QuestForAMillion.net

This week the M-Network is blogging about cars. Since I have oodles of experience here, I’ve decided to join in.

I bought my first car when I was about 15 1/2. I saved money from my job and traded a bicycle and cash for a 1968 Ford Bronco. Since then I’ve driven:

• Dodge Omni hatchback - purchased by my parents for my brother and I to share, it eventually wound up in my hands for my last couple years of college.
• Jeep Cherokee - as soon as I was making any kind of money after college ($15,000/yr) I traded in the Omni on the Jeep.
• Oldsmobile Cutlass Ciera - I sold the Jeep and my girlfriend (now wife) and I moved to Phoenix. When we got there I put $600 down (on a credit card) for this car, for which I paid $100/mo on the loan. I called this my “Grandpa Car.”
• Pontiac Grand Am - once I started to make some money in a new job I traded in the Olds on a brand new Grand Am, my first ever new car. Of course I leased it. I purchased the car at the end of the lease and wound up driving it longer than any other car (almost 4 years!).
• Jeep Grand Cherokee - I traded in the Grand Am on this because I had a job where I needed to haul computers occasionally and I drove a lot. I needed a 4-wheel since we were back in Colorado winters. This was brand new and I leased it as well.
• Acura CL - I got tired of driving the Jeep and turned it in before the end of the lease to buy a used Acura CL. I desperately wanted a sporty coupe and this one was a great deal!
• Acura TSX - I traded in the CL for a brand new TSX. My son was coming and I needed a 4-door car. At least I didn’t lease this one. I was making enough money to afford to purchase it, with the help of a 6-year loan.
• BMW 325xi - A few months after buying the TSX I got a job downtown where I could ride the bus and train to work. I went without a car for about 18 months. Shortly after getting my first six figure job, I rewarded myself with a used Beemer. Little did I know I’m not really a snobby BMW person.
• Jeep Grand Cherokee - I liked the BMW but not as much as what it was costing me. I traded it in on the same year Jeep, which cost about half as much. Of course there was a loan for this vehicle too, but we recently paid that off. I’m driving this thing until the wheels fall off.

What have I learned in my 20+ years of car buying and selling?

Don’t lease. Leasing cars is nothing more than renting them. At the end of the lease you’ve paid money to own nothing. If you have to lease a car in order to afford it, it’s too much car. Leasing my be beneficial in a business, where it’s something you can count as an operating expense, but for the average consumer it’s a bad deal.

Don’t buy new cars. New cars depreciate at alarming rates. We wound up trading in my Acura TSX and my wife’s Chevy Blazer on a Chrysler Pacifica. The TSX was about 9 months old at the time and it took almost everything we got from the paid-for Blazer to offset how upside-down we were in the TSX. The Jeep I currently own is a Limited model and it is loaded. I bought it when it was 3 years old and paid about 1/3 of the original sticker price. It’s a bit high in miles but I drive less than 6000 miles per year so it should last me a good long time. It’s also the nicest car I’ve ever owned and it goes anywhere, even in the snow. I’d prefer better gas mileage but I drive so little I only fill up every couple of weeks as it is.

Pay cash for cars. This isn’t something I’ve managed to accomplish yet, other than my very first car, but it will be our MO going forward. Both my wife and I plan to drive our current cars until they aren’t drivable anymore. The money we were paying for the Jeep payment is now going into savings and will be used to payoff the Pacifica once there’s enough there. After that we plan to never have another car payment. It’s much better to earn interest rather than pay it.

Maintain your car. Early in my adult life I didn’t think I was earning enough money for regular oil changes and such. It wound up costing me big-time as I needed costly car repairs more than once, which of course were paid for using a credit card. Since then I’ve wised up and we’ve performed regular maintenance on our cars. Surprisingly we haven’t needed any type of major repairs. Funny coincidence there…