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I was a car junkie a few years ago. By that I mean I can call out the brand and models of most cars on the road; and I visited the dealership and test drive from time to time. Not to mention I spent tons of time on the car web sites, such as edmunds, autotrader, cars. com, etc.

This is all past for me. I am no longer that enthusiatic on cars any more. I felt while luxury cars and SUVs are great, I can live with my current 5 years old middle size sedan. Basically car is a tool to get me from point A to point B: with good fuel efficiency, reliability, and safety. On the other hand, I can fully understand and respect my friends who fall in love with their cars: the style, the color, the feel of “driving machine”. It’s just that I am cheap on my car these days. I will ignore the “Service Engine Soon” light because I think it’s a nusance. I also ignored the windshield wiper noise for half year before fixing them.

I read an interesting article from Yahoo Finance the other day. And I agree what the author said. In the article the author strongly suggest buying used cars to save some money. I still remember my American mom once said “when you drive a new car off the lot, you lose several thousand dollars”.

I am not suggesting we all hold on buying new cars. It’s just from personal finance point of view, used car makes sense for people like me. But if we all don’t buy new cars, how can the car companies and dealships survive (not to mention make money)? This will also have effect on its suppliers and the economy as a whole. I just heard from CBS “60 minutes” that if GM go bankrupcy, it will affect one million American jobs. Now I believe the GM Ad campaign “Keep America Rolling” after Sept. 11 is true.

1 comment

  1. I read another article from Laura at Yahoo Finance, it’s about the readers’ response of her first article. Some of the comments are fun.

    I’m an auto mechanic and have been for 20 years. In Maryland, a car has to pass a safety inspection before you can get tags. Many times someone purchases a car and brings it to us to have it inspected, and the car will need hundreds or thousands of dollars in repairs before it will pass.

    If the vehicle is sold with a valid inspection certificate, it can still have problems. A young girl brought in her car she had recently purchased from a local small independent dealership with no warranty. It had a valid inspection certificate, but it had a blown cylinder head gasket. It cost her over $1,000 in repairs. I would suggest that when someone is thinking of buying a used car, he have it looked at by a mechanic.
    — Michael Routt

    Don’t top off your tank. You’ll pay for gasoline that’s fed back into the station’s tanks because your tank is full.— Mark Arbuse

    I keep an air compressor in the garage and check the tire pressure on our Dodge Caravan a couple times a month. I know it sounds compulsive, but it only takes five minutes, and it keeps my 20 mile-per-gallon vehicle from becoming a 19 mile-per-gallon vehicle, or worse.
    — Ken Reibel

    When I bought my last car (two years old) through an auction agent, I had my old car left over. A national car chain said they’d buy it for $2,800. I sold it myself for $3,700.
    — Duane Winkler

    Consumer Reports’ yearly auto edition (comes out in April) has good information on reliable used vehicles (as well as their approximate prices). If the private seller or dealership isn’t willing to let you take the vehicle to a (mechanic) shop to get it checked out, just walk away. If they try to get you to sign paperwork before they allow you to take it to a shop to get it checked out, just walk away.
    — Tim Jurgensen

    Use to check a car’s history before you buy. The small fee ($30 for researching an unlimited number of VINs for a month) is well worth the information. It will forever change the way you look at used cars.
    — Keith Gabel, CPA

    In 2001, I bought a five-year-old Jeep Grand Cherokee with 40,000 miles. I paid cash for it and decided to invest what would have been a “new car payment” of $400 a month into a mutual fund. Five years later, I have nearly $40,000 in the fund. It was easy and a lot of fun watching my money grow. My Jeep is still running great, and I’m now trying to figure out what that to do with some of that money when I retire!
    — Brent Barchent

    Our daughter, who will be graduating from graduate school, hasn’t owned a car yet. Luckily, all through high school, college, and grad school I was able to convince her of the benefits of driving the family car. With the money we saved (car cost, maintenance, insurance, etc.) my wife and I are thoroughly convinced that we were able to pay her entire college and grad-school tuition, and all expenses. She worked during the summers, and we even matched her contributions to her Roth IRA. So, she graduates in about a month, debt free, with a nice-size Roth IRA for a 23-year old!

    I drove my wife’s 1971 Ford Maverick for 26 years – how people laughed! Boring, but we saved the money that would have been made on car payments. We were able to pay off our 25-year mortgage in 11 years and also put our son through college — he’s debt free too.
    –Frederick Gloeckler

    I live in Toronto. Up until a few months ago, my wife and I owned a 13-year-old Honda Civic that was infrequently driven (we both take public transit to work). I kept detailed accounting on all my expenses for the past three years, including parking fees for as little as $1. My three-year average cost on that old Civic is about C$3,600 (about $3,170) per year, plus depreciation.

    When we faced our last big repair bill a few months ago, we decided to sell the car instead. Our alternative? We joined, which is a car-sharing business. Members pay an hourly rental fee. Among the many convenient locations throughout the city where the cars are parked, there’s one right next to our apartment building. I can book the car on the Web in just a few seconds, and the next minute I can jump in the car and drive away. The cars are much newer than my 13-year-old Civic, and the cost is much lower.

    My driving pattern hasn’t changed, but after being a member for three months now, my projected annual cost is about $2,000 — over 30 percent less than owning that old small Civic. Of course, an auto-share club is not for everyone. If you drive every day to work, it’s cheaper to own your own car. But it’s an attractive option for leisure drivers or for a second car in a family.
    — Vincent Yin

    Use a bicycle. And for the minivan substitute — bicycles for the kids as well. I’ve been riding my kids to school, soccer practice, ballet, and to the train for longer distances, since the youngest was five. I only wish there were fewer vehicles on the roads to deal with.
    — David Williams

    Learn to do your own minor maintenance and inspections. General maintenance and authorized-dealer maintenance books are readily available. Keep a good log book of required inspections and basic work you can do yourself.

    Preventive maintenance can save you loads on an expensive repair, keep your vehicle running longer, and possibly identify an unsafe condition (poor brakes, shocks, or low brake fluid, for example). Not only will this save significant labor costs, you’ll be more aware of your vehicle and know what’s normal.
    — Eric Forrest

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