Despite my disdain for the costs of owning a car, I find myself in a familiar situation…looking for a new car. This time, it isn’t a replacement for my dented Toyota Camry. Instead, my wife is looking for a new car. With the prospect of having a family being in the not so distant future, we are looking to upgrade my wife’s Honda Civic to an SUV. This article will summarize some of the discussions my wife and I had about car ownership along with discussing our final options that we are looking to purchase.
Our Differing Views
So here is where my wife and I split on our car buying philosophy. My car frustrations have been well documented on this website and in the future, I have decided that I am going to take a different approach to purchasing a vehicle in the future. This approach will include the cheapest option that I can ride into the ground and will almost certainly not be a new vehicle. I’ll be scouring the used car market in the search for the best value out there for an asset that I hate spending money on.
My wife on the other hand, prefers new cars. Historically, she has leased vehicles and loves receiving a new car every three or so years with all of the updated features. Currently, her lease is set to expire on a 2014 Honda Civic. I love the car and we had a $0 down, sign and drive lease that was $269 per month. It came with all the features you would expect, Bluetooth, sunroof, backup camera, and so on. I thought the lease agreement was pretty reasonable at the time give the fact she left the dealership only having to pay her first monthly payment. I’m sure it could have been lower, but we were both excited about the car, the features, the great gas mileage, and the deal.
Compromising
Judging by the previous section, I’m sure you can see that my wife and I are on opposite ends of the car buying spectrum. We first discussed the lease versus buying option and how I prefer buying over leasing. My preference has always leaned towards purchasing a vehicle and I am less than 12 months away from owning my car outright. I cannot wait for the period where I can own the car outright with no more payments and can ride that sucker into the ground. My Toyota Campy should get me to 200,000 miles with the proper care and I envision a long future with this car considering I just hit 60,000 miles at the end of my fourth year of ownership. You never realize this payment free period with a lease and are in a constant cycle of monthly payments. Sure they are lower, but there is no break.
We discussed my point of view and she gets where I am coming from. She is willing to purchase a car outright and accept the fact that the car will be ours for hopefully the next 10+ years. However, where she isn’t willing to sacrifice, is just selecting the lowest cost car option available and calling it a day. If she is going to dive the same car for a long period of time, she would like the newest technology so the car does not become outdated quickly and miserable to dive in the second half of our ownership cycle. Me personally, I will be willing to accept this for my car. However, I am willing to listen to her on this point because this is going to be her primary car. I completely understand where she is coming from.
A newer car is going to be more expensive, but if she is willing to hold on to the car till 200,000 miles an d 10+ years, it is reasonable for me to compromise on the front end. We’ve decided that we are willing to consider new or certified used cars for the models we will eventually select, meaning that if we do buy a used car, it is run through the vigorous check by the dealership and the car is relatively new. My wife would have her updated features in either of these two situations.
The Features and The Final contenders
We’ve been kicking around for a few months now what features we are going to want in our car. Since the winters in Cleveland can be pretty bad and the car will eventually drive our family around, we are only considering all wheel drive options. Not surprising, we are looking for cars that are reliable and the cost of maintenance will not be that great. Lastly, as suggested, we are looking for cars that have the updated features…at a minimum what she has in her current Honda Civic. Other than that, we are pretty open to ideas for our next car.
After performing our test drives this weekend, we have determine our final three contenders for our next car purchase. We drank a lot of free, bad, car dealership coffee and had a lot of awkward conversations while on test drives with the salesperson. But we are pretty happy with the listing and look forward to driving one of these bad boys soon. One of the tools I have been considering in my research is the Edmunds True Cost to Own Feature, which takes into account the cars depreciation, taxes, financing, insurance, fuel, and maintenance over the first five years of ownership. The numbers mention below were all for 2016 versions of the cars we considered and are subject to change, especially if we decide to purchase a used car versus a new car. But I am using this tool to gauge whether or now one of the SUVs is significantly more expensive to own. One other item to mention is that I excluded MPG discussion because I found all three to be comparable and the difference would not be significant or significantly impact my decision
2016 or 2017 Subaru Forester – 5 year cost to own – $37,328- What gets us the most excited about the Forester is the all-wheel drive. Heck, that’s what Subaru is known for after all. Plus, this was our favorite of the cars to test drive and we thought that it had the best visibility, was a quiet ride, and was very smooth.
2014 through 2016 Toyota Rav 4 XLE – 5 year cost to own – $38,421 – We enjoyed our test drive experience with this model, but noticed it was noisier than the Subaru. But it had all the technology features that my wife is looking for. Luckily, the Rav 4 had its major redesign/refresh in 2014, so there really isn’t that large of a difference between the 2014 model and the 2017 model. The 2017 model is pretty darn expensive, so for this SUV, we are only checking out certified used options. We drove a 2014 with 40k miles that was about $10k cheaper than the new model, so there may be some great deals to be had on a used Rav4. Another thing I found interesting when comparing the Rav4 to the Forester is that the dealer suggests changing the oil every 10k miles on a Rav4 versus every 6,000 on a Forester. If we can make it to 200,000 like I am hoping, the Rav4 would require 13 less oil changes over the life of the car. That does add up over time, especially considering how expensive synthetic oil is.
2015 through 2017 Honda CRV – 5 year cost to own – $36,644 – We did not test drive the Honda CRV yet; however, I suspect that we may be able to get a better deal here for the CV considering we have a relationship with Honda already and they may be the most willing to work with us on our lease trade in. The ratings for the CRV are very good and it is the cheapest to own of the three. The one thing I have been reading is that it is not as cheap as the Forester, but if the cost to own over the long run is less money and the car is just as reliable (if not more reliable) over the long haul, paying a little more upfront may be worth it.
Summary
I am pretty happy to make this compromise with my wife. While I will not enjoy the monthly payments for the first five years, I am looking forward to purchasing a car that I know is reliable and has a great chance of making it to 200,000. Incurring the payment will not be as painful for whatever option we select because my car will be fully paid off in April 2018. The payments on her new car will definitely be less than the sum of our two current payments, $629 ($360 for me and $269 for my wife), so within 12 months the cash outflow for total car payments will reduced. This will be VERY nice once we purchase a house and begin our monthly mortgage payments. Who knows, maybe I will consider what Lanny is doing and also pay off my car loan early to help manage out monthly cash flow. For now though, I am happy that we were able to find a compromise and know that we are going to purchase a quality product that will be with our family for many years to come. We have taken our time and our now going to find the best possible deal out there to push out monthly payments down as low as possible. It sucks that we are going to have to take out a car loan and debt, which is why the goal is to keep these payments as low as possible!
What are your thoughts on our thought process? Do you like the three cars mentioned above? Or are there other options that you think I should consider? Have you had a good or bad experience in the past with any of the cars purchased?
Bert