Wednesday, July 1, 2009

Madd Money: Feeding the Cars

I’m now 41 years old, and in that time, I have gone through my fair share of automobiles. Some have been great, some have been terrible, some have been placeholders until the next one came along (especially when I was younger). But in each case, I learned a little bit about myself and the process of buying and owning cars, and where it’s placed my head about them today. This has been an odd journey, so I think it’s only fair to start at the beginning:

The First Car: 1975 AMC Hornet (Dec. 1983 - Jul. 1984)
For the record, this was one of the ugliest cars I have ever seen, but it worked and it drove, so I didn’t complain too much. Also, it was given to me by my dad, so it was free. It came with its quirks, such as a manual transmission that locked up if you didn’t shift it in the right order (it was a 3 speed, so going from 1st gear up to 3rd gear or 3rd to first, or from 2nd to reverse) would lock it, and you would have to get out of the car, lie down on the ground, and flip two coupling levers to get the transmission unstuck. I still have burn marks in my left forearm from doing this and burning myself on the tailpipe. The clutch proved to be twice quick to deteriorate (partially from my lack of experience in driving it) and the car finally gave up the ghost after a concert I went to (to see Berlin at the Wharfield ...the aftermath of the Hornet breaking down having some more serious consequences for my at the time girlfriend and me, but that’s a whole 'nother story (LOL!) ).

The Second Car: 1971 Ford LTD Station Wagon (Oct. 1984 - Nov. 1986)
My grandmother Kathleen gave me this car when it became clear to her that her ability to drive was becoming greatly hindered by her advancing age, so she gave this car to me at that time. From December of 1984 to November of 1986, this car and I were inseparable. It was a boat on wheels, but it was a great way to pack people and stuff and go places. I even used it to deliver pizzas for almost a year, but man, talk about wear and tear on a vehicle. I think we replaced the brakes twice during this period (and when I say we, I mean my dad). I also didn’t realize it at the time, but my gasoline bill was a huge percentage of any take home pay I received. This car probably would have continued on for quite some time had I not gotten into an accident on Hwy 580 in November of 1986 that completely totaled the car.

The Third Car: 1973 Buick Station Wagon (Nov. 1986 - May 1987)
My dad bought this car in 1976 when we flew back east for the Bicentennial celebration. We bought it in Boston and drove it back across the country. Over the years my dad had it, it had its share of issues (alternator, radiator, etc.) but we kept patching it up and driving it as we could. During this time, I kept using this car for band practices and moving gear, delivering pizzas and going to school. My dad knew this car wasn’t long for this world, as it had issues with the transmission and burning oil, so he encouraged me to save up as much money as I could, and he’d match me dollar for dollar, so that we could buy a replacement car when this one died, which it did in the fall of 2007 (transmission finally went in a billow of smoke that totally fogged up Hwy 680. It was an epic death for that vehicle).

The Fourth Car: 1977 Ford Courier Pickup truck (May 1987 - Apr. 1988)
This car was basically all I was realistically able to afford. It cost $2,000 in 1987, and it was already 10 years old with 60000 miles on it. Today 60000 miles doesn’t sound like much. Back then, it was a geezer. However, it was lightweight and it allowed me to haul equipment for my band, so it worked out well for its intended purpose. There were, however, multiple oddities about the car that had to be addressed time and time again, such as the lack of a catalytic converter and the occasional “gutless wonderness” of the vehicle. It also suffered from the ignominy of my rear-ending a vehicle and crumpling up the hood and front fenders, along with the frame. We managed to straighten out the frame by ourselves using my dad’s car and a chain looped around the frame, but that accident did damage to the engine that ultimately caused its demise in April of 1988.

The Fifth Car: 1978 Saab 99 GLE (Apr. 1988 - Jan. 1990)
For the record, this was and still is my all time favorite car that I ever owned. I loved it when it ran properly. Sadly, when it ran properly grew to be less and less often. Added to that fact was that this car had a lot of exotic parts and repair bills were always stratospheric. But when it was running well, oh it was so much fun to drive. This car actually held out for close to 21 months, an almost record for vehicles at this time of my life (note, this was effectively my fifth car since turning 16). It lasted until January 1990.

The Sixth Car: 1990 Ford Escort Pony (Jan. 1990 - Jun. 1995)
This time, my Dad decided to help me do something we had never done before… he helped me to buy a new car. Mind you, this was not to be any type of luxury purchase, but it was indeed a new, off the lot vehicle. What we bought was bare bones to the extreme. No power windows, no power steering, no A/C. standard brakes, manual transmission… it didn’t even have a radio at first (we added one later). But it was inexpensive, relatively speaking; the car off the lot and all things paid for was just over $7,000. This vehicle was amazing. Unlike all of the other money pits I had driven over the years, this car required next to no maintenance other than the basic oil change and occasional parts that came with wear and tear. What was amazing was just how much wear and tear I was able to throw at this thing over the course of five years. By the time I gave it to my brother when he graduated from college in 1995, I had driven 140,000 miles and had required minimal upkeep. Rob drove it for another four years, and an additional 130,000 miles before it finally gave up the ghost. But wow, talk about dollar for value… nothing I have owned since has come close.

The Sixth.5 Car: 1982 Toyota Corolla (May 1990 - Feb. 1998)
This is the car that Chriustina owned and was driving when we met, dated, married and carried over into our married life. It was her car exclusively from about 1990 until I agreed to take it over as my commute car in 1995 (more on that later :) ).

The Seventh Car: 1994 Saturn SL-1 (Mar. 1994 - Aug. 2000)
This would prove to be the last car that I would buy with payments of any kind (as I don’t intend to ever pay for a car without having cash in hand ever again). We financed $10,000 and made a down payment of $5,000, and we felt like we were being really smart. Christina was the primary user of the vehicle at first, and the idea was that we would have her dive this one, I would drive my Escort, and we would hold onto her 1982 Toyota Corolla as a “spare vehicle”… needless to say, we did not quite realize how silly we must have looked living in San Francisco owning three cars. After awhile, we decided that we would spin off my Escort and we would make do with the Saturn and I would take over the Toyota Corolla, since I was the only one who knew how to drive Stick-Shift and Christina didn’t really want to learn (LOL!). I grew, however, to really regret driving and having the Corolla; it was just too short a car for me, and over time, my back started hurting just from driving it in a hunched over position.

The Eighth Car: 1998 Saturn SL-2 (Feb. 1998 - Oct. 2007)
By this time, working at Cisco has proven to be very advantageous. My stock options and Employee Stock Purchase Plan Shared had raised to what I felt were very high levels. I felt it was time to finally trade in Christina’s Corolla and replace it with a new Saturn that we paid for with cash. It was a Valentine’s Day present for Christina. From there, I took over the Saturn SL-1 and drove it as my main car. This car served us well for many years, and probably would have stayed Christina’s main car had it not been for two events. Both of them were female, and both were born two years apart (LOL!). It became my primary commute vehicle after we bought the minivan. Towards the end of 2007 we decided to downsize from three cars to two cars (it just felt like an incredible luxury to have three cars), so we found a buyer for the 1998 Saturn SL-2 and said goodbye to a car that served us very well for 9 years.

The Ninth Car: 2000 Toyota Sienna XLE (Aug. 2000 - PRESENT)
Frankly, this was spurred entirely by the fact that we were expecting a third child, and the thought of three car seats in a Saturn was just too painful to contemplate. Thus, we went and found ourselves a good quality minivan and joined the ranks of the moms and dads officially (nothing screams mom and dad louder than a minivan (LOL!). Again, this vehicle was paid with cash that was derived from selling stock shares that I had (and I can say this was also the last purchase I made when the stock's I had were riding high). We also traded in our Saturn SL-1 at this point to help with the purchase, but really, the trade in value was not much at all (we had well over 100,000 miles on the SL-1 at this point; I think we got $1,000 as a trade in. Probably could have sold it privately for more, but we weren't really focused on the money at that point in time, we just wanted to get the new vehicle and be done with it. We still have the minivan in active service today.

The Tenth Car: 2001 Ford Escape XLS (Mar. 2001 - PRESENT)
Looking back now, this purchase was entirely driven by my hobbies; I finally gave in and said ‘I need a 4x4, but I don’t want some big hulking gas guzzler, I want something that’s reasonable and can carry my stuff to go snowboarding and camping and do scouting stuff’. That turned out to be the Escape. For this I paid cash, and I had quite a lot of fun going in ans writing a $25,000 check and saying "this is what I'm willing to pay, it's already written, if you want it, just say so. If not, I'll gladly leave". Needless to say, I got the car for $25,000 (LOL!). It's as fully loaded a vehicle as I wanted at the time, which is ironic, considering that, with the exception of the cruise control, many of the other "fully loaded features" I really could care less about... well, OK, I care a LOT about the 4 wheel drive. That was, after all the whole point of buying it. We still have this vehicle in active service today.

From this experience, I have seen all ends of the spectrum when it comes to cars and what their actual worth and value is. On one hand, I have gone through the beater phase of cars, and the incredible costs associated with keeping some of them running (if a person does decide to operate a beater, the best advice I can give is to get a car with very little in the way of extras; the more standard mechanical parts a car has, the more likely it will operate for a long time with little need of maintenance). On the opposite end, I purchased five cars in the space of 11 years brand new, and looking back now, realized that I spent close to $100,000 to purchase those respective cars. While I will admit they were nicer, and they did run longer when I had them, all told, I would say that the net expenses and total cost of ownership turned out to be roughly even.

The most expensive car to own and maintain, hands down, was the Saab. The least expensive car to own and maintain was the Ford Escort. Everything else falls somewhere in between. So what’s my next car going to be? Hopefully something I won’t have to think about for another decade at least, if I can help it. I’m perfectly content to do basic and standard maintenance and then drive the things into the ground or until the wheels fall of, whichever comes first.

From there, however, my plan is to save where we can to put away as much as we need to replace the vehicles when the time comes. At that time, I will purchase a late model used vehicle, preferably between two and three years old and with anywhere from 16,000 to 24,000 miles on it. This way, the major depreciation hit will have already been taken by the original owner, and I will be purchasing vehicle with its utility cost first and foremost in mind. Which vehicle would I buy? Currently I’m looking at a 4x4 pickup with a crew cab, but that’s because of my current reality as a Scout leader. Should the time come that I need to replace my vehicle, then that will be my first choice. If I need to consider this later, then I will let the realities of my life, commute and purposes determine what I will need at that point in time. One thing’s for sure, I will not be purchasing a new car or trying to be in the latest and greatest. The up-front costs are just not worth it.

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