In one of my first posts I mentioned that our household transportation setup is a tad bit ridiculous. I painted a picture about how a vehicle purchase is one of the biggest financial decision points you can make (right up there with home ownership, marriage, and college). I advocated buying a gently used car with no financing and preferably one optimized for the vast majority of our commuting.
We’ve been targeting this year as the year I would replace my trusty ol’ F-150. Gasasaurus Rex was on the path to extinction and I was making plans to stagger forward in my automotive evolution. Well the decision point for my truck moved up a bit earlier this year than originally planned and a couple weeks ago I severed ties with her. So, in the face of this looming financial decision, how’d I do?
Let me introduce you to the new whip (2018 Honda Accord)
**Ducks flying shoes from the Financial Independence & Retire Early (FIRE) crowd**
Before I am burned at the stake of frugal living, let’s review my goals for this purchase and how this new ride stacks up. Below are the original Goals stated in my earlier post, followed by my comments.
How about I buy a new (to me) vehicle, with much better mileage than the old BP-binging family truckster.
Well, its definitely newer… originally I was shootings for a 3 year old vehicle. I ended up going Brand Spankin’ New. I will give myself half credit on this one.
WITH NO CONSUMER FINANCING.
Uhhh, I missed the mark here a bit. It’s partially financed. More discussion below. Hard fail here.
I want something significantly more fuel-efficient… about an average of 30 mpg or better.
Sheila (you just HAVE to name your whip) gets an EPA estimated 33 mpg. Big win here.
I want something as reliable as can be. So, I will probably look at a Toyota, Honda, or Subaru.
It’s a Honda and the brand reliability is well documented. Who really knows on these things, but from a research perspective I am set up well here.
I want something safe.
This is a resounding YES. It was one of the most heavily weighted factors in my search. Further, it has already proven itself to me. Again, more below.
I want something my wife will drive.
Wanna guess where this ranked on the priority list? Hint: it wasn’t anywhere near the bottom of this list. As the saying goes: “Happy Wife, Happy Life”. I made sure to get the marital seal of approval on this one.
So 4.5 out of 6 goals achieved. Hey that’s 75% Solid “C” territory. From a FIRE perspective that feels about right.
What’s the deal with buying new?
Honestly, I started off by targeting a 2016 model, since it was the earliest model year that had most of the cutting edge safety technology. Unfortunately, a 2 to 3 year old Accord is like a unicorn around these parts… unless you wanted one with more than 60k miles. I had decided to wait it out and see what hit the market because: “I really don’t NEED a new ride yet.”
Immediately after I reached this conclusion the transmission started shifting very roughly and within the span of a couple weeks the ride was downright unpleasant. Then the windshield cracked entirely from left to right, followed a day later by picking up a screw in the tire. Very quickly, I went from a backburner issue to staring at somewhere between $1,500 and $4,000 in maintenance costs. My ability to wait was severely compromised.
Aiding in the push to a new car was a price quote from a nearby dealer that was substantially lower than the Kelly Blue Book value and what I thought a new Accord would go for. This quote was requested by my wife (Hint Hint). This put the new car price within $4-5k of the used model. Again, a model that I could not find. Also, I like to hold on to my vehicles for a long time: 7 years on my first car and 11 years on the truck, so with good fortune I will probably have this car at least as long as the former vehicles.
So, what is this about financing? Have I lost my mind?
When you finance something it says: “Man, that is expensive! I can’t afford that.” Then turning around and saying: “I’ll take it, but please make it more expensive.” I don’t like renting money and especially not for something that is not an appreciating asset. So, why did I go against my better sense on this one?
The maintenance issues pushed the decision to buy a car earlier than I had hoped, so the necessary funds were not quite saved up yet. However, we did have a substantial portion of the purchase price already saved up (thanks to the saving power resulting from paying off our other debts, besides the mortgage). Additionally, with a decent trade in value for the truck in hand, the amount we needed to finance was fairly small. With the small principle balance the hope is to own this bird free and clear within a few months. Costs for carrying the financing will be relatively minuscule.
Other factors that tilted the scale: Safety and Vanity
I am no longer a bachelor, and with a wife and two daughters, safety is definitely in the forefront in decisions like these. Adding to that fact, I wanted the new ride to be the primary vehicle for the family. So this vehicle will be exposed to more risk than our past vehicles.
The new Accord is packed with great safety features including collision mitigation braking, blind spot monitoring, cross traffic monitoring, adaptive cruise control… and my wife’s favorite: Lane Keep Assistance. Apparently, straight line driving is a challenge for me and lane markers are merely suggestions.
The safety features definitely added a bit a cost to the vehicle. Was it worth it?
Every. Single. Penny.
Earlier this week on my way home from work, some lovely soul pulled out in front of me in a large SUV… while I was doing 40 mph. They pulled out of a gas station that has a funny angle to the road and I could see that they were not even looking my direction. The collision mitigation braking kicked in right about the time I tried to put my foot through the floor panel. Seriously, I gave myself a charlie horse I braked so hard. Somehow, I was able to control the car and dodge what I was 100% positive was going to be a life-altering impact by an impossibly small gap. Had I been driving the truck, I would have cut the SUV in half… impacting their driver-side door. Eeek.
On a final note, I know there are more cost efficient options out there that check all the boxes I laid out. I briefly considered a Honda Fit for example. But none of them really appealed to me (and more importantly my wife!). I am a recovering auto-holic. I feel as though I’ve come along way, but there is clearly much further to go. And look, if I am going to drive a vehicle for a decade or more, I want to make sure I actually like it. The last thing I want to do is to have to go car shopping again because of a bad “fit”.
All in all, am I happy with our choice? Yeah, I think I am. Could we have done better? Certainly. Could we have done worse? Absolutely. I think a letter grade of “C” is pretty spot on. Back in college the saying always went, “C’s get degrees”. So I will take it. Do I recommend following in our footsteps and buying new? Not without carefully weighing out your needs and financial situation.
So, what do you think? Did we bungle a golden opportunity? Are we on the right path?
Thanks for reading.