Archive for the 'Life' Category

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New Car Time Again, and Why I Won’t be Buying Used

Published on February 14, 2010 in Business and Finance and Life. 2 Comments Tags: cars, finance, ford, honda.

If you’re a long-time reader of this site (and therefore an unofficial stalker, thank you very much) you know that back in 2006 I put up a bunch of posts on car shopping because I was buying a used car. (If you click the link, keep clicking on “Older Posts” for the complete list of car shopping-related posts.) It’s four years later and I’m at it again. This time, though, I’m buying a new car (a far more enjoyable prospect).

I know, wisdom dictates that I either keep fixing up what I have or buy something used, preferably 2 years old, because values drop most during those first years and if there are any major defects they’ll have shown up, probably. However, this wisdom is faulty, outdated, and doesn’t account for my admitted control issues. (I’m OCDelightful!)

Our Situation

Currently we have 2 cars, a Civic and an Accord, both (obviously) Hondas, both from model year 2002 (and both which have recalls on them for some airbag issue).

The Civic, which I bought new in March of ’02 for around $13,000 (including tax, tag, and title), is at 160,000 miles. Overall, it still runs great, although maintenance issues have slowly become costlier. (For example, I just spent $600 in non-regular maintenance related issues.) Still, the car doesn’t cost me more than $2000 a year in total maintenance, which is pretty decent considering I own it outright. Fuel economy is still excellent and for the exception of a faulty fuel pump sometime back in late 2003 I’ve never had any issues with it. (The fuel pump was under warranty.) This is not the car I’m looking to replace.

The Accord, on the other hand, I bought used in September of 2006 for $13,500. Includes extended warranty, taxes, tag, and title. At that point the most important things for me were to get a reliable car with a payment of about $250 per month, and to get a car I felt comfortable driving long distances in. (I love my Civic, but being 6’1″, I can’t quite stretch out my legs.) The car had 43,000 miles when it was purchased. Just under four years later, it sits at approximately 122,000 miles, meaning that I average about 22,000 miles per year on the vehicle. This is the vehicle I’m looking to replace. Why? Because I can’t trust it (and its starting to cost me).

Don’t get me wrong: the car has never left anyone stranded, and it’s a good car, but before I got to it someone drove it for 43,000 miles, meaning I can’t account for its care history for the first 1/3 of its total mileage life (or half its age, although whoever had it obviously drove it a lot less than me). Recently it started having transmission issues, nothing big, just shifting harder than before; once in a while (very infrequently, actually), mid shift, the RPMs shoot straight up and the car quits accelerating. A second or two later, it catches and goes, pulling the car forward and threatening passengers with a mild case of whiplash. Due to this, we took the car to a transmission shop to get it check. The mechanic said that there didn’t seem to be anything wrong externally with the transmission, but that he thinks there’s something inside that needs repair. Minimum cost: $800, just to take the transmission out, look inside, put it back together and put it back. (This includes taxes.) Parts and additional labor would be extra. Add to this the need for new rotors, a timing belt, and a few other miscellaneous items and suddenly this car threatens to cost me around $2000 in repairs, not including the paint job I need to give it because of some major scratches on the side of the car (there when I bought the thing and are begining to rust) or the $900 I just recently spent on its 120,000 mile maintenance and getting it new tires. My father, formerly a car repair shop owner, says I should try a transmission flush, although the transmission mechanic said he doesn’t think that would help. Still, that’s at least $100.

The value of the car, in its current condition, is about $3900 for sale in the private market, according to Kelly Blue Book. We still owe about the same on it. If I can get that much for it it’ll be a miracle.

Can you see now why I’d rather get rid of this one?

The Fallacy of the Used Vehicle

Cars depreciate, that’s a fact. However, some cars depreciate far more than others. American cars, for example, have a far steeper depreciation after the first two years than either Hondas or Toyotas. (Some claim this is changing, particularly with Fords, but I haven’t really seen the evidence: I don’t know how much of that sentiment is based on fact and how much is based on patriotism.) This means that if you’re going to buy an American car, you might do well to go ahead and buy something used. If you’re going to buy a foreign car, though, chances are you’ll pay nearly as much with the used as you would with the new. There’ll be a few thousand dollars difference, true, but if you’re financing then this difference is offset by the financing deals banks and car dealerships give new car buyers. (For example, Honda currently has 0% for 36 months and 1.9% for 60 months on all new Accords, while Ford is has 0% financing, 60 months, on all new Fusions, plus $2500 cash-back.) Here’s a concrete example:

A 2010 Accord EX-L starts at about $29,000 according to Honda.com. Go to Cars.com, and do a search for used Accords and here’s what you get:

2010 Accord EX-L, 72 miles on it, $29,815
2009 Accord EX-L, 9,256 miles on it, $24,980
2009 Accord EX-L, 6,266 miles on it, $23,998
2008 Accord EX-L, 36,086 miles on it, $23,991
2008 Accord EX-L, 28,295 miles on it, $23,703
2009 Accord EX-L, 9,500 miles on it, $23,279 (although my first question becomes, “what’s wrong with it?”)
2008 Accord EX-L, 19,356 miles on it, $22,987 (Honda Certified Used, which is excellent.)

Looks good, right? If I was paying cash then this would be wonderful! Now lets look at monthly payments, comparing the last vehicle on that list (the Honda Certified Used) and the new Accord. (I’ll be using the Cars.com Auto Loan Calculator. Note that I round up for prices.)

Used: At $23,000, no down payment or trade-in, 6.5% sales tax and 6.96% interest at 60 months my monthly payment is $480.
New: At $29,000, no down payment or trade-in, 6.5% sales tax and 1.9% interest at 60 months my monthly payment is $540.

Alright, so there’s a $60 dollar difference. Not huge, but nothing to balk at. Now comes the big one: maintenance. (I’m using the AOL Autos calculator and presuming, quite safely, that I’ll be driving 20,000 miles. Yes, AOL still exists; I was surprised, too.)

For a 2008 Accord bought in its third year, my estimated maintenance costs would be around $1,610 for year 1. Year 2: $210. Year 3: $3,700. This breaks down to around $153 per month.
For a new 2010 Accord my estimated maintenance costs would be $120 for year 1. Year 2: $353. Year 3: $1610. This breaks down to around $57 per month.

This means that by buying used I’m spending, total, about $90 per month for the used above the price of the new, with the diference being purely maintenance. This doesn’t include efficiencies provided by new technologies introduced into the later model, or the fact that while the bulk of maintenance cost rise for the new will occur after the loan has been paid off (and the car is a mere 5 years old), the maintenance cost rise for the used car combined with the monthly payment will make the auto increasingly more expensive in the later years of the loan.

To put it simply: if you’re going to do a long-term (60 month) payment, buying new allows you to separate car payments from increasing maintenance requirements: you’re either paying for maintenance or for financing, but not both. Buying a used car, however, means that towards the end of the loan you’ll be paying for maintenance AND the loan itself, leaving you in the same place I’m at now, feeling like you’ve been taken for a sap.

Finally, there’s the whole control issue. I don’t know who did what to that car for the first 20,000 miles of its life. Did they change the oil on time? Do routine maintenance? Drove it around mostly in the mid-western and northern states, ensuring that rust would become a factor once it made it down to Florida? (Interesting fact: cars that spend their entire lives in FL develop far less rust than those which are brought from up north.) When I buy a car new I know exactly what goes into that car and what kind of care it has had; if something goes wrong, thee’s a pretty good chance I’ll know whose fault it was. (This is why I always either go to the dealership or find someone recommended in the CarTalk Mechanics Files. In fact, this is how I found my favorite Honda shop in Ft. Lauderdale, ForeignTech (formerly HondaTech), located on State Road 7/441, just north of Broward Blvd.) In other words, I control the environment that car exists in and there are few if any unknown variables. That’s piece of mind a new car will give you.

Of course, there is a third option: just keep what’s already here. Fix it up, pay it off, and keep it for a while longer. This has been heavily considered, but we decided that having two very high mileage cars, no matter how well maintained, put it at risk of finding ourselves in some future date needing to buy two cars at the same time. The last thing I want to do is have to buy two used cars in a hurry. While I love sparring with used car sales people, (seriously, I LOVE it!) I don’t care to do it at gunpoint.

Sidenote: There are a few points I’m sure some of you more financially astute folks are thinking, like “why not just save $500 a month and pay cash when you’re ready?” and “why not get a cheaper used car but finance for a far shorter term to avoid the maintenance cost overlap?”

With the first question its a question of practicality: we didn’t start saving for a car years ago (even though we do have savings, a rainy year fund NOT to be spent on cars). Had we successfully done so, it would be fine, probably. $500 for 4 years would be $24k, just about the right amount for a new midsize sedan. But starting now, even at $500 per month would still mean that it would be 2 years before we could buy something as cheap as a Smart Fortwo, which my wife refuses to drive around here (lots of trucks) and is impractical from the standpoint of our parenting plans (don’t read into that), or a used vehicle, which we would rather not buy, due to the aforementioned control issues. I really don’t think we have 2 years. Combine the repair and finance costs for what we do have and we wouldn’t even be able to start saving any appreciable amount for the next year.

The second question is actually a great one, and something we’re considering. I used a Honda Accord for my example because it was our default choice, since that’s what were replacing. Smaller, more inexpensive cars are also options. We also plan to put a down payment. The examples were simply for the sake of having some numbers to play with.

Alright, So Buying New. What Are the Options?

Although I used the Honda Accord for my example above, we’re far from making a final decision. We’re still considering the Ford Fusion and Taurus; Toyota Venza, Matrix, and Prius (yes, I’m well aware of recalls), Honda Insight, Civic, Crosstour and Fit, and others we haven’t yet really looked at. (One car, the Smart Fortwo, was eliminated, sadly, because we need a back seat. Oh, but how I want one of those little skates.) It’s still nebulous for us so the answer to this will come in another article sometime in the near future. For now, if you have any recommendations, especially about the cars I’ve mentioned here, I’d love to hear it.

Waiting for Christmas

Published on December 25, 2009 in Featured Posts and Life. 0 Comments Tags: Christmas.

Even as recently as last year, we unwrapped Christmas gifts first thing in the morning. As we’ve gotten older, “first thing” has come increasingly later (despite efforts to the contrary). Mostly, people want to sleep in.

This year we start at noon. We’re waiting for the arrival of my sister. She decided to stay at her in-laws’ with her husband and daughter, officially breaking the last vestige of an outdated tradition, one dependent upon the excitement of children, a vibrancy now missing. A new tradition therefore begins, and presents will be opened not first thing in the morning, but at the crack of noon.

Everything changes, even Christmas.

Today I turn 11110. Today I turn 1e. Today I turn…

Published on November 24, 2009 in Featured Posts and Life. 0 Comments

Today I turn 11110.

Wow. I made myself feel old. Let me try that again.

Today I turn 1e.

Better, although since most people don’t count in either the binary or hexadecimal systems, I suppose I should tell you that today, according to the decimal numbering system and Gregorian calendar, I turn 30.

Automated systems have flooded my inbox with celebratory messages; friends have sent me emails and notifications in various social sites wishing me a happy birthday. (The automated systems outnumber the friends. How sad is that?) Some of those people have been asking me how it feels to turn “the big three-oh”. I tell them it’s just a number in a particular numbering system. In truth, the answer–which involves the feeling of aging, marking one year closer to the end of my natural lifespan, joying at the understanding that comes with age and seeing history unfold, better appreciating the greatness of life and the people around you, etc.–is far more complicated; it’s far easier to keep it simple since those same complicated answers apply to every birthday, not just this one.

I know it’s supposed to be a pretty big deal, turning 30, but I would rather judge how monumental a birthday is according to what happens around the time itself, not because of a milestone in a particular numbering system. (Think about it, if we only had four fingers per hand then the world would likely run on a base-8 numbering system; I would be turning 36 today, which would be as much of a milestone as my turning 25.) For example, in retrospect, the year I turned five was a pretty monumental one.

I had recently grown cognizant of the concept of a calendar, though it hadn’t yet dawn on me that every year had 12 months. In fact, I still distinctly remember the day it happened, looking at the calendar and reading Septiembre, which meant that Christmas was only four months away, then New Year’s. “How many months will next year have?” I asked. My mom said “Twelve,” and for weeks I wondered how people knew how many months a year had, or what those months would be called. Maybe there was an announcement made on television, or maybe they got a letter. And if this year had four months while next year had twelve, then how many months would the year after that have, sixteen? Eight?

A few months later, I still was not yet totally comfortable with that whole “number of months in a year” deal, but at least I knew enough to know not only when my birthday was, but I also to anticipate it well in advance. Those random parties people threw for me in the past, although I didn’t quite remember them, now finally made sense, temporally speaking.

Yes, in some ways I was a slow child, one with far more imagination than sense.

Despite my inability to remember these previous birthday parties, I knew they were good events. Even with all the milestones and events of that year, or maybe because of them something about this year was different. Everything changed. That’s because this was the first birthday I can, to this day, really remember having a birthday party. Actually there were three, but I can only really remember one. (I think I remember another one, but I might be mixing up memories.)

My uncle’s family owned a place on a mountain in Jayuya, a tiny town in the middle of Puerto Rico’s central mountainous region, the Cordillera Central. While I infamously hated the trip up there–the twisty mountain roads all but guaranteed my becoming a fountain of vomit–I loved everything after arrival. The weather was cool, the view unmatched and I got to walk around in their farm. (A farm there is often on a mountainside.) In the house, I got to play with the arcade machine my uncle kept in his porch, the one with the coin bucket lock open so we would only need to use one quarter to play.

It was fun. Lots of fun. But as great as that was, a warning from my cousin turned that from a a dream-like, hazy occasion into a concrete memory.

For my birthday that year, during a party previous, I received a He-Man game. (I don’t remember that party, but I do remember getting the game, playing with it over and over, and taking it with me.) The only thing that still sticks out in my memory is the board, which had a plastic overlay that shifted players’ positions throughout the game session. During that period it was my favorite game. (It was a new toy, what else would you expect?) My cousin’s cousins (unrelated to me) were coming over, and while I was excited about more people coming to play, he told me they were thieves, and they would steal my toys. That’s when paranoia struck: they wanted to steal the game!

I raced though the house not only putting that game away, but also everything that belonged to me which I feared they might steal, mostly other toys. After hiding everything in the room, I went looking for my mom, who was in the kitchen with my aunt, and tried to convince her that we should leave before these thieves got there. Of course, I didn’t call them thieves. I didn’t even tell her I was worried. I just told her I really wanted to go home: there was another birthday party waiting there for me and I was simply making sure we wouldn’t be late.

I never met these cousins. We left before anyone got there.

Since then I’ve wondered whether what my cousin said was true, or whether he said that just to scare me. I’d like to think both are at least as likely, but given how my cousin was and given my willingness to trust him–being that he was so much older and therefore wiser than me (he was six)–it was far more likely that he wanted to scare me.

There isn’t much I remember after that point. I’d like to say that I remember having a party at the local Burger King, but while I do remember a party there, I don’t remember whether it was subsequent the trip, or even if it happened that year. I do remember going back to school after the Thanksgiving break and feeling like an old soul, wizened by the passage of years, finally able to stand tall next to all the other five year olds, although later, as a 5 year old in the first grade, I would once again learn that I was still young. Only in retrospect can I truly appreciate how young I was.

Makes one wonder whether youth really is wasted on the young, or whether it can only truly be appreciated by them.

Today I turn 30, or 1e or 11110. Take your pick. While I’m not in the “age is just a number” crowd, the fact is that it is, so instead of judging whether a year is a milestone based on a particular numbering system, I would rather judge it by the events surrounding it, and more importantly, by the memories that survive over the long haul. For example, I’m in the middle of my first attempt at a novel now, spurred by the National Novel Writing Month. I’m also working with my dad on his new business venture. My health is steadily improving, making this birthday considerably better than my 27th, 28th or 29th, even though it was during that last one that I bought a house, and during that first one that I went down to Puerto Rico for a great, but short vacation. Still, I actually feel younger than I did then, and unlike then I actually feel good about the year to come.

Instead of passing judgment, however, I’ll spend my time enjoying the occasion. Whether for good or for ill–the best memories contain aspects of both–history will attend to the rest.

I wonder if people will make as big of a deal when I turn 100000, or when I turn 20.

Tarzan Never Showed Up

Published on June 1, 2009 in Featured Posts, Gnorb's Favorites and Life. 1 Comment

For a long time no one mowed the back yard. The grass grew and grew until it was almost as tall as me. Being four years old, that meant the grass was at most three feet tall, probably two, which is pretty high by most modern standards. At that time dad still hadn’t set the foundation for the addition to the house, an addition that wouldn’t happen while we still lived there, so the whole back yard was unkempt grass and along the fence some bushes.

One day, when mom was doing the laundry, she looked at the back yard told me, “That grass is so high Tarzan’s going to make his next movie in our back yard.” This was the greatest news any four year old could get: Tarzan would be coming to my house to make a movie in my back yard!

Somewhere in the back of my mind thoughts wondering whether there would be enough room for him bubbled up. I mean really, there were no trees back there, how was he going to swing around? But I pushed those thoughts out as soon as they appeared. After all, mom said he’d be coming to make a movie, so she had already talked to him on the phone, right? And how had he found out about our yard? Dad probably told him. (They knew all the famous people.)

Although those questions still gnawed at me, my excitement never lessened, my faith never waned. He was coming to make a movie: he was the king of the jungle, and our back yard was as jungle as he was likely to get around here. And most of his movies were done just a couple of streets over, like everything else.

For days, I bragged to my friends that Tarzan would come to my house sometime soon. They were excited. I beamed. We all wanted to meet him, all wanted to be in the movie, all wanted to swing on vines. We even practiced our Tarzan screams, much to the chagrin of our parents and the neighbors.

Sometime later, I can’t say when, I heard the sound of an engine buzzing in the back yard. I stood at the marquesina and looked on as dad slowly mowed the grass, cutting it down to a more civil size. Why was he doing this? Tarzan hadn’t come yet! Then again, maybe Tarzan was like Santa Clause, the Easter Bunny and the Tooth Mouse, coming and going without being seen. Or maybe he had decided to film somewhere else this time. I never asked anyone about that, thinking that if I didn’t, maybe he’d still show up.

Months passed. Every time the grass grew more than six inches I would get excited: maybe this time he would come, or if he’d come last time, maybe I could see him. Or maybe I’d find a lion in the back yard. Or maybe… maybe…

Justifying to myself why he hadn’t come yet was easy. After all, it wasn’t like the back yard was big enough to swing in, and there really weren’t any trees, other than our neighbor’s lemon tree, which branches that grew over the fence to our yard. Maybe dad and mom decided he couldn’t make the movie in our back yard and forgot to tell me. But the hope lived, and lived, and lived, until one day it left.

I waked to the back yard, barefoot and in my underwear, with woolly hair looking a bit like a jungle boy. The grass was about as tall as my ankles. I looked around yard, at the bushes then at the sides of the house, even the where all the recao grew. He wasn’t there. He wouldn’t be there. No Tarzan, no movie. He wouldn’t come. He didn’t come. Tarzan never showed up.

Edit: P.S…
Years later–only a couple of years ago, in fact–I finally asked mom about what she said that day. She looked at me with as if she’d heard something very strange, then told me she didn’t remember saying anything along those lines.

For years I had wondered whether maybe she used the phrase regularly for things being so wild that Tarzan himself would be involved. (Having four small kids running about, this couldn’t be discounted.) Turns out this she didn’t; this was an off-hand remark, something she no longer remembered, and likely didn’t remember just a few hours after first saying it then. I obviously did.