When it comes to the Automobile, you really have a choice between two possible relationships.
You can be the Master, and thoughtfully use cars as a tool as needed to reach your goals. Or you can be a Slave to the auto – worshiping it, allowing it to steal your money, your physical fitness, and your sense of control over your life.
The Master sees the Auto for what it really is: A very elaborate and heavy gas-powered wheelchair. There is no shame in using a wheelchair to get around if you need one. But it’s obviously counterproductive to do so when you don’t. So the Master chooses the most efficient model he can find, keeps it in good condition and uses it only when necessary.
The Slave finds the very definition of the Master to be insulting. “I need my car!”, “And maintaining a certain image is important in my lifestyle and profession!”
So he buys wheelchairs so expensive that he has to borrow money from a bank for them, and so enormous and complex that the ongoing fuel and maintenance costs are more than what he even manages to put into long-term investments each month.
Slaves make up the overwhelming majority of auto users here in the United States. Our irrational habit of spending virtually all of our income on the constant driving of cars we can’t afford is so common that people offer only a speechless dull stare if you mention you don’t do the same thing yourself.
So until recently, I thought I was doing pretty well in the auto department because I get plenty of blank stares. Walking my son to the school in the morning, we notice the zoo-like roads from the comfort of our powerful sidewalk. Junior office workers swipe on smartphones while idling in BMW M3s. Teachers on $45,000 salaries show up at school in $42,000 Honda Pilots. Young fathers rip the breathable air to shreds as they spool up the turbos in their jacked up Diesel farm trucks after dropping off a 60-pound child.
Meanwhile, my car and van sit in the driveway waiting for the monthly trip to another city or a haul of building materials, burning just a few tanks of gas per year. It’s a complete luxury that I even own these things, but at least the cost is kept down to a reasonable percentage of my income: a hundred or two bucks of fuel, $400 of insurance and registration, and under $1000 of combined depreciation and maintenance per year.
When you compare this spending of $1500 per year with the average two-car family’s spending of over $9000 and assume I invest the surplus, after 10 years you end up with a wealth difference of $104,751.
That’s 104 grand. Every. Ten. Years. Just by having slightly less new (and slightly more efficient) cars and being slightly less ridiculous about the amount of Car Clown driving we do.
So there I was, going along feeling smug as usual, until I met a new friend named Ben.
Although Ben is an American, we got to talking while riding in adjacent seats on a bus in Ecuador. A fellow fortysomething retiree, it turned out that he was virtually a copy of Mr. Money Mustache, but with strengths in different areas. And one of these differences is in the realm of cars. Ben doesn’t just limit his losses on cars, he makes money on the habit. To the point that he has owned and driven over 50 cars in his lifetime, and sold almost every single one at a profit after he decided to move on.
Suddenly I wasn’t so impressed with myself, but my mind had been opened to a new paradigm about car ownership.
- Most people assume you should blow everything you earn on cars.
- Mr. Money Mustache works on the idea of keeping this waste to a minimum.
- But where we see only loss, Ben creates opportunity and actually makes money on the habit.
So I followed up with him by email to get more information on how he does it. In his own words:
The Man Who Gets His Cars for Free
by Ben M., a Mustachian who lives in Maine
My friends think I’m crazy. “You look like a grease monkey! You went to a fancy college, saved enough money to retire early, speak another language, etc. just to work on a creeper, stuck under a car?”
It’s true. I’ve reached FI and I work on cars. Junky older cars, not even fancy restorations or sports cars. Why? because I like to drive and I like free. So I found a way to combine them.
I have to say that one of the best feelings I’ve ever had in my life was when I fixed some fancy Honda MaxiVan* sliding doors for $4 in parts and an hour of my time tinkering (well, OK, I did some research online for about an hour as well, from the cozy comfort of my couch and there was nothing else I would rather have been doing). Seriously – it was WAY better than when I got my degree, or landed my first consulting gig in Tokyo, or won any race. $4! Take that, Honda Stealership!
Driving is a right here in America, not a privilege. Or at least car ownership is. I know it’s supposed to be the other way around, but it’s always been shocking to me how many people seem to believe they’re entitled to a car, but then stop right there and forget that how they get a car, and what type of car they get are entirely up to them. And if they go a step further (and they’re Mustachian Car Drivers – yes, we exist!), they can do the impossible (according to MMM): Driving For Free.
Yes my friends, DFF is not just for people with trust funds or car sponsorships and I am living proof.
My vehicle background begins with my first car back in the 80s and continues to today, and not one of my literally 50+ vehicles has been sold at a loss. In fact, at times, I’ve made significant profits buying, fixing, driving and selling cars, all with the goal of DFF. I’ve made great friends, learned tons of fun stuff and gotten from Point A to Point B in a motorized barcalounger, all while earning money.
So, how do I do it?
Here are some simple rules:
Almost all of my purchases these days are made simply by searching Craigslist. Once in a while I hear about someone (foolish) trading in their car or better yet, paying to have it junked and I swoop in and match any offer since I know any dealer offer has plenty of profit in it.
My first DFF deal in Maine was when my wife’s coworker lamented the “dead” Subaru Forester in his driveway and said he was having it junked for $100. I readily offered to trade him a crisp (single!) piece of boring paper in exchange for 3100 pounds of high tech steel and plastic – a complex machine that has the power of hundreds of horses and four wheel drive to boot! What a deal. I drove it for a few months (can you say four-wheel-donuts-make-winter-in-Maine-more-fun five times fast?) and sold it to a friend in need (bankrupted by the health care system [and a brain tumor] but that’s another story) having covered all of my expenses, including all the gas I used, insuring and registering it, AND the cost of all the repairs and inspection.
Look for neglected cars.
My wife thinks I should start a little company called Ben’s Foster Cars. I foster cats for the local shelter – unwanted animals that usually have nothing wrong with them but for various reasons their owners are no longer interested in caring for them. Some are pretty much ready to be re-homed, others have a little damage. The same goes for cars – there are tons of cars, EVERY DAY, being sold/traded in/junked that are just a little TLC away from being reliable, safe and enjoyable but the current owner just can’t see it.
My current ride is a 2001 Honda Odyssey. The seller was tired of it and even let me know during our meeting (“I just want to get rid of it. We need room in the driveway and we already bought a new car”- not the best negotiating on his part, huh?) and it had some deferred maintenance and one major problem (in his mind) – the sliding doors on both sides were not working.
He called the dealer and was quoted $1K per side to repair the doors. A minivan without side doors is really just a small box truck so what was he to do? Dump it on Craigslist. I got it for $500, spent $4 on parts and had both doors working in my first hour of ownership. I detailed it, registered and insured it, did the minor repairs necessary to pass the safety inspection and now I have a killer, leather/heated-seated, luxury MaxiVan that so far has cost $878 including gas, registration and insurance. I am planning to sell it next month and will ask $1000 more for it. DFF and then some!
Research, research and more research.
Find a car you know/like/want and check out all the cars in your area online. You will start to develop an innate knowledge of what a 200x Honda Odyssey is worth so you’ll be able to quickly respond when you see one that’s underpriced. The seller will often fully admit why they don’t want/like the car – that’s your chance to not only research the frequency of those issues, but you also have a great prybar with which to separate their thought of what it’s worth from what you’re willing to pay. They’ve handed you the psychological keys to their wallet.
I wasn’t lying when I pointed out to the Odyssey owner that it certainly was a large vehicle and that I wasn’t sure if it would fit in MY driveway… but that I was willing to take that risk (and remove it from his driveway, conveniently) for the right price.
Do as much work as you can, yourself:
This includes the research part. Case in point: I had a 1990 Montero with a frozen brake caliper. Before I learned how to do this myself, I called a few shops to get quotes. They were all around $300 for a front brake job. Then I did a bunch of research – watching YouTube videos showing the entire job, pricing the parts, etc. I then made calls back, telling the shop exactly what I needed done, that I had parts, and asking what their T&M (Time and Material) rate would be, knowing that even John Amateur on YouTube did it in under 2 hours. Voila – I get a not-to-exceed quote of 2 hours at $75/hour. Half the original price, since I did the research and made it much easier for the mechanic to feel like he would be able to make quick money on the deal.
Remember, that original quote was not because the mechanic was sleazy; she was just trying to cover the possibility that it was much more involved (sight unseen).
As I did more research, I began to notice that other successful DIY mechanics people I saw or read about were normal people like me, with normal, cheap tools and a desire to learn and save money. Now I do brake jobs myself, and know that if I ever get in over my head, I’m just left where I was when I started – having a car with no brakes.
Sell quickly and at a modest price:
I don’t set out to make money though it always ends up happening. The goal is DFF, remember? In the case of the Forester, my friend still got a killer deal (since I sold it at cost) because I bought it so low and only priced it at my cost. All of the other vehicles I’ve sold have been very fairly priced and every buyer has walked away from the negotiation happy. This comes from knowing the market, having cash ready to pounce on a good deal, and keeping my expenses low.
This includes shopping for the best insurance deals, separating accessories from the vehicle when documenting the purchase** and in Maine, rolling over registrations from one vehicle to the next***. When it comes time to sell it, I price it according to the market and the research I’ve done, and I value my time so I keep it fair. I also market the heck out of it with really good photos (and I use all 24 photo spots CL offers), concisely written ad copy and honest details. I respond super quickly and politely to every contact I receive and I offer incentives to friends and even strangers to sell it “for” me by telling their friends, etc. I’ve had potential buyers decide they don’t want a car, but end up bringing me a friend of theirs who wants to buy it!
The point is:
You can do this. It can be at a high level (maybe you want a Subaru WRX and who am I to judge you for wanting that? That’s MMM’s job…!) or a low one (search Craigslist with a <$1500 filter and see how many awesome cars there are) but the point is to come from the DFF perspective and you just might surprise yourself.
Here is a list of some of the more memorable or recent transactions. All cars from Craigslist unless otherwise noted):
2003 Jetta TDI wagon – bought for $5200 after five months of searching online; knew I wanted over 40MPG without the magic (and complexities) of a hybrid. Later sold for $6500.
2005 Toyota RAV4 – bought for $19,000 back when we lived in California, enjoyed it for five years. When we moved to Maine, got someone to drive it here for free and sold it here as a rust-free California car for $18,000.
2006 Jetta TDI – bought for $3900 and it’s still my wife’s car. Learned a lot from that first diesel. Started with a failing camshaft and luckily for me, the owner only went to the VW stealership for a quote (of $6200!). I didn’t lift a finger on this car except to call an independent shop after doing my research. Got it fixed for $900 total.
2003 Saturn Vue – bought for $1000 from a guy who had a bad breakup and this was his ex’s car (remember that psychological prybar?). ‘nuf said. Later sold for $2500.
2001 Subaru Forester – you know about this one already!
1999 Audi A4 Quattro – Bought for $900 because seller didn’t realize color matched paint comes in a spray can. Sold for $2000. It’s amazing what a million little scratches do for depreciation…
2002 Passat AWD Wagon – Bought for $1000. Seller was tired of the car failing to start on cold mornings and having the Check Engine Light on all the time. Invested $8 in spark plugs. Later sold for $3480.
1988 Chevrolet 2500 pick-me-up truck w/plow – Seller bought a house in winter with an old truck in the back yard, covered w/snow. I offered $400 knowing the plow blade alone was worth that. Turned out to just need fluid changes and it fired right up! Separated the plow and sold it separately. Sold for a total of $2,000, making 500% markup on the entire package.
1999 Mercedes ML320 – Bought for $1000 – Seller waited until a week before they were moving out of the country. Desperate times call for desperate measures. Meet my friend Ben Franklin! Later sold for $2100
1997 Toyota Tercel Blackhawk (ooh! Google it!) – Seller thought it had a transmission issue. Turns out the brakes were all seized from rust. Brute force and ignorance (aka a sledge hammer and nothing to lose) and I drove it home after I paid him $400 for it. Sold it for $1300.
2004 Honda Element – Belonged to seller’s ex-wife. It had a cracked radiator so no heat. Bought for $1300. Replaced the radiator, bought a used hood to replace the dented one and sold this highly-desirable, cult car for $6500.
2008 Mercury Grand Marquis – offered to me by an elderly neighbor’s out-of-state family when they came to dispense w/his property and heard I was a “car guy”. I offered to help sell it; they asked for quick $. I offered to match dealer trade-in of $3200. Later sold it for $6200.
2003 Kia Sedona Van – Seller’s rich mother handed down her fancier car. I pointed out how the neighbors in their McMansions didn’t have surplus cars outdoors cluttering their pretty driveways…and flashed some cash. Bought for $1250, sold at cost to a local school.
2003 Honda Odyssey – Seller hit a deer and dented the front quarter panel and hood. Replaced these parts from the local junkyard. Also the passenger windows wouldn’t go up after the accident so the interior got wet. Seller haphazardly covered windows with plastic but got sick of it and bought a new car. Bought for $1000. Turned out the child safety switch had been tripped by the collision – I flicked a switch and closed the windows for the first time in 6 months (and avoided the stealership quote of $600 to replace window regulators). Sold at cost to local school
2001 Honda Odyssey – you know this one.
1990 Mitsubishi Montero – given to me for free by a Californian acquaintance who was tired of her old (yet very reliable) car. It failed smog in CA and rather than pursue repair, it came to Maine where it’s a highly desirable hipster rig with NO RUST. I still drive this one but it’s worth about $4k.
2001 Mercedes C320 – Seller came out to a dead car one morning and almost lost his job for being late (I’m guessing this wasn’t the first time). Took a taxi to work and then a taxi to the stealership after work. Couldn’t be bothered to do any research so I bought it off him for $1000. Sold to a local friend in need at cost. Another cheap Benz for DFF!
1989 Jeep Wrangler w/Plow – my latest project. I’ve always wanted a plow rig. I found this up North (very sparsely populated) and knew as soon as I saw it that it was underpriced. Took my trusty prybar (Seller said it wasn’t “truck enough” for him) and a few pieces of green paper (man, people love trading real stuff for abstract stuff!) and now I have a Cheap DFF Jeep! Bought for $2250, current market value is $5k including plow.
* Like Mr. Money Mustache, Ben considers US “Minivans” to be absolutely huge, so he calls them MaxiVans.
**In most states, the DMV needs to know the sale price to calculate taxes and other fees. I don’t advocate tax evasion, but do appreciate tax efficiency. If the jeep is worth $1500 and the plow, extra tires, cool Hello Kitty seat covers and Truck Nutz (trucknutz.com) are worth another $1000, then I’m going to be sure to document that I paid $1500 for the truck, not $2500.
***Learn about the rules in your state. In Maine, for example, we remove the plates from a vehicle when it’s sold; the plates can then be transferred to your next car for a small fee.
++Keep in mind that I have legally and fully registered, paid taxes on and insured every car I’ve owned and I’ve driven them as my own. I’m always looking not only to DFF but also to find the car of my dreams. If only the former happens, I sell it. So, I’m not a dealer; I’m a guy looking for the right car and I can honestly say that to anyone who asks.
An Epilogue From MMM:
It turned out that Ben and his wife and I got along so well (plus each family has a single 10-year-old kid), that we decided our families should meet. We booked a vacation rental for next month on an island in South Florida and started working on logistics.
Should we rent a minivan? (Ben emailed me a Craigslist posting entitled “2004 Chevrolet Venture LS – $800” and said we could drive it for a week then sell it at a profit. Minutes later another one arrived for a big old Chrysler Sebring convertible for a similar price.)
How much is the water taxi to get out to the island? (Posting for a 6-person paddle boat for $80 on Fort Myers Craigslist)
Where can we get food? Fun? Bikes? All questions readily answered with just a few seconds of research.
You adopt this philosophy very casually or dive right in as Ben has done. The point is that resourcefulness and not following the standard consumer script pays great dividends, in both money and fun.