How Traditional “Rules” of Frugality Undervalue Time

A few weeks ago, I met up with an old friend of mine who reads The Simple Dollar. After a bit of catching up, he started criticizing me on my purchase of a Prius. “You’re basically throwing your money away there,” he told me. He then went on to describe how he buys cars – he buys old junkers for around $2,000 each on average and drives them until they fall apart.

I told him that I was intending to drive the Prius until it reached a little over 200,000 miles, so I asked him how many miles he gets out of one of his “junkers.” He thought about it and said, “Oh, about thirty thousand until they’re completely ready for the junk heap.”

A light bulb went off in my head. I started asking him some questions about his junker purchases.

“How much time do you spend looking for replacement junkers each time?” “Probably… twenty or twenty five hours, all told.”

“And you have to pay for the title transfer and new license each time, right?” “Yep.”

“Do you ever have to invest in these cars to get them road worthy?” “I usually wind up throwing $500 or so into each one to get that 30,000 out of them.”

I started scribbling on the back of a napkin.

Our one Prius purchase was $20,000. It took us probably twenty hours of active searching to find the one we wanted. We would pay about $100 for the title transfer and other paperwork. We intend to drive it 210,000 miles.

On the other hand, to get the same 210,000 miles, my friend would buy seven cars at $2,000 each, then put another $500 into them to get them road worthy. He’d also pay $100 each time for the title transfer and other paperwork. Each time, he would spend twenty hours looking for that next car.

So what’s the difference between the two? Seven cars at $2,000 each, plus another $500 for roadworthiness, plus another $100 for paperwork adds up to $18,200. The junkers are $1,900 cheaper (versus the $20,100 total for the Prius).

Now let’s add in fuel efficiency. The Prius averages 46 miles per gallon over 210,000 miles. I’ll be generous and estimate that his junkers get 20 miles per gallon on average. Over those miles, and assuming an average of $2.50 a gallon for gas, the Prius saves $10,000 on gas. Seriously – do the math yourself.

The difference is now $8,100 in favor of the Prius. Even if you start throwing in lots of other factors – insurance and the like – and forget reliability, that’s a shell shocker.

I’ll be generous and adjust the calculations a bit. Let’s say my friend managed to buy all of his junkers for only $500 instead of $1,500 – I’m giving him an extra $1,000 per car here. Let’s also say they get an average of 27 miles per gallon – he happens to stumble upon lots of Honda Civics, let’s say. Even then, it’s only $900 in his favor.

Now, my friend invested one hundred and forty hours in his car searching, while we invested twenty. That’s a difference of 120 hours.

Thus, my friend’s hourly savings for that 120 hours spent beating the pavement looking for a junker is $7.50 – less than minimum wage in many states. That’s after giving him the benefit of the doubt by assuming he gets a tremendous deal on every car he picks and they’re all fuel efficient. With the original assumptions, he loses $67 per hour.

Even if the cars were strictly equivalent in reliability, that wouldn’t be a good investment of my time. If you add in the fact that the first six junkers will be less reliable than the new car (and the seventh should be roughly the same, as they’re both junkers now), it’s clearly not worth it.

In this case, I’m not disputing that there is a cash savings by buying old used cars at all – there clearly is. In the example above, my friend does wind up with more cash in his pocket than I do if you’re looking strictly at the money invested in the cars. In fact, if you play with the assumptions a bit, you can probably increase (and also decrease) his hourly rate. I felt that some of the assumptions were actually favoring the junkers, actually.

However, our world doesn’t consist strictly of car purchases.

My friend’s car purchases took a lot more time than our single purchase. During those 120 hours, I could easily be doing something more productive than saving $7.50 per hour searching for an unreliable junk car. I could be writing a freelance article, air sealing my home, making homemade laundry detergent, preparing a triple batch of a home cooked meal, or going clothes shopping at a thrift store. Any one of those activities would earn me substantially more than the $7.50 an hour I would save doing repeated car searches.

The Lesson

Time has significant value

Whenever you choose to spend time saving money in one way, you’re choosing not to spend it in another way. Thus, if you keep filling your time with things that earn a relatively small return, you might find that you’re excluding things that earn a much bigger return.

We all put more value in spending our time in ways that are enjoyable to us

For me, looking for a car is complete misery. I do not enjoy the process at all. I hate talking to people trying to sell cars, whether it’s a dealership salesperson or a guy with a car parked alongside the road. I’d far rather be in my kitchen making three casseroles or brewing up a batch of homemade laundry detergent.

Other people, though, really enjoy the process and the time invested in it has an additional personal premium for them. They may also dislike cooking at the same time. If this is the case, there is a personal premium for them to invest their time beating the pavement looking for a car and then eating out for dinner – they’re still saving money and also doing something they enjoy.

Time has a real cost in the form of lost opportunities

Edit: I misplaced a decimal in my original math, so I fixed the math example to make more sense. (I shouldn’t do arithmetic in the evening.)

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  1. Josh says:

    Can you really expect to drive your prius 210,000 miles without any work? Wouldn’t the engine or transmission need to be replaced in that time?

    Some of your friend’s $500 per car to make them road worthy would also need to be spent on keeping your prius road worthy. I’m not sure how to estimate your repair costs on the Prius.

    I agree with your other points though, good article!

  2. jreed says:

    Yes, this is how the guy across the street feels when he has lawn service…you don’t like looking for cars, he doesn’t like doing his lawn. You feel frugally superior to the lawn guy; the car guy feels frugally superior to you. You make your own detergent, but you don’t hang out your clothes; some people buy detergent but they hang out their clothes. Round and round we go.

  3. Molly says:

    These are my favorite types of posts. I really like the math breakdowns and explanations.

  4. Josh says:

    Also, doesn’t your gas calculation make the prius cheaper? You said it saves $10,000 but then you only applied $1,000 towards the difference.

  5. Ruth says:

    I did do the math myself, and what??

    The price difference is ONE thousand, nine hundred dollars. The gas difference is TEN thousand dollars. He didn’t save $900 by buying clunkers, he lost nearly 8k.

  6. JP says:

    Also he could invest the money he isn’t paying up front – didn’t see that in this post

  7. Diana says:

    wonderful! I had to do alot of defending when my husband and I bought a four year old Toyota Matrix. To be quite honest, the last junker I bought lasted two years at the price of $2,500 cash for the purchase and then probably around $5,000 repairs and upkeep and only 22 gas miles per gallon. Our Matrix was $10,000 with 32 mpg and so far, NO upkeep so far at a year and a half of owning it. Naturally we’ve done oil changes and sometime we’ll have to replace the tires and break pads but that won’t be for a while yet.

    Imagine if I kept my Pontiac for more than two years? One more year would equal the same price of my Matrix…..or more, plus bad gas mileage.

    We saved quite a bit in the long run

  8. Johanna says:

    I second Josh’s question about why your maintenance costs aren’t included. And what about the interest you’re paying in the loan you took out for the Prius? Or is that included in the $20,000?

    Also, building off your “Synergy” post: Your friend interacts with car dealers more often than you do, which probably means he’s better at it than you are and is getting better all the time, which probably means he’s enjoying it more.

    And don’t forget that the $7.50 an hour is after taxes.

  9. Sassy says:

    How frustrating: I can follow right down to where you say he’s still saving $900 — could you show the math since I keep arriving at the answer that you are, over the life of the 210,000 miles, saving just under $8,000 over your friend’s approach … I know I must be missing something but it’s driving me crazy!

  10. kev says:

    Trent, I agree with all your points. Except, I get the impression that your friend probably enjoys fussing about with cars, so what he loses in hourly rate, he makes up in enjoyment.

    Of course, if he likes messing with cars, he COULD be spending that time restoring some sweet antique car or truck while driving a prius.

  11. KC says:

    This dude sounds like my sister, but she either has a better eye for junkers or is just a helluva negotiator (and she is). But she gets way more than 30k miles out of one (usually at least 70k before she re-sells it), doesn’t put much work, if any, into it, and then sells it for not much less than she paid for it. But I could never drive the cars she does – to each his own I suppose.

  12. Fenton says:

    Cars are being made a hell of a lot better now than they were even ten years ago. I’m sure there are maintenence costs for the Prius, but they’d probably be less than we’re used to.

    I’d be interested in the gas mileage math as well.

  13. great breakdown! I have had to ‘educate’ during dinners by drawing things out on napkins and its always funny to watch the person you are proving your case to lose their smirk when they realize its not as great of a deal.

    Plus with the difference, you did not factor the prius resale which will be minimal, but will still be something. Finally, what about the upkeep of the Prius? Your friend avgs about $500 before they are on the road till death I assume, however, I have read that the Prius can be expensive to repair and maintain in the long run.

  14. What exactly are these “traditional rules” you speak of? As far as I’ve known, frugality is and has always been about reducing waste by using your resources — including time — economically in order to focus them on your priorities.

    Now, I know some people don’t know the difference between being frugal and being cheap. Being cheap is all about paying the least in the short-term without considering long-term costs and other consequences. And, unless he is getting some sort of enjoyment out of it, your friend might well be considered cheap.

    The frugal choice would be to buy a good quality vehicle that would last. However, that doesn’t mean a brand new vehicle — and it DEFINITELY doesn’t mean financing a brand new vehicle. A slightly used vehicle is substantially cheaper than a brand-new one despite having relatively few miles on it.

    Of course, if you can’t afford to buy a slightly used vehicle then you buy what you can afford and save like crazy so that hopefully you can replace it with something better before it’s time is up.

  15. right side of the river says:

    I’m also getting a $8000 gain for you after factoring in the gas.

    You also need to factor in the time value of money. How long does a car last your friend? If he pays $2000 2 years from now to replace his current junker, that $2000 is probably worth less in today’s $s because of interest, so in your example one can’t really do a dollar for dollar comparison.

    And, as others have pointed out, you probably have maintenance costs of your own.

  16. Stacey says:

    I agree with Meg – why spend $2,000 on a junker that will last 30,000 miles, when you can spend a bit more and get a car that lasts MUCH longer?

    We’re going on 7 years and 80,000 miles in a Chevy that cost us $4,000. It gets 30 mpg and repairs are relatively inexpensive. :-) I firmly believe that you should buy the “best” car for your situation and budget. The Prius premium price just doesn’t make sense unless you’re driving major miles.

    Don’t forget to include insurance premiums in your calculation. It’s a lot less expensive to insure a junker or used car than a brand new car. In Pennsylvania, newer cars also have to pay for emission testing. That’s major $$ over the years.

  17. Des says:

    I think you are conveniently leaving off some major numbers here. You will likely need to replace the battery at some point if you plan on driving till 210,000 miles (the absolute HIGHEST estimate I’ve seen for battery life was 200k, the rest closer to 100k). If you didn’t need to pay labor, that $3k.

    Then, there’s insurance. Your friend only needs liability, but you need full coverage both because your car is worth more, and because you financed it. I don’t know how much you pay, but when we had full coverage we paid $140 per month. It went to $40 when we dropped down to liability. That’s an additional cost of $100 per month. If you drive 12,000 miles a year, your car will last 17.5 years. That’s another $21,000 you’ll pay that he won’t.

    $21,000 insurance + $3,000 repair – $8,000 gas savings = $16,000 in the red.

    That assumes zero interest on your loan.

    Looks like you friend is making about $133 per hour after tax. Not a bad wage, IMHO.

  18. Josh says:

    @Des

    His insurance would go down over time, and he could drop comp/collision at some point too, so you can’t assume the full $21k in insurance.

  19. lurker carl says:

    Has your Prius actually averaged 47 mpg since your purchased it? Only a few owners report getting near the EPA estimates.

    What about the difference in insurance costs? New cars cost considerably more to insure than old ones.

    Why doesn’t a Prius require maintenance and repairs for 200K miles? That is very unrealistic considering the specialized systems most hybrids have.

    A $2K car can either be priced for it’s poor condition or it’s age. Point your friend towards creampuffs instead of junkers.

  20. Carrie says:

    one of the biggest reasons i went with a new car was stress. it was far less stressful for me to shop for a new car than it was to shop for a used car. i’ve also had that car just over 3 years now and it’s needed nothing other than regularly scheduled oil changes so i don’t have to stress over repairs. makes me ponder what sort of a value we can put on being stress free

  21. pam munro says:

    When hubby talks about buying a new car vs. repairing our old ones – I remind him that our occasional repairs don’t = monthly car payments. Cars depreciate, better to buy used ones. Think of the INTEREST on the new car loan. We can get 200,000 on a used car with careful maintenance. Some things like oil changes, new tires & so on are = for new & old cars. New cars come with taxes and higher registration fees – That’s why it may be cheaper to put in a new transmission or even a new engine, rather than replace a car! (If everything is equal, a new engine could cost less than replacement, if taxes on buying a car are considered, as those don’t apply to repairs, except for sales tax.) Think about it.

  22. Jeremy says:

    Trent likely cherry-picked his numbers but I get the impression that you did too, Des. Maybe I’m naive since I’ve never paid full comprehensive insurance on a brand new car, but $140/month seems like a lot.

    There’s too many unknowns. A huge one is the cost of gasoline. If gas prices rise to anywhere near last summer’s highs, Trent will end up way ahead of his friend.

    We all seem to agree on one thing: the cheapest option is to buy a few year old, efficient used car and drive it into the ground. Not brand new, not a beater.

    Our example: We bought a two year old Kia Spectra for $5000 and we’ve driven it for 6 years and 70,000 miles without even doing all of the recommended maintenance. Our liability insurance is $23/month. It gets 32-35 mpg. I expect to get a lot more mileage out of this car. It’s still running great.

  23. Steve in W MA says:

    I don’t think Trent’s friend is buying the right cars. It’s relatively easy to buy a car for around $3000 and drive it another 10 years assuming you buy a car known for its longevity.

    If you are only getting 30,000 miles out of a 2,000 dollar purchase then you’re not getting a good deal or the right kind of car.

    That being said, factoring in time into one’s decisions does make sense. But my car has near 250K miles on it, (bought at 142K miles) and is 17 years old and is no way near done. And no major work has been done on it.

  24. Steve in W MA says:

    BTW, a beater is a car that is being abused by its owner or neglected in terms of repair. Beaters are owned by people who beat on cars. They are the same cars that could be reliable transportation with a little bit of love from their owners.

  25. Jim says:

    By my math the Prius would come out about $9,500 ahead on gas. But the Prius would also cost more for higher insurance, financing and repairs. If you count all the costs then its probably closer to a wash cost wise between these 2 examples.

    The friend with the junker doesn’t save money and spends a lot of time finding and fixing less reliable cars.

  26. Andy Hough says:

    Your friend needs to get better at picking junkers. I bought my Toyota Corolla for $1750 and got over 100,000 miles out of it. I sold it for $480 so my net purchase cost was only $1270. It got about 38 mpg on the highway and my insurance was only $20 a month. There is no way my cost per mile would have been anywhere near as cheap buying a new Prius.

  27. KC says:

    I’m not sure about the insurance numbers presented in the comments section here – they are closer than you think. I had an 89 Stanza that cost about $400/yr to insure w/o collision. I replaced it with an 01 Acura. You’d think the insurance on the Acura would skyrocket since you were adding 2 cylinders, a lot of horse-power and collision coverage. But the safety factors made the Acura much more reasonable to insure than I thought. I think it was about $600/year to insure (I live in a different state now so my current insurance for the Acura isn’t an accurate comparison).

    Also people cite taxes – remember those vary from state to state. Most every state has a sales tax, but some don’t have property tax. But even those states that have property taxes it isn’t that much of a difference between a $20k car and a $3k one.

    And finally, some people actually buy new cars with cash and have no loan principle to pay back. If I’m not mistaken, Trent, is in that category. Although I’m strongly in the used car category and against buying new I just wanted to point these numbers out. Also, I’d never be in the junker car category due to safety features in newer cars being far superior. If you don’t own a car made in the last 10 years you really have to justify giving up the safety features engineered into newer cars.

  28. Faculties says:

    I always wonder about the claims that if one isn’t doing X, one could be doing Y that saves so much more money or makes so much more money. But would we really be doing all those money-saving things? Wouldn’t we just be sitting around watching TV, or pottering around the house? Would all of that time REALLY go towards money-saving activities?

  29. Rosa Rugosa says:

    As far as the time thing goes, does the 20 hours of active search time include all time spent on research – online, discussions, etc? I’m guessing not, although I certainly could be wrong. I also fully agree with Carrie #20 on the stress factor, and I think you can’t really put a dollar value on that. When I ultimately retire my Saturn SL1 (currently 14 years old), it will be strictly due to stress/reliability issues – I would drive it forever if I could. And I would probably buy a new Saturn again if they’re still around, so I’ve got to get to work on that savings account!

  30. L says:

    @ 22: We pay 140 a month for full coverage on two cars. I don’t if my age hurts (23) or my 31 year old husband’s sport’s car is doing it. But with the right(or wrong?) circumstances it is totally possible to pay 140 a month for insurance!

  31. L says:

    Sorry, meant to add – that’s on two cars, not one. But my car is super old and cheap! With liability on my car, it would still be over $100 per month for full coverage on my husband’s car.

  32. Marie says:

    A person’s age also has a lot to do with the decision to purchase new or used vehicles. My number one priority when buying a car is getting one that I can afford outright. I had car payments the first time and won’t do that again. Now I buy the car outright and put a “car payment” in my bank account every month. If I miss a month, I still feel ok.

    Now, when I bought my last car, my daughter was 15 and so was my car. She asked me not to sell the old car so that she could have it when she was old enough. I’m sooo glad I raised my kids to appreciate things and not demand new cars! :-)

    I’m old and have no tickets or accidents, my insurance is cheap. I like a new car, less trouble and better for me. She’s young, a new driver and will only be driving around town. Having an old car makes her insurance much lower, so that makes sense for her. Plus, teens learning to drive sometimes hit the curb and things. Having an older car made more sense for her. So I told her she could have that one, to “treat it well, because you’re buying your own car next time”

  33. troy says:

    Sorry man, the Post’s example is the epitome of cherry picked data. and Des and Andy got it right.

    Your Prius was a poor decision when purchased, and it is still a poor decision. Time hasn’t changed the rules of depreciation

    Try this example.

    2 year old Toyota Corolla (2007). Similar reliability to the Prius. 30+ MPG.

    You can buy one under $10K (some are $8K) with under 20K miles. barely used.

    Essentially that Corolla will likely last at least as long as the Prius (no battery to replace). Maintenece will be less expensive. Insurance will be less expensive. And you are not driving a big bumper sticker.

    This Corolla (or similar) is a much better financial purchase than any new car, especially a Prius. 50-60% cheaper. 90% of the useful life. 100% of the reliability.

    Buying a new car, whatever the make and model, is one of the worst financial moves anyone can make. And financing it adds insult.

    If your now one year old used Prius will last to 210,000 miles, just like a NEW one will, then the fact of new or used is immaterial.

    Same with a Corolla. They last as long as they last. One hour, day or month after it is purchsed it is a used car. Is it somehow less reliable because it is used? If it is used will it no longer make it to 200K like the new one will.

    IS your Prius that is now used somehow less reliable because it is a year old?

    no.

    The only reason people buy new cars is because they are NEW. Not because of reliability, or mileage, or usefullness or warranty or anthing else. A one year oldcar has all of those benefits.

    And Because they are shiny.

    Of course that is until you actually buy it,then it isn’t. When you get it home,it is used, even if you trailer it home.

  34. Steve says:

    I love your attempting to justify yourself. You’ll spend time making laundry detergent to save a few dollars but when faced that your friend saved hundreds with his junker program, you suddenly don’t need to save money that badly. Well played.

  35. garrett says:

    Got to agree, your math is wrong. You save $9333 in fuel costs over 210,000 miles. Subtract the $1900 he has on you, and you win by $7433.

    Your friend’s searching is costing him almost $62 an hour, not gaining him $7.50/hour.

    But the cost of his time clearly doesn’t matter, as you’ve slaughtered him in cost savings before you even considered time.

  36. Geoff says:

    I have to believe that the new car will be far more expensive if you factor in:

    1) new car insurance
    2) intrest on the new car loan (or value)
    3) maintence (I know my 7 year-old-subaru is costing around $1,000 year for tires, timing belt, breaks, ect)

  37. Fenton says:

    Interest on the the loan? Assuming he didn’t pay for it in cash…

  38. Trent says:

    I fixed the math issues and even gave the used car guy an even bigger benefit of the doubt.

    Troy, show me a used Corolla that has 100K miles worth of warranty and only 20K miles on it for less than $10K and I’ll believe you. I certainly looked for these fictitious cars and they simply don’t exist.

    Take a look yourself! http://www.toyotacertified.com/ lets you search every certified used Toyota in the US. Search for two year old Corollas with less than 20K on them. All of the ’07 and ’08 Corollas with that low of mileage are around $18K, only $2K less than my brand new Prius.

    You can create all kinds of stories about used cars, but the reality of buying used doesn’t match up to them.

  39. Trent says:

    Also, for those new readers: I had the cash to buy the new Prius, but the financing offered to me was virtually the same as the interest I was already earning on the money, so I just left the money in the bank and set up automatic payments on it. This allowed me to keep the money liquid instead of tying it up in the car. Some readers continually call this a stupid financial move for some reason that I cannot fathom.

  40. Faculties says:

    Well, I bought a seven-year-old Toyota Tercel with 20,000 miles on it for $1200. It is a stick shift with no extras. How did I do it? I put out the word that I was looking for a used car, and someone at work offered me the car for the same price the dealer had offered them for it. They didn’t want it any more because they were moving to a different country. I had it checked out by my reliable mechanic before I bought it, just to be sure. It has averaged around 32 miles per gallon and nothing has ever gone wrong with it, though I take it in for a check-up once in a while and I bought new tires at one point. The insurance is very cheap. I paid for it in cash. Another friend of mine recently offered a similar car (a low-mileage Toyota) for sale for $1500. So those deals are out there. But you’re not going to find them at car dealers. You find them by putting the word out, not waiting till the last minute, and getting a reliable mechanic to check out the car before buying.

  41. Paul says:

    The main problem here is the guy with the beaters is buying cars he can manage. Its not really a cost savings, its probably a decision based on Cash flow.

    I used to do this, some cars cost as much to repair as a monthly payment on a good car. Some cars you bet on and you lose badly.

    Beaters in general are not comfortable, or reliable. If you spent the time to get a gently used, highly reliable car, Accord, Camry, etc and treat it well you’ll get to 200k miles on it easily.

    So your friend would be THE MAN if he found himself some old Consumer Reports online, learned to drive a stick, and bought accordingly. My 1984 Honda Accord had 148K when I bought it and 214K when I sold it, the 3 barrel carb needed to be rebuilt, that’s about it.

    If he picked his car wisely Tires and Gas might be his biggest costs.

  42. Whee!!! I thrive on car debates. :D (It’s just the one area that I know a lot about… Teehee.)

    This one, though, I can’t really argue with. It’s all about making the smartest purchase for YOU.

    My only question: How many times with the Prius’ batteries need replacing? It seems to be ~100k miles, so for 210k miles of use that’d be two battery replacements. And, since batteries are vastly different than actual engines, no matter the care and love you show batteries they’re gonna go no matter what. I don’t know much about the Prius, but I have heard that replacing the batteries ain’t cheap. Was that ever taken into consideration?

    I love my “beater.” She’s a 19 year old Nissan 240SX, with 300k miles on her original engine and transmission. Of course, we in no way bought her expecting much out of her. She’s already shocked me with being insanely reliable… To a point. Much is starting to fail, which is a shock. We’re replacing OEM parts here!

    $2k for the car, probably $2k into the car already, and the work that we plan on doing to her is probably going upwards of $10k. The work involves an engine swap and a front-end swap, plus overall pretty-fying the car. She’ll probably end up cheaper than a new car, just as pretty as a new car and also as reliable. Then again, it’s a lot of work, time and patience. It’s our hobby, though, so the sacrifice is well worth it. I plan on keeping her forever, at the end she’ll be one of my dream cars that I never thought I’d get to have! (Nissan Sil-Eighty.)

    The only thing I hate hearing from people is that new cars are more reliable. Um, yes and no. More reliable than a car that was ragged on, yes. Always reliable? Hardly. Ever hear of a lemon? I know a lot of people who have had more trouble from their new cars than we’ve had with our eight year old Honda. I expect trouble from my 19 year old, and my 12 year old Mazda… She’s, erm, interesting. I think we finally figured her out.

  43. lurker carl says:

    Please compare apples to apples. A Corolla doesn’t need an 8 year/100K mile Synergy Hybrid Drive warranty because Corollas do not have those particular components. Otherwise, the factory warranty identical to every other Toyota.

    Here’s the Prius warranty, straight from Toyota:

    Basic 36 months/36,000 miles (all components other than normal wear and maintenance items).
    Powertrain 60 months/60,000 miles (engine, transmission/transaxle, front-wheel drive, rear-wheel drive, seatbelts and airbags).
    Rust-Through 60 months/unlimited miles (corrosion perforation of sheet metal).
    Emissions Coverages vary under Federal and California regulations. Refer to applicable Owner’s Warranty Information booklet for details.
    Accessories For accessories purchased at time of the new vehicle purchase, the Toyota Accessory Warranty coverage is in effect for 36 months or 36,000 miles (whichever comes first) from the vehicle’s in-service date, which is the same coverage as the Basic coverage of the Toyota New Vehicle Limited Warranty.

    For dealer-installed accessories purchased after the new vehicle purchase, the coverage is 12 months or 12,000 miles (whichever comes first) from the date the accessory was installed on the vehicle, or the remainder of the above 36 months or 36,000 miles Basic coverage from the vehicle’s in-service date, whichever provides greater coverage, with the exception of car covers. Car covers are warranted for 12 months from the date of purchase and do not assume any coverage under the Toyota New Vehicle Limited Warranty.

    For customer (non-dealer)-installed accessories purchased after the new vehicle purchase, the coverage is 12 months or 12,000 miles (whichever comes first), from the purchase date of the accessory.

    Hybrid-Related Component Coverage Hybrid-related components for hybrid vehicles are covered for 8 years/100,000 miles. The HV battery may have longer coverage under emissions warranty. Refer to applicable Owner’s Warranty Information booklet for details.

  44. greg says:

    I am not at all surprised that the overall cost of the two options should be more or less the same: as the economists say “there is no free lunch”.

  45. lurker carl says:

    Carmax is currently listing quite a few new 2010 Corollas in the $16K range. Late model used ones are thousands less depending upon year and mileage, many with the original manufacturer’s warranty still remaining. But nothing under $10K still under warranty.

    A “certified” vehicle is no more dependable or troublesome than before it was certified but the price becomes considerably higher. The buyer is paying for an advertising trick and the option for an extended warranty, not a better automobile.

    It’s been my experience that the best deals for vehicles seldom come from a dealership. Private owners are where the bargain hunters go. Scout for that replacement vehicle before you need it while there is no pressure to make an immediate purchase. Then you can still get a bit of cash for your old car before the wheels actually fall off – a running jalopy is worth more than a dead one.

  46. steve says:

    Trent, I see awesome cars for sale under $3500 on a regular basis. Honda Civics, Toyota Corollas, etc, 5-8 years old or older. Which means nothing for their reliability. True, there is no warranty for such cars, but the truth is I’ve never needed one.

    Faculties has it right on another good strategy: Essentially, put the word out you are looking for a car and offer to pay dealers’ trade in value for it. There are people who will take you up on it: these are the people who would trade in their car (for less money than they might get in a private sale) because they perceive it to be easier.

  47. almost there says:

    Most people that buy older cars do their own maintenance and save that way too. I am suprised Trent didn’t pull out the 5 year cost of ownership from the consumer reports and go from there as a base line on the overall cost of the Prius. Until the state I live in more that doubled my registration I paid 24 bucks a year for tags on my 94 honda with 233k on it. My insurance with full coverage is cheap too.

  48. JonFrance says:

    Another way to score a bargain on a used car can be to go against the prevailing style. What I’m thinking of is that here in France, automatic transmissions are generally only driven by handicapped people–who have a very hard time reselling them, because they’re so unpopular. Since I’m happy to drive an automatic I can get significantly more car for the money buying one used this way (whereas for a new one there’s no discount, just less demand!)

    I imagine that in the US it’s a similar situation with stick shifts. Since the number of people who can drive them keeps shrinking, they’re probably harder to resell and potential bargains.

    Of course if you plan on reselling the car later you’ll fall victim to the same difficulty, so this only really saves money if you plan on driving it all the way to the junk heap.

  49. Tim says:

    this is just mind numbing. insurance would definitely be different. also the probability of crashing your one expensive prius versus crashing the clunker cars. since the friend’s plan automatically includes the probability of replacing cars along the way, yours does not. also, the difference also does not include the opportunity costs associated with higher upfront costs versus later costs.

    conversely, i think your friend grossly exaggerates how much money is thrown into the clunkers to get 30k out of them. your friend must be the luckiest person on earth to drive $2k clunkers which only require $500 to keep them running for 30k miles. i would say that on average your friend spends at least, at the very least, the cost of the $2k clunker to maintain it for the 30k miles.

  50. kim says:

    We bought a used 1995 geo prism at a a dealer (before we knew to shop privately)in 2000 for 6K. It currently has 147K miles on it. In the time we’ve owned it we’ve dropped about 1,500 into the car. Mostly in the form of oil and tires. My husband has been able to do most other repairs for the cost of parts and do the work himself, but truthfully, it’s required almost no repairs in the time we’ve owned it. It still runs like a champion and we plan to hold it until it literally dies, though our very good mechanic told us at inspection that the car will run for a good long while. It costs next to nothing to insure and register and it gets 30+ miles per gallon. Trent, you have no guarantee that that Prius will run for 210K. It certainly will need work in that time, for which you did not account in you revision despite the fact that you heavily weighed those costs in your cost of ownership of the beater. Do you seriously think that you are never going to have a single repair cost on any vehicle in 210,000 miles? Your revision also failed to take into account the difference in insurance and yearly registration. Please rework your article again to reflect these numbers too. A table would be an excellent addition to this article.

  51. Fantasitc post, and something I think a lot of people fail to realize. If you have to spend an hour to save yourself $5, or to make $5–is it worth doing?

    To me, no it is not. I could better spend this time with my family.

    I apply a Time/Work rule to this topic. If I can’t save, or generate, at least as much money as I make at my regular job in the time it takes me for any particluar savings/money generating project, then I don’t do it. Its not worth it to me.

    I also firmly believe in the phrase–”Save to live, don’t live to save.”

  52. Dave says:

    I bought a 2002 Hyndai Accent for $8500 new, Prius was $22000 then, Aceent gets 35 mpg, Prius gets 55 mpg?
    200,000/35=5715.3 gallons at lets say $3 a gallon=$17143
    200,000/55=3636.4 gallons at $3 a gallon=$10909
    $17143-10909=$6234
    $8500+$17143=$25643 Accent
    $22000+$10909=$32909 Prius
    Both about the same size car.
    thats assuming my Accent will last for 20 years, 9 years and going strong, and if I do need 2 to go that far, it’s still only $35000 and I get a new can in the middle.

  53. Tracy says:

    Trent, I love your site, but seriously – I’m so tired of the posts that continually attempt to justify your Prius purchase and “prove” to all of us that buying it and financing it was the right decision because it’s just such an awesome car that it saves you money just by sitting in your driveway.

    Please write about something else.

  54. Valeria says:

    As mentioned, insurance. We won’t go into the damage to the american economy by being fixated of Japanese cars. But we will mention that new batteries for the Priuss are not cheap and they are likely to skyrocket about the time you need one because of the huge drain they are putting on the stock of rare earths. Then there is – since you’re so GREEEEEEN the impact of disposing of those batteries.
    I’m driving a 10 year old Buick LeSabre. 140K bought for like, $8K at 80K miles; very little maintenance so far and I can carry 2 adults, 2 dogs in crates and luggage and the trunk still has room – and on the road I get about 30 mpg; around town my commuter tank is averaging 24 mpg. In terms of not raping my financial resources, or the rare earth stocks or having to worry about disposing of potentially toxic batteries, I’d say my Buick is the winner (and since the fellow who traded this in bought another Buick, it helped keep Americans working).

    Oh and I know you claim to be tall and say the Prius is comfortable, but we obviously have different standards for comfort – I’m 5’10″ and 20 minutes in one of those tin cans and my legs felt like they were getting numb.

  55. Jane says:

    “2 year old Toyota Corolla (2007). Similar reliability to the Prius. 30+ MPG.
    You can buy one under $10K (some are $8K) with under 20K miles. barely used.”

    I agree with Trent. These numbers are WAY off on what a Corolla costs. I paid $10,000 for a 5 year old Corolla twelve years ago! There’s no way you can find a two year old Corolla for anywhere close to $10,000. Try $18,000-$20,000 like Trent said. Toyotas and Hondas retain their value too much, which is why we’ve started looking at Kias for our next car. It is only smart to buy a car that retains value if you might plan to sell it later. We drive our cars into the ground, so it makes sense to buy a car that doesn’t retain its value but is still known to be reliable.

  56. Jane says:

    “I’d say my Buick is the winner (and since the fellow who traded this in bought another Buick, it helped keep Americans working).”

    You do know that Japanese cars are also manufactured in the States? Yes, perhaps the ultimate profits don’t remain here, but buying foreign also keeps Americans in those factories working. Either way it’s jobs. I can see wanting to support American companies, but it’s a fallacy that foreign car companies don’t create jobs here.

  57. Michelle says:

    Just an FYI Valeria, most Japanese cars are manufactured mainly in the US. In fact, Honda and Toyota employ more auto workers in the US than the 3 American car makers. Even a lot the design process for Japanese cars occurs here as well.

  58. Johanna says:

    Trent, I really don’t care whether financing the Prius was a smart or a stupid financial move, whether you could have paid cash or not, or whether paying cash would have better or worse in your situation. My own choice is not to have a car at all, which means that I don’t have a horse in this race. All I’m saying is that there are costs associated with the financing, and I think they ought to be included in your calculation here.

    In the posts you wrote at the time you bought the Prius, I think you said that you’re paying something like 4% interest. Are you still getting anywhere near 4% interest on that savings account? If so, I’d like to know how you managed that. And even if you are, taxes probably knock your real return down below 3%.

    Again, all this is not to say that you shouldn’t have done things the way you did. Obviously you had reasons that make sense to you for wanting to keep the cash in the savings account. But if you adopted your friend’s strategy of buying $2000 cars (or are they $q000 cars?) one at a time, you could also keep the cash in your savings account, and you wouldn’t be paying any finance charges. That’s why I think that finance charges need to be included in your calculation.

  59. Christine T. says:

    I purchased new because of risk. I don’t know alot about cars and I felt that my risk of purchasing a used car with problems was higher than for someone more savvy about cars. I used to own a car that broke down all the time, and the toyota dealership mechanics still could not figure out the problem 1000$ later. It is not fun getting stranded! Yes I could make an effort to learn more about cars but its not fun for me and I’d rather learn about something else. It was also because of safety. Car crashes are pretty common and I think a newer car is safer than a comparable but older car especially if you have things like side air bags and electronic stability control.

  60. Matt says:

    Trent, you are assuming you will get 210,000 miles out of the prius without a battery replacement, something I personally find unlikely as someone familiar with battery technology. Additionally prius is a more complicated car than a traditional gas engine and any serious maintenance is going to be a lot more costly than on a clunker. I personally buy new cars because I need the reliability, I certainly am capable of buying junkers and fixing them myself which would be a considerable cost savings, but as you said its not worth it to me. However a close friend of mine goes by this rule: he expects to get 1 year per every $1000 dollars he spends on a car (that includes any maintenance or repairs). He puts this money in a savings account every year and typically does better than this (currently on a mercury marquee he bought for $4,500 that has lasted 6 years with no repair costs) By that logic I will have to drive my new car for 14 years (assuming no major repairs) to get my monies worth by his rule.

  61. Mary says:

    In some states, like South Carolina, you have to pay property tax on your vehicles. So if you have an older car, you pay a good bit less on your annual tax bill. There’s also an additional discount if you qualify for a high-mileage discount, which is much more likely on an older car. This isn’t a welcome bill on each car every year, but I guess if we don’t pay it here, we’ll pay it in another way, like increased taxes on our home.

  62. Scotty says:

    The one big thing that strikes be about Trent’s prius purchase is what he paid for it – $20,000. I was once interested in a Prius, and it was a heck of a lot more than $20,000. A brand new base model, taxes in, I was quoted $25K at most dealerships. And that was base – fully loaded they were almost $35K. Good on Trent for being able to buy one for the price that he did, but in this case I don’t think that was entirely representative of what most priuses end up going for.

    Like Trend essentially alludes to, it boils down to what your time is worth, and how long you intend to drive the vehicle. Considering how incredibly cheap new and slightly used card are nowadays, there’s an argument to be had for buying new (or slightly used) more than ever.

    I bought a new car (Civic) for similar reasons to Trent, I intent to drive it until is literally falls apart. And given the track record of Civics, that means I’ll get good value for my $$.

  63. Johanna says:

    Interestingly, in the post where he announced his purchase of the Prius (March 21, 2009), Trent said he planned to drive it for 150,000 miles. I wonder why that’s now bumped up to 210,000?

  64. Kevin M says:

    This is an interesting strategy your friend has. I’m hoping my 98 Cherokee lasts another 10 years – I bought it in 2002 for $11k – I’ve put a couple sets of tires on it, done oil changes but nothing else major. It’s cost me around $2,000 a year excluding gas, which is pretty good IMO.

    We can debate numbers until we’re all blue in the face, in the end I’ll take a car I like to drive, research it, buy it for a reasonable price and keep it forever. After all, the best way to save money on cars (aside from not having them at all) is to not replace them with the new, shiny model every 3 years.

  65. Hope D says:

    I can remember my dad buying a car for $35, 20 years ago. He then drove that car to work every day for five years. He carried only liability on it. He fixed it himself and changed the oil himself. His commute was only 18 miles a day. It was a Volkswagon Dasher. His is the only one I’ve ever seen. Most people now days do not have the knowledge to change their oil, let alone tune up their car. I am included in that. You can save a lot of money with know how.

  66. justin says:

    10 days ago on Sept 22 trent wrote:
    Yet, just by following the maintenance schedule actually provided with the car, over the 150,000 miles we plan to have the car, we’ll save ourselves twenty (!) oil changes. That’s a lot less time and less money.
    yesturday he wrote: We intend to drive it 210,000 miles.
    You sound like obama….

  67. Kevin says:

    A bit off topic, but Trent, prior to your purchase did you speak with any Prius owners about their experiences driving in snow and on ice? A friend at work – he’s our Director of Maintenance so he’s a technical guy by nature – owned a Prius and got rid of it because it was “horrible” & “useless” in the snow.

    Also, at ~6’6″, how exactly do you fit in a Prius?

    I’ve been curious about both issues since you posted about purchasing a Prius.

  68. Christina says:

    How much is $q,000, exactly?

  69. Dave says:

    Comment #39
    Do you have that money set aside in it’s own account, or sub account? if so I agree with you that is the way to go. or are you factoring that into your emergency fund?

  70. Jim says:

    A lot of people have raised concern about the lifespan of the batteries in the Prius.

    The Prius battery should be good for a long time. Its reasonable to expect 200k miles out of one.

    From one source:
    “According to Toyota, the life of the Prius battery pack is determined more by mileage than by time, and it has been tested to 180,000 miles. Supporting this are first- and second-generation Prius taxis in Canada that have reportedly traveled more than 200,000 miles without suffering any battery problems.”

    If it does die then you can buy a used battery 2nd hand. There is a surplus of such batteries from vehicles that have been in accidents.

  71. Troy says:

    “awaiting moderation”? for 4 hours?

    Come on man, post the response. You said my example was fictitiuos and made up.

    I just gave you three examples to show you how un-made up they are.

    And quit using toyotacertified.com. Of course those are high priced cars. That is a toyota only website. Kind of like the sticker price.

    Autotrader or cars.com yields much better results.

  72. A.J. says:

    Agreed on Autotrader, but my test didn’t reveal any of these magical 10k Corollas either. Okay, technically it revealed one 10k 2007 Corolla, but that’s an outlier–most of them were around $13,990 in this neck of the woods (northern Illinois).

    Do Corollas even cost $20k NEW?

  73. Troy says:

    For whatever reason my detailed post about the elusive 10K corrolla is awaiting moderation. Hopefully Trent will approve and post it. It contradicts his position, so we will see.

    Basically there are 152 2007 & up Corrola’s nationwide for under 12K and under 30K miles, becaseu that is the closes parameters., and I gave three examples with the name of the dealer, the year, model, miles and contact phone number to refute the fallacy that they don’t exist.

    they exist. lots of them. they are all over the country, like the readers on this site. Fully warrantied and essentially new.

    10-15K miles for $10k dollars. One was a 2008 for 9K with 10,500 miles in NY.

    Used cars are a dime a dozen…even Toyotas and Hondas.

    And no, most Corrolas don’t cost 20K new.

  74. Troy says:

    That one worked, so we will add to it.

    go to autotrader and search nationwide for 2007 and up corrolas, and used the advanced search and narrow to 12K max price and 30K miles max.

    152 results all over the country.

    On the first page there are three examples of quality cheap used Corrolas.

    a 2009 with 10700 miles listed for $11,900. Price is likely negotiable

    a 2007 certified with 14K miles listed for 10,900 and is negotiable

    and a 2008 with 10,500 miles for $8,995.

    All from Toyota Dealers. All in different parts of the counrty. All different colors. And this is just from the first page. I only scrolled through the first 15-20 listings out of 152.

  75. Troy says:

    maybe I need to break up my posts.

    My point is not specifically about a Corolla. That was simply the closest example to a Prius. Same manufacturer, same buyer, similar car. Vastly different price.

    But a Corrola is boring…especially a used one. It is not trendy. No hybrid decal, so the demand is less. And the market shows it.

    And I like a Prius. Good technology and advancement.

    But I don’t like the tone of the post where those who buy used don’t factor in their time. And I don’t like the example provided to compare to the Prius.

    So I gave another example that is a little more fair. A little more balanced.

    And those who have done little to no research said I am wrong. But I am not.

    Not a fallacy. Not “fictitious and they don’t exist” and “create all kinds of stories about used cars” as T man said in his response to me, so far his only response to this thread.

  76. Jim says:

    Troy,

    Keep in mind that there are regional differences in car prices and availability.

    There are no Corollas with under 30k miles for less than $10k within 100 miles from me. There is just one under $12k with 27k miles and thats a 2006 model.

    Where my dad lives 400 miles away I can’t find a single Corolla for under $15k with less than 30k miles.

    If I look nationally in Autotrader then skim through the results, I see that many of the cheaper Corollas have body damage. I would also assume many of the other cheap ones out there are specials or sales which may be sold by now. But even if its easy to get a $10k car somewhere in the country that doesn’t mean I can get one here.

  77. Joan says:

    We have one car in our family – a 2003 Ford Taurus. It was bought used with 23,000 miles on it in early 2004. It is now paid off at 78,000 miles, and we plan to drive it to close to 200,000. (Various sites say that’s a fair expectation for this model, if it’s well-maintained, which ours is.)

    Total purchase price for the car was $22,000 including interest, but that included a “rollover” of $4,000 from a note on my previous car, which was a mistake. Thankfully, it’s a mistake that’s now officially in the past.

    Gas mileage is good – and we don’t drive a lot – so we spend about $30 per 14-gallon fillup, every two to three weeks, which works out to about $625 a year.

    Here’s the thing. My two previous cars were “junkers” – bought for as little money up front as possible, with the goal to drive them till they died. Well, you see what happened there; one died before it was even paid off!

    Also, while we’ve put the needed work into the Taurus, we have not had any of those “unpleasant surprises” beyond the replacements outlined in the manual – belts at specified times, brakes, tires, etc. – we have not put NEARLY the money into this that I did into those two junkers, and I’ve owned it for as long as I did the two of them combined.

    And might I add, this car has never let me sit due to a surprise breakdown, unlike my previous ones. THAT, to me, is a huge value, especially since, as it’s our only car, it’d be hard for my husband to come get me if it did! :)

    All that is just to say that I agree that time has value, that “cheap up front” does not always equal “fiscally responsible”, and that Trent, you are as always my hero. :)

  78. Bonnie says:

    I agree w/ #17. For the Prius, you really need to add in the cost of replacing the battery every 100K miles. Also, since the Prius is a relatively new model (compared to the Camry or Corolla), how do you know that it’ll even last 210K miles w/o being cost prohibitive?

  79. Certainly time is money. Unless a person doesn’t have a way to earn money, then time is cheap. Some efforts aren’t worth it even when they do save money at first look.

    Your material is top shelf, as always, Trent!

    John DeFlumeri Jr

  80. David says:

    Whoa, way to overanalyze and assume. You’ve ignored the cost of interest, insurance, and expensive repairs/maintenance that are unique to a Prius that you wouldn’t have with a conventional car.

    I bought a 1991 Volvo last year for $1700. I’ve spent probably $5,000 on it since then, much of that discretionary. But I’m done. That car will last another 4-5 years, I won’t have monthly payments, and my insurance cost is nil. I only drive about 6-8,000 miles a year, so factor in the futility of me paying a premium for a hybrid.

    Besides, driving a Prius kind of sucks, unless you don’t like driving. Not like my old 240 is a sports car, but it’s interesting to drive. Prius and most other Toyotas feel like you’re anesthetized.

    Oh, car payments. Unless you’re buying that Prius for cash — and I can certainly think of better things to do with cash than dump it into a new car, an asset that depreciates at the speed of light — you’re on the hook for $350+/mo whether you have a job, income, or savings, or not. Ooops, missed an insurance payment? Turn in your plates! My car’s paid off. I don’t have to worry about the repo man even if I lost my job.

  81. One of the problems with the committed frugal of the universe is that they don’t put a value on their time. Talk about the amount of time the friend spends looking for cars (or self-rehabbing them) and you lose them! Time just isn’t in the equation.

    A basic limitation of frugality is that it is typically a very real trade off of time for money. True they may be saving money, but they do it at a cost of their time.

    Thrift is needed in life, especially in after decades of easy credit essentially obliterated it. But like everything else in life, it’s subject to diminishing returns.

  82. Tim says:

    value of time to me is a meaningless calculation. you aren’t earning anything during that time anyways, so to say it is a opportunity loss is ridiculous. I know people do these calculations, but it makes no sense, especially when you consider you cannot put a price on intangible benefits.

  83. Bill in NC says:

    In general, most people will have to finance a new car purchase (over 5 years or more)

    That means they are paying a significant amount of interest and the cost for full insurance coverage (required by the lender).

    Don’t forget property tax, since most U.S. jurisdictions do tax vehicles annually typically at the same rate as any other real or personal property.

  84. SP says:

    While I refuse to accept that the prius was the SMARTEST financial car purchase, I agree with trent that finding that mythical honda/toyota with 20k or fewer miles will not happen for $10k, much less $8k.

    But if you find one, please let me know, I’d buy it ASAP

  85. SP (84)–Have to agree with you on the Prius, at least in part. It’s a play on higher energy prices (which I personally believe to be a solid bet!), however I see two potential problems with the hybrids. What happens if energy prices collapse as they have a few times in the past? Will the Prius still make sense? Will it have any resale value? (Think SUV’s when gas topped $4 a gallon, but in the opposite direction should gas go to $1)

    The other is mechanics–how much collective experience is there in repairing hybrids? At 20k miles, sure, but what about at 80 or 100k? The hybrid phenomena hasn’t been long enough or deep enough to know with any certainty.

    Just my thoughts…

  86. Arthi says:

    Trent, I am sorry to point out that there seem to be several mistakes in your calculations.

    The initial cost of the junkers is mentioned as 2000, 1500 and 1000 in three different places.

    >>he buys old junkers for around $2,000 each on average and drives them until they fall apart.
    >>“I usually wind up throwing $500 or so into each one to get that 30,000 out of them.”
    which means the total cost per car is 2000 + 500 + 100 (for title transfer) = 2600

    >>my friend would buy seven cars at $1,500 each, then put another $500 into them to get them road worthy
    He’d also pay $100 each time for the title transfer and other paperwork

    now, are you saying the cost per junker = 1500 + 500 + 100 = 2100?

    >>Seven cars at $q,000 each, plus another $500 for roadworthiness, plus another $100 for paperwork adds up to $11,200
    What is $q,000? judging from your calculations, it seems to be $1000, so total cost per junker = 1000 + 500 + 100 = 1600

    >>The junkers are $1,900 cheaper (versus the $20,100 total for the Prius).
    They are actually 8900 cheaper, not 1900 cheaper

    Also, we need to factor in:

    1. The fact that the miles per gallon of the prius will decrease over time, so you will get an average of 30 mpg and not 40 mpg.
    2. Difference in monthly insurance payments between an old and a new car ( the difference over 17 years seems to tilt the balance in favor of the used one).
    3. Maintenance cost of the Prius (compared to the $500 per each junker) + battery change.

    I must also say that:

    1. Back of napkin calculations are not the most precise, we tend to leave out data more often, and mostly in favor of our argument.

    2. Also, the calculations would have been more precise if you already owned a Prius that you used for 210,000 miles.That way, you would know about each and every expense and insurance premium etc for the car.

    My conclusion? without insurance premiums, the Prius and the junkers break even. Considering full coverage for the Prius and only liablity for the junkers, the junkers win.

  87. tentaculistic says:

    Ah-ha, the dreaded Prius Debate has raised its ugly head again!

  88. Trent says:

    As the article says, he buys them for $2,000 each, then puts $500 into them to get them running well (usually basic maintenance, like flushing everything, new plugs, etc.), and $100 for paperwork.

    Later in the article, I suggest a recalculation, assuming he gets them for much cheaper, just to try to give the used ones the benefit of the doubt.

    Some people prefer used cars, and that’s fine. The hard-and-fast rule of thumb that used is always cheaper, though, isn’t really true.

  89. Bill in Houston says:

    Trent, I have to ask how you found a Prius for $20,000. Did you have a trade, or was that the “drive off” price?

    The cheapest base model I’ve seen is $23k. The dealer might say, “starting at $21,000″ but when you search inventory the cheapest is $23.5k or so. Admittedly, I live in “the bubble” (Texas) not very affected by the current down economy, and gas hikes weren’t as severe. Thing is, I don’t see a lot of this model here. On average I’ll see the same one per day on my 24 mile commute (the same sandy/tannish/greenish one with the Obama/Biden sticker on it). You’d think the dealer would want to push them.

    Then again, you may have been able to deal with a seller who wasn’t moving inventory.

    I’m just curious about that. Me, I bought my wife a Versa, loaded, for $16000 barely a year and a half ago (0.9% interest rate) because I went through Costco. She averages 30mpg.

    To me the Prius screams, “I’m making a statement!” I’m more interested in quality versus cost, and besides I prefer something more attractive.

    The 180,000 mile claim on battery is best case. Your warranty will run out long before then, unless you’re driving 30,000 miles a year. In addition you’ll have to worry about that AC motor, the transmission, and the switching system. The thing you won’t really have to worry about is the IC engine. Toyota builds them pretty darned well, but you’ll still need things like timing belts every 60,000 miles or so. I hope you wangled an extended warranty and didn’t pay for it.

  90. troy says:

    It is now October 5th and my comments are still awaiting moderation 3 days later. Nice ?

    Did you get a chance to call those non-existent Toyota dealers about those non-existent Corolla’s?

  91. Isha says:

    Trent, I think neither of you made the most economical choice. Buying a new car is always somewhat wasteful. You could’ve paid several thousand less by buying a car with 15K miles, and you could drive it to 300,000 miles. Getting rid of a car at 200,000 miles is not a rule to go by. A quality car might very well go significantly further. I buy cars with 200,000 miles (from people like you) and drive them to 300,000. How do I do this? My stepdad’s a Honda tech, so we pick out great ones, and then I resell them usually for close to what I paid, when it’s time to move on. The best example is my 89 Accord. Bought it with light body damage from a customer who felt it’s life was over–for $300. Spent about $500 on repairs. Drove it from 190k to 280k when another deal came along and it was time to upgrade. Sold it for $1400. Original Engine and Trans–they don’t always go bad. Current vehicle is an Odyssey, bought it cheap with a bad trans at 200,000. Replaced it and will drive it for a long time to come. I see many cars at all kinds of mileage and levels of neglect or care come through my stepdad’s repair shop–if you want to save money, buy a 10 year old quality used car, have it thoroughly inspected BEFORE you buy it, drive it and enjoy. No car payments, liability only insurance, and if all goes well, no major repairs. But, even if you do need a major repair, that’ll equal only a few car payments of what “the Jones” are paying every month, and their 3 year old car could end up needing a trans while they’re still making payments. Sometimes it’s just luck… but that’s the best advice I can give.

  92. Daniel says:

    Trent, I enjoyed this article because it(you) make the usual good points. I also agree w/ Comments: #16, #36, #40, #46, #47 w/o the critism. However, I believe wholeheartedly in the position of Mary in comment #59 that persons w/o much knowledge of automotive concepts, or persons with reliability-sensitive occupations(doctors, nurses, teachers, etc.) should purchase a newer, most likely more dependable, vehicle.
    Another point in this abduction and assault prone world we live in is that I am happy that my sisters each drive very reliable vehicles.
    ‘nough said,
    Daniel

  93. Megan says:

    Here’s an idea for those of you who have young families and are saving for a home: My husband and I purchased a 1994 Chrysler LHS in February 2007 for $1200. We’ve replaced the tires and the brake pads (my husband enlisted some mechanically-inclined friends for help with this DIY), and have the oil changed regularly. (All maintenance-type things that must be done with every vehicle, old or new.) Because our car was purchased so cheaply, we have the bare minimum insurance for it. Though it only gets 21 mpg, we feel the cost savings have been worth it. Next time we have to buy a car, I’ll get a more fuel-efficient one. Otherwise, I won’t change one factor. To each his own. And we choose clunkers until we’ve purchased a house, have a substantial emergency savings fund, and have saved for a slightly used (2-3 years old) Prius.

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