How To Save Money While Maintaining Your Vehicle

I must have written this story out 10 times in the last 5 years, finally decided I’m just going to blog it and then instead of writing it over and over again I can just link people here.  I’m going to tell you my story … it starts off with some tips you may have already heard, but I’ll give you some nice, juicy stuff at the end that you may not have heard before.

I used to live in NJ, near NYC, and since both states have great public transportation I didn’t get my license until I was 21.  From the time I got my license until I was 26 I had one POS car after another.  None of them were worth more than $600 when I got them, none of them lasted more than a few months, all of them cost me more money than I could afford.  It was pull-your-hair-out stress, almost monthly.

When I was 26 I had no car, no degree, and a minimum wage job at a museum that I had to ride my bike to (3rd shift security guard).  I got really lucky and wound up dating a girl who came from a family who had a little money.  She didn’t like to drive so she’d let me drive her around.  Then, for my birthday one year she took me to Vegas and an awesome stickman at one of the craps tables taught me how to play.  I went home with over $10k.  (Awesome birthday!)

First thing I did was buy a new vehicle – a 1999 Ford Ranger, almost exactly like this one.  My payment was $250/mo.  As of the time I’m writing this the truck is 14 years old.  It’s been paid off for years, but I’ve kept it because I see no point in buying a new one (you’ll understand why in a few minutes).

Some of you may or may not know what a “Christmas Club” account is.  If you have a savings account at a bank you can ask them to set one up for you.  Each month the bank will take a certain amount of cash (you tell them how much) and put it into this separate account for you.  Because it’s taken out every month you learn to live without it, and then at the end of the year you’ve got money set aside for Christmas gifts.  You can have more than one of these, and some banks will let you name them.  In my case, once I paid off my truck I set up one for Vehicle Maintenance and told my bank to put $100/mo towards that account.

As I said, my truck payment had been $250/mo, so you can see putting $100/mo aside is still giving me more money to play with.  With $100/mo set aside that gives me $1,200/year.  I plan on $200 for a rental car for 3 days, so that leaves $1k/year that I can put towards vehicle maintenance.  You’ve probably heard this tip before.  The first tip that you might not have heard is to schedule an appointment every 8 months to have your vehicle repaired at a local mechanic’s shop (never use a dealer shop, that’s a topic for a completely separate blog post).

I schedule myself a rental car, drop off my truck at the shop, and tell them to look it over and give me a list of anything that needs to be fixed (listed in order of priority).  I fix whatever is within my budget, and put off the others for the next visit.  I’ve also made it a point to tell the guys at the shop that this is what I’ll be doing every 6-8 months.  I don’t care if they think to themselves, “Oh good, we can rip him off every 6-8 months” for four reasons:

  • If they know you’re not coming back they have a reason to get as much out of you as they can while you’re there.  Maybe I’m admitting I’ll be a cash cow for them, but they’re less likely to try and screw me with a huge bill for something I don’t need because they know I’ll be back in 6-8 months.
  • If they know I’ll be taking care of my car (aka spending money) on a regular basis then it’s not in their best interests to screw me – because then I’ll have reason to find another shop to work with.  They’ll make more money in the long run by being honest.  If they don’t want that, someone else will.
  • Good mechanics respect people who are willing to take regular care of their vehicles – it’s by taking care of your vehicle regularly that you avoid the bigger problems. Mutual respect makes it more likely for them to be fair with you down the line.
  • Since *I* schedule the maintenance and a rental, *I* get to choose when it goes in the shop – no more of this crap getting stuck on the side of the road, dealing with being late or missing a day of work, no more worrying about the cost of the tow to the shop (which could be huge since my job is 40 miles from the shop).  The stress relief of this alone is worth a little added cost, trust me.

Now, because most of my repairs have been under my $1k/yr budget that means money is gradually accumulating in that savings account, so the times I did have a larger repair bill I already had that money set aside.  Using this method I’ve only had 2 repairs go over my budget, and let me tell you – I’ve replaced the engine in my truck (twice!!), as well as the clutch, transmission, and rear end, and this covers all the tires I’ve purchased too.  For anyone who might say those repairs are signs the shop has been screwing me – I have a hunch about one, other than that they’ve been legitimate repairs, but describing them all would be another blog all on their own.

…. But wait, there’s more!  I’d always heard the cars that held their resale value the best were one-owner vehicles, especially if the owner had all the paperwork for the work done – so I’ve kept a file with all the receipts.  A few years ago I had a job that taught me how to use Microsoft Excel (a spreadsheet program), and I’ve gotten good with it.  One day it occurred to me that I knew enough to enter all the data from my repairs and calculate my total cost of ownership.  Not only that, I could also break it down to see how much it’s cost me by year, month, and even day.

Before I give you the numbers, recall that I was paying $250/mo for the first 5 years. My averages are skewed because of that, and these averages will continue to go down the longer I own the vehicle.  As of today, my total cost of ownership is $24,957 … I’ve owned my truck for 5,218 days, which means that total cost breaks down to $1,745/yr, $143/mo, and $4.78/day.

First, a small note: my daily cost of ownership is $4.78 … think about that the next time you rent a car for $25/day (or more)!

Now for the big news.  You’ll notice that my monthly cost of ownership is less than $150/mo.  If I were to buy a new car tomorrow I’d be back to $250/mo AND my insurance would go up.  I’ve played with the numbers and I would have to get a repair bill of $20,000 tomorrow to bring my monthly cost of this truck back up to $250/mo.  In other words, there is nothing short of completely totaling the vehicle that would make it worth my money to buy new.  I’ll say that again: Even if my vehicle was totaled, it would still be cheaper to rebuild the truck than to buy another vehicle.  The only exception is if I were to buy a used vehicle with a payment of $150/mo, but I’ll get to that in a minute.

Now, mind you, my truck is not stock.  The numbers above also include upgrades!  I was “fortunate” enough to get rear ended a few years ago at a low speed.  The damage wrecked my rear bumper and clipped a fender, and when I took the check to the body shop they looked at it and said, “Give me another $500 and I’ll paint the whole truck for you.”  For those who aren’t as “lucky”, you can get a good paint job for $1k, which would barely increase my numbers (4%).

Instead of replacing the rear bumper with the same kind I had them install a roll pan for the same cost (similar to this, but my license plate isn’t angled).  I’ve installed LED taillights, and the figures above include paying to have a newer style front end put on my truck (like this), and $600 for some nice wheels.  I’ve also installed a car alarm and a decent stereo (not mind-blowing, but good enough for me).  I’ve kept my interior clean too.  My truck looks damn good for being 14 years old.  I still get compliments on it regularly, and I see no reason to get rid of her any time soon – maybe not ever.

You might be reading these last two paragraphs and thinking you don’t have that kind of money to spend on upgrades … remember I’ve had the truck for 14 years.  That’s a long time to save up $50 here and there.  That’s the whole point of having the bank set aside $100/mo … I’ve learned to live on what I make without that, and in the long run it’s kept my cost of ownership much lower than if I were to buy a new car every few years (like they want you to).

Now: What if I could buy a car that’s used, but still newer than 1999, for $150/mo?  I’ve thought about this.  So far here are my reasons for not having done so:

  • My truck gets 17-20 MPG, and I cannot find a vehicle that will do better than that for $150/mo.
  • Even if I could find a vehicle that has matching MPG, my insurance would go up because the car’s newer.  I’d have to work out the math  to see whether or not I’m actually losing money on the deal.
  • Some people have careers where what they drive is an important part of the job.  I don’t, but even if I did, my truck looks like it’s only 5 years old … it doesn’t reflect negatively at all, IMO – but even if I got a job where I felt I needed a newer vehicle I’d still keep my truck.  I don’t see how I would ever get a trade in offer equal to what it’s truly worth.
  • Last but not least – I do have some sentimental attachment to the truck.  It really would be neat to put antique tags on it and say it’s a one-owner vehicle someday.

UPDATE: The truck is no more.

The week before Christmas 2013 I was in an accident. A tire blew out while I was going 65mph. I lost control of the truck, hit a cement barrier, the truck rolled onto its side and slid another 15-20 feet before stopping. Due to the age of the truck the insurance company considered it a total loss. Fortunately I walked away with nothing worse than a scratch on my arm.

I got a check from the insurance company but it was probably $1,000 less than the truck was worth.  I could’ve fought but it would mean spending $200-$300 to get $500, which wasn’t worth the effort. Anyway, because of the settlement check my cost of ownership went down even further than it had been, to $4.61 per day ($138.35 per month).

One interesting note: A friend did suggest that I ought to update my records to include gas and insurance costs so I could compare the truck with my new vehicle, a 2010 Volkswagen Jetta TDI.  The TDI means it’s a Turbo Diesel.  Diesel engines get better MPG but the gas costs about 20% more.  Without factoring in gas and insurance you can’t really compare the two vehicles.

I don’t have a number for insurance costs but I can tell you that my insurance rates barely changed at all, so I guess that’s a wash.  (I was told the insurance was lower on the newer car because of better safety equipment.) I had kept records of my gas purchases so I was able to do some calculations, came up with $26,510.40 for gas ($4.80/day). The Ranger was getting 19MPG, the Jetta gets 35MPG, factoring in the difference in gas prices I should save about $1,000 a year.

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