New Car or Used Car: Eco-Friendly Or Not?
Photo by mctheriot
Yesterday I received an email from a friend of mine known in the blogosphere as Armed Liberal, he is one of the main characters over at the political blog, “Winds of Change.”
AL is trying to figure out the most cost effective solution to his vehicle situation:
…so I need to bounce something financial off someone and I think you’re exactly the right person.
We’ve been pretty frugal this last year (except for my motorcycle, OK…) and that’s good because I just burned our loose savings by not working for three four months…
But we are looking at “spending to save” – which always makes me itchy.
We bought the hybrid so TG (his wife) could commute using the HOV lane. I want her driving downtown 2x a week as a risk management exercise (i.e. if she’s exposed to the risk 60% of the time, the risk goes down 40%).
But the hybrid HOV stickers will expire the end of the year, and won’t be renewed.
To get stickers, we’d have to get a natural gas car – which I really don’t mind, except that they can’t be driven much outside LA, so we’ll rent a little more and we’ll have to be thoughtful about fueling.
Our 2006 hybrid is worth ~15K. We could buy a used 2008 gas car for 18K, so we’d be trading up 2 years for 3K. But…there’s a 4K tax credit on new ones, which means a new one is 21K (no tax or fees on any of these prices).
So I’m reluctant to take on a used car for a 3K swing in price. But I’ve suddenly talked myself into a 6K spend which is enough that I’m reluctant to do it.
Questions – buy used for $3K?
Do this at all, or make TG man up and just sit in traffic with the plebes?
My personal take is that thinking you will save money by spending money on a new car that drops in value the moment it is driven off the lot isn’t logical. Lightly used is much better. Also I think he needs to look into cost effectiveness of the car TG is driving on her commute. AL knows as well as anyone that even if you are getting outstanding mileage, it takes a long time to break even on initial costs vs fuel savings on a new car, even a hybrid. It seems to me this is mostly about the car pool lane stickers. If I were him, given his situation with needing to generate some income, I would not buy anything right now and if the stickers expire, TG might have to adjust her commute a bit to cope with more traffic, or find a car pool buddy. There is also the possibility that before the year is out his financial situation could change, but it’s a pretty sure bet that getting another car isn’t going to earn him any money.
What do you think? Is is better to trade up when it comes to automobiles, if you can keep the costs down? Is the car pool lane worth a 3 or 6k investment?
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hmmmmm, quite the predicament with so many options! I wouldn’t consider a new car a good investment so I would advise against it.
As a sidenote, I was recently made aware that the way they make eco-cars is less environmentally friendly than how they make non-eco cars. So often in the end the eco-cars end up being more environmentally damaging. I haven’t looked into this yet, but a friend recently said that to me in passing… Just another thing to check out.
Have you heard anything in that regard?
I don’t know what kind of hybrid AL and TG are driving but unless they can finagle some sort of special financing deal I wouldn’t think of trading. They probably haven’t fully recouped their investment in the hybrid and although not being able to use the HOV lanes is going to suck it probably doesn’t warrant the additional expense. Keep the hybrid and get someone to carpool with would be my recommendation.
Sam and I wrote articles on this topic a few months ago – look for Sam’s “My SUV will beat up your hybrid and save the world” and my article “My smart car adventures in Germany”.
You’ll have to let us know what your friend decides, I’m curious now.
@Ryan-One of the things I love about blogging is the exchange of ideas that keep sending me out into the land of google to learn more. As near as I can tell, the debate about which is worse rages on, though if there were some way to make all cars electric all at once without the damage that occurs from manufacturing, it would certainly improve emissions. Everything about the cars themselves, except the starter battery seems to be recyclable.
@David-I agree with you and thanks for sending me to those two other posts. My favorite comment from Sam’s SUV post was:”Don’t be a vegan who wears leather shoes.” I loved your Smart Car Story. Iv’e often thought I would love to have one if I lived on a Greek Island, but for the freeway combat zone that’s my commute, I would be terrified in one of those cute little cars.
Hi Tracy, glad you liked the stories. The Smart Car is an awesome little vehicle but not for daily highway use. I think Sam and I both agree a cheap used car makes the most economic sense although I’m pretty sure either one of us would rather drive something much nicer (he’s got his eye on a BMW, and I’d love to have a Hemi Dodge Challenger (insert Tim Allen manly grunt here)).
I’ve been looking at the Smart Car and Prius.It’s a fairly tough choice, I live in a somewhat small town and work within 2 km of my home. The convienence of the Prius makes it a nice choice, but is it necessarily better than the prius? My main issue with the smart car is its length and weight imagine getting hit by a hummer you are practically history! What are your thoughts?
It depends on where you drive, I think. I wouldn’t feel very comfortable in a Smart Car on a So. Cal. freeway for example, but as I mentioned above, it would be perfect for an ancient town with tiny roads. The Prius also gets better mileage.
Only keeping cars about 3 years? $6K over 3 years; would you pay $8/day to drive the HOV lane? That’s just one way to look at it. Another way; it would be cheaper to take the gamble and drive the HOV illegally… no that I am advocating that! Is it still a $271 fine?
If the current vehicles are reliable and in good shape, especially if they are paid off, the best choice is to keep driving them. The cost of any car purchase must be factored over the entire ownership period. Every day they drive without a payment they are increasing their ROI.
Actually, if I drove here every day,I _would_ pay $8/day to use the HOV lane – it cuts the commute downtown by almost 30 mins each way; would you pay $8/hr for your time?
Used car is the way to go, always!
@ Coach- You are right on as always. One of the ways I used to stay in debt was through frequent car replacement. And every time I did it, I owned less of the car and more of the debt.
@Sam-I loved your SUV post at your site!
OK, yes…but…doesn’t it depend on the price swing between used and new??
On my last-but-one car – an Outback – I got an 18 month old Outback with 18K miles for a $6K discount. That’s worth it for sure…but $2K?? not sure, to be honest.
Thanks for all the sensible comments; our typical m.o. is to buy “gently used” cars with 10K miles or so and a factory warranty, and that plan has been good to us so far.
We broke it to get the hybrid, which was a new model, primarily for the HOV stickers…the 10K cars weren’t enough cheaper (like 1 – 2K to justify not buying new).
And, bluntly, the hybrid has been a mistake. At 60K, we’ve already replaced the main battery pack, which cured the driveability issues, but I just don’t have faith that this car will go another 60K much less 100K (our last two cars were sold with 140K+ on the clock).
So, first, there’s a bias toward dumping the car.
Next, my wife rides her m/c to work, which is great for her and slightly anxiety-producing for me. We’d made a deal with the hybrid that she’d drive 2x/week…which makes things much better for me, stress-wise.
And she is pretty flatly determined not to take a car that doesn’t have HOV stickers to work.
So there’s a bias toward getting a car that can have stickers.
Buuut…
We probably use our car 3-4x a week; the high miles on the hybrid come from some long road trips to Northern California.
And we’d have to rent to do that…
So it’s a muddle for us, with drivers on the pro and con side.
If we decide on ‘pro’ the issue is that a 2008-9 used GX is $18 – 19.5K with < 20K miles.
I can get a new 2009 for 24K, with a 4K tax credit.
Like the hybrids, the 2K swing in value doesn't seem enough not to get a new car.
Or, we could get a non-sticker car, and she could ride more.
Note that m/c operating costs are quite high – probably pushing $.80/mi ($400 service every 6,000 miles, $200 chain every 12,000, $350 tires every 6,000).
And my anti-anxiety meds are expensive…(kidding!).
It's a muddle.
We'll almost certainly get rid of the hybrid this year.
The stickers on it have value today – about $800 – 1K. That'll be gone in December. So I'm incented to get rid of it, one way or the other, soon.
Thanks again for the advice…
A.L.
Well, let’s see.
It seems to me that what you want to avoid is fixing this car again, or having to take less money for it once it goes far beyond the 60k miles.
Okay, smart. Yup, dump the car. You’ll be at an advantage because most hybrids aren’t put on the used market until they hit 100k.
As far as the car-car goes. I think your original plan of buying a used car (hopefully cash) with low mileage is rational. Given that a lot of combustion engines now get 27 mpg or even more, I really can’t see the fuel savings to be that great.
Remember, TG also has the option of hopping on the bus. Yeah, brutal, but isn’t there a park and ride in your neck of the woods near the 110? In fact, my kids and I take the bus when we can. A bus pass: $55/ month. The frustration tolerance training: priceless!
I will stay with my 12 year old Escort, thank you.
I would absolutely stay with the original car. In terms of sustainability keeping the original vehilcle far overrides the benefits of the car pool lane.
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Thank you so much…I am no whiz kid with code either, so I am not sure why the navigation is a problem with Red Hat, not even sure what Red Hat is to be honest, but thanks for letting me know, now I will have to ask someone who might understand it.
This post reminds me of when I was a boy growing up in Kansas. My pappy used to say “When life give you lemons, make lemonade”. But he was a hopeless drunk who never made much sense so I never paid much attention to him. Have a great day!
I agree
TJ –
Posted a new article, what’s wrong with green, I think you’d be interested in. Figured this was a good place to drop the plug.
With regards to your statement, “My personal take is that thinking you will save money by spending money… isn’t logical” can be applied much in the way to green living.
Check it out, let me know what you think. You always give thought-provocative responses.
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