130 comments

Car Strategies to Cut your Costs in Four (or more)

Look at this amazing picture I covertly took on a walk through my neighborhood just this past weekend. It reminded me that it’s time to talk about cars again, because I love them, and because almost everyone is wasting way, way too much money on their cars. The average person’s car transportation costs ALONE ($8,000 or so per person per year) are enough to make the difference between desperate debt and comfortable riches over a number of years. This overspending is common because it’s a confusing field if you don’t come up with a good Car Strategy. So here we go.

Rule #1: You NEVER, EVER borrow money to buy a car.
Ouch, that might piss some people off, since something like 73 percent of new cars in the US are financed. But if you look at that 73 percent of buyers, you’ll see that they are usually underwater on a lot of loans, quite nervous about losing their jobs, and have a net worth of close to zero. And if you look at the average self-made millionaire, you’ll find they do not buy new cars at all and they never buy on credit. Call me old-fashioned, but I think it’s unwise to even spend all of your money on a car, let alone more than all of your money by getting a loan! If you’re starting out and desperately need your first car, save up a few paychecks, scrape together $2000, and you have a decent late ’90s compact car (from Craigslist of course) that will keep you on the road for several years. Since you won’t have a car loan, you’ll easily accumulate the $8-10k needed to get some really nice 3-years-new wheels when you’re more established, a cycle you can repeat every 10 years or so. Just for reference, even as someone with a wife, a small child, no debts and enough money to not work, I STILL consider my 2005 Scion Xa which is worth less than $7000 right now to be on the newer and fancier side of what we need.

Rule #2: Buy a car that does whatever you will use it for MOST.
If you are a US Forest Service contractor who lives in a cabin in the woods, and all of your driving is done on dirt roads with slopes greater than 20 degrees, you can have that Toyota Tacoma with raised suspension and dirt tires. If the slopes are only moderately steep and rocky, wise up and use the more efficient Subaru Forester. If you live in a city with the luxury of actual pavement, SUVs and trucks should not even be on your radar screen. And there is NO valid personal use for a new full-size pickup of any sort*.  If you are a farmer and need to carry a lot of soggy manure and hay, you may use a 1991 full-size as long as you never take it off the farm. Use a car. Your car should be optimized to carry your ass and occasionally your family around, while burning the minimum possible amount of gas. You don’t need 7-passenger capacity “for those times your kids have friends over” because that doesn’t happen often enough to justify the gas-wasting you’d be doing the other 99% of the time you drive that vehicle. Remember that all your friends have cars too, so there is almost always a spare seat that will get the passengers where they need to go. You don’t need to be the one paying for it.

Rule #3: Cars are for inter-city travel, not for quick trips to the store
Many of my neighbors provide me with all-day amusement by coming and going from their driveways 5 times per day with their cars. What the fuck are they all doing? What is so time sensitive about errands #1-#4 that they could not be consolidated into errand #5 or the main trip to or from work? When I feel an urge to use my own car, I get a little excited and start scribbling a list called “Car Trip” on a piece of scrap paper. I imagine all the things I can get done with the car and after a day or two of soul-searching and trying to figure out if the trip can be postponed further, I finally step out to the garage and guiltily fire up the tiny car.

Rule #4: Cars are not for picking up your teenage kids from the high school 1 mile away
My neighbors actually do this. Our kids have not yet evolved away the ability to walk on their own legs – let’s try to preserve this ability in our species by using it. As a bonus, you’ll be able to afford to spend more time with them.

Rule #5: If you have to own two cars, pick them to cover all your needs efficiently.
When I walk through the neighborhood, all around me I see families with two SUVs, A pickup truck and an SUV, two large sedans, and various other ridiculous combinations in the driveway. Are these people deliberately trying to keep themselves in debt forever, or are they just totally clueless? It is unlikely that both people in a couple need to simultaneously scale rocky mountain roads with 7 passengers on board each. So at least one car should be an efficient commuter – a used 2004-2009 Toyota Prius available for under $10,000 is a good choice. The person who drives the most can use this one. If the second person can carpool with the first, or is close enough to work to bike or have very minimal driving, the second car can be a larger wagon (Volkswagen Jetta or Subaru Legacy perhaps, or even an older minivan). Then you get the best of both worlds – massive capacity on roadtrips and minimal gas-burning on workdays. 

Rule #6: You don’t “look funny” driving a small car. This is all in your head.  But you DO look funny ponying up your car payment every month.
As a newcomer to the United States, I only recently encountered the idea that some people think it is not manly for a Big Man or stylish for a Fancy Woman to be seen in certain types of cars. Some people refer fearfully to the idea of Prius ownership as “driving around in a suppository”. When newspaper articles announce new car models, the inevitable stream of grammatically-challenged reader comments is mostly about how the car looks.

Fuck off with your concerns about style! Cars are all awesome machines and even the crappiest one has been designed and built by great artists, engineers, and workers. Your job is to pick the one that enhances your life the most, and unless you are already financially independent, you’ll get a lot more enhancement from getting some cash in your ‘stash than you will from having 20″ wheels and 3 rows of leather seating.

Rule #7: Cars don’t cost you money per month, they cost you money per mile.
Because folks are financing their cars and not thinking about the long term, most people assume that once a car is in your driveway, you might as well use it with abandon. Totally wrong! When the car sits in your driveway, or even better, your locked garage, it is staying largely intact. As soon as you start using it, you are burning gas, oil, tires, wearing out each of its approximately 20,000 components, increasing your risk of a crash, and connecting a large-diameter Shop Vac hose to your Money Mustache, ripping out precious strands right from their follicles.

Here’s what happens when you use your cars sparingly: they last forever. Guess how much I have spent over the past ten years in repairs and maintenance other than oil changes (which I do myself, partly to save a few bucks, but mostly because it is fun and manly)? Guess how many sets of tires I have worn through? How many speeding tickets or accidents?

Zero.

It’s not because I am an amazing car whiz. It’s because I only drive when it’s actually necessary. For me, that adds up to about 4,000-6,000 miles per year for a family of three. After 10 years, you’ve pretty much worn out a single set of tires and nothing at all has even broken on your reliable used car.

It’s a harsh series of lessons, and admittedly there’s some repetition up there, but it is really fun to rant about this stuff. And sometimes ranting is necessary because car spending is the first and foremost thing standing between the struggling masses and Mustachian Freedom and Riches. That means YOU!

Are you still thinking it’s OK to borrow money for cars? If so, let’s hear some comments and I can present alternatives that will leave you much richer.
* Footnote on the full-size pickup truck issue: As a part-time professional carpenter who occasionally builds custom houses, I find that an older large minivan kicks the ass of a full-size pickup for cargo capacity, while costing less, handling better, and burning much less gas. Also, it does double-duty for carrying a lot of people, unlike pickups. But I would still never use this van for single-person transport. Look into it!

  • stuckincube May 2, 2011, 7:10 pm

    Mr. Money Mustache,
    You advice is almost excellent. However, I think you should consider the difference between debt for assets that are working capital and those that are simply for luxury. You should never have debt on luxury, but it can and does make sense to incur debt on working capital assets that can provide a return on capital that is above their cost (including debt charges). This concept can grow exponentially for a corporation where liability for the asset is placed on the debt loaner, especially if the investment is risky. How does this translate to car buying? Well, for personal use I agree with you. But in the case of a vehicle which has business utility, the argument to never have debt isn’t always true.

    Reply
    • MMM May 2, 2011, 7:58 pm

      Thanks, Mr. Cube, you are of course correct and I appreciate the comment! But to fully explain the difference between good and bad debt gets into a level of economic theory that Mr. Money Mustache will have to wait a while to start discussing.

      For example, it’s not smart to borrow money so you can have a new Honda Pilot to drive to work, even though that has some sort of business utility. Even Joe the Plumber would be stupid to borrow $40,000 to buy a Ford F-250 Super Duty to carry around his pipe cutters and little lengths of ABS pipe. Because he would be using the debt to justify an unnecessarily costly product. The time that debt WOULD be appropriate would be if I run an airport transit company, and my current van is always overbooked with customers, and all my company’s assets are tied up in property, plant, and equipment. In this case, it might be wise to borrow $20,000 to buy another van to immediately double the income.

      However, even then it’s not a clear cut case. How risky is it that there might be a business turnaround and you’ll be stuck with the now-idle asset and the debt? Here we get into another situation where people might slip off of the Mustache. It is possible to make more money with more risk, but Mr. Money Mustache advocates earning “Just Enough Money For You” so you can enjoy the good life and balance in lots of free time.

      In the personal sphere, this translates to paying off your mortgage a little early even though you technically will average a higher return over time with the stock market. I used to think “I’ll keep my mortgage FOREVER, because the rate is so low!”. But now I like the psychological peace of no debt whatsoever, and you can still put more than enough money into stocks once your house is paid off. The grass in your back yard feels different on your bare feet when you actually OWN it ;-)

      Reply
      • Prairie Practicality January 14, 2014, 1:55 pm

        New here, going through comments. I was embarrassed a little that I’ve only been paying my mortgage off, almost no investing. I do it 100% for the thrill of being free of the shackles.

        Reply
      • CTY April 10, 2014, 11:48 pm

        Been going through the archives and wanted to comment even though I am years late. What you said about the plumber made me laugh. We needed a new central air unit (live in the desert) and gathered estimates. One guy came in the evening driving a old small car. He got the job and when he arrived to do the work I was expecting a construction type fancy truck. Not the case. I mentioned it to him because I thought his “team” was using it & would be along shortly and would need to park. He laughed, said his right hand man would be along via Corolla. He said his car holds of the tools he needs and the big stuff will be delivered (the Co. he deals with delivers free when a certain volume of orders are placed). I instantly felt assured that he was the right guy for the job,

        Reply
        • Rachel May 25, 2014, 12:41 am

          I too have just been going through the archives! Although I live in the UK this post still makes sense (there is a 2014 reg Mercedes SLK outside my house right now), although I want to put this to you…

          In March last year I bought a Brand New Car. I know mustashians never buy new cars, but I worked out the math and in this instance I felt it was the best choice – my work. I am a freelance ecologist, so I travel around the UK working for environmental consultancies. I do about 20-25k miles a year. When I was at college 5 years prior, I was the proud owner of an 8 year old Ford Fiesta. It lasted just under two years before the repair bill was more than I had initially paid for the car. So I put the repair money towards another used car. Which lasted one and a half years. I desperately needed a car to carry on my work experience in the last year at uni, but hadn’t got the money so I borrowed from my parents to buy another used car, 7 years old because I couldn’t afford anything newer. It lasted 8 months… enter next used car. So over 5 years or so I spent about £10k on used cars plus an extra couple of grand on repairs. When I finally went freelance last April, my current Ford Fiesta was also on the brink with 122,000 miles on the clock and repairs more than the car was worth.

          So I walked into Vauxhall to buy a Brand New Car. A Corsa, just over £14,000. Take off the deposit of £500 for exchanging my old car, their deposit contribution of £750 and a business partner discount of 8% (thank you boyfriends dad), I ended up getting the car on a 5 year finance plan for just over £11,500, which is about what I would have to pay for a new-used car. At 0% interest. It’s more fuel efficient, car tax is lower, it’s better for the environment, the perfect size to fit all of my equipment in, is lovely to drive and so far hasn’t cost me a penny in repairs (I change my own oil too). And I intend to look after it so it lasts me the next 6-7, maybe even 8 years, by which point I will have saved up enough money to buy another new car and barter the price down since I can pay in cash.

          Are there some situations where you think it’s better financially to buy brand new rather than used?

          Reply
          • Izak July 9, 2014, 4:29 am

            I’m curious if this situation, where the repairs eventually (and rather quickly, two years!) cost more than the car could be a UK thing.

            I’ve never been to the UK, so I wouldn’t know.

            I almost cannot fathom how a car that is only 8 years old could cost that much in repairs, which is why I’m now questioning the cost of the car rather than the cost of the repairs. I bought a 6-year old 3-series BMW once, and that was the worst car I ever had in terms of repairs, but even that thing only amounted to around ZAR 40 000 a year (divide by around 10 to get USD, around 17 to get GBP) which was way lower than any interest and devaluation on a new car.

            In the end, I sold the Beemer because it’s the most impractical vehicle for a family. A full size spare wheel and rear-wheel drive leaves little space for luggage. I then did the wrong thing: I bought a 2-year old Corolla and borrowed the money to do so. So far the car hasn’t cost me a sent on repairs (I’ve had it 4 years now) so the overal annual layout is still less than with the BMW. But… I should have bought an older Corolla…

            Reply
  • Adam May 8, 2011, 2:56 am

    Loving your blog!

    With respect to tires, however, typical lifespan of a modern tire is between 6 and 10 years, regardless of mileage.

    I have had a radial tire steel belt break on me while driving, and although the tire stayed in one piece, the deformation it was so violent, the associated shock absorber failed internally and the resulting vibration created a real danger of loss of control. Thankfully it was one of the rear tires.

    Anyway, just a heads up. Tires are critical and if they are older than 5 years, should be inspected carefully, frequently.

    Reply
    • MMM May 8, 2011, 7:25 am

      Thanks Adam! That sounds like wise advice. If you look it up, Bridgestone tires recommends 10 years as a tire lifespan as well: http://www.automotivedigest.com/content/displayArticle.aspx?a=32491

      Luckily, most people will still drive more than I do so their tires will wear out faster. My car lives in a nice shady insulated garage which will definitely keep the rubber more healthy. I once left an old bike propped against a South-facing shed for two years and found that the relentless high-altitude sunshine had burned the sidewalls into a powder.

      I should probably take it easy on the old 1984 Nissan pickup I still have borrowed and sitting in the front street. Its tires are a mixed litter and one of them dates back to the Cosby Show era.

      Reply
  • Chris May 19, 2011, 6:00 am

    Wondering if you could offer an opinion.

    Deciding on getting a crappy used car or getting a 2 year old Corolla for about $13,000. I was thinking I would get the Corolla and drive it for 5 years to about 150k then offing it and getting another 2 year old. Then I’d get 6-7k for selling the car and put up another 7k into another 2 year old new one. Effectively carrying 6k or $1,200/year perpetual into a car as a carrying cost with a 6-7k overhead (sunk cost).

    Does this approach make sense? I have a 2 year old boy, married, another beater car for putting around (and a dead van which I killed). I need the car for general light commuting and frequent (enough) trips out of town to visit family which run 2.5-5 hrs each way.

    What do you think about my above plan?

    Reply
    • MMM May 19, 2011, 10:22 am

      Hey Chris!

      Your strategy is kind of in the middle of the range – way better than many people because you’re buying a good efficient car somewhat used instead of an SUV or truck new. But still way newer and more expensive than I would do for myself. Your idea is like buying a 2009 car (2 years old) and selling after 5 years (like selling a 2004 car today). My own strategy would be to buy a 2005 today, and sell it after 7 more years or so (like selling a 1998 car right now). It’s all based on calculations on a cost per kilometre basis (I assume you’re talking about Canadian values in your case so I’ll use them too).

      2009 Corolla: Buy for $13k with 32k on odometer
      Drive for 5 years@ 23,600k/year (way above average, but just using numbers from your example)
      Sell at $6000 with 150,000 km on odometer (CDN value of an unusually-high-mileage 2004 Corolla today)
      Buy-sell cost: $7,000
      Opportunity cost of tying up $13k permanently in the car@7%: $910/year = $4550
      Total cost is $11,500 for 118,000 km – 9.7 cents/km

      2005 Corolla: Buy for $7500 with 96k on odometer
      Drive for 7 years at 23,600 km/year: 165,200 km
      Sell at $2000 with 261k on odometer (sounds crazy but this is just 162k miles for US readers – some people already have this many racked up on their 2004 cars right now!)
      Do major maintenance twice at $1000/each (timing belt, water pump, etc)
      Buy-sell cost is $5500
      Maintenance cost is $2000
      Opportunity cost of tying up $7500 is $525/year: $3675
      Total cost is $11,175 for 165,200 km = 6.76 cents/km

      At 23,600km per year the difference between these two costs is almost $700 per year. After ten years of the New Corolla Strategy you are almost 10 grand behind with compounding.

      If you used the older car, AND figured out a way to drive less (average in Canada is 16,000km/year), the older car would work even better since you could get away without as much maintenance. It also improves the numbers above because the savings from less opportunity cost becomes larger per km.

      Good luck!
      MMM

      Reply
      • Chris May 19, 2011, 7:33 pm

        Wow, okay. I’m going to re-read this a few times and let it sink in. For starters I guess we don’t drive that much! 15,000 km would probably be plenty. I’m finding used cars (2009) at around 50,000 km on the odometer right now at $13k. You’re right, corollas will sell for 2k even with over 250km on them. They maintain value very well. I’m not seeing a lot of used ones up in the 100 km range. I do see them come up occasionally though.

        So I guess the strategy is to get a 5 year old car with just over 100km on them and kill it (or maybe not kill it, but off it just before that)? I did think of this too. I just figured that in 5 years time, I probably wouldn’t want to put up with the hassle of an unreliable vehicle on those long trips. I sort of feel like I’m on a edge with my 98 chrysler cirus right now with 250km!

        Right now I’m riding my bike around town and it’s great. Even to work and back. It’s great.

        Reply
        • MMM May 19, 2011, 7:43 pm

          Awesome! I am especially glad to hear about the biking.

          Also amazing to hear you squeezed 250,000km out of a 1998 Chrysler Cirrus, not known for being the most reliable car.

          If you start with a 2005 Toyota Corolla, which is an infinitely better car in so many ways, it won’t FEEL old by the time you get to 250k. Good cars age well. My work truck (for my part-time contractor business) is a 1999 Honda Odyssey Van with 193,000 km. It still looks and feels like it’s absolutely brand-new! And that is despite the fact that Odyssey is actually not as good as most Hondas for reliability.

          Finding a used car with reasonable mileage and price is definitely a bit of a challenge. Search online, use Craigslist and Kijiji and call/email dealers, and if you want to save a couple thousand, be a bit hardball in your negotiation – as long as you are offering a value that is somewhere in the range of blue book values. Also, put a big priority on low odometer miles, since that is the true age of a car, more than model year.

          Reply
          • Chris May 20, 2011, 11:32 am

            My mom was tired of her blue dodge caravan 1993. After two years and only about 150km on it, I blew the head gasket. Not doing anything crazy or driving too much, it just rotted out! My mom parted with her Chrysler Lebaron 1992 which I let go just 2 years before that! I’m a car killer, ha. And I drive what no one else is willing to drive. But now I have a 2 year old, so getting stranded (which only happened once with a wet distributor cap – until it dried out), is a bit more risk than it would be otherwise. I’ll heed your suggestion and see what I can shake out. I’m okay with your calculations on the 2009 though since my wife and I only need one good car anyway and I can put up with a beater (cirus) for inner city travel and when we absolutely need two cars. I also run a self-employed reno company with my brother as a side business so carrying hand-tools is a must. I still try to do this via bike and leave my tools on the job or in my brother’s truck.

            Thanks for the advice, I appreciate it.

            Reply
      • Daniel Cox October 11, 2011, 3:36 pm

        Dude,

        Your example kicks ass!

        My 2003 Corolla is sexy, gets great gas mileage and meets our needs. We expect at least 7 years out of this used car. I love it when things make sense!

        Reply
  • BW May 19, 2011, 7:06 pm

    Never own a truck? Live in the city much? Ever pick up a load of lumber or mulch in your scion? Must be a renter.

    I really think you need to open your mind a little- I agree with most of your points, but the “never drive a full size truck if you’re not a forest ranger” is patently silly.

    Good luck with those shingles…

    Reply
    • MMM May 19, 2011, 7:48 pm

      Thanks for the comment BW. I did address the truck issue a bit more right in the article – I guess you missed that part. Here’s what it says:

      * Footnote on the full-size pickup truck issue: As a part-time professional carpenter who occasionally builds custom houses, I find that an older large minivan kicks the ass of a full-size pickup for cargo capacity, while costing less, handling better, and burning much less gas. Also, it does double-duty for carrying a lot of people, unlike pickups. But I would still never use this van for single-person transport. Look into it!

      Also, regarding shingles: If you get more into professional roofing jobs in the future, you’ll learn that shingles are always delivered directly from warehouse to rooftop on a belt crane truck, and the tearoff always goes directly into a rented dumpster. That cuts both transportation and labor costs.

      Reply
      • Chris May 21, 2011, 6:19 am

        We always pass material pick-up onto the client as well. Spending our time picking things up is such a waste of skill. For $100, why not have someone else move shit around. Installing it, is something you really want to pay for. If you just need a few things, then any old car will do.

        Reply
      • Mike December 20, 2012, 8:17 pm

        Yeah! The above comment borders on complainypantsism! I know a lot of people who are constantly trying to justify their vehicle purchases. I’m kind of on my own among my friends when it comes to the vehicle debate. My friend has a limited edition Ford F150 and says he needs it for the 2 times a year he towes his jet ski!! I find this mindset very sad. Way to tell it like it is MMM! People need to wake up!

        Reply
    • Jane October 18, 2011, 10:49 am

      My parents live in the country and are constantly trucking around mulch, compost, straw, dogs and the like. Their 1998 Volvo station wagon is all they need and more. Most importantly they bought it at 2 years old with 0% interest so it’s been paid off for years.

      Reply
    • CG January 24, 2012, 6:49 am

      We have a Hyundai Tiberon and a Dodge Caravan. Both have been adequate for picking up lumber, furniture, mattresses, flooring, shingles, and mulch. My hubby picked up all the shingles for our roof redo in his Hyundai. He just stopped by after work every day for about a week and got as many packs as would fit in his trunk.
      There are work-arounds for most hauling dilemmas. A small trailer you use occasionally is a better idea than paying for more car than you need for the majority of your driving. My dad made several of these over his lifetime by picking up free or nearly free old pop-up campers that weren’t habitable and gutting them.

      Reply
  • Tim Rapp May 24, 2011, 2:55 pm

    Spot on [Mr. Money Mustache]. My car gets about average fuel economy (aka it sucks gas), but I only drive it about 5K/year. And I paid cash for it. I turned down a “better” job that would have required me to commute 50 min by car each way. For me, time spent commuting on foot or by bike improves quality of life — driving degrades it.

    Reply
    • MMM May 25, 2011, 8:26 pm

      Thanks Tim! Glad to have you reading.

      I’m also glad to have you on the record saying a 50 minute commute is out of consideration. Very wise indeed. I remember doing some math early on in my career and figuring out each minute of car commuting requires about $1000 per year to justify it (including driving cost plus paying for my time at say $40 per hour). So even going from a 10 minute commute to a 30 minute one for a $20,000 raise would be a wash.

      Reply
      • K S August 10, 2011, 1:58 pm

        I’d love to see a rehash of that equation. Commuting distance vs rent/mortgage cost vs quality of life is an ongoing debate in our home.

        Reply
  • Acorn May 25, 2011, 11:38 am

    Erm, dumb question here, but how long can you leave a car sitting in a driveway before it becomes not so good for the car? Can it sit 6 months without starting without any damage?

    Reply
    • MMM May 25, 2011, 9:44 pm

      Man, you are showing up everywhere on this blog, Mr. Acorn! :-)

      I’ve wondered that myself. The limiting factor is the storage life of gasoline. It does degrade and become dangerous to the engine and other components over time. Especially gasoline with ethanol blended in, since this mix is more unstable when exposed to oxygen – the water separates from the alcohol.

      I think 6 months is getting into the danger zone, depending on how airtight the gas tank is and how full it was to begin with. My construction van usually only drives about 10 miles a week for some local projects. Since its range on a full tank is 500 miles it would take almost a year to use up a tank – or at least several month until the next camping roadtrip happened. To keep the gas fresher between roadtrips, I only buy 1/8 tank at a time for this van – so it gets used up and refreshed about once a month.

      Reply
      • Bakari June 28, 2011, 10:47 am

        You can get gas stabilizer if its going to sit.

        I’d be more concerned about the tires, from UV damage and sitting in one place.
        Keep the car (or at least tires) covered, and rotate (i.e. move the car a few feet) every couple months.

        Reply
        • turboseize February 23, 2013, 4:58 am

          In the european classic car scene it is quite common to drive the car during summer months only and hibernate during winter. (For example, in Germany you can choose a “seasonal registration” for any duration between 2 and 11 months, most common being april to october for classic cars and then october to april for the “beater” or “winter” car. You only pay taxes and insures for the registered period, meaning you can own 2 cars for the cost of 1.17. Of course, you need a garage to park the car during off season, as it is not allowed on public roads and parking spaces then).

          So it is quite common for a lot of precious cars to sit idle for about 6 months a year, which usually is no problem.

          Standard practice is this:

          – fill up the tank (the more gas is in the tank, the less air, meaning less air moisture to condense and less water at th ebottom of the tank. Water in the gas tank can lead to corrosion both to the (metal) fuel tank and the fuel pump.) High quality gas should last 6 months without problem, if you feel unsure, use a gas stabiliser.)
          – clean the car, let it try. Wax the paint.
          – inflate tires to at least 3 bar, better 3.3 or the sidewall maximum. (No idea what that is in psi.
          – park in dry(!) garage
          – open windows a tiny bit (small enough to prevent mice etc from entering the car, big enough to allow for some air exchange, to prevent fungus)
          – disconnect the battery, peferably remove it from the car and charge it from tim eto time
          – if your garage is *really* dry, cover the car with some old bed sheets or the like to protect it from dust. If your garage has only slight moisture, do not cover the car, as this will impair gas exchange and might promote corrosion and fungus. (Dust contains small sand, which is harder than paint, that’s why you do not want it on your car in the first place. Do not wipe off dust, rinse it off with lots of water instead. Wiping it off might cause tiny scratches.)

          I would be very reluctant to park a car “on the sidewalk” – UV radiation will bleach and crack plastic parts, temperature changes will leave air moisture condensating in hollow cavities of the body, promoting corrosion.

          If your garage ist not completely dry, use silica-based air dryers and change/recover them often. Or use rice instead (but be careful, rice=food, might attract pests…)
          Protecting your car against corrosion is always a good idea, if you do not own a completely dry and temperature-stable garage it’s a must. (Of course, this also applies to cars that stay on the road during winter!). Corrosion protection is so much cheaper than paying for welding and paint jobs in the future.
          Renew not only underbody sealing, but cavity sealing as well (will cost 250-400€ if done by a professional, depending on the product – wax-based products are easier to use, but will dry and crack after some years, so the need yearly renewal, fat-based will last longer, but is harder to process and will probalbly leave some marks under the car for the next years. If you do it yourself, you’ll need a compressor, a spraying pistol and a cavity sond.)

          There is a debate whether to chage oil before or after hibernation. Both sides use the same argument: oil does also degrade due to oxydation. Changing before hibernation removes all pollutions from the engine and leaves the engine hibernating with the best possible oil and corrosion protection, changing in spring lets you *use* the engine with fresh oil. I tend to prefer the latter.

          If you plan on hibernating the car for more than six months, better change ALL fluids before hibernation – and before putting the car in use again.

          I have been hibernating cars since 2003 and never have had a problem following the short procedure: fill up, wash, let dry, wax, park in garage. ;-) But then, our garage is *extremely* dry.
          Awaking a hibernated car is equally easy: check tire pressure and set back to normal, pull fuel pump and ignition fuse, put back battery (or jump start), start (this will not lead to ignition, but turn the engine and therefore distribute oil in the entire engine), put back fuses, start, drive until warm, then check suspension and brakes, change all fluids and enjoy the new season.

          Reply
  • J May 25, 2011, 12:49 pm

    Some good points, but I hope the ‘F’ word isn’t a regular feature here – what did it add? I’d like to feel confident in pointing family members here…

    Reply
    • MMM May 25, 2011, 11:34 pm

      Oh, thanks very much, Mr. J!

      Unfortunately, the F-bomb and all of his exciting friends do tend to make regular appearances here on Mr. Money Mustache.

      What does the swearing add? Well, it adds both Hilarity and Authority to the articles. It tells readers that Mr. Money Mustache is fuckin’ serious about people getting some financial discipline and helping themselves and their world out. The world of personal finance needs far more swearing, and MMM will deliver!

      Reply
      • Heidi May 26, 2011, 12:59 pm

        I dunno, I think Hilarity and Authority could be added with the plethora of adjectives available. Really, you can only shock with those friends a limited number of times–say 3?

        How about?

        flat out
        bloody
        in toto
        to the max
        wholly

        those are just some I like. I bet there are more.

        Reply
        • Mike October 11, 2011, 10:19 pm

          I know this thread is come and gone, but I can’t help but comment that where I’m from the use of “bloody” is far and away more offensive than anything you might find on MMM.

          I actually did a double take and had to remind myself that this is indeed an American blog and you probably find the term “quaint” or “cute”, not knowing its origins or how it might play beyond your borders.

          Just a good example of why you should just use your own voice and not worry too much about what others might think, because you can’t please everyone and someone, somewhere is going to find a reason to be offended.

          Reply
      • J May 26, 2011, 1:06 pm

        Ah, OK – that’s called a gimmick…

        Seriously, you seem to be an intelligent guy (I came from the article you wrote at ERE) but the majority of your posts are pretty standard money-blog fare, and to me the swearing comes across as an unsuccessful attempt to differentiate yourself.

        Why not put the energy into writing posts that show what’s actually different about how you do or approach things? Or deal with areas others haven’t. Etc etc.

        Reply
        • Mrs. Money Mustache May 26, 2011, 1:50 pm

          As the Mrs. in the family, I’m going to chime in here. It’s not a gimmick. This is the real MMM, in all his glory. You either love him or you hate him. I, for one, am happy that he’s using his real voice and not toning it down for the audience. :-)

          Reply
          • MMM May 26, 2011, 3:52 pm

            Ahh, this has turned into a very interesting side-discussion indeed! First of all, utmost respect to both of our non-cussing friends for sharing their views on the matter. It is actually quite educational to me to read things like this.

            It seems that in adult society in my new homeland, we have the Swearers and the Non-Swearers. There are many millions in each camp. The Non-Swearers have somehow adopted the idea that certain words are “bad” and certain words are not “bad”. Perhaps this idea was part of their upbringing, or maybe this belief came later in adulthood.

            The Swearers, on the other hand, can not identify any characteristic of the “bad” words that makes them worse than any other words. This may be difficult for a born-and-bred-Nonswearer to comprehend, because certain subcultures and religions of the US have anti-swearing components built right into them. But imagine if I visited your blog and took offense to your use of the word “Banana”. I would suggest that you speak instead of “Apples” and even “Plantains” if you were feeling frisky, but none of those offensive but delicious yellow B-Bombs were to be discussed. It might seem a bit illogical to you.

            To the Swearer, each individual word is just a shape you make with your mouth as you send sound waves through it. Words are ALL good. Sentences can be bad, if they express genuine hatred and invoke wars, but plain old individual words are just fun.

            Ironically, the constant pressure created by Non-Swearers to suppress the use of certain words is exactly what makes them fun to use for the Swearers. These words are given a special meaning and status, because they are not seen in conservative newspapers and magazines or on the larger US-based television channels. Using these special words allows authors to express advanced, counter-cultural sentiments amongst themselves that could never be shared by USA Today or Fox News. And they just sound so good.

            So, although you might not choose to read on because of your personal beliefs, a decision which I fully respect, please understand that the special words are not meant as a gimmick or shock technique. This is the real way Swearers write, and we quite enjoy it. Every day I get emails supporting the wonderful combination of Swearing and Personal Finance.

            We enjoy it not because we want to offend Non-Swearers, but because these words are part of our dialect and we just love creative use of the English language in its entirety.

            Reply
            • Gerard January 11, 2013, 11:54 am

              I am a sociolinguist and I approve of this post. :-)

              Reply
            • Esther September 24, 2013, 11:18 am

              I am a little late in this discussion, but The “F Bombs” take nothing away from the post. I am a Non-swearer, however, I do know sometimes, it’s needed, it add a little , “je ne sais quoi”. Besides, this blog is about FI, Let’s not be so uptight. If you are offended by one comment, just skip to the next comment.

              Reply
          • jDeppen June 7, 2011, 12:10 am

            MMM you need a “like button” for comments. (FYI: I couldn’t reply to your comment so I did it here)
            Exactly how I feel, they are just words, I would bet most MMM readers are adults. I’m not sure if you’re familiar with DHH, since you were in software, but check out his post:
            http://www.loudthinking.com/posts/15-potty-mouths

            Reply
      • Heidi June 1, 2011, 11:05 am

        To each his own. And down with Fox News.

        Reply
  • KevinW May 26, 2011, 8:23 am

    There are a few additional issues. All the fluids degrade with age, not just gasoline, but also motor oil, transmission fluid, coolant, etc. The service interval for these is usually described as “X miles or Y months, whichever comes first,” and you’ll find yourself hitting the time intervals before the mileage intervals.

    You need to keep the battery charged somehow. If tires sit on one position for months they can develop “flat spots.” Pests may start living in an immobile car. You can buy inexpensive products to solve these problems, but at that point it’s worth asking whether owning such a rarely-used vehicle makes sense.

    Reply
  • samantha May 27, 2011, 11:09 am

    Hello MMM,

    So! I enjoyed this post. I am a super frugal / high saving / not quite as retired as you / married / 40 year old who reads personal finance articles to stay focused. I rarely read anything I have already thought of or implemented. That having been said, this post made me think a bit! Hooray!

    Here is our situation: We have a 2008 Nissan Altima that is paid for by my husband’s company via a stipend. Being a super frugal dude that he is, his stipend is $30 more than his monthly payment. I’m sure you know about the restrictions on what cars people can buy under this kind of management, but he worked the system enough to get a great car, that is cheaper than the reimbursement on it. His insurance and company gas is paid for. It get’s 30 miles to the gallon. He has applied the extra $30 a month from the stipend to the payment and in a few months will be collecting the stipend without having a car payment. He is considering leaving his job in the next year, so we will have an essentially free car with 50k miles on it which has been maintained meticulously. I feel pretty good about how we handled this part of it. He could have gotten an even better gas mileage vehicle but a Prius or other similar wasn’t on the sanctioned list of vehicle to choose from.

    However! We also have a 2000 or 2001 Nissan Frontier pick-up with 165k miles. (We bought it several years old. $2k under the KBB value). We used it for a few years to haul bark dust, gravel, lumber, concrete etc, etc. as we redid our fixer-upper. (Our home is gorgeous now!! It is also on a very steep incline that big trucks will not come up. And there is no where to dump gravel. Using the truck is the only option we had to get materials up there. The bonus – views of the Willamette River and four snow-capped mountains.) We also raft and white water canoe regularly. The truck hauls the gear associated with these sports. For instance, we hauled all of our crap up to the Broken Group Islands last September for a week long paddle through paradise. (Google it!) This weekend we are going with eight friends on a float trip. So the truck gets tons of dirty use.

    So! My question: I’m considering whether or not we need the truck anymore. I use it to commute three miles to work when I don’t ride my bike. I live in Portland, OR, so it rains a lot and I get tired of riding in the rain day after day, month after month. Also, my husband will drive it to work with his bike in the bed, ride his bike home (it is a 22 mile trip) and then ride is bike back the next morning and then bring his bike home in the bed (on days he isn’t visiting customers and in the fancy car.) But the truck gets only 17 mpg. And I think we could do lots of our stuff in a more efficient vehicle.

    So…sell the truck and get a more efficient vehicle that will get completely trashed with all the dirty stuff we do. Or stick with what we have which is a paid off vehicle with no mechanical issues and suits our purposes fine. (Insurance is $40 a month.)

    What do you think?

    (P.S. We have no debt other than our mortgage and the mentioned car payment. We also have three rental apartment buildings that operate in the black. Our 401ks and what not are loaded and managed watchfully. I think successful personal finance management is sweating the details. Can you see that I sweat the details? It’s my hobby!)

    Looking forward to seeing your blog grow and evolve and expand.
    Cheers!
    Samantha

    Reply
    • MMM May 27, 2011, 2:57 pm

      Hi Samantha, thanks for the inspiring tale.

      Sounds like you’re already pretty set since you aren’t throwing a lot of money away on your vehicles. If you did feel the need for even more savings, you could always sell the Frontier and buy a similar aged wagon of some sort like a Subaru Legacy without actually having to fork over more money. Still not the best gas mileage but at 25 MPG combined it would still save at least a few gallons and also hold more people. And the cargo capacity with the seats folded down is similar to a small pickup.

      Or, you could just relax and do nothing except pat yourself on the back for already being way ahead of the game.

      nice to have you here!
      MMM

      Reply
  • Bakari Kafele June 1, 2011, 10:20 pm

    “older large minivan kicks the ass of a full-size pickup for cargo capacity”

    you gotta be crazy!

    Take a look at the picture on my home page. No WAY you are ever going to get that much in a van (much less a mini-van)
    Not convinced? how about these pictures: http://www.biodieselhauling.org/Contact.html

    Whats more, with a little ecomodding and hypermiling, I’m getting 30mpg out of it – better than most people’s cars. And I paid $2000 (cash) for it.

    Aside from the truck comment, I’m with you 100%

    Reply
    • MMM June 1, 2011, 10:36 pm

      Hahaha.. very well, Mr. Kafele, I will give you full points for your excellent pickup truck because it appropriately badass looking and you’ve done some very Mustachian mods to it. 30MPG is reasonably fuel-efficient too (I can squeeze 31 out of my big Honda, but only on the highway).

      I still stand by the minivan as having the largest cargo space for a housebuilder/carpenter like myself, because we need a COVERED space to protect expensive tools and materials from weather and theft overnight. Most contractors just throw a topper on the back of their full-sized pickup, but then they are stuck squatting up in the bed and trying to drag tools over top of other tools if something happens to be loaded into the cab end of the bed. With the van, you have a sliding door on each side PLUS the hatchback, PLUS the low-loading floor height, making for much more usable space.

      If I need to haul as much stuff as you have in your pictures, I would have to add a $400 trailer from Harbor Freight and connect it to my van’s trailer hitch.

      By the way, if you weld yourself up a nice custom roof and back rack, as I did for my previous compact pickup truck, you can increase your capacity while drastically decreasing the time you spend securing materials – more profits for your neat business!

      Reply
      • Bakari Kafele June 2, 2011, 8:24 am

        Ah, well – if you need a covered space, you’re definitely right.

        I don’t do the rack because of the added weight, cost, and wind resistance. I could secure things faster, but that won’t necessarily mean more profits, because I charge by the hour.

        Reply
    • Steve June 2, 2011, 6:59 am

      LOL at picture #1. It reminds me of when I used a VW Rabbit to move my stuff once. I put my bed on top and then stacked all my other furniture on top of the bed, put my windows down, and tied it all down to the roof of my car. I made a lot of people laugh as I made my way back up I95.

      Reply
  • MrAwesome June 14, 2011, 1:58 pm

    Señor Dinero Bigote,

    My car was totaled in a hit-and-run a few weeks ago, and I just got accepted to my dream job a few states away. I need to get a car in the next two weeks, but between insurance payoff and help from my parents I have maybe $2000 to spend on a car. Until I read this article I had been planning on taking out a small loan (in the $4000 range) to go ahead and get a reliable late 90’s car with great gas mileage (maybe a VW or Mercedes diesel) instead of an old clunker. What do you think?

    Thanks,
    Señor Awesome

    Reply
    • MMM June 14, 2011, 10:22 pm

      Hola señor awesome.

      Congratulations on the new Job! It sounds like you are in a unique situation of not even having $4000 around right at the time of opportunity. Maybe you just graduated and all your money went to schooling until this moment. If you are sure you can pay the car loan off within your first few paychecks, $4k is certainly a nice low amount to spend on a car. Just don’t be one of those suckers who takes years to pay it off.. No beer until you own your own car! ;-)

      Reply
  • JJ June 27, 2011, 7:02 pm

    My understanding is that safety ratings are based on a cars class size. In other words, they don’t do crash tests between a Prius and an Escalade. I live in Ohio and about 5 out of 10 cars in my area are closer to Escalade size than Prius. Do I drive my two kids around in the Prius or the big American metal?

    To me, the risk of transporting my kids in a small car is not worth it. Small cars don’t weigh enough to stand a chance against an Escalade in a crash. I have considered a used volvo. Still, in a crash, I’d want my kids in a big hunk of American made metal. To me, it’s simply protecting my most important possession. Right now I’m rolling in my ’96 Jeep Cherokee and my ’04 GMC Envoy. My wife frequently drives on the interstate to and from work. Do I really want her commuting amongst the suburbans and semi’s in a Prius that weighs nothing? Um, no. Again, the safety of my family is worth the additional cost.

    Now, if the recession means that people in my area start driving all small cars… I’ll change my stance. I just haven’t seen that happen where I am yet.

    I suppose that the advantage I have is that even a 30k suv is not a large percentage of my liquid net worth. It would suck to have to skimp on something I consider a safety issue. Car accidents kill somewhere around 40,000 Americans every year.

    All this being said, I would support a federal mandate requiring non-commercial vehicles to be below a certain weight (say the weight of a mid size car).

    Reply
    • MMM June 27, 2011, 9:24 pm

      Hi JJ,

      You might want to do a little bit of real research before making that old assumption about safety. According to the Insurance Institute for Highway Safety, SUVs were statistically more dangerous than cars up until about 2005, when most models finally had electronic stability control added. Your ’96 Jeep Grand Cherokee is still a Death Trap, because the handling is awful for accident avoidance and there is also a high rollover risk. The 2004 Envoy did have stability control as an option – if you have that option, you are back to car-level safety. If not, it’s also probably more dangerous.

      see here
      http://www.thecarconnection.com/news/1061304_its-official-suvs-are-safer-than-cars-well-mostly
      and especially here
      http://www.iihs.org/externaldata/srdata/docs/sr4605.pdf

      With careful shopping, there are still plenty of non-stupid vehicles that are statistically very safe. For example, the Honda Accord is several times safer than the Cadillac Escalade. CR-V is a good SUV that does not get overly shitty gas mileage as well.

      Finally, if you really do care about safety, then take advanced driver training, cut your driving down to nearly zero, and don’t take kids around in cars unless absolutely necessary, especially on winter days. The “Safety Conscious” consumer who drives an SUV because they believe it is safer, then shows up at the shopping mall with the kids for some Retail Therapy is a rolling contradiction! My own priorities are – healthy life while I’m alive, healthy earth, saving money, then low-probability safety issues like fatal car crashes below that.

      Reply
      • JJ June 28, 2011, 6:59 am

        Again, I’ll take my chances in my SUV if/when a Prius crashes into me. Also, I drive well below the speed limit to save on gas so there is little risk of me inadvertently rolling it.

        Reply
      • JJ June 28, 2011, 7:23 am

        You do have me thinking tho. We’ve been considering getting rid of the Jeep. We’ll have to make sure we upgrade to something with stability control. This might be a challenge since we want a mini-van rather than another SUV. As I understand it, stability control hasn’t necessarily been added to all mini-vans yet.

        Reply
    • Bakari June 27, 2011, 10:06 pm

      There is an extremely important factor that the government, the insurance institute, and manufactures all seem to forget: the likelyhood of getting into a crash in the first place.

      Lets say you have a 25% better chance of surviving a crash in a heavy car.
      Lets say you have a 400% better chance of avoiding an accident in a light car.
      These are random made up numbers, but in this case you are more than twice as safe in the small car.

      Consider:
      1) momentum is directly proportional to vehicle weight.
      In other words, a car that is twice as heavy takes twice as long to stop (all other things being equal)
      That means heavy car slams into the back of the truck ahead of it, while small car stops before hitting it.

      2) when a crash does occur, extra mass is only advantageous in a head-on collision. Extra mass has little to no affect on rear and side impacts and may be a liability in roll-overs (esp. if the weight is high). Rear, side, and roll over collisions make up a greater proportion of accidents than head-on.

      3)The single greatest factor in both chances of getting into an accident, and of surviving it if you do is vehicle speed. While mass has a linear (direct) relationship to impact force, speed has a exponential relationship. In other words, twice the speed equals 4 times the impact.
      What this means is you are actually safer traveling at 45mph in a small car than you are traveling 75 in a heavy car.
      And saving gas and money at the same time.

      Reply
      • JJ June 28, 2011, 7:00 am

        I’ll not debate random and made up numbers. You are free to believe what you will. :o)

        Reply
        • Bakari June 28, 2011, 11:32 am

          Fair enough.
          I was just meaning to illustrate a point, but just for you (because I care about your safety) I spent some time and found some real life statistics.
          This is from a 2000 NHTSA study.

          Type avg lbs fatalities per bil. miles
          Small 4-door cars 2,469 11.37
          Mid-size 4-door cars 3,061 9.46
          Small 4-door SUVs 3,147 10.47
          Compact pickup trucks 3,339 11.74
          Large 4-door cars 3,596 7.12
          Mid-size 4-door SUVs 4,022 13.68
          Large pickup trucks 4,458 9.56
          Large 4-door SUVs 5,141 10.03

          Note how the death rate does not go down linearly with increases in weight.

          Reply
          • Bakari June 28, 2011, 11:35 am

            Mat, that is hard to read when the comment editor takes out all the formatting. lets try…
            First column is average weight of a class of vehicles.
            Second column is the recorded average. driver and passenger fatalities per billion miles:

            2,469……..11.37
            3,061……..9.46
            3,147……..10.47
            3,339……..11.74
            3,596……..7.12
            4,022……..13.68
            4,458……..9.56
            5,141……..10.03

            Reply
  • jDeppen June 27, 2011, 9:31 pm

    All other things aside you may want to check into this gas tank fire issue with your Jeep if you haven’t already:
    http://wheels.blogs.nytimes.com/2009/10/03/asserting-risk-of-jeep-fires-safety-group-urges-recall/
    “Grand Cherokees from the 1993 through 2004 model years have “a fatal crash-fire occurrence rate that is about four times higher than S.U.V.’s made by other companies”

    Reply
  • JJ June 28, 2011, 7:02 am

    Thanks, I will. We’re thinking of getting rid of the Jeep anyway. Looking at Odyssey mini-vans.

    Reply
  • JJ June 28, 2011, 7:04 am

    How will all the Prius drivers feel when they get in a wreck with an Escalade. Will they be pleased with their choice? It’s an honest question. Is driving a Prius worth the risk when so many have chosen SUVs, pickups and mini-vans?

    To me, the weight difference is too risky.

    I would support a government mandate on max vehicle weight. Then I’d be comfortable going with a Prius like car when transporting my family.

    Reply
    • KevinW June 28, 2011, 9:13 am

      Common sense would say that heavier cars are safer in collisions, but actually the engineering that goes into structural engineering, crumple zones, airbags, etc., is more important than sheer mass. To demonstrate this the IIHS filmed a head-on collision between a 1959 Chevy RWD land yacht and a 2009 Chevy FWD midsize sedan:

      http://www.iihs.org/50th/default.html

      Watch the video, especially the end that shows what happened to the crash test dummies. Extra mass doesn’t equate to extra safety.

      Reply
  • DavidG June 29, 2011, 1:33 pm

    Great article.

    Before I started my FI journey 2.5 years ago my current car died and I suckered myself into buying a late model used car. I wanted something reliable with good fuel economy and ended up with a 2006 Scion xB. It’s been a great car so far, and you’d be surprised at the large items I’ve fit in the back: washer/dryer(not both at the same time, though), large steel desk, large propane grill, etc. I was suckered in on the loan though and still have around 7k to pay. Should have it finished in less than a year and other than the mortgage that will be our last piece of debt.

    My wife has a 2000 Camry (manual transmission) with 90k miles. We’re hoping between the two we’ll be covered for many many years of transportation.

    Reply
  • Tobias September 12, 2011, 3:19 pm

    Where I live, I mapped out the city (big hills run north and south) to figure out the most efficient way to get around. After a bit of planning and getting back into shape, I am able to ride my bike pretty much anywhere, but I still have to have a car for monthly-ish long distance travel.

    The thing that frustrates me is that, even if I could store the car away from the elements (I have no garage) and never drive it for months on end, I would still be paying yearly licensing and monthly insurance fees. For me, insurance is about 50$/month (still a college kid), and yearly registration is about 200$, so I have a *minimum* 65$/month bill.

    Reply
    • Bakari Kafele September 12, 2011, 5:20 pm

      If you use the car that infrequently, it might be more economical to sell what you have, and just rent one when you need it.

      Depending on the options in your city, you might pay 1/2 what you are paying now.

      Reply
      • Tobias September 13, 2011, 8:28 am

        I’ve always thought renting a car was crazy expensive, but I did a little internetting and some armchair math and came up with these numbers:

        My average car expenses (fuel and maintenance, taken from my most recent records): 1200$/year
        Average weekend rental cost (other areas may differ, seasonal or special events may change pricing of course): 30$/day

        So then, I could rent a car for 40 days (1200/30) per year (slightly less than once per week) and it would cost the same. Of course, there’s all the hidden costs in car ownership that make owning one more expensive, and I bet if you rented a car that frequently you could get a membership deal type thing to reduce renting costs.

        One problem may be: My understanding is that you either need your own insurance, or you have to pay extra for the rentals insurance. If I have to maintain my own vehicle insurance, it would be as cost effective to own a car, and then you’d have the convenience factor.

        Reply
        • MMM September 13, 2011, 9:55 am

          Yeah – I have rented many cars while on vacation, and I am always amazed at how cheap they are, especially when you book them online.

          You should try calling your insurance company – see if they will drastically drop your rate if you do un-insure your car (and thus they would still be covering you for those rare times you rent a car).

          Also, everyone probably already knows this, but always say NO to all forms of optional rental insurance when renting a car – your own insurance covers most things, and most good credit cards will provide all the leftover collision/comprehensive coverage you might need on a rental car.

          Car rentals are amazingly cheap, but all the optional things are amazingly expensive. I remember a few years ago they were pushing GPS rentals at $10/day. Since the $15,000 Corolla I was renting was costing me $30/day, that implies the GPS was worth about $5000. Since it was actually worth about $100, that implies this rental option was about 50 times overpriced. So we can assume their insurance option is of similarly dubious value.

          One final trick you could try – make a deal with a friend who lives nearby, where you pay him to borrow his car occasionally. You will both profit, and you’re building up the “sharing stuff among friends” community spirit which makes life more fun.

          Reply
          • Tobias September 13, 2011, 12:47 pm

            Good point about the “sharing with friends”! I occasionally need to borrow a truck/van for carrying larger items, and my friends are usually quite willing to let me borrow them because I always give them a little extra for their troubles. Renting might then be a backup option.

            I’ll call my insurance company and chat with them about insurance costs if I don’t have a vehicle. I should think it would be much lower, but…

            Reply
          • anne October 19, 2011, 11:18 am

            Loving your blog! I decided to read from the beginning and find myself nodding and laughing at most of your posts. Thanks!

            The posts about cars are spot on. We’re a family of 4, lead a middle class life in the city and don’t own a car. Since most of our needs (kids school, their activities, library, grocery etc) are within 1-3 miles of our house, bikes get us where we need to go most of the time.

            For occasional trips we can’t do on bikes, we have a Zipcar membership.

            Car sharing, if available in your city, is a great option for occasional use.

            Zipcar rentals include insurance and gas and can be used for 1 hour or 24 (I think the max rental period is 4 days and for those situations renting a car through a rental car company is a better deal)

            Since the 24 hour rental is the same price as a 5 hour rental, we typically save up our list of “car errands”, reserve the Zipcar for 24 hours and get all of them done in one day.

            We don’t have to deal with car maintenance or pay for insurance on a car that would sit in our driveway most of the time. Plus the cars are new (2-3 years old at most) and the models varied so there is a car for pretty much any need we may have.

            Car sharing among friends is tricky because of the insurance issue. CA recently passed a car sharing law (AB817) that will allow individuals to share personal vehicles and have insurance coverage. I think OR is working on one as well. Hopefully other states will follow.

            The insurance company we used when we owned a vehicle does not offer coverage unless you own a vehicle. The insurance goes with the car, not the individual. For now, we’re covered through Zipcar and when we rent a car through a rental car company, we’ll just rely on the coverage through our credit card.

            Reply
        • Bakari Kafele September 13, 2011, 10:02 am

          If you had to maintain your own insurance, but you didn’t have a car, that insurance would be a whole lot less. Also, it depends how much extra the rental insurance cost (I think its typically $10).

          If you add in the cost of insurance and registration, as well as the upfront cost of the car divided by its life, owning the car costs more like $2500 a year minimum (depending how much your car cost)
          So, with the optional $10 insurance, you could rent a car 5 times a month and still come out ahead.

          The only possible problem is that some rental places want you to be at least 25 before they rent to you.

          I figure if you were as concerned with the convenience factor as most people, you would be driving a lot more than once a month!

          Reply
  • Pedalcarpusher October 11, 2011, 11:37 am

    Loving your blog! I’m a 38 yr old nurse, husband and father of two young children in a single income family. You have some great advice here that makes sense to me, but I have yet to practice it. I am also a home brewer and bicycle fanatic who is obsessed with Velomobiles and commuting by human power. These “velomobiles” can be very expensive though. I am interested in your thoughts on these ultra efficient bicycles as daily commuters.

    Cheers,
    Daniel Runyan

    Reply
  • Joey October 16, 2011, 12:09 am

    I don’t think I agree about never financing a car.

    I bought (financed) a car two years ago (after driving my prior one for a decade).

    The dealership was running a promotion of 1% annual interest for the 5-year term (and no, there were no financing charges or other random up front junk fees).

    That’s less than inflation and way less than I’d expect to make in the market. So, the dealer’s financing arm was *paying* me to finance the car. I’d do that deal again in a heartbeat.

    Reply
    • MMM October 16, 2011, 9:27 pm

      It’s true – if a new car is what you actually need, and the interest rate is near-zero and there are no incentives for paying cash, then that’s a reasonable way to go.

      The main reason I recommend against it is that the new car depreciates rapidly, so you end up paying a higher cost per mile driven than a series of used cars if you work it out over any ownership period. Especially if you drive a low annual amount, as the rest of this blog suggests. It’s more efficient to buy cars that are 3-10 years old (newer for taxi drivers and people with crazy commutes, older for people like me who just do 1,000-4,000 mile road trips a couple times a year with zero commuting). Also, financing tricks people who don’t even HAVE enough cash or net worth available to buy a $10k or more car, into buying one.

      Reply
  • Erin October 19, 2011, 8:08 am

    Hi MMM,

    I’ve been really enjoying your posts on vehicles, however I haven’t seen you discuss the cost of car insurance (or at least haven’t come across it yet).

    While driving your vehicle infrequently saves lots of money on gas, car maintenance, etc, the cost of my car insurance is the same regardless of how much I drive it in a month. I pay $90/month to insure my car that I drive only a few days a month. I always resent that even though I use my car sparingly, I still have to pay as much as someone who commutes by car to work and drives it every day.

    Have you ever come across car insurance, in either the US or Canada, that lets you insure a vehicle on a per use basis, or for x number of days a month?

    It would be nice to see my insurance reflect my driving usage!

    Thanks!

    Reply
    • MMM October 19, 2011, 9:02 am

      Hmm.. my own insurance is lower when I drive less. Specifically, there are categories for “pleasure only (non-commuting)” and “under 6,000 miles per year”, which I get to use for my own car use. Also, buying the minimum required insurance (get good liability protection, but no comprehensive/collision coverage on your own car) is a good gamble if you are a safe driver who does low annual mileage. All-told, my own car insurance is only in the $20-30 range per month – for two drivers with two vehicles. Your location is a big factor in this: big cities can cost several times more, and I live in a small city where traffic (and therefore crashes) are light.

      Reply
    • sdp April 11, 2012, 2:53 pm

      Erin,
      My wife and I do just that. We have insurance through State Farm and have a reduced mileage credit. As long as we drive less than 7500 miles per year we qualify. I have a 1996 jeep with 165000miles on it, I pay about 19bucks a month for it. My wife just got a 2006 chrysler (which, by the way, we financed at 2.1% interest. Secured the financing with the bank BEFORE we looked at cars. They said I was qualified to borrow up to 50,000DOLLARS, oh good gosh… Bought it used at a dealer, traded in her useless old car and bought the new one for 8300 bucks, it has 80,000miles on it and is in pristine condition, should last atleast another 100,000 miles. Her old car was costing too much in upkeep, things kept breaking on it, it had 192,000 miles on it)
      anyway since we financed it we have to pay for comprehensive insurance on it, but it comes out to 42 bucks a month for her car. she drives it to work everyday ((laziness if you ask me, but I didn’t say it)) but she should still keep it under 7500 miles per year.
      My jeep gets horrible gas mileage so there is more incentive to bike to work even when the weather is crappy…. also we are accident free. Being careful, just like being healthy, is one of the best investments when it comes to working on your car. No added hours, since you are in the car anyway, just make sure you don’t damage the car. nuff said….

      Reply
  • Kevin November 29, 2011, 8:47 pm

    Enjoying your blog a lot so far – you talk a lot about cars & bikes, a topic I’ve been thinking about a lot over the past few months. I am taking steps on the bike front, but I have a question on the car front…

    If you already owned one of those unnecessarily large mid-size vehicles that doesn’t perform well as transportation to work (100% paid for), would you sell it at a loss (less than you paid) and put in the time investment to buy a tiny used commuter? I hesitate because I am not sure it’s worth it, and I don’t ever get numbers as clear as your examples when I try and calculate it out for myself.

    Any advise you might offer would be greatly appreciated!

    Reply
    • MMM November 29, 2011, 9:10 pm

      YES! I would definitely sell an inefficient car/truck in order to get an efficient one, regardless of its payment status (paid for, loan still outstanding, loan underwater, whatever).

      The current status of the vehicle doesn’t affect the calculations at all. The only things that matter are: price of the new vs. old vehicle, and ongoing operating cost of the new vs. old one.

      If you want to send in your vehicle type and pertinent numbers (make/model, odometer mileage, annual driving distance), maybe it can become a future example.

      Reply
      • Kevin November 30, 2011, 1:26 pm

        Thanks – I guess my biggest hurdle is the hassle of completing two vehicle transactions… but I know it would be worth the savings. I also have fears about checking the mechanical aspects of an older used car – any advise regarding this?

        I own a 2006 Toyota Highlander ~70,000 miles. I drive approximately 10,000 miles per year (at least half highway), I am 12 miles from work.

        I’ve thought about honda/toyota sedans, volvo wagon, etc.

        Reply
      • Brian March 28, 2014, 12:36 pm

        MMM,

        I have been reading and applying principles from the blog for the last few months and appreciate the insight and direction. We have already cut cable and made some other changes and our on our way to FI. I’m sure I will have other opportunities to ask questions but had one specifically related to this post. In the past few years I finally made a the poor choice to buy a new car and bought a KIA Optima in 2011 with everything on it. I have managed to get 26-27 mpg (less than advertised and less than the 98 Civic I sold to get it, but I digress) on the 48k miles driven so far. I paid the car off in the first year and will continue to drive similar miles each year. I also have the bumper to bumper warranty to 100k miles.

        I have been searching for an inexpensive hatchback Scion etc. but nowI have the opportunity to but a 2007 Civic Hybrid with 107k for $7500. It has a brand new battery with a warranty for 3 years and is in great shape.

        So the question is to sell the KIA for around $17k, giving up the warranty we paid for and buy the Civic and use the difference toward mortgage debt or keep it for the long haul. We will be paying down mortgage debt regardless but this would provide a bump now.

        Thanks for the opinion and all of the great articles. We are makin great progress towards FI thanks to the great information.

        Reply
        • Mr. Money Mustache March 28, 2014, 6:21 pm

          Hey Brian – YEAH! Sounds like a huge upgrade to me: a nearly-new 2007 Honda that is far more more efficient for almost $10,000 less? 100K miles is a lot, but the car is still probably well under halfway through its lifespan. Get that deal done before it is gone!

          Reply
  • Patrick December 29, 2011, 12:20 pm

    Just found the blog and going through the archives…love it so far. I have a tendency to get bored with cars quickly, so I usually find good ideas for ones from http://www.beaterreview.com Some of their posts are dated, but I’ve had a good quarter of the cars on the list for some time or another. A couple years ago, I bought a 97 saturn sedan for $1900 with about 130k miles on it. It broke down maybe 3 times over the course of my ownership, costing me about $100 in parts each time. I sold it 2 years and 73k miles later for $1500. If you have heavy usage, that’s exactly the time you want to buy a beater. Why put high miles on a 3 year old car?

    I live in the DC area, so being stranded is not really a horrible/dangerous thing. I think putting reliability so high on your list does you a disservice, almost like buying extra insurance. First of all most problems show up before the car is unusable. Hear a new whir under the hood that wasn’t there? Fix it or take it to your mechanic. Very few serious problems happen out of the blue. And if it does break down on the road, how hard is it to get to the side of the road and use your cell phone to call a tow? It’s also cheap…you can take a day off of work, have it towed to your house and fix it, if you know what’s going on. If not, have it towed to your mechanic, and rent a $30 car from Enterprise for the day or 2 it’s in the shop. And this happens rarely.

    My current car has 250k miles on it and runs fine. I had a new radiator put in 2 years ago because I noticed a pool of antifreeze on the driveway under it. Last year, I did get stranded because the water pump went. It took me an extra 1.5 hours to get home after calling the tow truck, and I used our rarely used minivan to get to work the next day while it’s in the shop.

    Reply
  • mmtrapani March 15, 2012, 7:30 pm

    Loved your post!

    Reply
  • Meghan May 22, 2012, 1:47 pm

    On the topic of cars… my husband and I just recently paid off both of our cars (two 2003 coupes), and at the moment we really only use one- we both work at the same place and are able to carpool, and rarely do our plans deviate on the weekends; I can’t remember the last time we took both our cars out at the same time.

    Is it smarter to sell one of the cars to reallocate the value of the car and the cost of the insurance toward our debts, or do we keep the car since it’s paid off? Both cars have around 90,000 miles on them, and I’ve always liked the security of knowing that we have a “backup car” just in case. We do carry student loan debt and a mortgage, so I’m not sure where our priorities should lie.

    After re-reading what I wrote, it seems pretty clear what your answer will be, but I figure I’ll still let you spell it out anyways. :)

    Reply
    • Bakari Kafele May 22, 2012, 3:46 pm

      Absolutely no possible way it makes sense in your situation to keep both cars.

      “Because it is paid off” is no reason to keep something which is holding money you could use to pay off debt hostage which you rarely if ever even use. Imagine if by some lapse of reason you went out and bought 10 cars. Would you keep them all sitting in a garage just because there were no loan payments on them? That would just be silly! Even though it would provide a back-up back-up car to your back-up car…

      Your back-up car should be a bicycle and/or the bus, or worse case scenario a rental car.

      Reply
  • Pat May 24, 2012, 7:49 am

    Mister Mustache, do you make any exceptions for those of us who express ourselves and our passions through our automobiles?

    I work “smart” for many reasons, but one of them is SO THAT I can drive whatever I want.

    I buy new… I drive for pleasure with no destination in mind… and I drive a turbocharged Land Rover SUV -> on pavement ;)

    I do not go easy on the vehicle, enjoying the power and exhaust notes of 3,500+ RPM.

    Ah yes, this is fun for me ;)

    I’m interested to hear your thoughts,

    Pat

    Reply
    • Mr. Money Mustache May 24, 2012, 9:15 am

      Well Pat, I guess I can’t argue with what you claim to love! As long as you’re happy with your rate of wealth accumulation, your physical fitness, and your conscience is clear regarding the environmental consequences of driving, then go for it! On the other hand, if at some point in your life you do ever wish you were richer or more muscular, you know the first place to look: ditch the driving habit and learn to ride a bike.

      You just might not enjoy this blog very much, because your priorities are so much different from mine.

      It’s not that I don’t love cars, power and speed – I do. Less than 4 years ago I still had a ridiculously fast motorcycle. Before that, I came very close to paying a friend who is a Subaru mechanic to supercharge my Impreza’s 2.5 liter engine to get it close to 300HP.

      I’ve just learned about other things that are even more fun since then.

      Reply
      • Pat May 24, 2012, 10:32 am

        Very good, MMM!, and I do indeed enjoy your blog (since finding it recently).

        Our priorities aren’t much different- you save on driving, so you can invest into more rewarding activities- and I do the same.

        I think the lesson here is that “passion” is always relative and subjective. Some people are going to draw immense personal value out of things that may sound goofy to us: collecting art, traveling to world wonders, maintaining a lawn of grass, etc. Our duties as good friends (and as you eluded to: stewards) is to help each other explore our actions to make sure they’re really valuable, and not substitutes for a potentially more richer life.

        At age 26, I own my own businesses, and earn an income in the mid six figures with less than an hour per day of input. I’m happily married, and we’ve got a baby on the way. My pleasures in life are spending time with my wife on trails, on the beach. We walk over 5 miles each day, and I go to the gym 3 days per week for a more intense physical challenge. We cook together, and enjoy 3 organic meals every day.

        I enjoy coffee… the occasional tobacco pipe… online gaming… reading… and yes: driving. Next year, I will buy a new Mercedes G55 AMG – but I don’t think about the future much, except when in contemplative prayer at mass. I am alive today, and so I will be grateful and happy.

        Life is what we make of it, and your blog is helping people make a lot of their lives. I consider you a very good steward for that reason. Just remember, please my friend, that not everyone with an SUV in their driveway is a disconnected jerk ;)

        -Pat

        Reply
  • fidjo June 19, 2012, 2:20 am

    Loving this blog MMM!

    I bought my first car (1992 2WD pickup) on credit. Since I was fresh out of college, had very little money, and got a job which required me to have my own vehicle. The 5-month contract didn’t allow me to pay off the truck – but my next job did! I’m really happy I bought the thing as I wouldn’t have been able to get my feet under myself when I did if I hadn’t.

    Now, to the next post!

    Reply
  • danny October 2, 2012, 10:02 am

    I love your articles, but I think saying NEVER pay for a car loan is bad advice. I got a 2.25% car loan and I intend paying the minimum for the life of it. I’m taking the money I’d otherwise pour into paying off the car into the stock market, where on average I’ll make money. Heck, even if I put the saved money into I-bonds it would pretty much match the interest I was paying, except all that money would be liquid and readily available to me.

    You should never pay a car loan if it’s above a certain percentage, perhaps. But hell, I’ll take free money–money that more or less just keeps pace with inflation–any day.

    Reply
    • Mr. Money Mustache October 2, 2012, 11:46 am

      Hey Danny – you might not have reached this article on exactly that subject yet:

      http://www.mrmoneymustache.com/2011/11/28/new-cars-and-auto-financing-stupid-or-sensible/

      The key question is: how expensive is your car? Is owning such an expensive car an optimal solution, in the bigger picture – how long will it take you to use up all of the 200,000+ miles of reliable inventory that come with a new car? And what if you could live closer to work so you hardly need to drive? What if a $5,000 car could last you 20 years because you hardly need to drive it? That’s the bigger picture.

      I’m not arguing with you that low-interest rate money can be flipped to higher yields for profit. The issue is purely in how much money to allocate to the depreciating liability of automotive inventory in the first place.

      Reply
  • Dee December 7, 2012, 6:51 am

    Tip #1 I received years ago from an older colleague: your car will last longer if you park in covered parking. Where I worked then (and now at another university) covered parking was available for free, but required about 5 more minutes of walking to the garage. When he saw me parking my much loved first car (Toyota corolla-which lasted 14 years) in the open lot, he told me the paint, tires, and upholstery would last much longer parked out of the sun. I’m amazed at how many of my neighbors have garages and carports and don’t bother to use them because it might involve cleaning out the stuff stashed there or walking a few more feet.
    Tip #2 My daughter just turned 16 and became a licensed driver. I was happy to find out that the $195 week-end course I made her take (in avoiding accidents through better car handling) resulted in $50 off every 6 months premium for her. I made her take the class to be a safer driver, but this was a nice surprise.

    Reply
  • John December 28, 2012, 10:32 am

    I’m 50, FI, have a CRV with Thule bike rack emanating from the trailer hitch. We use the CRV for everything. Wife wants a fun sporty convertible (in addition to the CRV)…we might spend 15K on it, insurance will probably run $500 per year. I’m struggling with the idea of going to two cars. I work 1.5 miles away from home and can walk or ride my bike. Any ideas or suggestions? Buy the convertible so the wife is happy, or trade in the CRV for a Jeep convertible with a trailer hitch…..just don’t know.

    Reply
    • Everett October 19, 2013, 3:01 pm

      Happy Wife, Happy Life! You are already FI, and most FI mustachians find that they end up with MORE money than needed or anticipated so go ahead and treat the wife. You can get a used miata or volvo C70 pretty cheap. Even used porsche boxers can be had under $10k nowadays. Alternatively you could buy a classic car (1971 Mercedes SL or many others) as an alternative investment. Sure the carrying costs are high (garage, insurance) but classic cars actually appreciate in value, unlike a newish car. I wouldn’t recommend this route purely as an investment if you weren’t already FI, but if you can keep the wife happy, diversify your investments and have a classic in the garage, you have a win, win, win.

      Reply
      • Mr. Money Mustache October 19, 2013, 6:16 pm

        There is some wisdom in there, Everett – but is it automatic to assume one’s wife (or husband) must derive happiness from manufactured products like cars? If you read enough around here, you might find that attaching your life’s meaning to stuff like that is a weakness that can be overcome, making you even happier in the process.

        A little bit deep for a post on cars, of course, but worth thinking about!

        Reply
  • Amy January 10, 2013, 4:30 pm

    If you are able to start driving your car less remember to check with your insurance carrier to see if you get a better rate. With my carrier, if I drive less than 7,500 miles a year I get a discount. I just called my broker and let them know.

    Reply
  • Segmond January 20, 2013, 1:25 pm

    I save money by always buying used. I buy used and reliable. My prior car was a 1990 lexus ls400 that I bought for $2500. Drove it for 6yrs. Put 80k miles and probably spent $3000 in maintenance in that 6yrs. Drove it across the country, from the midwest to West Coast, and to Florida. Sold it for $2500. My current car is a lexus ls430. Bought used, had for almost 2 yrs. Spent $300 once on maintenance. People think it costs so much, it doesn’t. I see lots of people driving newer economy cars who are still spending more on car payments than me! Yet, they think I paid $50k more on my car than they did there. Outside of Lexus, I won’t touch another car, reliability is very very pick on my list. I hate my mechanic, I do be happy never to see his face in life ever again, that would mean my car is running without issue.

    Reply
  • Rand McNalley January 30, 2013, 1:20 pm

    I only discovered this website about a week ago and have since devoured a couple dozen articles. This is life changing stuff. I’m pumped to transform my life. So thanks for that.

    Looking over last year’s finances I was appalled by how much money our paid for cars cost us. There is no way we can really grow our ‘stache if we are hemorrhaging money like that. We had to replace a transmission, get new tires, bearings and dozens of other minor fixes. All the repairs plus fuel/oil cost us over $9k last year alone! We have a ’92 Ford Explorer and a ’95 Civic. The former has 170k miles at the latter has over 200k.

    My question is should we replace the car that costs us the most money, even though it’s only driven a couple times a week, or replace the one with more miles, that gets driven everyday, but has been cheaper to maintain?

    Our newly sprouted ‘stache needs serious help.

    Reply
    • Segmond January 31, 2013, 10:08 pm

      Rand McNalley – Get rid of the explorer, it’s less reliable, and bad on gas. It’s not about how many miles a car has on it, but how many miles it has left on it!

      Reply
  • Rhys February 11, 2013, 8:39 am

    Regarding the small car vs pickup, and optimising one’s transport to carry one’s ass and little else, what is the mustachian view on motorcycles as a primary transport?

    I currently scoot around on an 81 Yamaha, slightly less efficient than I’d like, mostly due to maintenance (and something I’m dead keen on sorting out)- which I picked up for the very (I think) mustachian price of 1800 aud. Poor old girl needs a new set of rings, but that’s something to happen in a little while to come.

    I commute around half an hour each way, more than desirable, but due to a debt I’ve got, buying a place isn’t an option yet, and the rent on this place well and truly makes up for the difference, to the tune of over 120 a week.

    My girlfriend is close to getting her licence, and we have a 95 ford laser for her to run around in, though we’re trying to land her in a job that she can get herself to by push bike.

    Unfortunately, both car and bike are carby driven, and the cars an auto, so we have a little way to go before we’re going to get our car-stache on properly.

    Reply
    • Mr. Money Mustache February 11, 2013, 9:02 am

      Motorbikes are great, especially the old low-cost type as you have (although I must express my sympathies – here in the US you could get a solid model year 2000 bike for $1800, and an ’81 would be something you find discarded by the side of the road for $0!).

      Anyway, if the insurance and registration fees are lower as they are here, the motorcycle can be an excellent solution for a long commute. Tires and chains are a bit expensive and they wear out much more quickly than the car equivalents, but you make up for it in lower vehicle/gas/tax costs. And FUN!

      Reply
  • Laurie March 1, 2013, 7:38 am

    I never spent more than $1000 on a car (hubs is a mechanic), but I also never had a car last more than 2 years. I am very good at crashing them.

    Reply
  • BC March 7, 2013, 12:32 am

    I’m a new reader and am very much enjoying reading through all of your posts (started from the beginning). I await the day when we live where we can bike more and I have in the past when my situation has been different. With all the talk of biking and less car driving I was feeling very guilty about our two cars (I tired to figure out how to sell one of them last year, but our logistics just wouldn’t allow it) but as I read, I felt less guilty, and simultaneously amused at how well our situation was described. We have two paid for cars, a 1999 Subaru Outback and a 2002 Subaru Forester, my husband and I live at the top of a mountain pass in the Cascades, he works for the Forest Service, I am a ski patroller. :) And up until very recently we were able to walk across the street to work in the winter and we only drove the 45 min to town once or twice a week for groceries and social interactions. Living that far from town is also a good way to avoid spending.

    Reply
  • Richard March 12, 2013, 11:25 am

    Mustachians, assemble! I need your advice:

    I have a 2000 Mercury Cougar with, to be exact, 130,826 miles on it. Stick shift. Bought it four years ago for about $1,300, a great deal because it came from a family friend. Since then, I’ve put in about $1,500 of repairs (including a new clutch).

    Here’s the dilemma: it recently broke down. The cost to repair it would be $1,800, which, you know, is MORE THAN WHAT I ORIGINALLY PAID. I recognize it was ridiculously cheap in the first place, but it still gives me pause.

    I live in New York City, but only keep it here about half the time–otherwise I can keep it at my parent’s house in Massachusetts. I take the subway to work, so I’m only using the car when I feel like going on a weekend trip, need something from Ikea–oh, and I have to move it to the other stupid side of the street every morning. Street parking can take a long walk off a short pier.

    Likely, I will not get another car for a long time if I scrap this one. Seems silly to pay $5,000+ for a new car when I live in a city and can get most places by subway. The car’s clunky, but it serves its purpose. It’s convenient when I need it, and saves some hassle when I have to move things (yes, I could rent a moving truck, but that’s not fun).

    Could I live without a car in NYC? Yes. Do I want to not have a car? No. I plan to move out of the city in 5 years, but not having a car at all is scary to me.

    What do y’all think? Pay the $1,800 on a slowly deteriorating but much-loved car, or go carless and strand myself? Any and all suggestions appreciated, as it’s currently in the shop, waiting to see if I give it the death penalty.

    To recap:

    -In 2009, bought a 2000 Mercury Cougar for $1,300
    -Now has 130,826 miles
    -Have put in about $1,500 of repairs
    -Recently broke down, $1,800 to fix
    -Live in NYC, don’t use car a TON, but do occasionally go on weekend trips, or to Ikea.
    -Kill it? Keep it on its legs a little longer?

    Help me Mr. Money Mustache, you’re my only hope.

    Reply
    • Mr. Money Mustache March 12, 2013, 12:09 pm

      To make the $1800 repair worthwhile, you’ll want car to perform for another 18,000 miles after that (since 10 cents/mile is a nice, cheap figure for car depreciation).

      With your existing mileage relatively low for that kind of car, and the car not being too much of a gas-guzzler, I’d gamble that it is probably worthwhile.

      But since you are in NYC, consider your insurance and registration fees. How much is that car costing you per mile when you factor that in? Now check out ZipCar and other car-sharing services, which are readily available out there.

      The equation in the Eastern US is vastly different than it is here in Colorado, where registration on my construction van is $70/year and insurance for both of my vehicles and 2 drivers is around $360/year. (!!!). In my area, owning an old car or two costs almost zero except when you are actively driving, but in NY, it is huge.

      You could easily end up saving thousands per year, all while getting to drive newer cars, by ditching the car and using Zipcar when needed.

      Reply
  • Kevin H April 9, 2013, 6:22 pm

    Great article!

    It’ll certainly take some extra stash-tective work when looking for a good used car here in Atlantic Canada. All that extra salt is a killer. Yet another good reason to keep the car off the road as much as possible eh?

    Reply
  • Ian May 7, 2013, 6:08 am

    Great site – found it via Raptidude (which I found via Ran Prieur).

    Just on not spending anything on tires in 10 years:

    They do actually have a use-by date. This may or may not be the actual date that’s calculated by looking at the numbers on the sidewall… yours will probably be good for much longer than usual, given that you garage your car.

    I bought some used tires last year and put them on my car. Heaps of tread left. No abnormal wear patterns. Nice and cheap. Yet, when push came to shove, they didn’t grip when braking in the wet, due to the fact that the rubber compound had gone “off” due to age and exposure to the elements.

    You can guess what happened next…

    Reply
  • Jess June 1, 2013, 12:05 pm

    Mr. MMM! First off, thanks for all that you do. I know that this post is very old, but it very much applies to me right now…

    I just graduated college with only 8500$ in debt, and right now I am doing ok at about 28-32hrs/wk at 19$/hr (can’t get more hrs at the moment, but should pick up soon.) After working for only a little over 4 months, I’ve widdled my debt down to 2500$. However, I desperately needed a car, and wanted something I would have for years to come… I bought a Smartcar for about 8200$, but frankly, it was a horrible ride and a poor decision, so I returned it for a very nice 2007 Honda Civic with 54k miles that I literally would like to (and plan) to drive for the rest of my life! I traded in the Smart to a different dealer for 8k I believe after about 4 weeks of ownership, so wasn’t a big loss, and I spent 4hrs bargaining with them for a good deal on the Civic (got it for an additional 3500$). I spend about the same per month on it with insurance and gas as I did with the Smart (insurance dropped with Civic, but gas rose a bit.)

    I paid in cash, but borrowed about 5,500$ from mom. I know you reccomend not to do this, but I was nervous about spending only 2k on a car that could turn out really crappy. Plus, with all the registration fees, taxes, etc out here in Colorado (Aurora no less,) it just didn’t seem smart to go through that again when I buy a newer car.

    But now I’ve got to buy the plates, registration, and then some other 100+$ check from the dealership for some reason. I’m not sure how much this is all going to cost me, but I assume about 800$. So all in all, I’ve probably spent 13500$+ on this car already. Poor decision? Any tips? Thanks!

    Reply
    • Mr. Money Mustache June 1, 2013, 1:04 pm

      Hi Jess,

      Sounds like you at least got a good start at the debt initially. But owning a $13,500 car when you have a negative net worth!? You’ll never get Mr. Money Mustache to go along with that :-) Your car is worth more than BOTH of mine combined, and even then I feel I have way too much money tied up in cars!

      It would cost you far less to own a nice under-$5000 4 cylinder manual hatchback – no matter how often it needs service, it will still cost less to own than the nearly-new Civic. For non-millionaires, I would rarely recommend such an expensive car. For people with debt? Crazy!

      Reply
  • Jess June 1, 2013, 1:48 pm

    Thank you for your response about the Civic! I know the 13,500$ was a pretty big purchase, and I NEVER wanted to spend that much on a car. I bought a Honda Accord for 5,000$ back when I was in college (although I only paid 1,500$, thanks to family efforts,) but the miles were high (160k). I really was looking for something with low miles that would last me for life, but for a nice Honda, I couldn’t get very low on price.

    Now I’m sort of stuck with it. I wish I could sell it back, but I feel like I’d lose even MORE money doing that, and then would have to go through the hassle of finding another car that’s reliable! I’m sort of in a crossroad at this point. Had no idea buying a newer, nicer car would result in higher registration and plates and insurance etc! Very frustrating. Certainly have shedded a lot of tears on this dilemma… Not necessarily because I want more money, but because I feel so stupid going through with this. My dad kept pushing on me, get a new car! A used car will always break on you!! Trust your father!! Which was a big influence. Sigh….

    Reply
    • Mr. Money Mustache June 1, 2013, 3:09 pm

      Aww.. sorry if I made you feel bad Jess! Everything will work out fine – no need to sweat any one decision as financial responsibility is more of a lifetime process. And I admit, you DO have a very sweet car now.

      It seems to be common (but incorrect) “wisdom” in our society that buying newer cars is the way to save money. Many parents of adult children perpetuate the myth, with the best of intentions. But some of us Mustachians love to prove them wrong. A friend of mine, for example, is still running a 1984 Nissan compact pickup truck. Is manufacture date is mid-1983, as in a full 30 years ago. I am still fond of the early 1990s Hondas (20 years old now). If kept in a garage, many of these things still look and run like new, including some I eye enviously in my own neighborhood.

      I was just changing the oil on my own 2005 Scion the other day, and I marveled at the absolutely perfect condition of that car. 81,000 miles and not a single hiccup in its performance. Even the undercarriage and engine look new, although that is partly due to the dry climate where I live. It could easily last another 25 years.

      Reply
  • Jess June 1, 2013, 3:41 pm

    KBB says it is retailed at 12400$ in “excellent” condition (the 13500$ is accounting for all the extra taxes I paid.) Oh yeah, and two days after buying it, some asshole backed up into it overnight and pushed in the bumper so hard that it popped back out and left a very noticeable, large ring and also scratched paint. Couldn’t find the car that did it, had a 500$ deductible on my insurance so didn’t bother to fix it. A very nice neighbor buffed it out for free, but it’s still noticeable up close….

    So should I try re-selling the car and getting something cheaper you think? Or just stick it out with this one? Thanks for your help!

    Reply
    • Mr. Money Mustache June 1, 2013, 9:07 pm

      In general, if you have the spirit and energy for it, I always suggest people sell any car they can’t afford, and own a car that is closer to being affordable. A few good cars are listed here in this post from last year: http://www.mrmoneymustache.com/2012/03/19/top-10-cars-for-smart-people/

      Also, look into biking more, if you’re not already doing so! If you live close to work and use a bike for your commuting and errands, you will find you don’t use the car nearly as often. Then you feel more comfortable with an older car, and it tends to last much longer despite being older.

      Reply
  • Jess June 2, 2013, 9:47 am

    But don’t you think it would cost me more time and money to return my SECOND car? What if I can only get 12k for it, after paying 13,500+$? That is my biggest dilemma. And I’ve had quite a few old cars that have given me issues in the past that weren’t worth the repairs. Even my trusty Accord I bought for 5k with 160k miles, I gave it to my brother at 180k and total repairs once he drove it back northeast was over 3,000$!

    Do you reccomend trading a car in at a dealership, or getting from a private owner? I know there is no law in Colorado that requires people to disclose all information on a vehicle that they are selling, which makes me iffy. Thanks!

    Reply
    • Bakari June 2, 2013, 10:01 am

      5k + 3k in repairs = 8k

      8k is less than 13,500.

      So the old car which needs repairs still wins. By 5 thousand dollars. Which more than covers the loss of depreciation.

      Reply
  • Jess June 2, 2013, 10:53 am

    Haha, you are good, aren’t you? ;-)

    Alright, I put an ad up on CL. I calculated exactly what I spent on it: 8,400$ for Smart Car, which I traded in at the dealership for 8,100$ (-300$). Then I spent an additional 2,800$ for the Honda. Looks like I spent roughly 1120$ in taxes and fees, not including the registration and plates later this month (how much is that?!)

    So disregarding fees and taxes, I actually got the Honda for about 11,000$.

    But after all was said and done, I spent about 12,000$+ on it. So, I’m trying to at least get that back for it. KBB says that is in “very good” condition from a private dealer, so I don’t think I’m over-shooting…

    Again, you are awesome Mr. MMM. Thank you so much for giving me advice, I have read TONS of your articles already. And about biking — yes, I think it is RIDICULOUS that people do not own bicycles! I was in Florida for four years for college, and half of those years were spent on bike alone. I actually gave away my car at one point because I felt I didn’t need it. I still ride my bike to the gym (3 miles 1 way,) grocery store (2.5 miles 1 way,) and have been considering work (6 miles 1 way,) although the drivers around here are CRAZY and it seems very unsafe to ride, not to mention unenjoyable and stressful because you have to be VERY aware of your surroundings. I also am quite tired after being on my feet for 8 hours a day working in a physical therapy clinic, and all I can think of is eating at that point. ;-)

    But even driving to work, I only average about 4-6k miles a year. I HATE driving. ;-)

    Thanks again!!

    Reply
  • Bruno June 14, 2013, 2:39 pm

    Couldn’t agree more on all points. The mustache carrying crowd hates putting more money than necessary into cars (and yes, I sport a mustache in real life).

    I mentioned our financed, used Prius on another post (lowest TCO), There is no better time to buy a car than during a downturn and while the manufacturer is accused of self-accelerating cars. We were lucky!

    My wife bikes to work most days, I work through a series of tubes, so we don’t get enough miles between the required maintenance intervals (needed to keep the 7 year warranty). It is always fun when the service staff asks why we want to have another maintenance done, and we have to explain that we need to ‘go by months’ – unbelievable looks on their faces sometimes.

    Also love listening to my pickup driving neighbor complaining about gas prices – and secretly hoping they go up(!).

    Reply
  • Jennifer July 9, 2013, 4:56 pm

    This single mom could really use some expert MM advice…

    I can relate to Jess about being pressured by Dad to get a brand-new car for peace of mind. And for the first time in my life, I fell for the idea of a lease because I was in a “transitional phase” (divorcing mother of a young child). To be fair, I was making a somewhat better financial move at the time, trading in my giant “family/dog car” Honda Pilot for a more efficient/economical 2011 Kia Optima. It just was not the best choice (and mileage is not what was professed).

    But now that I am recently on the road to FI, thanks initially to Dave Ramsey and now thanks to your badass blog, I am a bit flustered at how to get myself out of this mess.

    My lease is up next July and the payoff is $10,700 (current payoff is $14k). I miscalculated and will probably end up at about 12k over my allotted 36k miles (I’m at 33k now. Ugh.)

    I use my car for 5 days/week commuting as well as dropping my daughter off at child care on the way. Total daily commute is 50 miles, plus perhaps another 25 miles every other weekend (visiting parents), and typically two big trips a year to visit relatives in the snowy states of MA & WI (from Pittsburgh), so that’s another 2300 miles a year. I no longer have a dog and my sedan is still probably larger than I need.

    My dilemma is I can’t seem to figure out the best financial move given all of the sunk costs ($2,000 down, $10,000 in payments/tires). I’m investigating options: 1) selling it to a dealer or private party and roughly breaking even vs. 2) buying it at lease end to save overages & excess wear & tear fees (some interior damage from my little one) and driving it for 10 years vs. 3) just biting it and paying the fees (probably $3k total) and then saving up as much as I can between now and then to buy a used car with cash and replacing that every 5-10 years.

    Biking to work isn’t possible (though I wish I could) and I don’t see myself changing jobs anytime soon. I may decide to move closer to work when my rented house lease ($950 rent) is up next year (another transition move post-divorce), but do really like having the access to the city where I currently live. I realize it’s not optimal… I hope to get there someday!

    My Assets:

    $60k salary
    (no child support currently)
    $32k in retirement
    $5k in emergency savings
    $14k in company stock

    Debt: My car lease is really my only debt remaining. I was fortunate to pay off my student loans, credit cards, etc., and partially fund my emergency fund by selling my house last year.

    I’m considering selling some of my company stock (it has quadrupled since purchasing!) to fund the car purchase if needed, since I’m also trying to save for a house downpayment. Unless you think that’s a dumb idea. :)

    So basically, I need a safe, efficient, commuter / family / travel car, but don’t want to hurt myself anymore than I already have financially and want to get on the right track. Where do I go from here?

    Would appreciate any insight/advice and thank you for putting out such an incredible, life-changing blog!

    In gratitude,

    Jennifer

    Reply
  • Bidonet September 10, 2013, 10:38 am

    “It is unlikely that both people in a couple need to simultaneously scale rocky mountain roads with 7 passengers on board each.”

    So meaningful and funny at the same time. That reminds me of my neighbor from across the street with TWO Jeep Cherokees.

    MMM, your blog is so inspirational. I’ve been reading random articles for a week and now I am reading all entries from the beginning. I think I just found the motivation I needed to put some order in my personal finances. And eventually start to grow that little stache.

    Continue the good work, you really change lives.

    Reply
  • Trevor September 23, 2013, 4:59 am

    MMM
    I was referred to your website by a friend. I had read a couple of posts here and there, but recently decided to read through your blog from the beginning thanks to a post on Get Rich Slowly. I’ve been a Dave Ramsey follow for many years and for some reason thought your advice and example differed greatly. But really it doesn’t; it just kicks up the badassity!

    This summer my wife and I sold our 2000 Altima and now only have a 2001 Accord. I bought a bike and have been taking the bus a lot. Cars are such a money pit but it can be so hard to get people to hear what you’re saying when you try to tell them that. You do a great job of conveying the importance and seriousness of the issue while bringing your very enthusiastic personality through. I hope I’m able to emulate that.

    Really enjoying reading through the site. See ya around.

    Reply
  • Megan February 4, 2014, 8:13 am

    I have read your strong viewpoint on car loans and the importance of not having them. I have been discussing this with my husband and we are not strongly persuaded one way or the other and I hope you can add a perspective we are not seeing to help me out.

    The situation:
    Owe 10k$ on a car
    Have ~ 233k$ in savings (33k$ emergency, rest down payment savings)

    We clearly could wipe out the loan in an instant, but hesitate because our primary goal for the last several years has been accumulating as much cash as possible so that when/if the perfect property comes on the market, we are in as strong as position as possible to put in an offer.

    We are passively looking and think we may buy in the next year or two, but nothing is pushing us out of our current living situation (which allows us to save quite a bit). The strong incentives to eventually buy are 1) we both really want a big garden 2) I want to own outright and be able to rent part out (thinking something like a duplex) 3) our current rental has no insulation or central heat, which can be uncomfortable in winter even though we live in CA.

    Benefits of getting rid of the car loan seem to be almost $1000 savings in interest over the life of the loan. The downside is that we would be short 10k$ cash in savings which may or may not make a difference in the near future. What is your thought and why specifically would you recommend that?

    Reply
    • S. February 8, 2014, 4:14 am

      Megan, It sounds like you are in a great situation. Though, a lot of it is relative to where we are in life, our age, our savings goals, long-term goals, and short-term needs. As someone who paid off his house of almost an identical value and put $100K in upgrades, and then went out and bought a $51K car (as crazy as that sounds because the used car that I had was totaled), I would go with paying the car off first and then negotiate the $10K plus that $1K off the price you want to spend for the house. Another thing to keep in mind is that the car will depreciate, while the house may appreciate it. You can off-set “the loss” in some ways, by potential growth of value in the house, even though you won’t cash out of it. I am with MMM in that all I am focusing in now is on investments, and staying lean. I don’t like the idea of a mortgage at all and I believe in saving and buying things in cash. I’m actually meeting with my team of financial advisers this coming week. S.

      Reply
  • PatrickGSR94 March 13, 2014, 3:15 pm

    Hey just found this blog after seeing the post about your recent legal issues with KISS Trust come up on my Facebook. I say GIT ‘EM!!

    Anyway, I feel lucky that I have not had any car payment since July 2002. I bought a 1994 Acura Integra GSR for $6500 in June 2001, financed it through a local credit union, payed it off in 13 months, and have been just driving it ever since. It had 89K on it, and now has 336K miles on it today. I have done 100% of all mechanical work on it myself, and now with cycling to work twice a week am only driving it about 9K miles per year.

    My wife’s 96 Corolla, which she had before we got married, has about 260K on it, and hasn’t been quite as reliable as my car has been, but it’s still a great thing having no car payments.

    Reply
  • Eric May 4, 2014, 10:34 am

    I would like to add a bit to this and perhaps a slight difference of perspective. I’ve done the used car deal numerous times – if things go well then yes – you make out financially. If the previous owner abused the car then things can go wrong in a hurry. I hear you MMM on doing things yourself but cars are becoming complex computing systems – not sure I would want to be messing around but that’s just me. I decided to buy a Honda Fit (new) as my commuting vehicle and that car is amazing in terms of storage capacity and efficiency… using the 5-speed manual shift and some wise shifts to neutral where I can coast I am getting 40.4 mpg on average. Compare that to say a used Prius which I’ve seen mentioned here… if I understand correctly, you have to change the damn battery in the thing at around 120k miles (about $1000).. my new Fit cost a bit more than a used Prius and WAY less than a new Prius or any other “eco car” for that matter yet I’m getting near equivalent mileage and the inherent flexibility of the design is unbeatable… To all the other readers out there only under threat of imminent torture would I ever buy a used American model car and expect the thing to last – they don’t retain value, they fall apart.

    Reply
  • ZachB June 6, 2014, 2:33 pm

    I got stuck with a car I bought(08′ Ford Tauras X) which gets barely 15 mpg, and I don’t need a car with 6 seats. I want to get a small cheap car, but I don’t know the best way o get out of this one. I still owe around $6000 on it, and its only worth $13000. I don’t know the first thing about selling cars, but should i take it to a dealer, and trade it in for a used car, or sell it on CL and see if someone will give me $5000 and take over payments?

    Reply
    • Mr. Money Mustache June 7, 2014, 7:32 pm

      I’d go to hardcore frugal mode first and eliminate the tyranny of the car loan. Starting with a good bike as your primary transportation will accelerate this process. Then with the title in hand, sell it on Craigslist, then later get a car you can afford with cash ($1-5k perhaps), and begin to prosper.

      Reply
  • Mani June 21, 2014, 5:35 pm

    Looking at the picture on top of this page I think rule #7 “Cars don’t cost you money per month, they cost you money per mile” is missing something for those who have an alternative. On that parking space the owner could grow vegetables or grapes or even teach their kids how to ride a bike… So that rule should probably say “Cars cost you a lot of money per month but they cost you even more when you drive around”. Or in more frugal terms “Owning a car is an expensive luxury that should be avoided if possible. If it cannot be avoided driving it around should be considered a very special occasion.” This sounds terribly fundamentalist but it is only very over-the-top. Because in my city (central europe) having a car is really not necessary due to abundant public transport and a car-sharing cooperative that provides me with 8 different vehicles within 1 minute walk/bike ride from my home. So l’m not particularly badass at all and only 50 percent of all households actually own a car. It’s quite a surprise that not more people have worked out that the real luxury is not having to deal with the issues of owning, maintaining and storing a car but still being able to use one if needed (actually quite rarely). I believe the Zip car system in the US is run as a commercial company which is nothing bad at all but they seem to operate only in specific areas. Wouldn’t a small car sharing cooperative also work in your neighbourhood? That would be maximum moustache!

    Reply
  • Salvador August 19, 2014, 4:38 pm

    I don’t totally agree with the debt thing regarding cars.

    I’m portuguese and live in Europe, and here of course I pay cash. Heck, my first car was a 800 dollar VW Polo wagon that was around 12 years old.

    Lucky for me (even though I didn’t care if it were otherwise) people actually liked the look and style of the car. It had that “Californian” stylishh surfer dude type in it. It was about to enter the Hall of Fame of classics! ahah

    Currently I have no car, this after using the public transportation system for about 1-2 years, which if you have been to Europe you know it’s damn darn freaking good. Anyhow, being on a very hilly city I thought I had to get my own transportation especially because I was vomiting up 50 bucks a month for my transportation pass – which I consider cheap for what it offers.

    Well I bought then a 125cc Honda motorcycle, which cost me 2000 dollars and has a gas mileage of …. drum roll please … 1.7 liters per 100 km … which in American Language would mean 133 MPG !!!

    Gas is expensive here at around 8.5 USD per gallon so this is great for me! Since I’ve been making around 200-300 miles a month, it’s pretty much the same owning the bike or taking the public tranportation with the first one being much much more flexible.

    Maintenance and insurance is a non issue (I paid 50 bucks for a full year of insurance and oil cost me 5 dollars in a supermarket to change it myself) so all in all I have a monthly ownership expense of around 25-30 dollars which is cheaper and way more flexible than public transportation.

    Anyhow I divert… here we don’t have the ridiculous low price of money as in US, where I’ve seen auto loans for 0.8%!!

    In these cases, if I were to buy a used car in the US of course I’d go for a loan! For a 1-2% loan on a car, if it costs 5000 dollars, it’s something I can defer tjhe payment down the road, where it doesn’t cost me much in interest and use that money (or should I say soldiers) to make me much more during the life of the auto-loan.

    Reply
  • FIZZ September 9, 2014, 9:21 am

    Hello MMM,
    I’m about to get an oversea assignment soon for about 2 years. I am currently paying $200/ month for my car (crazy I know, considering l earn $2000 after tax). In the effort of becoming a mustache, I’m trying to figure out if I should seIl or keep the car for the next 2 years, which by then world have been paid off. It’s a sensible 1.3 auto ( a Myvi Perodua, a national brand). It’s currently got a mileage of 65,000 and I bought it in 2010. I’m afraid if I sell it off, I would be tempted to get a better car ( a Vios maybe?), but $ 200 for 24 months = $ 4800. Although in my county (SEA) a second hand car would still cost a lot… Appreciate your advice. Thanks!

    Reply
    • Mr. Money Mustache September 9, 2014, 4:26 pm

      SELL!! That is a massive amount to pay for an idle car. And when you get back you can get a much older car instead of something so fancy – double win.

      Reply
  • Anne September 11, 2014, 11:42 am

    Hi MMM, I know this post is quite dated but wondered if you had any thoughts on Swap-A-Lease type arrangements wherein you assume someone’s lease, therefore avoiding any down payments, and typically benefit with a lower than average monthly payment because whomever you assumed the lease from plunked down more than required at signing. My situation is that I swapped a lease for a 2012 mini cooper with more miles left on it than I can use before it’s due back, gets~32 mpg highway (my only real driving is a 20 minute highway drive to work). I realize this isn’t the same as buying a cheaper car outright but thought it was a pretty stealthy way to handle having a nice, fuel efficient vehicle. My plan is to do the same, find someone who has overpaid their lease and is dying to get rid of it, when my current lease is up. Would appreciate any commentary. Thanks!

    Reply
    • Mr. Money Mustache September 11, 2014, 5:27 pm

      Hi Anne, sounds better than being the original lease sufferer, but not as good as just buying a less fancy/expensive car. For example, add up your payments ($200? $300?) plus collision insurance and a portion of your registration costs over 3 years. You probably are at $10,000 or higher.

      Meanwhile, I bought a 2005 Scion in 2008 for about $9k. I have now had it 6 years, it is still worth over $6,000, averages over 40 MPG, and maintenance has been $0 other than a few oil changes. So this car has cost me about $500 per year, while your smaller cooper is burning $3000-$4000/year. A 600-800% difference!

      Reply

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