Finding The Sweet Spot of Car Ownership

When I played tennis, I learned that the sweet spot on a racket was the area in the middle where if you hit it just right you would get the most "pop" from the ball, or the most speed for your strength. I think of buying a new car the same way, I want to get the most bang for my buck, so here is what I've learned.

1. Buy used, duh. We all know how much a car depreciates in value as soon as it's driven off the lot. But you wouldn't believe how many people try to justify purchasing a brand new car because they will keep it "forever". Even if you keep it until the day it dies, you have to purchase a pretty inexpensive car and hold onto it for a very long time to beat my method.

2. Buy direct from a person. Car dealerships are a ripoff even if you're buying used. Just bring the car to a mechanic and have them inspect it first, if the owner balks that should be a huge red flag.

3. Choose the car you want to purchase and then wait for a good deal. We searched for over a month before finding a great deal on the make/model we wanted, and we still had to forfeit our color preferences to get it.

4. Save up and pay cash. Another duh, no matter what deal you get it's not going to be as good once you pay interest on it. If you can't afford it now, you can't afford it.

5. Always make an offer. Even when buying direct form the owner, people price their vehicles knowing they will sell it for less. Decide what you would be willing to pay and then offer a bit less, that way you'll have some negotiating room.

OK now the things you may not have thought of:

6. Do some calculations as to how much the car will cost you per year for the number of years you expect to use it. My ideal target is $1000-$1500 per year, so if it costs $10,000 and we expect to use it for 5 years and then should be able to sell it for $4,000 our per year cost is $10,000-$4,000 divided by 5 years for $1,200/yr.

7. Consider the costs of car insurance, registration, taxes and gas as all part of the cost! I do not factor these in for the per year cost, but do use them to compare costs of different vehicles. Insurance alone can be an extra $2,000 a year for a new car, get a gas guzzler and you're looking at several thousand additional per year. When I compared the cost of gas of a Honda minivan vs. a Honda Pilot we figured out it would literally save us $5,000-$10,000 depending on the number of years we kept it. That's a lot of money I'd rather spend on something else-like vacations!

8. Pick your top 2-3 features and stick with them. You can't have them all, especially if you're looking to save money so decide what's important to you. Having lower floors, sliding doors and easier ability to move about inside were all important to us, that's what ultimately made us choose the minivan over the SUV (practicality won!).

9. Stick with old and boring. You may be longing for a new shiny car, but as long as old faithful is still reliable and your family's needs haven't changed, there's really no reason to switch-and it will cost you.

10. On the other hand, once your car becomes unreliable and you're spending more on regular repairs than you would on the per year cost of getting a "new" car, it's not smart to continue spending more money on an inferior vehicle. Cut the cord.

All that to say, I've found the sweet spot of owning a car to be purcharing one that is approximately 4-6 years old and keeping it for 5-10 years (the ranges are due to the varying makes/models and their reliability, the mileage it has when you buy it and how many miles per year you plan to put on it).