1000/year average just to own a vehicle that is driven regularly excluding any fuel.

There's budgeting and there's comparison. No matter which vehicle he drives, he needs to budget for repairs, but who knows what repairs will be needed? So for comparison purposes, call it a wash on repairs, and focus on known expenses- gas, maintenance, insurance, etc.

 

[rjundi]

The chances for repairs doubles with two older vehicles especially a new wildcard. Also $5k car is more likely to be repaired then not no matter what the maker. That is entry point it seems now for an okay ride.

 

[dlundblad]

The math I do know is that Ill be paying roughly 3k per year with a 15 MPG vehicle. My fuel costs would be cut in half if I bought something that achieved 30 MPG.

Heck with a decent used car (a Corolla for example) the cost is about 12k here with 100k on the OD. Id assume this would be nearly maintaince free for some time too. (Wouldnt worry about changing the oil either.

)

Buying new seems like a better bet in that situation.

 

[fdcg27]

If a used Corolla with 100K on it is twelve grand, then you may as well spend another five grand on a new Prius C and really save some fuel.
OTOH, four grand more than twelve grand would buy you a new Yaris.
If you're a little less risk-averse, you could be driving a new Mitsubishi Mirage or Nissan Versa for less money than a used 100K Corolla. The chepo Versa even comes with a real 5 spd transaxle. Either would use less fuel than a Corolla as well.
As I noted in my post earlier in this thread, if you want a fuel sipper, now is the time to buy one.
Wait until gas prices pass solidly through three bucks a gallon, as they inevitably will, and it'll be too late to get a decent price.
Cars are for driving and it's hard not to enjoy even the most basic car if you actually like to drive. Car snobs are for ignoring.

 

[SatinSilver]

One of they guys on here from Ohio bought a certified used Corolla for 12k with 30k miles on it. I think it was advertised for $14k and he negotiated $2k off. At the time it was 3 years old and coming off a lease with maintenance records. Which seems like a good deal to me.

 

[fdcg27]

When you can find new ones for just a few K more, I'm not so sure.
Used cars always come with some baggage, although it isn't usually serious.

 

[IndyIan]

Versa's don't get great mileage, by their EPA rating atleast.
I'd look for a used yaris or see what a new mirage is like. I bet it's Nvh is atleast as good as a Cherokee. Maybe a cobalt xfe would be cheap too?

 

[sciphi]

Having a practical and reliable fuel sipper in the fleet is really nice. Jobs open up that aren't cost-effective otherwise, it keeps wear and tear off a "fun" vehicle, and right now when gas is "cheap" it's money in the bank. Like others are saying, the short-sighted folks are trading up their fuel-sippers for thirstier vehicles.

Obviously a stick will be more efficient and likely cheaper to run on an older econobox. It might be a bit of a search to find a stick-shift econobox in decent shape for $5k. It can be done, although the pickings are slimmer than in years past.

 

[raytseng]

If you're talking economics, you need to consider the scenario holistically, with the whole of "opportunity costs" and next best option.

In the original situation, you have assumed 450miles a week in a car. That's going to be roughly over 2hrs/day or 8% of your life sitting in that vehicle (and a higher percentage of your actual waking hours).

You need to consider if a better vehicle makes a difference in your life for you, perhaps it's worth it to step up.
Do you have a better "investment" or use for the money saved that can extract you better gains for your life?

If not, then the more expensive car is the better choice.

You can make this same economic argument to "invest" in eating McDonald's Dollar menu every day, which will provide you adequate calories to survive.

 

[Stregone]

Originally Posted By: fdcg27
Cars are for driving and it's hard not to enjoy even the most basic car if you actually like to drive. Car snobs are for ignoring.


These little cars are fun to drive because you can really wind 'em out without breaking the law (too much, lol). I have a Chevy Spark and its fun to throw around winding country roads even with all of 85hp.

 

[dlundblad]

Very good words of wisdom everyone.

Like I said earlier, I am in no position to buy anything at this moment. Just thinking out loud and getting advice from a more skilled and experienced crowd.

 

[linksep]

Originally Posted By: dlundblad
Ultimately that is what my Jeep would be for. Realistically its probably worth 2-2.5k on trade anyways. I would also be using in the winter months when nothing but a 4x4 can make it down the road.


Towing on the weekends? Towing what? A PWC or utility trailer full of leaves? You can do that with most econo-cars. Sure it's harder on the car and you might take a $500 "condition" hit when you sell the thing because it has a hitch but a $500 hit a couple years from now is a lot cheaper than a $2,500 (keep the Jeep) hit today, sure you'll wear out the clutch faster towing, but how much will you be towing and how often? I'd bet you only reduce the functional life of the clutch by several (5-10) thousand miles.

Nothing but a 4x4 can make it down the roads? I don't know what winter is like in Indiana, but in Minnesota and South Dakota my little 5-spd FWD Saturn without traction-control and with excellent snow-tires has driven all around town at low speed in snow up to the top of my front bumper; and I don't mean drift-busting, I mean 5 or more blocks at a time at 20-25 MPH in that depth of snow. For drift busing I have run through drifts almost as tall as my car and probably 20-30' from beginning to end (granted I was doing 45-55 MPH when I hit those drifts).

My advise would be to trade in the Jeep on a $5-$6K vehicle that gets 25-30 MPG highway (FWD or AWD), then invest another $1.5k in a hitch, a small-ish utility trailer, and excellent deep-snow tires. The trailer probably won't require insurance (don't know IN laws), take up less space than the Jeep, require less maintenance than the Jeep, and will prove to be even more versatile than the Jeep.

 

[dlundblad]

You arent the first one here to question whether or not a 4x4 is essential where I live. I promise you it is. Your experience seems limited to driving in town which is also no comparison to where I live. As much as i love my Jeep, if I lived in town, I would most likely drive a car.

I would plan on putting a hitch on the car mainly for a bike rack. The goal was to keep the Jeep for the other towing like I said earlier. I don't tow much with my Jeep, but at the same time I still think it would be nice to have.