How to come out WAY AHEAD when buying a used car

A recent comment from a valued Mr. Money Mustache reader asks something like this,
“I need a new car – we want a Honda CRV, but after looking at the used car listings, it looks like new might be a better deal, especially since it saves me from the need to put much money down”.

As a first note: NOOOOOOOOOO! Don’t Do It!!!!

This question is perfect, because it is exactly the same path many people go down when they end up with a new car. It’s even more perfect because the CRV is the best-selling SUV in the country right now, so many people make the exact same decision.

The car industry makes it very easy and convenient to buy a new car, and by comparison it takes much more legwork to really score in the used car market. How exactly do you buy a used car, without feeling like a sucker walking onto a used car lot and having the little fast talking slickster start harassing you? What if you don’t know much about used cars and how to take care of them?

Here are the steps I recommend, as a lifetime car addict who drives inexpensive cars but secretly covets every Audi and Volkswagen (and especially Tesla) that comes off the line. I love cars so much that I can identify any model currently for sale in the US (and give you all the stats on it), just by seeing a picture of one of its headlights or taillights. Even though I rarely buy them, I love shopping for cars.

Step 1 – Figure out what really is the best car for your needs
You might start with a certain model in mind (Honda CR-V in this case). Figure out what it is you like about this car. For the CR-V, you probably like the large interior space, easy loading/unloading of kids, combined with general Honda quality (it won’t break, it will have good resale, it feels nice to drive). You can start by reading up on the CR-V on a website such as MSN Autos or just doing Google searches for the model.

There you will also find a list of competitors in that category. In this case, the category is “small SUV”, so the competitors are stuff like Jeep Liberty, Ford Escape, Toyota Rav4. As with most Hondas, the CR-V is one of the best buys in this category.

But in South Florida, do you really travel on a lot of extremely rocky and steep mountain roads or deep snow? Or are most of the roads paved there? If so, maybe there is a way to keep the good attributes of a small SUV (interior space), while shedding some of the bad ones (high price, fuel economy rating of only 21/28MPG vs. your Civic’s 32/38MPG).

This fuel difference alone will leave the average person about $8300 poorer after ten years, and that is before factoring in bigger tires, larger amounts of oil, more expensive maintenance and insurance, etc.

When it comes to interior space, three things matter most: rear seat legroom, headroom, and cargo space.
Since your other car is a Nissan Frontier pickup truck, you’ve already got cargo space (and traveling across wild beach areas!) covered. So you might also consider a 2009 Honda Fit, Scion xD, Nissan Versa, or Toyota Matrix. These are all tall, roomy passenger cars with awesome hatchback designs that can easily hold 5 people and stuff in the trunk. If you want even more space, you can click on a Yakima or Thule aerodynamic roof box for only the times you need it – like family camping roadtrips and such. If you commute a lot, consider a 2004-2009 Toyota Prius at 50+ MPG, which also has a surprisingly large passenger and cargo area.

Step 2 – Figure out how much your car should cost used, and how NEW a used car you need.
If you drive a ton of miles, like 12,000 or more per year, you will cover 120k miles in 10 years. That means you should get a fairly new car so you can squeeze those 120 out of it without having anything break. So buy one with less than 60k on it so far. On the other hand, I only drive 4,000 miles per year. So I only need 40,000 over the next ten years. Because of this, I recently bought an older minivan for my construction business that already had 120,000 miles on it. After 10 years, I will still be at only 160k, well within the range of a Honda. As a result, my van only cost me $4800, yet for my purposes it is just as good as a new one worth over $30k.

For our example, let’s stick with the CRV. Because you deserve some luxury, let’s get you one that still matches the newest generation of CR-V. This generation came out in 2007, so I go to Edmunds.com and appraise the used value of a 2007 CR-V (midlevel EX model). Looks like the private party sale value averages around $15,860 in the Ft. Lauderdale area.

Step 3: Search your local Craigslist for Cars that Match
So in this reader’s case, we we look at the South Florida Craigslist for a Honda CR-V, specifying a price range of $10,000 to $16,000, and sort by price (very important, since some used car sellers have a very vivid imagination when it comes to how high a price to ask for their used cars!). You want to pick out a meticulous-sounding, wealthy person who has babied their used car and done all scheduled maintenance, yet is selling it cheap because they don’t really need the money. Dealers are fine too, as long as they have been around a few years and have a clear file with the better business bureau. Your best insurance is simply to get a car with the lowest mileage on the odometer. Here’s a link to a Craigslist search for your model. Looking quickly at those results, I see some of the 2005 models out there actually have really low miles, like 49k, and are only about 10 grand. That is still a beautiful Honda, and compared to buying a new one at 30 grand with finance and taxes, and including money compounding, it will save you more than $30,000 over ten years just to get this used one with 49k miles!

Keep your eye on this craigslist search for a few weeks and call/email any of the ads that sound especially fair, honest, and detailed (good pictures, etc.).

Step 4: Go out and Buy your New Baby
When you are ready to make an offer, type the exact year/mileage of the target car into the Edmunds used car appraiser again, and send the seller an honest offer explaining your reasoning. Do this before you even go to look at their car, to keep yourself in the strongest bargaining position. Then if they accept, you go thoroughly look over/drive the car and if it’s as good as they say, you buy it.

Regarding “saving” a cash cushion by buying a new car – Don’t Do it!!!  Any person over the age of 25 should definitely have a cash cushion large enough to live on for a few months AND buy a used car. But you don’t get a cushion like this by buying a new car on credit. That is financial suicide! Instead, think ahead ten years, when you will still have the used car you buy now, AND you’ll have an extra $30,000 in the bank because of not buying the new CRV on credit. AND on top of that, you’ll have an extra $450,000 or more in the bank because of regularly reading the Mr. Money Mustache blog and applying more of his principles.

As a final note, since I think you want a Honda Fit or Toyota Prius and not a Honda CRV, so you can become even richer, here are two pre-set Craigslist searches for those in South Florida too!



  • Greg April 20, 2011, 1:07 pm

    I think the most obnoxious thing I ever had to do, upon buying a new car, was to accept that I had to pay car payments. The lack of properly efficient used hatchbacks in 2005 and those GM employee pricing things led me to a new Vibe.

    But GM doesn’t let you buy cars. They only let you finance them. “But wait!” I cried, “I saved up money. I can pay cash!”

    They wouldn’t have it. I could pay 1% for 4 years (a cold, calculated deception) or I could pay it up front. No cash rebate.

    So I held my nose and “financed” my car, taking the cash and shoving it in my mortgage, so at least I came out 4% ahead. Even then: “Ew, car payments.”

    • MMM April 20, 2011, 10:28 pm

      Greg – Sounds like a very Mustachian strategy for an otherwise annoying situation. I must also admit to borrowing money from a credit card once – during the easy-lending boom, they offered me a balance transfer of the whole credit card limit ($50,000), with no fees or interest for 1 year. So I used it to pay off a house line of credit at the time, and set an auto-transfer back from that same line of credit to pay it back after 51 weeks. It saved about $1800 in interest, so it covered the hassle of me worrying occasionally if I had been a sucker. Nowadays they tack on a hidden 4% fee to similar offers as well as other tricks, rendering them useless except for people looking for quick cash for a party in Vegas before committing suicide.

  • Anita April 25, 2011, 9:58 am

    I’m wondering if you have advice on WHEN to replace a car. My car is close to 11 years old and has about 95000 miles. According to Kelley Blue Book it’s worth around $1,500. Currently it runs OK and haven’t had any major repair needs. Let’s say in a near future it breaks down and I am told I will need $2000 to repair it. Do I repair it or get another (newer) car?

    • MMM April 25, 2011, 12:26 pm

      That’s a fun question. In your particular case, the car still sounds pretty new, especially when measured by mileage. When I was shopping for used cars earlier this year, I found many people had racked up 95,000 miles on cars from 2005, and some of the 2000s had mileage over 240,000! So if your car is a somewhat reliable model, it is quite likely you might only be halfway through its life.

      As for the hypothetical $2000 repair bill, that’s a tricky one. My general rule is that you should value used car drivable mileage at about 10 cents per mile. So you can feel good about a $2000 repair if you expect it to give you at least 20,000 miles of trouble-free driving. I can’t predict the future, but I would say it is a good bet with a low-mileage car like yours.

      Most good new cars give you the first 100,000 miles or so with no repair bills, then the next 100,000 miles require about $5,000 in maintenance. After that, the maintenance amount per mile might rise even more, and you might want to buy a newer used car with about 50-75k miles to get back into that low-cost-per-mile sweet spot.

      • Joe Average March 6, 2015, 3:15 pm

        $5K? I drove the first 200K miles for less than half that.

      • Drunkstruction March 8, 2019, 9:06 am

        My situation is actually similar to the higher mileage car you speak of. A 2005 Honda Pilot (I know, not efficient, but it was a hand-me-down) at 276,000 miles. Still runs smooth with minimal maintenance. My concern though is when I should get rid of it and upgrade to a more efficient car like the Honda Fit. Should I wait for a major repair or dump it sooner? I could probably get $800 if I were to sell it right now.

  • D May 29, 2011, 12:06 pm

    Need advice. I have made every mistake in the book due to financial stupidity (immigrant from Eastern Europe where there is no such thing called credit) but now I am out of debt, living frugally and saving 50 percent of my pay at least each month.

    Now, here is my question. I am driving cheap little 2005 Gm Sunfire with about 85k miles on it which may be worth $2500 now and probably still last another 2 years before major problems.

    I have an opportunity to buy 2005 TDI (diesel, 50 percent gas savings) to replace Sunfire for $10,000, $2000 below going market rate from my family member (which also saves me 13 percent tax). Jetta has about 65,000 miles on it and being TDI, it will last at least another 100k miles without much maintenance which is about 6 years of driving with insane fuel economy.

    So, do I spend $7500 cash (difference between Jetta purchase and Sunfire sale price obviously) to upgrade my ride, or do I invest my money and wait for Sunfire to die? I must have car due to work description (company chips in $500 per month for expenses, so I win anyway).

    Thanks in advance!

    • MMM May 30, 2011, 12:30 am

      Hello D, nice question! I’m a little behind in the questions and answers because there have been many recently but hopefully nobody’s in a rush ;-)

      I think you should keep milking your old car as long as possible and pass up on the Jetta Diesel for now and here is why:

      – the used private-sale value of a 2005 TDI is actually only about $9200 anyway: http://www.edmunds.com/volkswagen/jetta/2005/tmv-appraise.html?sub=diesel&style=100477667

      – Your Sunfire is still not overly high on mileage at 85,000 miles. The Jetta is only 20,000 less, and neither one is considered a specially reliable car. It would be different if you were going from a 1994 GM car to a 2005 Toyota, but the two you are comparing are both moderate in reliability.

      – the TDI rated fuel economy is 31 city/39 highway. The Sunfire rating is 23/32. Combining the averages to 35 Jetta, 28 Sunfire, you’ll only use about 25% fewer gallons of gas, but Diesel costs about 10% more per gallon. So the savings is more like 10-15%, or $200 per year at your level of driving.

      I know there are emotional benefits to driving a nice stylish Volkswagen instead a non-stylish Pontiac, but just make sure you know it would be a very expensive upgrade! Much better to just keep your old one and try to drive as little as possible outside of work while you build up some more money.


      • D June 3, 2011, 2:12 am

        I appreciate the advice but it came few hours too late. I got a good deal on Sunfire at $3500 and bought Jetta. I should have clarified that I am in Canada, so prices are bit higher, taxes are lot higher and diesel is cheaper some days.

        BTW, from my own experience in driving both Sunfire and Jetta, actual gas mileage is about double. I drove both cars for extended periods and I get 500 kilometers on a tank in Sunfire 10 talons, and always over 1000 on Jetta with the same amount of gas. I reset my trip counter at every fill-up and do the math. I even drove both cars on different occasions from Detroit to Minneapolis once and it tool two tanks in Sunfire and just one in Jetta. Both cars are stick shift so maybe that is why data is different from yours?

        Awesome blog. You are inspiration to many, myself included. You were lucky to be smart from the start. I was a dumb buffoon who made every mistake in the book for the first 7 years after moving to capitalism from Eastern Europe, then spent 5 years getting out of the $hit hole and finally started shoveling money to savings 2 years ago. I am now amazed that banks and credit card companies can hypnotize so many people to become financial slaves – working months each year to pay interest to banks. My favorite is when they call zero-down primary residence mortgage – an investment… LOL…

        BTW, been to Hamilton many times, and been to your part of Colorado few times as well – don’t blame you for moving there :)

  • jDeppen June 3, 2011, 1:25 am

    Here’s my situation, maybe you can offer a little advice. We’re moving to Rochester, NY from Ft Knox, KY in a couple months and need (want) to get rid of my 2004 Lincoln LS (89,500) because it’s rear wheel drive (sucks in NY snow). It will probably bring around $10,000 and we don’t owe anything. We bought a 2003 Taurus 2.5 years ago for $4,000 cash and it now has 158,000 (turns out that was a great choice). I’d like to just have one car but my wife is convinced that won’t work and I’m not sure myself (hard to bike in snow however there is a city bus system).

    So I’m leaning toward another 2003-2007 Taurus 80k-114k since neither of us has a 9-5 so we don’t do a ton of driving. I will be taking about 4 trips to KY each year (about 1,400 miles round trip). This is a pretty common car and repairs seem to be inexpensive (especially compared to the Lincoln). The used car prices seem to have gone through the roof lately so I’ll probably be $6k-9k.


    • MMM June 8, 2011, 10:32 pm

      Hello there Mr. Deppen,

      Hmm.. sounds like you have a nice conservative vehicular life with no car loans, so congratulations on that. The Ford Taurus is a good quality car, although a rather gigantic one. I had one as a rental car once – it seems to be designed to comfortably take five unusually large people, plus their luggage, on cross-country road trips. And the fuel consumption, at 20MPG City / 27 HWY, reflects that enormous size.

      If you have fewer than ten very large people in your family who need to travel simultaneously, do you need TWO Tauruses? An alternative for your second car could be a 2005 Corolla, still comfortable for up to 5 regular-sized people, and rated at 32 MPG city / 41 HWY, with blue book value similar to a Taurus of the same age.

      either way, best of luck and thanks for reading!

      20/27 32/41

  • Valerie August 31, 2011, 1:15 pm

    Hey. Just came across your blog yesterday through Canadian Dream – Free at 45. Been reading through a few old posts and was very pleased with myself after reading this particular post.
    In July I needed to buy a new (used) car. I had my hopes set on a CRV or a Rav-4. (I also test drove a Nissan Rogue.) The CRV was beautiful – leather seats, and loaded. LOVED it. It was hard to walk away from, but it the first vehicle I had test driven. I started feeling a little guilty, that a small SUV was still overkill for my needs. (Just me and my Weimaraner.) I started looking at smaller hatchbacks and finally decided on an ’08 Matrix. Finding one was actually more difficult that I thought, because I really wanted a manual-transmission, and a sun-roof. I live in SW Ontario, and finally located one at a Toyota dealer in Toronto – almost 2 hours away. I emailed them to ask some questions and make sure it was a non-smoking vehicle. Then I asked a friend who lives in downtown TO to check it out for me. (I didn’t want to make a second trip there.)
    I contacted the dealer again, told them what I was willing to offer, and said flat out I wouldn’t haggle, and wouldn’t pay their $300 admin fee. Take it or leave it. (They tried to push the admin fee and I refused.)
    So, I now have my fuel efficient and extremely spacious new (used) Matrix. I do wish it had heated leather seats, (SO much easier with a dog), but the extra cash left in my bank account from the original purchase, and the extra cash left in my wallet at the gas station at every refill is well worth the trade-off.

    Loving your writing MMM! So glad I found you!

    • MMM August 31, 2011, 1:25 pm

      Thanks Valerie.. great story. I also feel the same way – I drove around quite a bit in a brand-new 2011 CR-V this summer (in Canada, in fact!), and it was very cozy and fast. But it’s just too big, expensive, and fuel-thirsty for the needs of non-millionaires. In my view, that should be the biggest and fanciest passenger vehicle that should exist – I couldn’t imagine anything nicer existing. It could be something to look forward to as a present to yourself once you are wealthy enough to stop working.

      But even the Matrix, which I have also driven plenty, is a fabulous, roomy, and sporty car. I’m curious about how leather seats are useful for a dog owner. Wouldn’t you just want cloth seats, which you outfit with some vinyl or scuba-material covers which are immune to claws and dirt? You can even get seat covers with built-in 12 volt heaters, a nice frugal way to get the same luxury without paying for it in the sticker price.

      • Valerie August 31, 2011, 2:22 pm

        Quality leather (in car and in home) are the way to go with owning a dog (and in general) I find. (Cheapo bonded leather will not last, and not worth paying any more than cloth.)
        I have a 17 year old leather couch in my living room. I consider the scratches ‘character’ and think it still looks great. Visualize a pre-distressed leather ‘Roots’ chair. (You’re Canadian(ish) – so I know you know what Roots is.)

        My previous car had leather seats. Leather will over time get scratched up with a dog’s claws (one reason why used is another way to go) but it never gets dog hair stuck to it like cloth. It’s super easy to keep clean – whether dogs or kids are involved.
        My dog doesn’t shed much at all, but I had my brother’s dog in my car over the weekend she snuck into the front seat for a minute and I was appalled at the dog hair when she got out! It just sticks to the cloth seats! And her white fur on my dark navy seats was brutal. I actually gasped when I saw it!
        I don’t like seat covers/protectors – they just look sloppy. Also my dog doesn’t sit in the front seat and he doesn’t shed much at all. The back seat is left down and he has the whole back hatch area to roam around. He’s a big dog, so he occasionally likes to stick his head out the sunroof as well. (The Matrix has a hard plastic in the back hatch and when the seats go down. I did have to go out buy a large rubber bottomed utility mat from Canadian Tire for $30 and cut it to shape, so my dog wasn’t slipping around in the back.)

        “You can even get seat covers with built-in 12 volt heaters”. I have one! :) It is a little sloppy looking I feel, and it’s not quite the same as heated seats, but when the winter is particularly brutal it does the trick.

  • kasia September 26, 2011, 9:05 am

    I totally agree with this post. I really really wanted to buy a 2011 Honda Fit. But dealerships were not aggressively selling them since the 2010 hadn’t done so well and Honda had put some limitations on what they could or could not do. I was also trying to arrange to buy something right upon arrival in my new city so I was trying to deal with the stealerships over the internet like so many websites recommend. What an exercise in frustration, they will not even tell you the price beyond MSRP even though you know they can go lower. I got so fed up with them I just bought a used car from the internet. I got cash from the bank, test drove the car, gave the guy the money and he gave me the title. It took 30 minutes. I will never go to a stealership ever again.

  • DP October 15, 2011, 9:27 pm

    I enjoyed this post and everyone’s comments afterwards. I just recently discovered this blog, so I hope you don’t mind my posting a comment 6 months after the original post.

    Anyway, my 1994 Honda Accord got stolen last week. In broad daylight at 9am, right in front of our house on a tree-lined quiet street. Sad day. Anyway, the insurance company is considering it gone forever, and they are going to cut us a check sometime next week. (I’m going to push for $3000 but I’m expecting somewhere around $2500 from them.)

    Other key info:

    (1) I have $3000 in a designated “car fund” already.
    (2) I have a wife & 2 kids now, but in 10 years we may need more than 5 seatbelts.
    (3) I technically own a 1995 Volvo sedan*, but it’s located in Pennsylvania (about 3000 miles away) so it’s not really accessible. (Resale = $3500)
    (4) I plan to move to PA soon, no later than January.
    (5) We have access to a borrowed pickup truck and also have 2 mountain bikes but no trailer. We also have a great social network locally and many neighbors have offered to let us borrow their cars.
    (6) Both the stolen Honda and the faraway Volvo have over 200,000 miles on them.

    So my question is, what would MMM do with the insurance money?

    [1] Immediately replace the old Honda with a financed 2012 Escalade. (Just kidding!!)

    [2] Save the insurance money in the car fund, but don’t buy anything—just wait it out, move to PA, and resume driving the Volvo. In the meantime, borrow a car when absolutely necessary, like taking kids to the doctor or visiting the in-laws over Thanksgiving.

    [3a] Sell the Volvo and use the proceeds, plus the insurance money and car fund ($9000 in all), to buy a newer vehicle. Factor in the current family size (4) and future family size in the next ten years (4-6).

    [3b] Same as [3a] but ignore the future family size and just buy something economical with 5 seatbelts.

    And finally, if you would recommend [3a] or [3b], do you have any great suggestions for efficient cars in the $9000 price range?

    * The Volvo was a recent purchase from a family member and I don’t know its maintenance cost/history, but I’ve heard horror stories of the costs of maintaining a Volvo. Also, it’s an automatic and the MPG is in the low 20s.

    • MMM October 15, 2011, 11:09 pm

      Hi DP!,

      I’d probably do 3b, and look for a Toyota Matrix or its identical mechanical twin the Pontiac Vibe (same car, nicely lower resale value), Scion xA or xB, Toyota Yaris 5-door, Nissan Versa Hatchback, Honda Fit, or 2004 Toyota Prius.

      For a warmer climate or smaller family, (or if you are a really badass family), I would have suggested a less costly car ($5-6k). But there are lots of you, so cars end up getting used more. Also, if you do many things within 2 miles of your house (even groceries!), a bike trailer will be HUGELY profitable, as it will drastically cut down on your short car trips. You can get a gigantic bike trailer that holds 2 kids up to 5 years old, such as the Burley D’Lite.

      Then, many years down the road if you do indeed have more children, you can change car strategies. Transaction costs for switching between used cars are low, so it’s best to optimize for your current life situation, then change later if needed.

      • DP October 18, 2011, 10:47 pm

        Thanks for the tips. Just curious what you might recommend in that $5-6K range.

        (And also, do you have any suggestions for where to find these cars? I am turning up nothing on Craigslist and sites like AutoTrader in search of the manual hatchbacks you described. )

    • Nathan February 21, 2016, 7:28 am

      How much did you end up getting from the insurance company? I have a Honda Accord that now is about as old as yours was and the Blue Book value was about $750.

    • Wookey January 30, 2017, 2:54 pm

      Planning to have 4 kids isn’t very mustachian, is it? It’s a very full planet already, and kids are expensive.

      • JMA January 30, 2017, 5:19 pm

        I gave birth to two children and adopted two children out from Social Services for a total of 4 kids–seems very mustachian to me.

  • saurab August 20, 2012, 6:15 pm

    A great article!

    I am looking for a used car to buy and would like to have some advice on it.

    I’m in Los Angeles-Torrance. My requirements/constraints are as follows… in that order…

    1. Resale Value:
    I may leave USA and go back to my home country in 2 years. So I need to sell the car at that time. I won’t be very happy to take a depreciation hit of more than $1000 per year. Hence I could not buy a salvage title, so looking only for clean title car.

    2. Maintenance cost
    Maintenance cost should be low/minimal because I would be using it just for 2 years and don’t want to spend much on maintenance and bargain for that expense during selling the vehicle.

    3. Budget
    I am willing to spend anything less than 9k. I can pay more but simply don’t like the idea of locking my money into a car that’s not going to be with me for long term. So, I will stick with 9k.

    4. MPG
    It should give at least 24+ city MPG.

    Now the things that I can compromise on,

    I’m single and hence space is not my concern, as far as friends are concerned we are young and could be squeezed in happily :)
    I can pay 9k cash. I’m buying the car because I ‘need’ it, LA is spread across many acres and I feel if you don’t have a car you just cannot do any other activity than office work! I plan to take college and take some evening/weekend classes as well. So the utility value is the first thing in my mind – comfort and luxury is what I can compromise on.

    This is going to be my first car. From what I have analyzed till now, Honda Civic should be my first choice but below 9k . Corolla, Matrix, Yaris, Sentra and Versa also interest me, but not sure how to rank them considering my constraints.

    I’ve learnt a lot from Mr.Mustache and people here, hoping for some more great advice!! I’m so glad I found this blog!

  • Laura October 2, 2012, 5:25 am

    Hi, thanks for all the informative help – really really appreciated. One question: could you please explain how you managed to get craigslist results sorted by price? Maybe it’s because I’m using a Canadian craigslist page? I just don’t see any function to sort search results by any method.
    Thanks :)

  • Savannah October 11, 2012, 9:12 am

    I have a currently financed ’03 Jeep Grand Cherokee Laredo with a KBB of $4397 and I owe $5527. Only 113,500 miles on it. I drive quite a bit (roughly 20-22k mi/yr) I’m wondering if it would be better to sell this via Craigslist with a starting price of 5500 and see where it gets me. I would rather have a more fuel efficient vehicle such as Honda Civic/Accord. My fiancee has a ’00 Civic Ex which I drove prior to getting this car and I definitely miss the $40 tank/week rather than the $60 fill up with the jeep that gets me Fri-Wed.
    I have about 1200 in savings and roughly $4-5k coming at tax time that I would’ve used to pay off this Jeep. (I only make roughly 20k/yr)
    If I sell the Jeep now, I have a loaner car that my parents have agreed to let me drive provided that I do any/all maintenance, tires, etc on the vehicle which is no problem. They understand me wanting to get out of debt and are willing to help in any way posible.
    Should I sell the Jeep now?, wait to pay it off at tax time?, find a decent Honda with good/low mileage?.. if you could help me in any way I’d appreciate it!

    • Mr. Money Mustache October 11, 2012, 10:53 am

      Oh yeah! You should drop that baby like a hot potato!

      Combining your extreme gas guzzler with that extremely large amount of driving on a 20k salary, you are basically living only to drive right now. This will change your life!

      The next step will be figuring out how to drive much less..

  • FinanceGeek October 21, 2012, 8:05 pm

    Hey MMM,

    I recently discovered your blog, and I must say it speaks to my soul. Great stuff!

    But now, I have a confession. Last year, I bought a new car. Like not “new to me new”, new new. From the dealership. Pause for reaction. Now I know it’s not very Mustachian, but hear me out because I’m the last person who would have thought I would EVER buy a new car. In fact just months prior, I had sent my sister a detailed email outlining why buying a lightly used car was the way to go. But here we are.

    My old car was a paid off 2003 Ford Escape, that I had bought with cash used from a family member in 2006. It seemed like a great car for me at the time, but it got horrible gas milage, especially in the mountains where I spend a lot of my free time, and I had just taken a new job that would involve a 40-mile (one-way) commute – I know, I know – dealing with that one as we speak. It was also pushing 120k miles, and I was getting nervous that expensive maintenance was just around the corner. Anyway, my main criteria for my next car were the following: 1) it had to be a manual transmission (because I didn’t know how to drive one and I figured the only way to become proficient was to own one), 2) it had to get great gas mileage, and 3) I wanted a small car, but one with enough cargo capacity to haul my friends and gear (skis, climbing gear, whatever) to the mountains every weekend.

    After doing some online research, I quickly decided that a Honda Fit would suit my needs nicely. It was fuel efficient, reliable, and the Fit, in my opinion, is especially well designed with regard to efficient use of cargo space. It’s a small car, but it doesn’t FEEL small. (So much so, that I actually had a hard time parallel parking it for a while because you feel bigger than you are.) Anyway, once I decided on a Fit, I started looking for used options with fairly low mileage. The two biggest issues I ran into were that most of the used models available were of the Sport variety (not the base model – which costs several thousand dollars less) or had an automatic transmission. Because of that, the used prices I was finding (on models ranging between 2-3 years old) were actually MORE than a brand new 2012 base model with manual transmission. Coupled with the fact that buying new made it easier for me to negotiate, I decided this was the way to go.

    As a Mustachian at heart (before I even knew what that meant), I did my research and long story short, got an amazingly good deal on my trade-in and negotiation of purchase price (as it’s really the bottom line that matters – not the trade-in or the purchase price alone). It probably helped that the sales guy underestimated me when I showed up alone to buy a car I didn’t REALLY know how to drive – the test drive was, let’s say, interesting! I was able to pay cash, and ended up getting a much better deal and a brand new car to boot than had I gone with a used model. Feel free to judge, but be warned – I have a spreadsheet to back up my decision. I am an engineer by training, too (I’m not sure it’s possible for me to make a major life decision without a spreadsheet).

    BTW, I am coming up on the one year car anniversary, and I still love my Fit!

    • Mr. Money Mustache October 21, 2012, 9:02 pm

      Haha, nice story FG. I do think you probably made one of the best new car purchases possible. But the only way to really win in car ownership is to figure out how to design most of the driving out of your life.

      Once you do this, you will find that your car hardly gets used, and it will be hard to justify owning such a new car: http://www.mrmoneymustache.com/2011/11/28/new-cars-and-auto-financing-stupid-or-sensible/

      • FinanceGeek December 13, 2012, 2:37 pm

        I totally agree that eliminating most driving is the way to go. Since posting my original comment, I have moved closer to work so now it is much more reasonable to take the bus or ride my bike to work. I’m working towards becoming a full time bike commuter, but I’m not there yet.

        So yes, during the week, I could get away without a car, but the weekends are the part I struggle with figuring out how to make work car-free. I spend nearly every weekend of the year in the mountains (1-3 hour drive depending where I’m going) either skiing or climbing. These activities are extremely important to me and are a major component of keeping me fit and active. I carpool most of the time, but not always. If I didn’t have a car, I would always have to count on someone else to drive (and pick me up with all my gear). I’m just not ready to go there yet.

  • Jay Dillon December 1, 2012, 4:44 am

    I’m a research scholar at Purdue and I need to buy a used car under $5000 for commuting to class , grocery shopping and hauling stuff from Goodwill Stores etc. I’ve been following your posts and Honda Fit seems good … is it OK for long distance drives and in the snow ?

  • Megyn @Unstuffed December 12, 2012, 4:11 pm

    If you had asked me three weeks ago if I agreed with this post, I would have said a resounding YES! However, since having BOTH of our cars go out on us, I now believe buying new CAN be a fantastic option. We purchased our 1st car from a family member. It is a ’97 Camry and came with under 70K miles on it. That was about 5 years ago. It now has about 115K miles, and the transmission gave out with no warning. Next we purchased a 95 Escort for $2k with only 45k miles on it. We knew the person selling it, and from what my mechanically-inclined husband could tell, was in good working order. We’ve had it less than a year, and it already needs extensive work. All of this to say, mileage doesn’t equal everything. Even if you drive something and take a look, it doesn’t mean you aren’t getting a lemon. For us, it’s worth putting in all of our cash for a new car that comes with a warranty rather than still putting thousands of dollars into cars that will see no return on investment.

    • Mr. Money Mustache December 13, 2012, 12:28 am

      I’m not so sure about that line of reasoning, Megyn…

      If you had bought new cars, the depreciation and opportunity cost alone would have been MUCH larger than the cost of having used cars which need repairs. And your situation is a rare one – you’ve just had two instances of bad luck that happened to occur close together in time.

      There is almost no possible situation in which you save money by buying a new car, as long as you choose reasonable used cars. But read on, and you’ll find out which ones are the best bets, see “top 10 cars for smart people”.

      • turboseize February 23, 2013, 5:02 am

        Even several thousand dollars or euros for repairs will be MUCH less then the typical depreciation of a new car. Then, most people do not buy a new car in cash, but finance it, so there is interest. Even if they bought knew, their money could be investet, so there are huge capital costs. Thridly, a new or financed car will have to be insured for fully comprehensive insurance, meaning higher insurance as well. Depreciation, capital costs and insurance will be SEVERAL THOUSAND dollar/euro per year.

        You will definitely not pay that much for repairs on a beater, especially if you have some knowledge and an internet forum to ask for help and to buy used parts from…

  • jlcollinsnh March 25, 2013, 10:27 am

    I’ve got a 2007 Subaru Forester we’ve had since new. 85k miles on her now.

    It has been great for getting up our steep snow covered drive in winter, the reason we bought it, and for hauling our daughter to and from university these last few years. One more year left of that.

    It has also been very useful in carting off stuff we are unloading now that the house is sold.

    With the house now sold, we won’t be needing the 4WD to get up the hill. 2WD and snow tires will serve us just fine in winter now.

    On the other hand, we are also giving up the garage. The Subaru, or what ever replaces it, will be living outside 24/7. Not something I’d want for a new(er) car, but perfect for the age of the Subie.

    We could get better mileage with a 2WD drive something, but we know this car and its history. Plus it has been flawlessly reliable. And it’s cargo capacity will be useful for the next year or so.

    So, worth making a change? And, if so, into what?

    • Mr. Money Mustache March 25, 2013, 1:58 pm

      Oh, looks like ol’ JL is swooping in on the older articles now!

      Since I happen to have a rough idea of your life situation, I can guess that you’re probably not too worried about a few thousand one way or the other. But still, just for car choice purity, here’s an auto prescription:

      The Forester has a pretty amazing cargo area, outdoing many bigger SUVs. Among more fuel-efficient cars, you might find competitive amounts of space only in the Scion XB (2007+). Good, smaller hatchback designs can be found in the Toyota Matrix, Honda Fit, Mazda3, Prius, and a few others listed here: http://www.mrmoneymustache.com/2012/03/19/top-10-cars-for-smart-people/

      When you have a surplus of money, it is hard for some people to get excited about the difference between 25MPG and 35MPG, since it’s only a few hundred dollars in fuel annually. But I still do. I think I get about $10.00 of pleasure from each gallon of gas saved, so my Scion xA makes me very happy, averaging about 42MPG.. Versus the 2004 Subaru Impreza wagon I sold a few years ago that had a hard time cracking 28 even with hypermiling.

      • jlcollinsnh March 25, 2013, 2:48 pm

        Well, I didn’t get to where I am by NOT worrying about a few thousand $$$ here and there. :)

        I guess my concern is that with the Subaru I know I have a good vehicle because it’s been in my care since day one and it has been hands down the best most reliable car we’ve ever owned.

        Still, it only averages about 22 mpg.

        So the question is whether the risk of an unknown car is worth the better milage.

        Or maybe I’ll just pick up this sweet 2007 Cadillac DTS on Craig’s at the moment: http://nh.craigslist.org/cto/3671793143.html

  • Dr.B April 29, 2013, 1:49 pm

    Also consider using cargurus.com to both find and accurately price used cars in your area. If you play with it for a while you will find you can plot out price fluctuations by month, region, and model to better time your purchase if possible (generally Dec -Feb is best). Edmunds.com has a button for “true cost of ownership” for each model a year or more old that can help you a lot in estimating how good a “deal” some models really are. Some used cars are MORE expensive overall than a new version of same model (BMW I’m looking at you). Three year lease cycles dump a pile of some models on the market at the same time a new model may be arriving, this is a perfect time for high leverage on a used car purchase. After safety and reliability, cost of ownership is the priority. A little free research can go a long way. Cheers.

  • Haykakan June 4, 2013, 12:08 pm

    What is your opinion of purchasing new cars with an absurdly low interest rate? I bought a base model 2011 Corolla new with a .9% APR (which works out to be a little over $200 in interest over the life of the loan). I plan on driving this car until it dies. However, I’m curious if a smarter financial decision would have been to buy used, or if the almost non-existent interest rate change things?

    • Bruno June 6, 2013, 8:05 pm

      Why don’t you get a used car with a low interest rate? That would be the moustachian thing to do.

      For instance, when I was shopping for a car I was offered 0.9% on a new Prius and 1.9% on a used Toyota-certified Prius. The price difference was ~$10k, on a 18 month age difference and a 12k miles difference. The used Prius had the better options package (better sound system and a rear camera). No question I took the used Prius.
      Look online for such deals, cars.com for instance

      You save $10k and pay about 1.5 times your interest – $300 by your claim.
      Throw the savings on any other high interest loan you might have.

      • Mr. Money Mustache June 6, 2013, 10:53 pm

        You have a good eye for a bargain, Bruno, and your examples are great. but I still maintain that borrowing money for a car is very rarely a Mustachian thing to do.

        Sure, if you are a super-investor and you already have many times the value of the car invested in assets with higher returns, you could make a case for borrowing if the rate really is that low.

        I guess the key is to make sure the loan is not enticing you to buy a more expensive car than you would if there were no loans available. And maintain appropriate scale in either case.. for example: don’t go buying a $15,000 car if you only have a $150,000 net worth.

        • Haykakan June 18, 2013, 8:22 am

          Thanks for the advice! Unfortunately I bought the car about a year and a half before I discovered this blog (a time when I thought about money very differently). I was attracted by the low-ish monthly payment coupled with the low interest rate. (I did have enough good sense to go with the base model and a manual transmission though!) I have debated the pros and cons of selling or keeping it. If I sell it, I’d be lucky to net $2K and would need to buy another car. If I keep it, I’ll still have 3.5 years worth of monthly payments to worry about until it’s paid off. Overpaying right now is not an option because all my extra cash is going towards student loans with higher interest rates. At the moment I’m leaning towards keeping it because I can expect to drive it for 12-15 years after I finish paying it off. Any thoughts or personal experiences to help with the decision?

  • Jon June 29, 2013, 9:13 am

    I have a unique situation.

    Bought a 2010 Lexus RX350 brand new (dumbest thing I have ever done) three years ago and it now has 37k miles. I am now stationed overseas and getting 18 MPG because of all of the stop and go traffic and roundabouts. I have already paid it off and it is currently worth $29k (kbb). I know I need to get something new but there isn’t much of a market for a US spec Lexus in Europe so I can only get about $25k for it.

    I have looked at selling it and getting something small and cheap (used civic or toyota) for under $5k. Only problem is that most of the cars over here are Euro spec so I can not bring them back to the states (and I don’t know there maintenance history). This means that even if I find a great deal with low mileage (or I spend any money on maintenance) it will be somewhat wasted because I have to leave the car in Europe. I have to be prepared for a complete loss if I cant sell it to another service member before I leave.

    I love the RX and the fact that it is paid off but the depreciation over the next few years should be about $6k but I could honestly see my family using this car for the next 6-10 years.

    My question is…Since I have already absorbed the bulk of the depreciation, I have low mileage, and I know the maintenance history should I keep my RX for the long haul? or…should I purchase a used car, hope I don’t have too many problems and that the depreciation + maintenance is less than the one I own?

  • Janna P July 8, 2013, 11:21 pm

    What are your thoughts on Honda hybrids?

    My husband and I are in the processes of making a number of changes to our financial situation. (Someone gave us their Burley bike trailer for free and I might be getting a bike for Christmas!) We’re hoping to become a 1-car family as soon as we can alter our home-to-work proximity, but in the meantime we’d at least like to get rid of a car that still has a hefty loan on it for one that we could pay off very quickly. (We own the other car outright.)

    We spotted a 2006 Scion XA for $8k (one owner, clean carfax) with 79k miles on it, but then came upon a 2003 Honda Civic hybrid for $7k (also one owner, clean carfax) with 72k miles on it. Estimated 46/51 MPG. I’ve read that the battery pack on these can have a relatively short lifespan and can cost around $3k to replace, so that’s where our main hesitation is. I notice on your list of favorites, a Toyota hybrid exists, but no Honda hybrids. Is there a reason for this?

    Thank you for writing a blog that makes me laugh at and question my own stupidity. :)

    • Scott September 22, 2014, 1:26 pm

      Welp, this is an old comment and likely no longer relevant, but I figured I’d chime in anyways.

      I too have been looking at a Civic hybrid, since it’s the only* car ever sold in the US that seats five, is a hybrid, and is available with a manual transmission. But I’ve decided against it for several reasons.

      1) the battery pack is located behind the rear seat back, which is a terrible location. It drastically eats into the trunk space AND means you can’t even put the back seat down, meaning your sedan-sized cargo space which was already lacking is now reduced even further! Plus it puts a bunch of weight higher than it should be, which affects handling if you’re into that sort of thing.

      2) you HAVE to get a manual transmission, because Hondas of this vintage are notorious for automatic transmission failures.

      3) as you said the early battery packs have some issues, but most of them can actually be taken care of by rebalancing the cells instead of replacing them. This saves a lot of money, however it is a time and labor-intensive task that must be performed several times per year for an old pack.

      Personally, I’m leaning more and more towards a 2001 Honda Insight. These cars only seat two people, so obviously it’s not an option for everyone, but they do have a hatchback and they are rated at 60 city 68 highway with a manual transmission. They’re also really great for hypermiling: many people have achieved over 100 MPG with a bit of effort. If you need 5 seats, I would go for a Prius. You get all the benefits of the Civic Hybrid, plus a hatchback. They can also be found for around the same price as a normal hatchback, or maybe a bit more if you want fewer miles.

      *At least as far as I’m aware.

  • AJDZee July 11, 2013, 10:30 pm

    MMM, please help me… I’ve been reading your blog non-stop for the past 3 weeks. At one point I came across a chart that showed what year used car you should buy depending on how many miles (although I tend to drive more km than mi) you drive in a year.
    But now for the life of me I can’t find it! Can you post the link if you know what I’m referring to? Thanks!

  • Kipp July 24, 2013, 11:54 am

    I had ended up purchasing a new car in August of last year. In a few ways this turned out to be a good thing, but overall I wish I could have found a decent used car in my area instead.

    I had about $3,000 to $3,500 available for a non-loan purchase, however the cars in this range at the time all had high miles, large amounts of rust, and/or something clearly wrong with the car which would cause another expenditure that I did not have the funds for at the time.

    The background information: It didn’t help that a year before this we had to replace my wife’s car and that took a away $2,600 from our cash fund. I was working at about $14 an hour and while I saved about 11% in retirement accounts, our bank accounts were not moving at all. Additionally my wife worked part time while completing school. We were trying to reduce loans by paying for books, parking, etc and took out about 2,500 a semester in federal loans. Earlier that year I had paid off some of her unwise high interest student loans ($4,500 total including interest) and was nearly finished in paying off my small loan balance that started at $5,500. All of this cash going for these previous debts and a car the last year resulted in not enough of a balance to purchase a reliable vehicle.

    As a result, I looked to financing. In hindsight, after reading your blog, I probably should of just sucked it up and biked the 7 miles one way to work. But, as other events played out it is good that I have a car. I ended up with a 2013 Hyundai Accent. The overall price seemed to be fair comparing to other reliable brands such as toyota or honda where the used cars still costed more than this car did new. Later that year, Hyundai had a settlement with the EPA for overstating the gas mileage on vehicles built between 2011 and 2013. Do to the timing of this purchase I now get a “reimbursement” for the difference in MPG (they calculated my model at 2MPG difference), by the amount of miles driven, by a 12 month rolling average of regional gas prices, and then by 115%. I don’t view this as money to blow. I view it completely as a reduction in the value of my car, so all money from this goes directly to the debt of the vehicle. I also am eligible to continue the reimbursement of this car as long as I own it (and I hope it will last 20+ years!).

    So fast forward to now and I have a new job, currently 51 miles one way, and I have a new reliable car. So yes, I could have walked to work for a short period of time, barely changing my financial situation other than delaying the purchase of a car, then still needing a car a few months later, but I would have missed out on an unknown financial gain. I am on track to have 25,000 miles in the first year due to all of this driving. Also ALL optional / errand driving is done on this car, extending the life of our 2001 neon with 130k miles (we have owned for 2 years, bought with cash, and have put 20k miles on. On track to put on less in future years).

    Sorry for the rant, but I think a lot of things are variable, the market, your situation, and things change! I do still wish I didn’t have a loan and there could have been better options for financing a used car. But sometimes we feel that time is not on our side when making decisions.

  • John July 30, 2013, 9:29 am

    New here to Mr. MM and I have to say I wish I had stumbled upon this site a couple of years ago. I am definately going to start applying what I am learning here. I love this blog. I started with the first post and just reading my way through. I have a question about my car situation and hoping someone here can offer some advice. I am driving a 2012 Chevy Cruz that my wonderful brother sold to me as a “good deal”. The car is great gets 38 MPG but is way too expensive. I want to find a good used car and get rid of this one. The problem is I owe way more on it than it is worth. A year ago I traded my Harley in for a Kia optima that I promptly totaled without having gap insurance. All of that was rolled into the financing of the cruz so I am sucking big time on this one. Would it be wise to sell it and finance the rest of what i owe till it is paid off and just go with a used paid for car? Or since I am so upside down would it just make sense to pay this car off and try to drive it for the next 10-15 years? Any advice would be greatly apprciated. I have a long way to go but I am looking forward to my journey to growing my money mustache!

  • Lan Y. September 8, 2013, 4:17 pm

    I’ve got a 2005 Murano with about 90K in very hot and humid Texas. It commonly floods in these parts. I’m about to start my Realestate career and have been asked about changing my not so stylish ride. I’d like to buy used SUV with better mileage, and the required “stylish” ride. Any suggestions? What does your wife use?

  • Bella October 25, 2013, 5:15 pm

    Hi Mr. Money Mustache!

    I’m a long time follower but a first time commenter. I’m hoping to get a bit of advice.

    I was recently involved in a car accident (hydroplaned in my Honda Civic 2007 Coupe) and the car was declared totaled a few days ago and the insurance company is giving me just under $10k for the car. The car had just over 100,000 miles on it and I bought it used two years ago with around 80k to start. In the last year I have moved and do considering little in-town driving (I am grateful to be living in Ann Arbor MI where I am within 2 miles of work, grocery stores, banks, doctors, etc etc so I rarely drive in town). The way I end up racking up miles on my car is through trips every other month to see my boyfriend in Upstate New York, which racks up about ~1100 miles round trip (ugh). By next May 2014 or September at the latest he will be moving to MI so those long trips will hopefully stop.

    I am in the situation now where I have a good chunk of money to invest in a good, pre-owned car and I do not feel rushed to buy one since I don’t need a car to function on a day-to-day basis. Having a car for random around-town trips is helpful sometimes (beer runs, big grocery trips, bringing one of my many bicycles to the shop and having to leave it there, etc) but overall the function of a car for me is to act as a pack mule on road trips.

    I was 90% satisfied with the Honda Civic. Even the coupe model was big enough for me and I had a roof rack on it that allowed me to carry up to three bikes or a bike and a thule box. It got GREAT gas mileage on the highway. However, the handling was so sketchy, especially in snow and rain (apparently). I was hoping to upgrade to something that might have better handling capabilities, such as AWD but that tends to come with either way lower gas mileage and/or a bigger car, which I don’t necessarily need. I’ve also looked into Volkswagon TDIs which run on diesel and I hear get great gas mileage, but as far as I know they don’t handle any better than a civic.

    So I guess I have two questions. First, do you have any suggestions for models to look into that might meet those specifications? Are there any cars that handle well out there that also get good gas mileage? Also, while buying a used car is it better for me to find a car I would like for exactly $10k or would it be better to find one for $8k, for example, and put the rest of the money aside for any maintenance costs that may arise?

    Alternatively, I know I’ve heard some people suggest simply renting a car when it is necessary. In my car, I’m not sure that is the least expensive option. I am about to turn 24 so I still get charged lots of extra fees at car rental services. Zipcar seems like a cool program, but for long distance trips it ends up getting expensive very quickly.

    Sorry for the long comment! Any advice would be greatly appreciated. Thank you!

  • Charlie November 9, 2013, 3:01 am

    Hi MMM,
    1st off, thanks for the site. Please bare with my quick story before getting to my car dilemma. Im 33, and admittedly a little late to the ‘stash ride. My wife and I’s “comfortable” stream of income and non-mustachian lifestyle was recently interrupted when we found that she’d not be able to bring our 13 mo old son to work anymore and was also unsure of whether she’d be keeping a job. It was an eye-opening experience that showed us how freakishly close to the edge of bankruptcy we were. I found your site looking for tips to handle our car dilemma. Found that I enjoyed it so much that I started reading from the 1st blog post. One word…BRILLIANT. And I feel like such a fool for not seeing the light sooner. Weve since been brainstorming on how to unplug ourselves from the craziness that seemed so normal before. And not only get back in the positive, but stay frugal and put the extra money to work for us. Our 1st goal is to free up some income and stop paying interest on a car loan, then the credit card debt, etc. We currently have a 350/mo payment on a very inefficient Nissan Xterra that hasnt been offroad since its purchase, roughly 40 mo left on the loan. The clean retail value is basically what we owe on it. Trade-in values range from 3k-1k below what we owe. I also have a paid for Mitsubishi Evo that has a clean retail around 14k w/ high miles and lots of stuff that Ive done to it that could be a plus for some, but negative for others. The trade-in is between 9k and 12k. Its been my baby for a long time, but its so obvious now that the priorities need to shift, it needs to go, and we need to use the money to get out of the other payment and into something more efficient. Im having a tough time getting what the Mitsu is worth. Its going to take the right person at the right time. I feel like if I cant sell it before the snow flies, Im still going to have it come next spring. Its currently put up for winter, and not on the insurance either (wouldnt be very mustachian to pay insurance on a toy sitting in the garage, would it?) And maybe its worth it to me to take a little less for it now to be able to get back in the positive sooner. From what Ive seen at a few dealers, it looks like Id be able to get into a 10k car if I can trade 2 for 1, factoring in the negative equity in the Xterra. What do you think? Hold out on craiglist for the rigt buyer for maximum dollar? Or get out asap and move on with our lives and growing ‘stashes? I really dont want to get through this and still have a payment. But it wouldnt be the worst thing in the world to borrow a couple thousand and pay off in a few months. I could target a slightly cheaper replacement, but then I feel like Im taking even more of a loss. And in ME, cheaper and older typically means rusty. We are targetting cars on your smart list. #1 option being a Fit yet a little over that 10k mark at 12k or so. I commute in a ’94 civic hatch, averaging low 40s mpg and want my wife and budget to enjoy the same with a little more reliability.

    • Mr. Money Mustache November 9, 2013, 3:54 pm

      Wow! Quite a story Charlie, and welcome!

      I think you’re on the right track: you are currently in a financial emergency, so you definitely want to ditch the Offroad truck and the racing car. Those are vehicles you only consider once you are at least a millionaire (and then you re-consider and get back on your bike). Selling before the winter might still be worthwhile, since moving quickly is a great psychological boost.

      Your 1994 Civic Hatchback is a great solution for your own commuting (until you can move somewhere closer to work so you can start biking!), but I’d be hesitant about buying a $12,000 luxury car for your wife in your financial condition. Instead maybe something from the 2005 model year range on Craigslist, which you should be able to find under $6k.

  • Maria December 15, 2013, 9:24 pm


    Thanks for this post. I thought I’d comment in the hopes of getting some advice. (Though I think I can guess what the answer will be!) I’m a recent grad with about $40k in student loan debt who let my parents talk me into buying a new $21,000 car seven months ago. While the car gets fantastic gas mileage, I started to realize basically a week after I drove it off the lot that taking on $13k of debt for the car was a mistake. Generous support from my parents keeps my car payments a shade under $200 a month, at a 0% interest rate, but I’m still about $12k in debt at this time. While my relatively well-paying job keeps me in a fairly decent financial position as-is, I’m looking at making a transition (possibly toward more schooling) in the near future. So, I’m a bit stressed out that I’m not saving more right now.

    I’m thinking about selling the new car and buying a 2004-2005 used Prius, as you recommend. Assuming I can score a deal on the Prius for around $8k or $9k, I should be able to pay for the Prius in cash once I sell the new car, which should go for around $18k or $19k based on Kelley Blue Book value and the listings I’m seeing. Two issues that I see with this: (1) The new car has already depreciated considerably – about $3k so far. I can’t recoup that by selling. So would I be making a poor decision in the long run, losing about 5 or 10 years’ car lifetime for a smaller gain than I would have seen buying used in the first place? (2) In the short run, maintenance and repair costs would likely eat up some of the money I’d save on car payments; because my new car is under warranty, I don’t need to worry about maintenance at the moment.

    My driving habits: I don’t really use my car for my commute, but I do use it regularly for long trips to see my boyfriend in another town. Public transportation isn’t an option for these trips. I’m on track to rack up about 15,000 miles per year in this situation. That said, I don’t know how long this level of driving will continue, as my boyfriend and I hope to move in together in the next 2 to 3 years.

    TL;DR: Having already incurred quite a bit of depreciation on my current car, will it save money in the long run to sell my slightly-used car for a much more used car? Thanks a bunch for your advice.

    • Mr. Money Mustache December 15, 2013, 9:29 pm

      Yes! It’s still a big win to get out of the new car death spiral before any more depreciation hits you. It is happening every day, to a huge extent, so you might as well capture some of that equity for yourself before it goes up in smoke.

      • Maria December 16, 2013, 4:17 am

        Wow – thanks for replying instantly! Also, thanks for confirming my thoughts on this. The aforementioned generous parents are aghast that I’m considering selling (they’ve always bought new themselves and are convinced that used cars will be lemons), so it’s good to have outside confirmation that this is indeed the right decision. :)

  • agentsmith February 8, 2014, 8:42 am

    Loved this article! I’ve just recently discovered the idea of early retirement and I’m kicking myself of not knowing about this stuff earlier. Ah well I’ll get there and I’m enjoying the journey thus far.

    My soon to be wifey is completely on board with these plans which really helps. However, we’ve been running numbers and we’re finding areas of concern. Specifically in the kid department. Now we don’t yet have children but it’s in our future or at least we hope.

    What we’re concerned about is how the numbers ‘basically’ workout. What are people doing to keep their annual expenses low while raising children? Did you use day care or were you lucky enough to have family members close bye. Or maybe just have one spouse stay home during the first couple of years. That seems like a big dent in the amount available for saving. And what about other expenses like diapers and food. Of course you could do cloth diapers. Is anyone really doing that anymore? I know my parents did.

    @MMM I think this topic would be a worthwhile chapter on the blog in itself.

  • Amanda June 4, 2014, 12:37 pm

    My husband loves MMM, and sent me this link. Figured I’ll ask…
    I have a 2011 Nissan Cube that’s a prior salvage vehicle. My brother in law repairs them and they’re inspected, so I get the savings on that, but the downside is that when something goes wrong, the manufacturer won’t honor the warranty. That was the case with my Cube. Last summer, 2 weeks after I paid it off, the transmission crapped out. Turns out the CVT transmissions in Nissans tend to do that, and instead of a recall, they extended the warranty to replace them, which unfortunately did me no good. So, luckily through my stepfather (also a mechanic) I managed to get a new transmission installed from Nissan for $2,000. I spent $8,500 initially on the car with the idea I’d drive it till it drops, but now I’m not so sure. After that episode and after sliding all over the place during an especially hellacious winter (I’m in MN) I’m wondering if I should risk driving the car since it is paid off, or buy something more reliable i.e. Honda or Toyota, something that can handle winters better and may still have a warranty on it? Its been almost a year since the transmission was replaced, so that warranty will soon expire, but selling a prior salvage on Craigslist and getting something more reliable seems like a hassle. Though I got a new transmission on a fluke, and if that goes out again, I will likely pay closer to $3,000 the second time around. Is it worth the risk?

    • Mr. Money Mustache June 5, 2014, 9:04 am

      Hi Amanda,

      Although it seems scary because you had the rare bad experience, it is really unlikely that any given new transmission will fail – especially within the first 100k miles. Nissan is a great company in general. Also, it’s not the CAR, but rather the TIRES that are the important thing in winter traction. In Minnesota, you need a spare set of wheels with snow tires, that you keep in your garage and swap in when the snow season arrives (and take ’em off as soon as spring returns).

      On the other hand, you could always sell the nearly-new Cube with a new tranny on Craigslist for a good price and get a 2007 Honda Fit or 2005 Prius and get better fuel efficiency.

  • MKGirl July 10, 2014, 12:13 pm

    Hello Mr. Money Mustache! I would love your advice on whether it makes sense to fix up my car and keep driving it, or go ahead and invest in another vehicle. I’ve had a ’94 Geo Prism for the past 18.5 years – GREAT little car with a Toyota engine (but you already knew that), manual transmission, gives great gas mileage. I purchased it with a little over 40,000 miles on it, and it now has about 148, 500 miles. I use it to get to work and run around town – as of late I usually will rent a car for longer travel. The A/C doesn’t work – went out about four/five years ago and I haven’t seen it necessary to fix. I live in Michigan, so the hot summers are somewhat short (although it does get quite hot/humid at times). This summer has been really hot – even 10 minute drives in my car causes profuse sweating – lol. I recently got a quote to fix the A/C – there’s a blockage in the valve (freon is full) so the mechanic said it would be about $600. Other possible repairs – I have changed the clutch twice since I’ve had it and it feels a little soft right now, but no major alarm as of yet. If I do have to change it, that would be another $550 or so. The left wheel pulls a bit when I am going over 60 mph and need to turn a little – even a slight turn…gives a little of an unstable feel, but I have not checked this out as of yet. I have not put a lot of money in this car at all (paid it off the first year I had it) – regular maintenance including tires and brakes, and then alternator, master cylinder, clutch (x2), water pump. I recently went ahead and changed the timing belt while the water pump was being changed…I hadn’t done anything with the timing belt since I’d bought the car so figured it should get done now. The hub cabs are gone – fake covers on now and that looks just fine. Things inside the car are falling apart to a certain degree – radio doesn’t work, tear in the driver’s seat, a few knobs are broken, regular wear and tear in the interior. There has been a lot more rust showing up in this past year – on the hood/roof and by the wheels. So yes, there are concerns (maybe more safety concerns), but overall the little car still drives and rides great. I don’t usually cart folks around – now mainly because of no A/C. We live in Michigan and the winters have been harsh the last couple of years. My husband and I recently came across a great deal on a 2012 Honda CR-V AWD. Both of us currently drive small cars, manual (my Geo and his VW Jetta, which is 14 years old). We have managed in Michigan winters…so we definitely could keep managing. We are considering the CR-V – would be able to pay cash for it. It has 39,000 miles on it and was a one-owner car – no accidents, regular maintenance, etc. It is very versatile – both for hauling stuff as well as for Michigan winters. Research shows that it gives about the same mileage as the Jetta (V6). The Jetta has been a money-pit…should replace that soon. Do you think it makes sense to fix the A/C in my car, and hope that it keeps running for a good while longer, and invest in a newer vehicle in place of the Jetta? Or we can buy two older cars (but still in good condition) instead of the Honda. Our thought is to hang on to one of the small cars and possibly look into the Honda (although it is an automatic…might be too difficult to compromise on the manual). If the Honda will give us 15 – 20 years…it might be worth it. But maybe our thinking is faulty, and we shouldn’t pay more than $10,000 – $14,000 for a used car. Any advice? Would the CR-V be a ridiculous option for just the two of us? We do host people often and we live close to the airport, so we do get asked to pick people up…luggage space would be great. And older parents overseas…when they come to visit it’s nice to have a vehicle where they don’t have to fall into and have issues getting out of…but it’s not like we’re always doing these things. We could do it more if we had the option…but I guess that shouldn’t be the reason to purchase something bigger either…eh? Thanks so much for your thoughts.

    • Mr. Money Mustache July 14, 2014, 6:07 am

      Hey MK – that is a pretty badass and frugal automotive history. If you want to save some dough, what about a 2005 or so Toyota Matrix for just a few grand instead of the expensive gas guzzler CR-V? The Matrix is great for cargo as well. I would definitely have ditched the V6 Jetta years ago :-)


      • MKGirl July 23, 2014, 4:29 pm

        Thanks so much for your advice. We will be looking for something smaller, better gas mileage, and a manual transmission :-)

  • Matt August 9, 2014, 8:09 pm

    My wife and I are in the market for a larger car. Our family is expanding to 4 members at the end of October, and my 2000 Toyota Celica GTS isn’t gonna cut it with 2 carseats in the back. We feel like we’re inbetween a rock and a hard place with what to buy. We definitely don’t want an SUV, and want to buy used to save on some cash, but I really don’t know enough about what would make a good deal on what type of car we’d want.

    We know we only want what we need, and really don’t need anything extra. Any advice from car buffs out there? Thanks a ton!!!

  • oshara November 28, 2014, 5:08 am

    I’m in the middle of buying a 2014 corolla sport. I found a black one over a 100000 in mileage and a grey one about 68000.
    From basic viewing, the black looks better and well used. At the moment I can afford the black and not the grey.
    wondering what I should do scared if a 1000000 is not too much.

    • Mr. Money Mustache November 28, 2014, 11:38 am

      Wow, how did a 2014 car end up with 100,000 miles on it? My 1999 van has only a bit more than that and it is 15 times older!

      Anyway, I suggest counting the miles at around 10 cents each. So, the 68,000 mile car is worth about $3200 more than the 100k mile car. Both are probably highly negotiable, so look up the Edmunds used car value before placing your offer.

      • oshara November 29, 2014, 12:45 am

        Sorry I meant a 2004….Apologies

    • Joe Average April 3, 2015, 10:16 am

      We’re nearly 300K on one of our family cars. If it’s well cared for and you treat it right no big deal.

  • Audge December 1, 2014, 10:52 am

    Three questions:

    First, why do you consider only the use you will get out of a car in the next 10 years? Wouldn’t it be safe to assume that if a buyer has no goals to stop owning a car in the next 50 years to think about a longer term than just 10? I mean, as long as a car is used (and paid for in cash), and you plan to use it up (but be in charge of the maintenance of said vehicle for a longer period of time) wouldn’t it be a better investment to buy a car with lower mileage? Or is it always cheapest to buy only what you will use up in a 10 year period?

    Second, is it wrong of me to be afraid of that whole old car stage where cars require a lot more work and maintenance? I grew up in a house where my parents’ cars were always breaking down, and it just seemed like one of the most straining things on them.

    Third, (the long one) my husband and I have been a one-car family (a 2004 Honda Civic) for the duration of our marriage so far–6 years. It has worked really well for us, but we always had a flexible lifestyle up until the past year. We’ve now entered the world where my husband works full time, and I am a stay-at-home mom with a small tutoring business. We have a 5-year-old who will start Kindergarten next year, and I’m 8 months pregnant with our second. The plan was always to buy a second car, and the idea at the moment is to buy another Honda Civic very shortly. However, in my opinion, we’re actually still doing fine on one car, and I’m having a hard time trying to identify the cost-benefit of having a second car. My husband has a 12-25 min commute (10-11 miles. depending on traffic–we live in DC-MD–we have one of the shortest commutes possible in our pay range), and typically 2-3 days a week I will drive him to work so I can have the car to do my tutoring, go on play-dates with my son, Dr appointments, errands, etc. I try to be as efficient as possible, but sanity demands I have a car 2-3 days per week, which is putting extra miles on the car as well as extra gas money essentially doing a double commute a couple times per week.

    I would appreciate some perspective on how much I’ll be paying for that convenience of having a second car, vs what I’ll be saving in terms of not having to be doing this double commute. Thanks!

  • Meechity January 13, 2015, 8:32 pm

    I inherited a small home 15 years ago but it’s 70 (mostly highway) miles from my job of 13 years and counting. I’ve been through a Geo Metro, Toyota Echo, and my 2010 Toyota Yaris now has 190,000 miles on it.

    The Yaris works great and I’ll run it into the ground; it was about 5K more than a used version. In this case I can’t see a better route than purchasing the new car to maximize mileage, by paying half in cash. But I’m going broke on cars and I hate it, but hey, no mortgage…

    Any advice for me, besides “move”? Are there more efficient cars out there? Should I buy a string of used cars? Thank you :)

    • Wookey January 30, 2017, 3:23 pm

      You’re driving 140 miles/day! Yes MOVE! (or get a different job). At least if you got an electric car you wouldn’t be ruining the planet quite so badly, but 3 hours driving every day (maybe you don’t go every day?) is an an impressive waste of time as well as money.

  • Carol Schmid April 2, 2015, 10:37 am

    Mr. Money Mustache, Would like your opinion please. I have a 2010 VW Golf TDI 4 door in great condition with 43,000 miles. I love the look of the car, the gas mileage, and how it drives. Problem is the car seems to be a lemon and I am out of warranty. The transmission was replaced at 25,000 miles. I am on my third battery, the sensors went out to the tune of a $900.00 tune up 6 months ago, and I just had the fuel line hose come unclamped from the fuel case [or whatever it’s called] which was a $442.00 repair plus $100 tow, not to mention a danger when I drove the car 5 miles unwittingly spilling fuel everywhere. I’m afraid of more costly repairs. I’m thinking I should get rid of the car and buy a certified used car that runs on regular unleaded fuel. Looking at the 2014/2015 Mazda CX5 or Mazda 3 hatch. What would you do?

    • Mr. Money Mustache April 2, 2015, 1:13 pm

      I agree, Carol – Volkswagens of that era are notoriously unreliable. A good car should go at LEAST 100,000 miles with nothing even minor breaking.

      I’d avoid the CX5 as it’s a big heavy SUV, but the Mazda3 is pretty good – or check out these cars: http://www.mrmoneymustache.com/2012/03/19/top-10-cars-for-smart-people/

      • Carol Schmid April 3, 2015, 10:13 am

        Mr. Money Mustache, Appreciate your reply. I read through your top 10 used car list and will next pick up a copy of Phil Edmonston’s new and used cars & trucks and read through that as well before I go shopping. My Golf is definitely going to have a new home soon. Thanks again, Carol

    • Joe Average April 3, 2015, 9:30 am

      Change mechanics. Seriously. See if your success improves or if you have a mechanic that is milking you.

      That third bad battery has me scratching my head. I’ve owned ~35 cars over the years and never had but one battery go bad prematurely and it was a discount battery that sat in a car that I very seldom drove. My family is heavily involved in the old car hobby and none of them has ever had a battery go bad prematurely more than once in decades. Again dead battery from disuse.

      I have to wonder why that battery went bad. Was it a defective alternator/charging circuit? What the battery indeed bad? Or is the mechanic feeding you a story that somehow pads his bottom line? I have a friend whose car was being slowly pilfered for parts by a mechanic. He could never prove it. Go in for a repair, leave the vehicle there for a day or two – and new problems would pop up a week later. Could not prove it but the vehicle had some weird failures that miraculously ended when they switched mechanics – and he was using the dealer (different brand).

      I’ve owned maybe ten VWs modern and antique over the years. They aren’t that bad – VW didn’t get to be the third largest auto manufacturer in the world by making lousy cars. They’ve had their problems certainly – and all brands do. Go talk to the Ford guys about the 6.0L turbo diesel truck engine.

      I gauge VW’s reliability to similar to a Chevy. Not great like a Toyota or Honda but not as bad as their internet reputation suggests. I put my money where my mouth is and plan to upgrade from a 16 year old Chevy to a newer VW JSW TDI 6MT in the next year or two.

      THAT said – a TDI engine is a very expensive beast to maintain via a mechanic. As long as everything is good – and it generally is – all is well. When something goes wrong it gets expensive very quickly.

      Example: the diesel particulate filter. If your’s goes bad outside of the warranty and you rely on dealer labor and dealer parts – you are looking at a ~$3K repair. This filter captures ash from the combustion process and stores it instead of sending it out the tailpipe. When it becomes clogged – it needs a replacement. It shouldn’t get clogged for most of the life of the vehicle but driving in urban settings apparently can cause this to happen prematurely so it must be removed, and replaced with a new or rebuilt filter at great cost.

      Now the experienced DIY mechanic like me can take the filter off, cut it open with a grinder and wash the ash out (it’s very much like fireplace ash) and then weld it back shut for the cost of gaskets = ~$20. It’ll take some hours b/c it’s awkward work.

      Example: diesel fuel filter. The filter itself is $30. It is easily accessible from the top of the engine. After replacement, you have to bleed the fuel system of air by running the fuel pump via a computer/cable/software. For me that task is trivial. For you – if you are reliant on the dealer – it is quite expensive. And you’ll pay as much for a filter replacement as I do for the software and filter to do it myself forever more for $30 each time.

      The TDI must be purchased for the love the engine and what it will do. The economics of the engine – despite the high fuel economy – won’t pay for itself for many years and possibly 150K miles. The old design five cylinder gas engine that they are or were putting in the VWs was not as interesting or efficient as the TDI but it is was much, much more robust and trouble free.

      Lastly: I suspect you have the DSG automatic (double clutch, computer shited transmission. Like an automatic but it is really a manual with a computer shifting for you). I hear the service on those transmissions is very expensive at the dealer and must be done every 40K or 50K miles. If it fails then the repairs are quite expensive out of warranty. My solution is to avoid that fancy thing (great idea if I budgeted for $K transmission repairs). I’ll be buying the manual transmission.

      My recommendation: you’ve already absorbed the depreciation. Keep it and switch mechanics. Don’t buy the same battery brand. All parts stores have batteries for your car and some will install the new battery for you for free. They can also test the old battery for free. Google search for “vw tdi forum” and read/study. Prowl the VW forums like VWVortex a little and learn about the care and feeding of your steed. Just enough to know when you are being lied to by a mechanic. Just so you don’t look like an easy target for a mechanic should you need their services. You are informed.

      Or – go buy a used something or another for $7500. Something very ordinary with a frugal gas engine and a manual transmission. Or automatic but budget for a $1800 transmission rebuild if you keep it long enough.

      That’s why I don’t like automatics. They cost $2K more at purchase time and if you keep them long enough they’ll cost another $2K to rebuild/replace. They SHOULD last 150K miles or more but some do not. Poor design or they live hard lives under the care of owners that don’t change the fluid/filter on time or the driver has a heavy foot.

      We just bought a used Chevy sedan (16 years old) from a friend. It was in their family since new and well cared for. I’ve slowly been servicing it/cleaning it in my spare time. Great car but perhaps bland for $1500. I expect it last us at least another 60K miles (about a decade) and possibly be my eldest child’s first car and perhaps last through college. If not we can sell it next year for $1500. And the year after for $1500. And possibly the year after that for $1500 b/c the depreciation is just about gone – as long as we take care of it. Meanwhile there is a lump of money in my car fund for expensive repairs if it needs one.

      FWIW I don’t value cars strictly by their resale value – I value them on their utility. Every month I keep the old car going that’s another month without a car payment. My annual car repair bills are usually well below one car payment. Over the past year – our other car – a 16 year old Honda – has cost me a couple of oil changes and a couple of plastic parts on the engine – airbox bottom and air snorkel from online OEM Honda dealer for about $75 or so.

      Ask some friend who works on cars to go for a ride with you – maybe half an hour or so. See if they can point out any driver/owner bad habits that might working against you. I used ot have a girlfriend that ruined her car by shifting into high gear – and then suddenly decelerating to some speed below the speed limit and then suddenly accelerating briskly to about ten over the speed limit. All the way down the road like this. When I pointed it out to her she reacted badly. Led to a blown manual transmission and axles eventually. Another friend rode with me and would not leave the window switches alone. Window up and down, and then holding the switch in the “up” position while the window was up (risking burning out the motor). I switched them all to “lock” with the parent control on the driver’s door. Yep – must have blown a fuse. -eye rolling- Another guy I know is a door slammer. If closing the door with a gentle push would get the door to latch he’ll slam it like Zombies were chasing him to the car. And so on, and so forth.

  • Aparna July 14, 2015, 11:29 pm

    Hi MMM/Readers,
    It has been a wonderful experience to be a reader of MMM since a couple of years. I have benefited a lot from it and recommended to my friends as well. You are doing good work..
    I recently moved from India to US and plan to stay here for at least 5 years.
    We have a honda civic which does not give more than 24mpg in city and most of our driving is within 14 miles one way during weekday (2 offices and a daycare)
    I decided to buy another vehicle to save morning stress and the time spent by the last person on road. I am a bit environment conscious, hence even if in the end it may not save money, I want to go for used hybrid. We wanted a sedan which has roomy backseat. Finally we zeroed down on used camry hybrid 2012 or 13 model (significant mpg enhancement happened in 2012). We live in southern california.
    Right now I am getting quotes like 17.5 to 18k plus taxes for a car (2012 and 13) with 30k miles on it from dealers, with internet negotiation, before even visiting them. We dont want to explore with private parties, at this point we neither have time nor energy, and interestingly, in this area none is listed in craiglist.
    We are frugal spenders, but do not want to compromise too much. So, buying this new vehicle is fine, still want to check with you if this price is ok or should bargain more. Also, is there any known issues with this car (Couldnt find by myself on net)
    Thanks and Regards

    • Scott July 15, 2015, 11:22 am

      I’m more concerned why your Honda Civic is only getting 24 MPG. I used to have a 99 Corolla that would get 32-34 regularly in mixed, not-very-careful driving, and I would expect your Civic to get similar mileage. The lowest I ever got in that car was ~27, driving in stop-and-go NYC traffic in the summer, with lots of idling, aggressive driving, and excessive AC use. How is your driving style? Do you accelerate quickly away from lights, brake hard, and keep the AC at 65? Changing your driving style is the easiest and least expensive way to improve fuel efficiency. On a trip where I hypermiled that same Corolla, I got 51.5 MPG, so there’s loads of room for improvement.

      And if it is indeed your driving style that’s the problem, buying a hybrid won’t help too much. I borrowed my dad’s Prius and drive it from CO to VA. I had several hundred pounds worth of stuff and people in the car, and I drove 85-105 MPH most of the way, going up and down steep mountain inclines as I got closer to Virginia. Despite being rated at 48 highway, I got closer to 32, showing again that it’s not so much what you drive, but rather how you drive it. (I hypermiled that same Prius not long after, and got 63.)

      If your driving style truly is fine, then there has to be something wrong with your vehicle. Are any lights on on the dash? When has it last been tuned up? Have a mechanic you trust check it over and advise you of any necessary repairs.

      If you’re dead set on getting a hybrid, I wouldn’t get a Camry. I would either get a Prius of a similar vintage (2004+ is excellent, but 2010+ is redesigned and gets slightly better mileage) or a Honda Civic hybrid if you don’t need the extra trunk space. Older Civic hybrids were available with manual transmissions, though newer ones are not. Another option is the Ford Escape hybrid, which despite being a big SUV manages ~30 average, which isn’t too bad. Of course, if you drive it like your 24 MPG Civic, mileage will drop off rapidly.

      • Scott July 15, 2015, 11:26 am

        Forgot to mention, the reasons I wouldn’t get a Camry are: 1) it’s bigger and thirstier than a Civic hybrid for no real gain in utility; 2) hatchbacks are more useful still; 3) since they’re not as popular new as the Prius, prices are still too high IMHO.

        • Aparna July 15, 2015, 12:13 pm

          Hi Scott,
          Thanks for the detailed reply.
          I am not too sure about mpg, I gave the dashboard number. Havent estimated based on gas fills. The Civic has 60k+ miles on it.
          I dont think we drive harsh. Friends say me and my husband drive smoothly.
          My colleague has a camry and I like the feel inside. I like the rear seat legroom too. Civic is so less space with a kid.
          I wanted to know if the price 17.5k is justified for 30k miles hybrid (43mpg rated when new)
          If not this, perhaps we will buy a new honda CRV base. Doesnt make sense to buy a new hybrid and doesnt make sense to spend a fortune or new sedan. If new, CRV is good with a mpg rating of 27 on 2015.
          Any more suggestions?

          • Scott July 15, 2015, 1:31 pm

            I wouldn’t spend that much on a car just to save gas, no. I’m not sure how old your Civic is, but let’s say it’s worth $10k. So you’d need to save $7.5k worth of gas to break even. If gas costs $4/gal, that’s 1875 gallons, or 45,000 miles in the gas guzzling Civic or 80,625 miles in the Camry. If you drive 10k miles/year, it would take more than 8 years just to break even… plus, you’re still paying for Camry gas, adding still more time.

            I have a spreadsheet designed to track my break even point when I went from a $1650, 16 MPG, premium fuel guzzler to a $2850 40 MPG hatchback. For me, it’s about 1.4 years; for you, entering your numbers it’s 10.18 years. That’s a long time just to break even. And this doesn’t factor in transactions costs of selling your old car, registering your new car, higher insurance, interest if you can’t pay cash, increased depreciation, etc.. In sum, you’re much better off keeping the Civic and doing your best to bring up the MPGs.

            • Aparna July 16, 2015, 11:29 am

              Thanks for the time, but you have totally misunderstood! (dont mean to offend, plain statement)
              I wrote in the original query that we have a civic and we share it but it is stressful with single car and hence i am going for SECOND car, not for trade in.
              Secondly, I am not trying to save money by saving gas. I wrote that it pricks my conscience to consume lot of gas for getting a roomy car. Hence plain Camry or old cars are out.
              Thirdly, after you pointed out something might be wrong with the car, we set up the trip thing and it shows on the dashboard mpg value. Good news is for more than 30 miles of highway plus city combined it has shown approx 32mpg. I was not too much educated on how to read the dashboard, so when once or twice I randomly sampled some random trip readings, I saw number 24, thats the reason for my misconception. My husband clearly demonstrated how at the start of a trip, when reset it starts with 3 to 5 mpg on display and quickly shows higher numbers, as you cover more..
              So, please dont call our dear civic gas guzzling for my mistake. It is a 2012 model with smooth drive and good mpg.

            • Scott July 16, 2015, 11:54 am

              Gotcha! In that case, what’s wrong with another Civic? You should be able to get another 2012 model for around $12k with ~35k miles on it, and being that the car actually gets closer to 32 MPG that’ll only increase the payback time versus a $17.5k Camry hybrid. Even a brand new Honda Fit gets 43 on the highway, with no hybrid trickery, yet costs $15.5k, and 2010-2012 models can be had for $8-12k while getting similar MPGs.

              I guess the short answer to your question is: no, I still don’t think getting a $17.5k Camry hybrid is a good idea. A cheaper Prius hybrid maybe, but honestly the payback period between a cheap 35 MPG car versus a pricier 43 or even 50 MPG car is so long that it only makes sense to go for it if you do TONS of miles/year.

        • Aparna July 24, 2015, 7:30 pm

          Hi Scott,

          I finally did a very much anti-mustachian thing consciously.
          I wanted Camry and after all the analysis, I figured out new Camry hybrid is the best vlaue for money. As I said I am mainly buying it to overcome the guilt of having to burn too much gas for getting more space inside the car. Didnt find any used hybrid camry nearby, except the certified ones, which costed just 4k less than new. So, obvious choice was new, considering 5 to 7 yr cost of owning. More will mean anyway new will win.
          Thanks for the inputs

  • Bronagh Shelly July 24, 2015, 2:21 am

    Is buying a car off Craigslist a good idea. My grown children say that dealerships offer all kind of ‘warranties’ which cover things that may go wrong or the next 12 to 48 months. Do those warranties give true value? Or is buying a car in good condition, with low mileage the best ‘warranty’?

    • Mr. Money Mustache July 24, 2015, 3:10 pm

      Yes, Craigslist is the BEST (bordering on “only”) place to get a car in my opinion. Warranties are pretty worthless – the best thing you can do in the reliability gamble is to just get a not-too-old Toyota or Honda hatchback, preferably with manual transmission.

      • Dolores Hantsch July 24, 2015, 10:03 pm

        Thanks for your reply. Why do you think warranties are worthless?
        With regard to transmission, I live in a big city, with lots of stop and go driving conditions, I could not imagine driving with manual transmission, it would ‘drive’ me crazy!

        • Bronagh Shelly July 24, 2015, 10:05 pm

          On my last reply I forgot to use my maiden name, which I prefer for security reasons. Can you fix that? Thanks

        • Mr. Money Mustache July 25, 2015, 6:58 am

          I became disappointed with warranties once I started actually trying to use them. You’ll often get a runaround from the manufacturer (‘sorry, this isn’t covered in full so it will cost you X’) , or some long delay where they keep your product for fixing and you don’t have it, or a failed repair attempt.

          Given the value of our limited time, it is much better just to focus on avoiding breakable products in the first place. So buy for reliability, then use the thing carefully and sparingly so it lasts decades or a lifetime without breaking.

          As for manuals – they are just as good as autos in stop-and-go once you know how to drive them. But even better, I’d suggest avoiding using a car in this type of environment in the first place. Cars are best for covering huge, open distances. In the city, you have much better strategies available to you: bikes, walking, or moving close to the stuff you need to do (as well as eliminating or replacing activities that are NOT close to where you want to live).

          It’s a broad strategy that sounds difficult at first, but if you take it seriously it will revolutionize your life. I haven’t had to drive regularly in traffic in my entire life, because I always insisted it was not a good use of time so it was worth avoiding.

  • Skip September 15, 2015, 9:04 am


    I could use some advice… I am looking to sell my 17 mpg Dodge Dakota (4 do0r) and getting something like a used Prius or used Volt PHEV. I hear good things about both and both fit my commute time, with a slight edge to the Volt, as I can do most of my commute time in town on electricity and do my longer road trips with fuel. Also, how would I calculate the kWh for a plug in? My price locally for kWr is .15 but I hear that is not the correct calculation to make.

    Which one and year model would you recommend and why? I prefer the Volt hybrid but even as a used vehicle, they are $10K or more. I could get a Prius cheaper but they are not a true plug in as efficient as the Volt, though better gas mileage than the Volt.


    • ChargeMeUp November 29, 2015, 1:02 am

      Check your electric bill, 15 cents per kWh could be correct. The EPA uses 12 cents per kWh in its estimates. There are often incentive programs to charge EVs at greatly reduced rates during off-peak hours.

      For most electric cars you will get approx. 3 miles / kWh, so at 12 cents / kWh this works out to 4 cents / mile. You can certainly beat this with more efficient driving. I pay roughly $30 / month for the electricity to drive 1000 miles / month.

      If your long road trips are infrequent you could also consider purchasing a used Leaf for your daily driving, and rent a gas car for the longer trips. A used Leaf can be had now for less than $10K with reasonable mileage.

  • Craig December 5, 2015, 1:04 pm

    Beautifully reasoned and focused advice. My gosh, if MMM was a woman, I’d be stalking you. lol.
    I want to share my experience/failure with a car to demonstrate how someone can have luxury for a fraction of the new cost.

    I purchased a 2011 Volvo S60, 2 years old with only 1800 miles!!! I was looking for used but not even looking at Volvos, instead Lexus, Infinity, BMW, etc. But this was too good a deal to pass up.

    One year later, through a combination of Dave Ramsey and MMM, I realized that I needed to get rid of the payment and restructure my finances. This car had every conceivable bell and whistle, lacking only a front view camera. It had blind spot detection, stability control, top of the line sound, and a 3L turbo engine that was a freaking cheetah. Shouldn’t have any problem getting top dollar, eh? WRONG-OH! I paid $40k for this car and 1 year later couldn’t get any dealer to consider taking it off my hands for over $16k and finally sold it to someone who droolingly threw $21k my way. It had 20k miles and 4 years left on a complete maintenance/failure warranty.

    Lesson learned. If you’re conscientious in your research and willing to consider something with less than stellar resale value (if you’re going to keep it 10 years, who cares, right?), then you can get a 3+ year old luxury car for a fraction of it’s new cost. The only thing to be careful of is that you don’t buy something with chronic reliability issues (Consumer Reports can help with that) which can turn your cherry deal into a money pit.

    I miss that car (sigh).

    • Mr. Money Mustache December 8, 2015, 5:29 pm

      Yeah, luxury cars (Volvos and notably the BMW 7-series) depreciate with amazing speed. My best advice is to avoid the category altogether, because they’re less efficient and tend to break. Second best is to buy a slightly older one (perhaps 10 years new), from someone who has babied and garaged it. Then continue to baby and garage it, except avoid the dealership service department. Worst possible idea is to buy a brand-new luxury car.

      And above all, NO cars of ANY type if you don’t even have enough money to pay for it in cash!

  • Alex December 15, 2015, 10:46 am

    I agree with most everything you say except for “we should finance a car”. The Fed has kept borrowing rates next to nothing for the last several years. If i can borrow $10k to purchase a car 0.9% it will cost me less $232 to finance the car for 6 years plus i can i keep my $10k and invest it.

    In this day and age where borrowing is extremely cheap cash is king to then invest in an investment (which a car isn’t).

    • Mr. Money Mustache December 15, 2015, 2:35 pm

      Hi Alex, I may have answered this in earlier comments, but here is the reason I disagree: when you borrow for a car, the finance company forces you to get ridiculously full insurance on it to protect their collateral. If you actually own the car, you can get liability insurance only, which I highly recommend. The difference is often hundreds of dollars per year, more than you save with the low interest vs. investment arbitrage.

      Instead, pay cash for the car but use a line of credit against your house for extra investment, if you want more leverage in exchange for more risk.

  • Shaniqua January 18, 2016, 2:43 pm

    Just started reading Mr. money moustaches posts. I totally agree with what you are saying about buying a used car. The one thing I would add is always before purchasing a used car go and get it checked out by a reputable garage. I work in a garage and so many times have I seen someone come in and say they just bought a car and are bringing it in for their first oil change and sure enough the car needs a whole pile of work that the new owner never expected.

    It is called a purchase inspection it will run you $100 to $200 dollars (I am in Alberta) and it can save you so much heartache and money and can also be a great bargaining tool. such as okay you are asking $6000.00 for the car it needs $1000 worth of work how about I pay you $5000.00 or the seller pay for the work to be done you still pay $6000.00 but end up with a reliable automobile or you can walk away and not get hit with some big bills a few months down the road.

    If the seller offers to pay for the inspection make sure it is a reputable garage that you both agree on.

    Great Blog so far.

  • Tiave January 22, 2016, 3:30 pm

    Hi I was hoping you’d be able to offer me some advice about my young family’s car situation.
    So my wife and I have 2 kids and owned an old toyota 2001 avalon that has a lot of cosmetic issues because it is about 160,000 miles on it already. So we went to a honda dealer and was desperate for a more reliable car. We ended up agreeing to a 2011 crv honda with 49,000 miles on it. We financed the car with an APR rate of 16% and the dealer charged the car to us for 16,800. We gave a down payment of 3,000 and also slapped on brand new warranty for about 1,680$ for a full 3 year coverage. In total after taxes the amount including taxes and interest is about 20,000$. The car has vibrating issues which they claim to be normal. We feel cheated because we payed 16,000 for this car for them to say the vibrating is normal the car is find every time we take it in. Car still vibrating. How bad have we been cheating how much worth is the crv honda 2011 with this issue worth? I don’t know too much about cars so please enlighten me if I am being cheated. Thank you

    • Mr. Money Mustache January 22, 2016, 4:22 pm

      AAAAAUUUUGH!!! Is that really 16 percent interest and not 1.6 percent? You were definitely cheated.

      The car is worth about $15k, and your first priority needs to be finding a way not to own that thing, ending the bleeding. Sell on Craigslist. When you have cash to buy a car with NO LOAN, get something under $5k (see my “top 10 cars for smart people” post for a few ideas).

      Sorry to be harsh about it but this situation is killing you.

  • Mike March 25, 2016, 8:45 pm

    I have been walking to work for the last 4 years. We are a one car family. We have a 2004 CRV that is paid off but not in the best condition owing to the abuse from our two young children. We have recently been gifted a car by a family member. It is newer, lower miles and in way better condition. Should we sell one of these vehicles? We could use the money to pay our our credit debt (about 5 k). Would you sell the new car and get more money or sell the old car and keep the newer one as it will likely not need as much work? Thanks for any advice you can give.

    • Mr. Money Mustache March 27, 2016, 7:38 pm

      Hi Mike, congrats on the walking commute!

      If you have credit card debt, I’d consider that an emergency and sell the newer car to get that paid off. Or sell them both and get a fuel-efficient car (Like a Honda Fit) instead.

  • Darrell May 2, 2016, 9:57 am

    Hi MMM – new reader here. I was turned on to your blog recently by a friend of mine and am totally diggin’ it! Since your first mention about buying used automobiles, I’ve been particularly thinking of what to do in regards to my own auto situation.

    As someone who lives in Seattle and already enjoys biking and walking as a means of transportation within the city, I have the (crazy?) idea in my head to actually DOWNGRADE my vehicle, so to speak. I currently own a 2011 Hyundai Elantra with 37.5k miles on it and a KBB private party value of about $9500. I’m starting to feel like this car is almost too luxurious for my needs, which include mostly short trips along the highway with the occasional long road trip.

    Anyway, considering my car will only continue to depreciate in value I wonder if it’s advisable to try trading it in for a car of lower value at this point. Say for example I could find a car I like for $7500, and stash up that extra $2k for things more useful. What are your thoughts? And hey, if you think this IS a good idea and since you consider yourself a “car head” I wouldn’t mind hearing your recommendations on such a reliable, fuel-efficient (and, okay, I’ll admit that Bluetooth is one luxury that would be nice) model.

    • Mr. Money Mustache May 2, 2016, 10:20 am

      Hey Darrell – in short, YES! If a few thousand dollars would be helpful in your life, you might as well extract it from your vehicle fleet and put it to use. My car is worth less than $5k these days, and it’s still way nicer than we need.

      Here’s a slightly-less-old article on exactly that. To adjust those 2012 prices and find the same cars in 2016, just subtract another 25% or so:


      • Darrell May 3, 2016, 12:11 am

        Thanks for the timely reply. I read the article and found it very useful. In fact, a used Honda Fit seems like a great place to begin my pursuit for a “new” car. I’ll be using some more of the links your provided in my search for sure.

        Thank you so much for your help!

  • Mguess May 23, 2016, 11:28 pm

    Great advice! And one I try to follow. So any advice on a good substitution in this situation?

    I had a great car…paid cash for it and was planning on driving it until it fell apart. Then we had a baby…now 1…along with our other 2 children… 17 & 15. I’ve been looking at the sante fe for over a year and love it! But I have resisted. Mainly because we need a 3rd row and with that warranty…I haven’t found a used one yet.

    About a month ago, we were in an accident…and my precious little car is totaled and only worth about 2k.

    The baby has a HUGE car seat and honestly the teens were squished when we all rode together. Hence, the sante fe. However, finding a decent sante fe (with a 3rd row) & low miles has proved impossible….

    I really really don’t want to be a minivan mom. :(

    Any alternative suggestions?

  • Bob. Frugal+as+dirt. May 24, 2016, 8:15 am

    Not one comment on having the prospective car checked out at a shop first? How can that possibly be?

    Also, there are some good checklists online for doing inspections. Practically every defect you find can be negotiated off the price… I just can’t fathom why your advice does not include anything about actually inspecting the car FIRST, whether it is on your own or by a mechanic you pay.

    I don’t pre-negotiate over the phone prior to making the personal effort of viewing their specific vehicle too many variables and most people find that is becoming a real turn off as Craigslist users evolve. I do negotiate via e-mail or phone after my inspection while I continue with my search – that’s when most people will get down to their honest price.

    And I run Kelly Blue Book, NADA, and Edmund’s values all three.

  • Joel July 1, 2016, 9:12 am

    I would disagree with the statement “Your best insurance is simply to get a car with the lowest mileage on the odometer”. The reason is – often, low mileage can mean city miles, which is a lot harder on a car. So sometimes, higher mileage means mostly highway miles, which translates into a car in better condition internally.

    • Mr. Money Mustache July 2, 2016, 8:44 am

      Good point Joel – although definitely not true in the case of my own cars: low miles, zero city use, and light road trip use. Maybe the key is to try to gauge the car’s past life by looking at where the person lives and their general story of how the car was used. Not perfect, but still reasonable.

      • Simon Kenton July 2, 2016, 6:22 pm

        It’s not all I look for in a used car, but if the radio presets are tuned to a classical station, and maybe a 40s station, I am not surprised to find meticulous maintenance and placid driving habits. If you infer that during the test drive I like to have the owner drive me around, yup.

  • Matt July 16, 2016, 7:42 am

    Awesome blog. Last year I bought a 99 BMW 540 wagon (car nut) for $5k cash and my wife got a 2006 x5 3.0 for $6k cash. Spending too much on gas, I found a 2012 volt locally for $7k and love it. It has 190k on it but electric motors are less complicated than gas engine so I feel like it was a good buy. I financed it at 1.8% but am wondering if I should just pay it off. I’m selling the 540 and could use that money toward the payoff. The question is, should I replace the paid off x5 with something more economical? Even if it costs a few thousand more than I can get for the x5? Thanks!

  • Joe July 27, 2016, 2:59 pm

    Hey MMM,


    I have a 2011 ford focus that has been ok, it has 100k miles on it gets about 27mpg combined and has recently needed a $1500 transmission repair. its recently started making some strange noises and am thinking of abandoning ship. I currently owe 6200$ with a apr of 4.85%. should i trade it in and get a 2010 accord crosstour for 13k at 1.99% apr. Hondas are much more reliable and in this case would be much more roomier and slightly better MPG. it is difficult to road trip in the focus with the Mrs, our toddler, and dog. I think the crosstour would fit our lifestyle much more but it would be counterproductive adding the 7k extra in debt.

    • Mr. Money Mustache July 28, 2016, 10:21 am

      No, Joe – you should never borrow money for cars! At your stage I’d look for a $2000 civic, buy it in cash, and make it last. Ride bikes.

      You can’t afford road trips yet, if you don’t even have cash for a car without a loan!

  • Bret in Boise July 30, 2016, 12:40 am

    I am the original owner of a 99 Honda CRV 225,00 miles that according to my Honda mechanic is on its last legs. As a person who has followed every recommended maintenance schedule diligently I was sure hoping to hit 350,000 miles. Apparently I have one of the four cylinders that has been maxed out in expansion when it comes time to adjust the timing. Dealer says the cylinder could go out on me any day. I had a second opinion from and independent and he indeed acknowledged I have a loss of 40% compression which leads to the lack luster performance I have come to hate. He doesn’t seem quite so sure the car is going to go out any day as the Honda dealer says, perhaps because he is not trying to get me to trade in on a new Honda as the dealer would like. He is more concerned that I keep my serpentine belt in good shape. At any rate I have time on my side and have been looking at Subaru Outbacks, specifically the V6 (H-6). 4cyl are everywhere but 6’s are hard to find in the Northwest. And Subaru sure does want a pretty penny for their cars both new and old! A new Outback runs in the upper 30’s but a 5 year old model seems to drop the price into the low 20’s. However, the millage on these 5/6 yr old cars seems quite high for the investment, often running anywhere from 70 to 100k miles. Is a used car with such high miles still a savvy purchase or with financing so low should one look at new cars? Oddly enough my financial advisor seems to push the new car avenue with such low interest rates,but I just cant seem to justify such high monthly payments vs used. What are your thoughts?

  • Travis July 30, 2016, 9:50 pm

    Hello MMM!

    I will try to make this as quick as possible. I own a 2012 CRV with 42k miles and owe 5k @1.3% 5yr left on it 113/mo. My wife, a stay at home mother, drives this.

    I have a 2015 FRS certified used Toyota. 7yr 100k miles powertrain warranty. Owe 15.9k on it @0.8% and 5 years leat as well 265/mo. I have bought wheels/tires for it, suspension stuff, and exhaust. I autocross this car and really enjoy it.

    I am feeling guilty and pushed to sell it by my own financial goals. My wife couldn’t care less and just wants me happy.

    I paid 23k for it 1 year ago it’s now only worth 19k. I have had it listed 3 weeks with zero interest from buyers.

    If I walk away with 2k or God willing 3k I would really like to buy a very rare 08 or older forester XT manual. Much more practical… but hard to find. I’d spend 10-16k and end up with 14k-8k in debt… hardly seems worth it.

    I’m stuck.

    I have 7k in savings, 5k in silver, 3k in roth ira. Active duty Military, 24 years old, one daughter, recently discovered MMM, and living in Utah. Potentially moving to alaska next year. I own a home but have very little equity at this point. Currently saving 600 to 800 a month with recent changes in lifestyle.

  • Ashley August 8, 2016, 1:58 pm

    So I’m not sure if you still reply to these old posts but I’m giving it a shot. I bought a new car, yeah ouch, at the beginning of 2015 however it was a 2014 model with hardly any miles on it (100 or so i believe) and the dealer was wanting to get rid of it so after some talk, and getting $1,000 for my piece of junk 2005 eclipse valued at negative dollars for what needed to be done to it, I financed my chevy sonic for $11,000 new so I’ll pay $13 or 14k over 5 years. Either way, new or used, I didn’t have money to buy a car with cash. I was 18 at the time and my parents couldn’t help me and I needed a car to get to school and work, not close to where I live. Also, I did try to finance a used car however no one would allow me to finance a used car when I had very new credit so I ended up with a new car. My question is, once I’m not upside down on my loan (within the next half a year i would think), should I sell my car and buy a cheaper used car with the money I’ll get from the sale of my current car, or should I just keep the car I have since the damage is already done basically.


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