Thursday, June 8, 2017

New Car

When I landed my second job in summer of 2006, I needed (ok, wanted) a car to get to work.  This would give me the freedom to go anywhere I want on a whim, instead of waiting around for a bus.  It would be a 30 minute drive from where I lived versus another hour plus commute by transit.  I've done the hour long transit each way for the past three years at my previous job, my days were so long from 8am-6pm!   

So I was ready to put my foot to the metal.  Back then, I relied on my dad to help me look for a used car.  My budget was moderate $5k-10k as I have enough in my savings to pay it off outright.  My dad didn't know how to use a computer and he would use the classified ad in the local newspaper.  He got fed up looking through the ads and calling potential sellers, so he's like maybe it's better if we go to the dealership to buy a new car.  He suggested a Corolla to me, I was adamant about not buying a Corolla due its uncool reputation.  

We went to a Honda dealership, I set my eyes on Honda Civic Coupe and fell in love, well not literally.  It was a new redesign 2006, it looked slick and sporty.  The price tag was around $20k.  We took it for a test drive and tried to negotiate a lower price, but they wouldn't budge much.  Settled on getting an undercoat and my dad wanted to upgrade for a nice set of rims that set me back another $900.  I didn't get the higher package of air conditioning and keyless entry as I was already spending way more than I can afford.

I got a personal loan from my dad and ended up financing my NEW CAR.  I paid off my dad within a year and financed the rest within 3 years at the rate of 5.9% ouch.  All the while, I started making $23k at my new job.  But luckily, I had steady raises thereafter.  When I paid everything off, I was able to save up more and put money into the stock market. 

Last May, I sold my 2006 Civic Coupe for $5,500 privately after a decade of usage.  It was in pretty good shape and no accidents with 140,000km.  I was pretty relieved that I managed to sell it for that price considering it doesn't have a/c and keyless which is in most cars these days.  By being cheap, I sweated those hot days in the summer and the inconvenience of not having a keyless entry.  My driver side door key lock was busted for over a year, so I used the passenger side to unlock my door each time.  What a pain in the ass.  Finally, I decided to fixed it just before selling it.  It was a $300 expense.  In hindsight, I should have gotten it fixed right away for convenience sake.  

Looking back, I kind of regretted buying that NEW CAR.  I poured a lot of money into maintaining and insuring in addition to gas.  Having a car is a big expense, that first year of ownership I spent $4k on just insurance and gas!  Over the years, my insurance went down as I regained my road star status and switched to another job that was closer to home in summer of 2012.  I did make good use out of my Civic for the past decade until I had to upgrade to a larger vehicle due to my little one coming.  I vowed to not buy another NEW CAR for my next purchase.

However, I fell right into the same trap again!  Upgrading to a larger vehicle, I was looking for a newer SUV or older sedan.  Most of the SUVs were going for around $20k still with decent mileage on it already.  So I looked into a used 2009 Accord for $12k at a Toyota dealership, but the stroller I bought was a little too bulky for the trunk space.  So we looked around at the dealership and I ended up test driving the new redesigned 2016 RAV4.  I liked the new look and was sold again!  The salesperson was really nice and wanted to make a deal that day.  But my husband said no and that we need to think about it and walked away.

Toyota had a 0% financing on new cars with no down payment on a 3 year term.  After weighing in all our factors versus paying around $15-20k outright for a used SUV, we decided to take up on Toyota's 0% financing option!  My husband emailed all the local dealerships asking for their lowest price as we were ready to make our purchase.  We got back several replies one lower after another.  We used those emails as our leverage to pick the closest dealership to where we lived and they able to offer us the lowest price.  

We ended up paying just over $28k for our brand new 2016 RAV4 LE Upgrade.  Yes, this time around I am not cheaping out on the upgrades!  Welcome to the new age, until next time.  Who knows what new technology will be in our future vehicles. 

Yes, I have spent a lot of money by owning new vehicles.  They do depreciate a lot in the first few years of ownership.  Who am I to judge someone who borrows money to buy a vehicle?  Sometimes,  I do wonder if it is better to use that money for something else...

Sometimes in life, you just have to enjoy the perks of the money you earn.  If you can afford it, just do it.  You can't bring money to your grave.  Can't wait to pay off the remaining balance left on my 3 year term, so I can free up that cash flow towards other expenses in life has to bring.

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