Am I an Idiot for Buying a New Car?

Sort of, but not FULL IDIOT

For many of us, car shopping is one of the great frustrations in life. You spend weeks if not months researching and searching for options only to either spend too much money or end up with something that is unreliable. The finance community has all kinds of feelings and opinions on purchasing vehicles. I don’t know that there is a one size fits all model for your car shopping experience, but there are definitely some bad car-buying decisions that can be made. The following is a walk-through of my decision-making process resulting in my ultimate purchase of a (gasp) brand new vehicle.

Much of the F.I. community would be appalled at my decision to buy a brand new vehicle. For the typical person, it might not have been the best decision to fit their lifestyle but after my debate and research, I do feel that it was the best decision that fits my lifestyle.

Transportation Priorities

Fuel-Efficient
Reliable
Storage Space
Okay for winter conditions
Longevity

Fuel Efficiency – My number 1 priority for a vehicle is its fuel efficiency. I want to be as environmentally conscious as I can as well as saving money on the monthly gas bill. I commute 70 miles a day and travel a lot in the summer and on weekends. Having a gas guzzler just doesn’t make sense to me. This rules out any kind of truck and really anything with 6 cylinders in general. My target while searching was 30 MPG.

Reliability – I need my vehicle on a daily basis and I don’t have a realistic backup. Additionally, I have very little knowledge when it comes to mechanical workings under the hood. I can do the basic maintenance myself. After that to fix something I would need a solid youtube tutorial plus a lot of free time, which is something I don’t have during the school year. I am envious of those of you with that skill and are able to drive around ridiculously old cars that are cheap because you have the skill set to keep them functioning. However, I do not currently have that ability so this essentially ruled out any of those ultra-cheap and old cars.

Storage Space – I have spent the last decade of my life driving the hand-me-down family sedan. I made the decision that I would like to have some more potential for storage space. Once again I spend my summers travelling in my vehicle. It would be nice to not have to fill it up to the brim ever road trip I take. Likewise, I enjoy my outdoors activity so a more accesible backend is what I was looking for. Essentially this narrowed the search to vehicles with a hatchback.

Snowy Conditions – Living in the North does bring about its limitations. Like I said I drove the family sedan fine in the winter for a decade. However, I had to always be conscious about snowfall and storms and it is nerve-wracking driving a 2-wheel drive vehicle on snowpacked roads. Had I ever had an accident? No. Was I ever stressed driving? Yes. So for this, I was really hoping to get something that had 4 wheel drive. It was my last priority but it was definitely on my wish list. It also made me hesitant to buy an electric vehicle. Last year we had several days below the -20 degree mark and I park outside. Current battery technology is astounding but I did not have faith of that battery holding up the same 10 years from now.

Longevity – I am not a car guy. I don’t like constantly searching for cars. Hence my being okay driving a hand-me-down Camry for 10 years. In my search I was hoping to find something that I could get several years out of. I put over 20,000 miles a year on my vehicles and I wanted something that I could drive for at least 5 years. In my mind this ruled out many vehicles that were well over that 100,000 mile mark. Yes there are brands with great reputations for running well beyond 200,000 miles but there are also brands that have the habit of wearing down and starting to be problematic once they get over 150,000.

Before all of the hardcore frugality types start tearing some things apart I would like to make it clear that up until this point I reached 270,000 miles on my slowly decaying toyota camry. It’s missing 2 door handles, the AC only works on certain settings and it doesn’t like that cold weather. I’ve reached the point where I have lost confidence in being able to drive it across the country in the summertime. Also, For the extremist out there thinking that why am I wasting my time driving to work rather than get a closer job and bike or walk for a commute saving thousands I will say you are correct but that isn’t what fits my lifestyle right now. I enjoy the place that I work at and I enjoy the city I live in. To me, that is worth the extra money every month.

And the winner is…

The 2018 Subaru Forester. Cheaper than the CRV Rav 4 with similar fuel efficiency and reliability. More reliable and better-predicted longevity than the Ford or Chevy equivalent.

The reason I ultimately chose the newer vehicle boiled down to 2 things. The Vehicle had 0 miles on it and was under warranty for the first 60,000. and I was able to get 0% financing. To me this was big. 0% financing meant that I would pay ZERO INTEREST for my car. At that point, I decided that I would get a new car. The only thing to decide was how much I wanted to put down.

I determined the amount I could put down based on how much I could pay each month. I felt comfortable with a $500 monthly payment for 4 years. To achieve this I put $4,500 down. Technically I would have been better off putting that into an account to gain interest but that’s not how my habits work. I was better off putting that money down on the car and keeping that $500 a month car payment.

HOW ON EARTH DID I JUSTIFY BUYING A NEW CAR? It’s a terrible investment right? depreciates as soon as you leave the lot. All of this is correct. I justify the brand new purchase with the idea of how I drive cars. My plan is that I won’t be looking for a new car again until the 2030’s. If I can get 12 years out of the vehicle, all of a sudden that $500 a month payments turns into $165 a month. Much more reasonable and definitely something to consider when car shopping. To me it’s worth the bad investment to not have to worry about my daily ride to and from work. Ultimately I would like to have a much shorter commute, allowing for me to have a cheaper car that barely gets driven but for today that’s not what is most practical.

A year later…

Well, it’s been a year since I bought the Subaru Forester and I have to say I enjoy it a lot. Some things that I have noticed…

I put a lot of miles on vehicles…
4 wheel drive is a nice perk but it doesn’t mean you don’t have to be careful driving in ice and snow.
Cars made in 2018 definitely ride differently than cars made in 2001.
Extra cargo space has made traveling more convenient and less stressful.
I’m averaging 33.0 miles per gallon since purchasing the vehicle.
losing out at $500 a month that I could be investing hurts. But it is manageable knowing that it is a temporary cost.

So overall a positive buying experience. And like I said, while it as not been fun paying $500 a month for a car payment I know now that I can do it and still have enough left over to invest. Meaning once I pay off the vehicle that will free up another $500 a month to invest.

I think buying a new car was the right choice for me at the time. It could also be the right choice for you or maybe it’s not. When buying try to take your own bias out of it and create a checklist of your priorities, just like I did. Then see what types of car fits your needs the best. Until then,

KEEP STACKIN!

I feel less like an idiot now seeing JL Collin’s post!