Why I Drive a $500 Car

Driving a $500 Car

I am 32 years old, and I’ve owned more than 30 vehicles.

This includes cars, trucks motorcycles and scooters that have varied in quality from not-even-close-to-roadworthy, through to brand-new off the lot.

For the last year and a half, I’ve been riding a brand new motorcycle. I bought it off the lot and justified the expense as “worth it to have something reliable”. I also told myself that I work hard (which is true), and I deserve a new toy (which is not true).

A couple of months ago, my wife and I decided to get serious about living the rest of our lives debt-free, and I knew that the motorcycle had to go. The bike was still worth more than $4000, and I knew that I could get a functional car for a fraction of that, so I began shopping.

(I still had a loan on the motorcycle when I made this decision. If you’re in this position check out this post on how to get out of a car loan.)

A couple weeks of deal-hunting on Craigslist and two ferry rides later and this is what I ended up with…

good reasons not to buy a new car

In case you’re not familiar with this car, it’s a 1991 Chevrolet Sprint. AKA Geo Metro, AKA Pontiac Firefly, AKA Suzuki Swift AKA…you get the idea. It packs a mind-blowing 48 horsepower and can run 0-60 sometime between now and tomorrow.

Right back where I started

Now to understand the significance of this, you need to know that my very first car 17 years ago was a Chevrolet Sprint like this one. A few years older, but more or less the same car. I’ve been through a whole lot since then, and it’s a little humbling in my mid-thirties to be driving the same car that I was at 16. It didn’t help that the first night I bought the thing I was driving home on the highway and two girls pulled up beside me in a brand new car, pointed, laughed and drove off.

It’s also worth mentioning that as a professional marketer, it is a little bit embarrassing to be driving something so humble, (I chuckled when I saw M$M said more or less the same thing about a Chevrolet Colorado, a much nicer vehicle). Others in my age/income bracket are driving around in brand new cars and I’m shifin’ gears like it’s 1992.

My car is a status symbol

I’ve always said that I would never own a car as a status symbol. The truth is though, it’s really not up to me. Whether I like it or not, people are going to make judgements about me when they see what I drive. Most will assume that I’m unemployed, broke or both and can’t qualify for a car loan.

A friend of mine who is in his fifties and has never owned a new vehicle congratulated me on the purchase and said something that stuck with me: “If you drive this for five years, you’ll be able to drive whatever you want for the rest of your life.”

That’s some straight-up truth right there, and that’s what I’m focusing on when I drive this thing to work everyday. It’s all about making some sacrifice now so that I can put my family in a better position down the road. A little sacrifice never hurt anybody right?

Saving a ton of cash

Here’s the thing, I’m saving a ton of cash by driving this car. If I had bought a new car, assuming I’m average, I’d be paying $570 per month for at least five years. That adds up to more than $32,000 in total that I’d dump into a vehicle that if I’m lucky, would be worth half that at the end of my loan term.

Add to that the fact that insurance on a new car would cost me more than double what I’m paying for this thing and you’ve got another $700 per year in savings. And of course there’s fuel. I measured at the last fuel up and this car got 48mpg which is incredibly high for a non-hybrid. There’s only a few modern cars that can touch that mileage and they’re all significantly more expensive.

What about a warranty?

I’m regularly trying to talk my friends out of buying new cars. Every time I have this conversation, the same thing comes up: “I really want a warranty so I don’t have to pay for repairs out of pocket”.

buying a used car vs new

 

The math simply doesn’t work on this one. Let’s assume that my wife’s 2005 Dodge Caravan has the most expensive breakdown possible and suffers a catastrophic engine failure. This of course is unlikely, but possible. Having a good, used engine installed would cost somewhere in the neighborhood of $3500, or a little more than 6 months worth of average vehicle payments.

What I’ve learned is that getting out of debt is hard. Budgeting is hard, and you need to make tough decisions if you want to be successful at it. I would much rather be driving something German with heated leather seats and a bit of street cred but that wouldn’t help me pay off my debt, pay off our house and move us forward on our path to financial security.

For the time being, I’m going to keep driving my beater and remember all of the money I’m saving. A few chuckles from strangers never hurt anybody.

What hard decisions have you made in order to get your finances on-track?

8 thoughts on “Why I Drive a $500 Car

  1. I don’t think that driving that car is embarrassing at all. I think they’re cool. And you have your own style, which is hard to build sometimes. And at least you have a car. I think they are amazing. Keep up the good work 🙂

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    • I think these cars are pretty awesome as well. What I didn’t say in the post is that this one is my sixth Metro. Embarrassing is more how others view my car.

  2. High-five for the embarrassing car club! I drive a 2004 Taurus that I’ve had for ten years. It has more dents, dings, scratches, and scrapes than I can count. The thing is, I’m weirdly proud of it. Other than the rear defroster having never worked, it still runs like a champ, and it’s without a doubt *my* car. We’re like Han Solo and the Millennium Falcon, except I’m not setting any records for the Kessel Run any time soon. Sure, I’ve had to pour some money into maintaining it, but nothing that I wouldn’t also have had to do on a newer car. I also haven’t had a car payment on it in six years, which is beyond awesome! Don’t be embarrassed about your Sprint, or Metro, or whatever it wants to be called. It’s serving a great purpose 🙂

    • Thanks Kyle, and sorry for the late response. Your comment ended up in spam for some reason.
      I actually feel you on the pride thing a bit. Sometimes I feel proud to have a reverse status symbol!

  3. Metros are awesome little cars. Were they the ones with the 3-cylinder engines, or was that the Prism? How many miles are on your car?

    • Yes, this car is basically a Metro. Confusingly, they sold it as Geo Metro, Chevy Sprint, Pontiac Firefly and Suzuki Swift in Canada. This one’s actually pretty low. It’s got 167,000 kilometers, which is around 110k miles I believe.

    • That’s how to do it. Truthfully, I’d like a nicer car, but I’m actually really enjoying this one for the time being. I may keep it long-term. Every time I drive somewhere it’s like Mario Kart!

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