• How the young and broke make car-related decisions

    Is it worth buying a manual car? You can push start them in a pinch if they won’t start.

    How long should we register it for? It’s cheaper overall to buy a full year’s registration upfront … but what are the odds this car is going to last that long?

    How much should we put in the tank this week? If this is the week it dies….

    (Seriously, I swear every one of our past clunkers gave up when on a relatively full tank, or was put out of action for an extended period of time with lots of petrol in the tank, such as after that one big accident…)

    I do NOT miss the constant stress of owning a beater – rattling around with multiple things falling apart, only ever being about one repair away from scrapping the whole thing. When just one more would be the last straw tipping it over the edge to not-worth-it.

    This may as well have been our anthem.

    One of the best things about earning more is being able to afford a much better vehicle that doesn’t give us cause to worry.

    I’m not happy that we needed to replace two tyres this month (are our wheels just magnets for nails?!) but very grateful that we passed the WOF check (our 2nd in this car!) with no drama, and are good for another year.

  • When borrowing for a car is the smart thing to do

    Getting a car loan was the smartest thing I ever did

    Taking out a car loan when your partner is basically unemployed and you’re living on one income. Sounds like the worst idea ever and the start of a judgey Reddit thread, right?

    Yet that is just what we did.

    I kept trying to hold out until T got a steady job, but eventually both the safety and reliability of our car deteriorated to alarming levels. We’re a one-car household and public transport will never be a viable option for BOTH of our commutes so it’s vital that we are able to rely on our vehicle. T needed to be able to get to job interviews and to start work at the drop of a hat.

    It was a bad catch 22 – needing a car to earn money but needing money to pay for a car. I’ve said before that our strategy of buying cars we can afford in cash has not worked out well in the past – thus, the loan, despite the terrible, terrible timing.

    A photo posted by egesther (@egesther) on

    Our car-buying process

    The last (and only time) I discussed our car issues with my mother, her advice was succinct: go for something in the $10k plus range, as cheap cars have always turned out to be money pits for us. Both her and my dad did and I don’t recall them ever having issues with their cars growing up. The difference of course is they had the cash to do that, and we don’t.

    Much as I’d like the peace of mind of a brand new car, there just weren’t any good finance deals around (Subaru had 0% and 3 lump sum payments, Mitsubishi had some good driveaway prices, but not for models we had any interest in). So we took a punt on the used market again, just higher up the price ladder. The one small comfort was that we know more about cars than ever before and T knows car sales from the inside out now.

    Looking in the $15k range (give or take) we were looking at cars falling roughly along two lines: 4 to 6-year-old cars with 80,000 to 100,000 plus km through to 10-year-old cars with 50,000 plus km, and everything in between. Basically, the best case choices split between newer model, higher ks and older model, lower ks. The older cars are usually Japanese imports, while the newer ones are occasionally New Zealand new (and thus with a full history).

    T zeroed in on a few different specific models; narrowing down our choices made things easier in some ways and harder in others. He loves driving, does 99.9 percent of the driving, and needs to be happy with whatever car we have (and let’s face it, it’s really the only decision he gets majority say in – I’m the boss on everything else). It’s got to be big enough and hardy enough to handle him – a little 1300cc is not going to work for space or engine power.  Being a gearhead he’s very specific about particular models and year ranges and knows all the little differences – features and problems alike.

    In the end we set our sights on a Mazda – possibly an Atenza but ideally a 6 (the Mazda 6 is the NZ version).

    The Subaru Legacy was another contender, but it’s difficult to find a lightly used Subaru without ridiculously high mileage, and being the most stolen cars in NZ, insurance is higher on them.

    (Toyotas are famously awesome for reliability but expensive as they don’t tend to depreciate as fast. Also, he doesn’t like any of their current models – last time we were car hunting he would have killed for a Caldina wagon but apparently the later years are definitely off the list.)

    Random thought aside: I feel like I don’t seem to see many Hondas or Nissans around Auckland anymore. Growing up there were tons of Civics, Integras,  Accords, Pulsars, and Primeras on the roads – these days the models have changed of course, but anecdotally the makes just don’t seem as common.

    Closing the deal

    So, what did we have to compromise on? In the end, we went for newer with higher mileage – a 2011 wagon with a little over 100,000 km. It’s an ex-lease car with a full service history that’s had regular maintenance, all documented.

    (I gotta say, it took a while to get used to the quiet engine. None of the rougher rattling, shaking or ticking kind of sounds we’re used to.)

    I’d read a little bit about negotiating with sales people at dealerships online, but it was truly bizarre sitting through the process. It actually happens – writing down the price you want to pay on a sheet of paper, then sitting and waiting for the rep to take the offer to the manager. I was super tense the whole time, convinced they were out to get us, but it really wasn’t that bad. I’d even go as far as to say that the rep didn’t really seem into it – maybe their commissions are small. He was definitely not overly pushy.

    If I recall right, we got a little over 10 percent knocked off, paying $16,000. Compared to what similar cars, even private sales, were going for, it was a very good price.

    Getting finance

    It’s funny how things work out. I was determined to shut down any attempts to sell me on dealership finance, and yet…

    1. The AA completely disappointed me. In their pre-approval email they gave me absolutely no details beyond the fact that I was pre-approved for a loan. I had to hit reply asking what my interest rate would be, and it wasn’t the best one they advertise.

    2. My bank was the complete opposite – what a great experience! I was actually almost excited about the whole thing. A banker called me up, went through every little detail with me, took the time to make sure I understood everything, and was incredibly patient.

    3. But the dealer in fact bettered the offer through their finance company. (There was slightly less flexibility around making extra repayments – however, given our situation, it was highly unlikely we’d be in the position to make extra repayments any time soon.) Also, going through them meant the whole process would be quicker, which was a bonus.

    Incidentally, I had to laugh at this:

    For every instance of a car loan “horror story”, how many people have no trouble or regrets about financing their car? You aren’t going to have a bunch of threads titled “Two years ago I bought a nice car, negotiated a good deal on it, put down a sizeable down payment, had excellent credit and secured a low interest loan and I couldn’t be happier!”.

    (Yes, I have become a Reddit addict. Reddict?)

    Plenty of my PF blog friends have borrowed for cars in order to get something reliable and on the newer side, and done so responsibly. Ideally nobody would ever take out a loan for a car, but we don’t live in an ideal world.

    I won’t say it’s the best financial decision I’ve ever made, but it’s definitely far from the worst one.

    I set the car loan up as an 18-month loan, so payments were rather high with the aim of killing the debt all the quicker. But halfway through, thanks to my new job, I decided to pay it off. That monkey is now off my back.

    It’s the best vehicle-related decision I’ve made to date. Our car hasn’t given us any trouble and will hopefully give us many more stress free motoring years.

    BONUS: having a car this new reduces our annual registration costs by heaps.

  • How long will your car last? A fun rule of thumb

    How long will your car last? A fun rule of thumb

    We’ve always paid cash for our cars, with the exception of our second car (a strategy I think we’re going to buck for our next car, which will hopefully last us a minimum of 10 years). Based on our automotive history, I have drawn the conclusion that every $1000 spent = 1 year of life.

    Car 1: Red Mazda 626 sedan, $1500

    I remember the bank teller looking at me all sideways when I said the cash I was withdrawing was for a car. “Half a car,” I hastily lied, to get him off my back. It served us for probably a little over a year before the gearbox totally gave up.

    In between car: We also had a freebie white Corolla hatch worth next to nothing for a few months that helped bridge the gap between the first and second car. I don’t actually remember how it came into our lives/who gave it to us or what specifically happened to it. 

    Car 2: White Toyota Levin coupe, $3000

    This was all T’s car – his chance to fulfill his desire to have a ‘cool’ car, and learn an expensive lesson in the process. Thanks to this car, we also learned how dang useless the police can be sometimes when it comes to car accidents. I’m really proud of T for going to court and coming out with the result we wanted (in a nutshell: the cops at the scene screwed up, basically tried to lay blame on him rather than the other party, and we refused to lie down and let them walk over us). This one didn’t quite make it to 3 years – maybe 2, actually.

    Car 3: White Mazda Familia hatch, $1800

    Left in the lurch and scrambling for a vehicle, we wound up with this little thing – again, all we could afford at the time. It is, I think the only car to break down on the road and actually strand us to date. This also remains the only car we’ve ever had that was in an accident where we actually wound up getting damages fixed at the other party’s expense. Unfortunately the engine and rust issues only got worse and eventually proved too much; we farewelled the car not too long after that incident (shiny new back bumper and all). I’d say this lasted us close to a couple of years.

    Car 4: Silver Mazda Familia wagon, $4500

    Our most expensive car – and the newest we’d ever bought, only being about 12 years old with barely 100,000km when we got it. Also the only car that ever managed to get through a warrant of fitness with no issues at all – you get what you pay for. It was still a pretty old car though, so that lovely streak didn’t last and after one or two warrants, we were back to the stressful cycle of expensive fixes every  6 months in an effort to get it to pass. It also has a weird ghost problem (to do with the tyres/steering/alignment)  that nobody has ever been able to fix.  Nothing that’s terribly off, just an annoying niggle – the pea to T’s princess, if you like.

    It’s in a sorry state right now – rubber chunk missing from the steering wheel, no handbrake, no power steering, the ongoing tyre issue, and most recent and worrying, dodgy brakes. It’s coming up on four years, and needs to retire.

  • Hybrid cars: a week in the electric lane

    T and I have just spent a week driving around a new Honda hybrid, all in the name of journalism (he also recently enjoyed some Xbox 360 review games; long may that continue. Gaming is not a cheap hobby).

    General observations about modern cars, from the three new vehicles I’ve had cause to be in over the past couple of months: all the bells and whistles, buttons and levers, that they now slap on steering wheels, are kind of distracting. However, I definitely like the move to put the speedo up top above the rest of the dashboard – it’s incredibly hard to miss that way, and hopefully will help if you’re prone to careless speeding.

    We did nearly 400km on $50 of petrol (!!!) though most of that can probably be attributed to the difference between our 15-year-old car and a new model vehicle rather than electric-specific savings. With fuel prices the way they are (and only going up), having to return the Honda IMA definitely stung.

    Hybrids are still new enough that they’re not even on our budget radar, but when we’re older and wealthier, then WHY to THE HELL NOT? It does remain to be seen, though, just how well the technology ages – a more complex system is more prone to things going wrong.

    Of course, the pipe dream would be for a real full-electric option. HaloIPT is one neat Auckland company spun out of the university (which has since sold to a UK firm) working on inductive power transfer technology that would overcome some of the barriers around charging car batteries. Now, if only industry would stop dragging its heels on mainstream electric cars …

    Would you buy a hybrid? Why or why not?

  • Our car isn’t all that bad. Be grateful for what you have, boy

    A few weekends ago we swapped cars with T’s brother. We were driving a fair distance up north and our car, while it’s the nicest we’ve ever owned, isn’t in the best shape – and he figured if we could avoid putting it through the stress of a long journey, why not?

    Now, he whinges and moans a lot about the state of our car. It’s always had a wee bit of an issue (we don’t know exactly what it is, and mechanics haven’t had any luck definitively pinning it down) that has to do with the steering or the wheel alignment. It drives fine, but not perfectly. And that really gets to him. He loves driving, and he has a long commute. He’s the one who spends the most time in the car. I get that. But I’ve always thought he’s overblown things. Our car gets us from A to B. It starts when we turn the key. The seatbelts work. Ya know? So it’s a little vibraty when we get on the motorway. No biggie. It’s more than 10 years old.

    But for some reason he has it in his head that our car should drive perfectly. Immaculately. I do not know where he got this notion. Like I say, our 1998 Mazda is the best car we’ve ever owned. Our friends drive equally old, if not older, cars, by and large. My parents drive cars that are nearly as old as me. His family, well, don’t even have cars. We do not know anyone who owns one of these mythical vehicles that feels flawless to drive.

    But as soon we exchanged keys, got into his brother’s Honda and drove off, he frowned. We weren’t even down the road when he declared it a piece of crap that drove even worse than ours. All the way through the high speed curves up out of Auckland he griped about the poor handling and what a terrible car it was to steer.

    The grass is always greener.

    (I think now he just might shut up about our car, at least for a few weeks.)

    Do you care if your car drives perfectly? Do you expect it to? (More interested to hear from owners of older cars, obviously.)

  • The true cost of owning a car

    There’s a truly irritating ad that’s currently doing the rounds on TV here that bleats on about the true cost of owning a car. Basically, it’s a public service message urging us clueless consumers to factor in the cost of petrol, and to check fuel efficiency ratings to see how much car X might cost to run vs car Y.

    Automobile

    Automobile (Photo credit: A*A*R*O*N)

    You want to talk the real cost of car ownership? Fine.

    Registration

    There’s a good $430 gone, if you’re in New Zealand. Every year. More, if you have a larger car.

    Insurance

    Varies wildly, of course, by location, gender, vehicle, driving history. But that will account for another few hundred dollars, at least. For us, that’s $1000 every year.

    Maintenance

    Oil. Filters. Tyres. Other miscellaneous fluids. I know we generally have to replace our tyres every 12-18 months, and our filters are not only pricey but annoyingly fiddly to replace. Another few hundred a year.

    Repairs

    On top of the normal things that need topping up or replacing. Parts give out or break, over time. You misjudge the distance between your rear and that wall, and tear your bumper loose. Some asshole swipes your side mirror clean off while passing you on the road (it’s happened to us twice. Steer clear of other motorist on Hillsborough Rd, yo). And be sure to consider – especially when buying a car – whether parts are going to come cheap, or even be easily available. I know someone considering buying a BMW but the matter of parts is proving pause for thought.

    Plus we could always go into potential parking costs, driving fines, or even venture down the path of depreciation, assuming you plan to sell your car eventually. But these are the unavoidable, non-negotiable realities. (Excluding, of course, non-legit running of a car. I’m more than familiar with people owning absolute clunkers that haven’t been registered or warranted for months or years.)

    Have I missed anything?

  • The art of the one car household

    How we get by as a one car household

    I have written about the monumental pain in the ass that is Auckland public transport many times, and touched on what it’s like to get by without a car.

    I have to say, it certainly has been easier since late 2010, when we finally got an automatic car (all our previous vehicles were manual, at T’s discretion, and despite my intentions I never really learned to drive manual properly), and a little more so again last year when we added a motorbike to our arsenal.

    That said, a motorbike is not a second car. You’re at the mercy of the weather (which is temperamental in this city, to say the least, and has been ATROCIOUS this summer). You’re limited to what you can fit under the seat and in a backpack, and while parking is a breeze, you will be stuck carrying around a bulky helmet wherever you go.

    I have always been inclined to think that we will eventually be forced to become a two-car household – either upon buying a house (because we’ll be priced out further into the suburbs than we already are) or having kids.

    But I’ve been inspired by a one-car family I know that lives on the North Shore, with one parent working over this side of the bridge. Heck, if they can make it work…

    I’ve reached a few conclusions about setting up for success at this.

    Plan and communicate like a boss

    I’m a planner. T is the opposite. Good thing, then, that I’m the car-less one. Getting by with one car requires getting to know each other’s schedules and planning all manner of journeys, from trips to the supermarket, parental visits, social engagements, and work functions.

    Live close to one person’s place of employment

    It helps if one person can walk to their workplace, or take public transport. Otherwise, planning gets even more serious, because you’ll have to contend with one person dropping off and picking up the other at the office every day (unless you can wangle a carpool with somebody).

    Having never owned a car of my own, the number one thing on my list when choosing a place to live is proximity to bus routes. I was spoiled growing up; my parents’ house is literally 10 seconds from a bus stop. Since then, the furthest I’ve lived from public transport is a 15-20 minute walk.

    Make sure you have a reliable car

    Cars that don’t start or fail WOFs or break down regularly are stressful enough. When that car is your only mode of transportation, it’s infinitely worse. T and I have always worked in different areas of the city – and his is not one you can get to via public transport, especially at 6 or 7am.

    And on that note…

    Only patronise mechanics where courtesy cars are available

    Or you’ll be forking out a lot of money to rent a car while yours is in the workshop.

    Could you swing it as a one-car household?

  • Eschewing the urge to wallow

    I’ve always been an extremely self conscious person. I would lie in bed at night when I was younger, replaying the day’s events in my mind. Berate myself for lost opportunities, for failing to come up with witty retorts, for a particularly embarrassing trip’n’fall, and so on. I had a kind of list going on. Points for having the guts to speak up in class. Points deducted for getting tongue tied in front of my crush. Basically, a tally of maturity, as judged by me.

    When we got the news about this latest car repair, I wanted to throw myself on the ground and launch into a tantrum. Why’d you have to make such a big deal about one tiny thing? Couldn’t the first two mechanics’ clean diagnoses have sufficed?

    I went for a long, sweaty run. Then I decided there was no point in sulking. I could let it ruin my afternoon, my day, my week. I could wallow, gloriously – if wallowing was a sport, I would be a Olympic athlete. I decided that heck, I can’t do anything about it. Shit happens; we couldn’t have done anything differently. You never know with a used car how it was treated before.

    Or I could chin up, change my attitude and move on. Basically, act like a damn adult. Whining might make me feel better, temporarily, but accomplishes nothing. (I started bashing out a furious post, that went something along the lines of:

    WHY do we always have the ridiculous problems? Why does nobody else we know have to deal with such insanely fucking expensive issues? Yeah, T drives a lot, but he doesn’t drive stupidly. Surely we’ve paid our dues with learning about regular maintenance, and paid our dues with his insistence on buying a stupid boyracey car and now opting for something sensible (insert LIFE’S NOT FAIR rant)

    If I had double my cash savings right now, I would be seriously thinking about financing a brand new vehicle right now – 3% over 3 years, 30% down.)

    before realising what a self-pitying douche I sounded like.)

    And in the long run, whining only serves to make feel you worse. Instead, I would do what I do second best: deal with it. I’ve been meaning to get around to working out a new realistic number to direct into our irregulars account, which I’ve been putting off. As for ponying up the cash, it just means a blow to progress on the travel fund.

    As always, car costs are the sticking point. We haven’t had any of our cars for more than two years, so judging reasonable ongoing repairs isn’t easy. Last year, the first year I tracked, we spent about $1000 on our piece-of-crap beater. So far we’re on track to spend double this year for our current 10-year-old one, between the new tyres and the new transmission (it was cheaper to replace the whole gearbox than the one specific part that conked out). I don’t anticipate much more for the rest of the year, and we shouldn’t need to get any work done to pass its warrant, but you just never know, do you?

    Maybe aiming for $1200, the same figure as our motor insurance bill, is a good starting point. I figure this is actually not that crazy, because between his commute, visiting friends and family, and trips, we put a lot of kilometres on our one car. Where tyres might last 2-3 years for some people, it’s more likely to be closer to 18 months for us. So that’s already nearly $500 there. Add to that maybe $100-200 on fluids and filters for regular servicing, plus room for other nasty surprises.

    So, do you love wallowing? Or are you a chin-up-and-get-on-with-it type? And how much do you spend on maintaining your car each year?

  • Why I liked having a car nearly as old as myself

    It’s been a couple of months now since we said sayonara to our old white hatch, and I’m finally used to seeing something completely different in the driveway when I get home. (ETA: For those who don’t remember, our new car is still more than 10 years old.)

    Despite its faults, it had its good points:

    – No car payments. Pretty self explanatory. (Not that we now have car payments…we paid cash for our new one as well.)

    – No need for full insurance. Not worth it.

    – No need to worry about nicks and scrapes. Obviously.

    But I hope that the benefits of our “new” car will outweigh the above. Namely:

    – More efficient.

    – Safer. Airbags, dude.

    – More reliable  – hopefully we’ll spend less on regular upkeep. And certainly remove the time and stress associated with major car issues, including passing WoFs and, you know, actually getting around like a car is supposed to enable you to do, rather than being stranded on the road.

    – Seatbelts and windows that work every time.

    Plus, after recent trips, we learned the following:

    – Room to sleep if absolutely necessary

    – Seats that don’t hurt BF’s back on long trips

    – Better and safer handling (it “sticks to the road”, sez he.)

    Do you ever miss your junker? Heck, have you ever even had one, or are you one of those spoilt kids who had your first car bought for you, and thus got onto the vehicle treadmill relatively painlessly? 😛

  • Adventures in car buying: Insurance

    Okay, so New Car brings with it New Insurance Costs.

    If you’re just tuning in, this wasn’t a case of lifestyle creep; it was a case of knowing when to let go of the last in a string of beaters, and upgrading in the hopes of getting something more reliable and efficient with a bigger initial outlay. (Also, you may recall that every single one of our other cars died before we got the chance to replace them. I figured we should try and beat that this time around.) I’d never call a car an investment, but the idea is we are investing in terms of, theoretically, coming out ahead by reducing the cost and headache of ongoing maintenance and repairs.  Our $1500 hatch was a steal (I’ve got a nostalgic post brewing) but the constant upkeep…ouch.

    Nicer cars also mean higher insurance premiums. According to this Liz Pulliam article on MSN Money, 10 per cent is the most you should pay for full coverage.

    Problem: That doesn’t work for us. Full cover is about $1200 annually – way more than 10 per cent.

    Meanwhile, third party, fire and theft cover is  only $500 (it was $300 on our old car).

    That’s a difference of $700, or just over double. And yet, is that really all that much extra for total peace of mind? I don’t mind a few dings and scratches, but what I am afraid of is a total wreck. After all, you can’t control the actions of others, and it’s not inconceivable that it could be totalled through no fault of our own. That would mean putting away $23 a week for insurance, as opposed to $6.

    In the worst case, I could afford to replace it, even now…but that would put a massive dent in my savings.

    So, it’s a gamble. Pay that $700 (our excess payable on claims is $500, by the way), or attempt to self-insure? It wasn’t even an option previously; none of our cars were ever worth the cost of full cover. Not even debatable.

    But this is a car we want – need, even – to last years.

    What would you do?