All about the challenges of Midlife Finance

Buying a Car… or Not?

A tan Jeep Cherokee has been a part of our life now for decades, schlepping us on errands or four-wheel-drive trails with equal ease. Those decades are starting to show on our poor baby now. It still can make it around town, and even did a recent hunting trip up in the mountains. The combination of 220,000-plus mileage, rough-running engine and a distressing tendency to shake at higher speeds make it clear:

     We need a new car. 

Or do we?

     You may be in the same situation, with a car that’s aging fast. Does that mean you rush out and buy a new vehicle right now? After all, this is an Emergency…

Well, no, it isn’t.  

QUESTIONS TO ASK

*Do you have a second vehicle? In our case, after much research, we bought a newer-model Outback last fall. That means we can use it (and its better gas mileage) for long trips and general travel — and keep our beat-up Cherokee for days when we both have to be somewhere. In other words: buying another car can wait, for now at least, while we search for a bargain.

*Can you drive the old car for a while? Keep maintenance basic (no huge repairs), and save your money. Paying cash (or mostly cash) is far better than financing. Don’t let the “you should be getting better gas mileage” argument shortcut you right now — a new car will have to be driven for years, before the savings starts paying for the vehicle.

*Research. A lot. When does it make more sense to get a new vehicle, rather than keep the old one? You’ll need figures on gas expense, maintenance, insurance, license renewal/taxes and any interest on your debt. (Hopefully, it’s been paid off for some time now.)  How much can you get for your old car, if you sell it? How much will the new one (or new, as in new to you) really cost, once any loans, title fees, etc. are factored in? (Some more hints on buying the new/keeping the old are here.) Finding the best deal may well take some time — why not start now?

OTHER OPTIONS

*Don’t buy a car at all. Arrange schedules so you can share another vehicle – either by giving family members a ride, or starting a carpool. (There are tax benefits for the latter, by the way.)

*Make arrangements with a friend. The strangest (but most effective) instance: a hunting trip Husband, the Brick, took with friend Tom. They needed a truck to pull the camper — so they borrowed Tom’s son-in-law James’ vehicle. James drove our oldest daughter’s sportcar (which doubled as our second vehicle, at the time), and Tom’s wife Chris drove our Jeep. Meanwhile, I had to teach in Grand Junction, some five hours away. And I needed space to carry the boxes and boxes of samples and sale products. Chris’s van was perfect! This multi-armed swap worked beautifully for all considered.

*Use a scooter or electric bike, instead. These are excellent for moderate climates, and local travel. They’re radically less for insurance and other costs, too. An increasing number of people in our Mountain West state even drive them during mild periods in the winter.

*Lease or rent a car, when you need one. This is especially helpful for long trips — rentals are generally unlimited mileage. That means you can afford to leave older, more stressed vehicles home — something we took advantage of during a recent driving trip to Nevada. (Nearly 800 miles each way) Or:

*Rent a car for just an hour or two – or longer, if you need to.  In a growing number of locations,  vehicles are parked in strategic spots. Reserve your vehicle, either on impulse or up to a year in advance, then take a bus or walk to the car, and tap your membership card against the windshield. That automatically opens the car doors — and the keys are already inside. Use and return to the same parking spot when you’re done. That’s it! We have friends in Seattle who have been using Zipcar there for years for grocery and furniture shopping, as well as showing visiting family and friends around. They’ve been very pleased with it.

Zipcar (actually a subset of Avis, who acquired it in 2013) leads the way worldwide, with more than 810,000 members and 10,000 vehicles parked all over the world. But there are plenty of other companies to choose from, including Hertz’s On Demand, Enterprise’s WeCar, UHaul’s Car Share and Daimler’s Car2Go. Other car sharing programs include City Car Share in San Francisco, Mint in New York and Boston, and I-Go in Chicago. International programs include eHi in China, Zazcar in Brazil and Zoom in India. (If you’re flying or taking the train to any of these places for business or pleasure, you should be considering them for your travel needs, once you arrive.)

You’ll generally need to pay a membership fee to join a program like this — but it’s generally modest, as are rentals. Gocar in Dublin, Ireland, for example, charges a one-time fee of €50 (roughly $79 USD), then a monthly fee of €5.  They also credit €15 as a welcome gift, when you first sign up.  Tou don’t have to worry about purchase, maintenance or insurance costs — that’s all taken care of for you.

*Find some other way to get there. Bicycling, running, walking will help keep your weight down and get the exercise your body needs. Or look into a bus pass: our state offers annual passes at a steep discount to businesses, who then sell them to their employees. (They’re good for lightrail, too, in some areas.)

While you’re considering possibilities, it doesn’t hurt to start researching options, even if you’re planning on waiting for a while. MLF has plenty of helpful posts, like important considerations when you do decide to buy, and how to never have to take on a car loan. There’s also more info on the first car/second car debate., 

as well as posts on saving and making more money. The average household, it’s estimated, can only afford to spend 15% or less of their monthly income on a vehicle — keep that figure as a starting point (remember: that includes insurance, gas and maintenance, as well as cost), and see what your family can afford. 

 

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