Tag Archives: used car

How Much Have You Spent On Buying Cars?

I was never a car enthusiast like many of my friends, but I’d be lying if I said that I never cared about what car I drove and that a car is just a tool to get from point A to point B. Back in the Fall of 2000, I was very fortunate that my parents offered to help me purchase my first car when I was in my junior year of college. I checked out a couple of used car lots and set my eye on a burgundy 1997 Acura Integra. It was listed at $8500, which was a little above budget, but I was hoping I could negotiate the price down. When I told my dad about the car, he said that he wasn’t going to help me buy that car. He said that the repairs would be expensive with an Acura and also, he didn’t want me to have the “need for speed” driving a sporty little car.

512px-3rd-Acura-Integra-sedan

So instead of the 1997 Acura Integra, I got a 1997 Nissan Altima. The Altima had about 55,000 miles on it when it was bought used in 2000. I drove the Altima in college and continued driving it after I started working while many of my friends purchased nicer cars. Once when I visited an old college friend who I hadn’t seen awhile, he was shocked to see that I was still driving the same car, 8 years after graduating. I was a little envious of my friends with nicer cars, but I was going to law school part-time in the evenings and working full-time during the days. I was not earning all that much while racking up a lot of student loan debt. Using all my savings to buy a car or racking up more debt to buy a nicer car wasn’t a priority for me. I think I might have kept the car a little bit longer, but repair issues started popping up. It also left me stranded a week before my wedding, so I wasn’t too sure about it’s reliability. When I finally traded it in after driving it for 10 years, it had about 168,000 miles on it.

Not my car but looks just like it.

Not my car but looks just like it.

In 2010, I purchased a used 2009 Hyundai Sonata with 38,000 miles on it for $13,300. I paid cash for this car and the salesman said, “it must be nice to have that much in cash!” I felt a little awkward and told him I took a loan from my 401k even though I didn’t. Then he started lecturing me about how taking a loan from your 401k was a bad financial move!

As part of a promotion at Enterprise Car Sales where I purchased the car, they gave me $500 on top of the KBB value of my trade-in, so I got $1000. I purchased the Sonata because it had the latest safety features which was important because my wife and I were planning on starting a family. Hyundais had also gone a long way in reliability but prices were still pretty affordable because it wasn’t a brand that many car buyers coveted. By this time, I had turned 30 and was a personal finance reading addict. I no longer cared about using my car as a status symbol.

Car

I drove my Sonata for a little over 6 years and replaced it in late 2016. Unfortunately, I have a long commute to work and had about 190,000 miles on it by the time I bought another car. The car was a road warrior and had been good to me. It was reliable and I probably could have kept it for a little while longer, but since I had two kids and often transport another adult or two in addition to my wife, I wanted a bigger vehicle. At this point in my life, I was definitely not defined by the car I was driving. Even with all the ridicule that I heard relating to dads driving minivans, I bought one and am happy with its practicality.

I bought a used 2015 Toyota Sienna in the Fall of 2016 for $18,500 from Hertz Car Sales. They gave me $500 for my Sonata. I plan on driving my Sienna until the wheels fall off, or actually until I feel it is reliable and won’t leave me and my family stranded on the road. I financed this car purchase as the interest rate was relatively low and I’d rather use my cash to invest, however I plan on making extra payments to it and paying it off quickly.

Sienna

So adding all three cars up, including the Altima even though I didn’t pay for it, the total amount spent for the purchase of these vehicles is $39,400. I could also subtract the $1500 that I received on the trade-ins, but that doesn’t really change the number all that much. So it’s just a shade under $40,000 for about 17 years and counting of driving, which I would like to think is a reasonable number since I know many who spend that much on just one vehicle purchase. However, this number might be high for many people who live in NYC since they can cut out cars completely as public transportation is easily accessible for most and there are Zip Cars as well as ride-sharing options available to others.

To see what cars other bloggers drive, check out The Cars of Personal Finance Bloggers at Mustachian Post.

Another interesting one is the Car Timeline on Money Watch 101, which is what inspired me to post my own car timeline.

How much have you spent purchasing your car(s)? Do you buy new or used cars? Do you think of your car as a status symbol?

Buying a Used Rental Car

hertz
Buying a car is a stressful event. Buying a used car is even more stressful. You don’t want to buy a lemon and you don’t want to overpay. I purchased my previous car years ago through Enterprise Car Sales and had a good experience with it. You can read about my experience here. In a prior post, I mentioned that I was looking at purchasing a bigger vehicle and eventually bought a minivan. After doing some research, it seemed like the Honda Odyssey was a good choice. One big reason was the fuel economy for such a big car. Unfortunately, Enterprise Car Sales did not carry that car so I considered going to a regular used car lot.

I did not have a good experience with the used car lot. I found a car with a very good price…maybe too good to be true. I had a mechanic check it out and he basically told me to RUN FAR FAR AWAY. He said that even if the price was dropped $2000, he wouldn’t recommend buying it. I didn’t want to deal with shady used car dealers so I considered other types of minivans and looked back at Enterprise Car Sales, but their prices didn’t seem as good as when I purchased from them years ago. I also looked into Hertz Car Sales, which like Enterprise sells their rental car inventory, CarMax, a no-haggle used car retailer as well as a new tech start-up called Carvana, which sells used cars online (they deliver the car to you).

After looking at those option, I found that Hertz had the best prices for the vehicle I was interested in. Hertz advertises that their prices are $1000 or more below the Kelley Blue Book (KBB) value. It is a no haggle price so the price is the price, however, I found the price to be very fair based on my research and over $1500 below KBB value. Also, if you are a Hertz Gold Member, you get an extra $300 off. If you’re not a member, you can just sign up online. They didn’t seem that strict about it. I just showed them my member ID card which I printed from my e-mail.

Hertz offers two options when purchasing their cars. One is Rent2buy and the other is Herz Certified. For the Rent-to-buy program, the cars are still in their rental inventory so you have to reserve the vehicle. You have three days to test drive the car and decide whether to buy it or not. If you end up buying it, you will not be charged for the rental. I went with the Certified program. According to their website, certified cars are “carefully selected from their rental fleet” and then undergo “extensive” inspections because it is put out for sale.

My car buying process went smoothly and without a salesperson trying to pressure me to buy or upsell me. There also wasn’t any hidden fees like “destination fee” or “documentation fee.” The person I worked with showed me the car and took me on a test drive. There was no pressure and the transaction was stress-free. I recommended Hertz Car Sales to a friend of mine and he also bought a car, but he went through the Rent2buy program. The cars in that program might have less mileage as they haven’t been retired from the rental fleet yet. My friend told me that during the three-day test drive, the car ran smoothly and when he took it to his mechanic, he was told the car was “like new.” Hertz also provides a 12,000 mile or 12 month power train warranty. You also get 12-months roadside assistance.

When I’ve mentioned that I purchased my car from Hertz, some have asked me whether I’m worried that it’s was previously a rental car and might have been abused. I guess this is a possibility, but I think the majority of people renting from Hertz are probably people on business. And for others renting the cars for leisure, do you really abuse it or do you just drive like you normally do? Another thing is that I bought a Minivan! Most likely the person renting it is a parent and I doubt they’re flooring it or doing donuts in the parking lot. Also, I think rental car companies have an incentive to keep their cars in good condition so maintenance is not really an issue.

One other criticism was that I didn’t get a good deal because I could not negotiate the price. However, I can’t say that was the case. As I mentioned in my previous experience with Enterprise Car Sales, I did my research and in that instance also went and negotiated at other dealerships. In the end, no-haggle is not a big deal because the price is fair. It’s possible that if you’re an expert negotiator and the dealership you go at a time is desperate to move its inventory you might get a better deal, but I’m happy with my deal. The only downsides for some maybe is that they may not carry the make and model of the vehicle you want, and their cars also probably won’t have higher end features. But I don’t need heated leather seats or an entertainment package so that’s okay.

Would you purchase a vehicle from a rental company or do you prefer to negotiate at the car dealerships?