I thought I’d give you all an update on the car situation around the homestead since it seems to be a growing part of our lives. 🙂
To get everyone up to speed, we made our kids an offer to get a new car. Details can be found in Kids and Car Incentives.
My daughter took the challenge, my son didn’t (he opted for the matching program — he saves for a car and we match what he saves).
In my retirement six month update, this was one of the 21 bullet-point comments I made:
My daughter made it a full year without sweets and soda and earned her new car. We began the shopping process but as we started to add up the costs of having the car at college, we had second thoughts. Did she really want to buy a new car, drive it all the way across the country, park it there, then pay for it to sit (insurance, permits, storage, etc.)? And did she want the hassle of dealing with it over breaks and the summer when she really didn’t need it?
She’d then leave college in two years with a car barely used (since she would walk everywhere), several thousand dollars less in her pocket, and a ton of depreciation. So we pitched her the idea of waiting to buy the car until after she graduates. If she moves somewhere she doesn’t need a car, we’ll give her the cash. And we’ll pay her car insurance to drive our cars until she goes to college. She went for it, so we’re now juggling two cars among three of us.
And that’s what we did for a few months — juggled two cars among three drivers.
It wasn’t that much of a hassle, really. I don’t drive much in early retirement, so my car is usually available. That said, some days it was challenging.
But overall it was fine. In fact it was so fine that once it’s down to just my wife and me, we’ll probably only need one car. There’s another retirement cost savings!
A Three-Car Family
Also among those 21 bullet-point comments was this:
My aunt passed away in early November and I was able to be at the hospital the day she died. It was a blessing for me and one I probably wouldn’t have had if I was still working. I then took another trip back to my parents’ house in Iowa (even though I was just there in October) for the funeral.
One Saturday I was eating my post-workout meal and got a text from my uncle (brother to the aunt who passed away). My other uncle (who was married to my aunt who passed away) was willing to sell her 2008 Subaru Forester (106k miles on it) to anyone in the family who needed/wanted it for $10. He said he thought I might be interested.
Uh, of course I was interested!
I called my uncle with the car and he communicated the same thing — $10 for the car if we could use it. I said we’d take it!
Over the next few days he did some paperwork to get it transferred to us. On Wednesday we drove to his house (about an hour away), picked up the car, brought it home, then took it to the DMV for title, plates, and registration.
We sprung it on the kids as a surprise and they were both thrilled. The plan was that my daughter would use it most of the time until she goes to college in August. At that time my son would likely drive it completely, assuming he ever shows an interest in driving.
BTW, we do have a three-stall garage, so there’s plenty of room. We did have to do a bit of organizing, but thankfully our garage wasn’t as cluttered as those of many of our neighbors.
Not a Free Lunch
But it wasn’t all rainbows and butterflies.
There were a handful of costs which significantly added to the $10 purchase price:
- We took the car in for a bumper-to-bumper review (to a garage recommended by a friend) — like you’d do if you were considering buying a used car. They wanted to charge $100 for the service, but my wife found an online coupon they had on their site for $50 which included a free oil change. Score!
- The garage found that the car needed a new timing belt and new front and rear brakes. We got their estimates plus called around to four other places that had good recommendations on Next Door and AAA. The original garage was $400 higher than the lowest bid. We told them so and tried to get them to come down on their price. They wouldn’t go for it. So we picked up the car and moved it to the next garage.
- We also needed to get the windshield repaired (we knew this when we got the car and my uncle said he’d have it done, but I wouldn’t let him pay for it given he was selling us the car for $10!) It’s a heated windshield, so it was a bit more expensive than the non-heated one.
- All told, we ended up with $1,600 in bills to get it up to snuff. FYI, the second garage confirmed what the first one said other than the rear brakes. They said we still had a few months on them, but we opted to get it all done at once and save ourselves another day at the garage in a few months.
In addition to these costs, I added $750 for this year and $1,000 next year to the “car repairs” line in our retirement budget. Older cars require more maintenance and we want to be prepared for it.
And we needed it. A couple months later and the battery died (it was the original, so it lasted well past its normal life). Thankfully it gave up the ghost in our garage, so we simply had AAA come out and put in a new one. Decent price and hassle free.
One piece of good news on the maintenance front: my uncle had new 60k tires put on at 103k miles, so we have a lot of life left in them.
So that’s the car situation as it stands: one new car earned and deferred and another acquired through the generosity of a family member.
Thought I’d give you a quick update on this Independence Day eve (for those of you in the US).
Hope you’ve had a good weekend so far and that you enjoy the day off tomorrow!
MWM @MyWealthManifesto says
It’s good that you’ve raised your children to be able to see their decisions more in the long term. That is not at all that common. There’s a lot of young people that would’ve wanted the car no matter what without thinking of the hassles of dealing with it later.
When I was young I’d probably be one of those kids that would’ve wanted to have it no matter what. Lol.
Lance @ My Strategic Dollar says
Awesome! How can you turn down a $10 car?! I appreciate the comments about it not being a free lunch. If there’s anything I’ve learned through personal finances is that nothing is ever free nor does it come without some work.
Mr. Freaky Frugal says
A car for $10 – sweet!
My guess is she will go for the cash instead of the car after she graduates.
We FIREd in 2012 with 2 cars. We eventually sold my car on Craiglist because we really didn’t need it and I’d rather save the money. We now have one 2009 Honda Fit.
ESI says
I’d bet on the cash too at this point…
Patsy says
I am not so sure.
If she gets used to the convenience of having a car now, it may be hard to give that up when she takes off for college. Plus- correct me if I’m wrong- did I read that she is considering attending Liberty University? Lynchburg is not really a walkable city, although there are a lot of stores and eating places right off Ward Rd. Anything other than those, she’ll need to find a ride, and public transportation is (as in most of the US except the big cities) atrocious!
ESI says
Yes, she’s off to Liberty.
She will not be taking the car at least for the first year. We’ve already decided that.
She will live in a unit with seven other girls (three bedrooms, common area, kitchen, laundry, etc. — much nicer than my first apartment). Someone will probably have a car. She’s already coordinating what she’ll bring and what her roommate will, so they are working together.
Liberty also has the #1 university cafeteria in the country two years running (at least that’s what they told us when we visited). I believe it. It’s amazing. MUCH better and bigger than any cruise ship I’ve ever been on and those are pretty good. They also have several restaurants on campus, so her need to leave for food should be low anyway.
Her hope for next summer is to get an internship in DC. Public transportation is awesome there and having a car would be both pricey and more of a pain than anything.
Of course, those are plans and plans are subject to change, but that’s what we’re working on now.
Patsy says
Sounds like a good plan, at least for the fist year! Working in higher education myself, my experience is that cabin fever quickly sets in, no matter how many things there are to do on or right around campus. After about 2 months students tend to want to venture further than the immediate vicinity and to want more flexibility than is afforded by relying on rides from others. Not having a car if she’s in DC next summer is definitely a good thing (assuming she lives IN the city itself- pricey).
But it’s probably okay to start off this way and figure out whether things need to change.
Tony says
Another 2009 FIT owner! Very happy with it. We call it “the little truck” amazing how much you can pack into it.
Car story was great, ESI. Hope the kids understand now how the purchase price of a car is only the beginning of the cost
ESI says
Yes, they do. Especially after the expenses we had getting this one up to speed.
MyMoneyDesign says
Even with $1,600 of expenses, that’s still a pretty awesome score! Nice work.
The Green Swan says
That worked out perfectly to get the new to you car! And for $10 and misc repairs… Awesome deal!
Have a great 4th of July!
K D says
Many years ago I had a basic manual transmission Mazda 626 that was eleven years old. It had always worked well and looking back I have no idea why I chose to replace it. Anyway, the trade-in value was not much so it didn’t feel right to do that, we were leery of selling it ourselves (live in a suburb next to a big city). I ended up giving it to my brother’s sister-in-law and her family. They paid to have it transported from the Mid-Atlantic region to Colorado. I believe it gave many years of service to my brother’s niece. It felt good to give-it-away rather than “practically give-it-away” to a dealer. That car also had some recently replaced tires.
There are opportunities if you are open to them.
I suspect your daughter may take the money and run (or at least use it towards a used car), after she graduates college.
ESI says
Your comment reminded me that we’ve given away four cars in our married lifetime — three to our church and one to my sister-in-law. It’s awesome to be able to bless someone with a car like you did!
Fritz @ TheRetirementManifesto says
ESI, we have a fun “college car” story. Our daughter was looking at in-State (cheaper) and our-of-state ($$$) colleges. We offered $10k for a car, but only if she chose in-state.
Needless to say, she did. We got a ~6 month payback on the deal (out-of-state was ~$20k more per year, and we agreed to pay her college costs since my parents did that for me).
She’s now 22, getting married in 2 weeks (!!!), and still driving that 2004 Mustang.
ESI says
Good for her!!!! Smart girl!
Congrats to you all on the wedding, too!
Jen says
A $10 car? Even with $1600 in repairs, that’s an awesome score. I’m sure most of wish we could “find” a deal like that. Congrats and enjoy!
Dads Dollars Debts says
Can’t beat that deal. A new car for $10…even after the maintenance and service you are coming out ahead. Kudos and hopefully your son will start driving soon!
Coopersmith says
Sweet deal on the car….even with putting in $1600 in repairs….
You bring up a valid point in setting aside money for future repairs. It does not matter what make car you have it is a simple fact that an almost 10 year old car will have problems. I have an 2008 where the seat belt locking mechanism is stuck and needs to be replaced. $280 and the car only has 86K miles on it. It is the age of the car.
Good luck and good find
Amanda @ centsiblyrich says
That’s a deal that’s just too good to pass up! Even with the repairs/maintenance. It’ll be interesting to see what your daughter decides to do later.
I’ve thought (often) about giving up one of our cars. Right now, the logistics would be difficult, but in a few short years, I think we could make it work.
High Income Parents says
I’d take a car for $1600 ready to roll!
Thank you for the article link about the kids accomplishing a year long goal to get a car. We have told all our kids that we will match them for what they are able to save up. Our oldest is 15 and he has about $3000 saved up so far. I’m encouraging him to get another $2000 saved so we can get a $10,000 car. I think that could last him through the rest of high school and college if we find a good deal. I’m gonna talk to Mrs. HIP tonight and see what she thinks about the year long challenge. That might be an interesting experiment. 🙂
Tom @ HIP
JayCeezy says
ESI, this is a great story. Your uncle is quite generous, as well as shrewd. Yet another example of ESI fine family roots! Will bet in future years, your son and daughter do not forget this act of generosity and will be more likely to pass it on.
Quick point I’m sure you are aware of, the DMV sales tax and future annual car ownership (property) taxes will be calculated off that $10 acquisition price. For Colorado registration, this is like finding money in the street every single year. Well done, sir!
ESI says
We didn’t know but got a nice surprise when we went to get the registration and license. 🙂
Rethink Retired says
Good story and sounds like the timing couldn’t have been better. Seems like every time I take my car in they say it needs new brakes haha! Good thing the second opinion concurred, and since they were honest about the back brakes you probably found your new go-to shop 😉
Maverick says
FYI, keep in mind Subaru’s are notorious for head gasket failures. Likely by 100K, @150K it’s like rolling dice. (I’m a car guy.)