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Best car for value investors?


stahleyp
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Hey guys,

 

My 2003 Malibu is no longer working.  I'm fairly tall so I'm looking for a mid size rather than a compact.  What cars tend to be reliable,  lower cost and good gas mileage? I'll probably drive it for 10+ years.  From what I've read Honda has declined in quality from the old days. 

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My brother went through this analysis last year and he chose the Scion which is also on the list of 10 cars above. He has a long commute to work and he saves enough to pay for the car in 3 to 5 years (the car was about $14000 Cdn). It has a long warranty 5 years I think so he figured it was cheaper than buying a used car. His cost of a thousand mile trip is about half my cost in a Volvo sedan.

 

It shows you how robots can make things inexpensive. I hope we get a free market again so the potential savings become more widespread.

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Where and how do you drive?  If you're mostly commuting and live in an area with decent weather I think a Camry is fine.  I had an Accord, tranny blew out at 140k, clear coat peeled, not satisfied.  Honda went to the CVT transmission, I'd avoid those if possible.

 

I like Toyota trucks, Sequoia, Tacoma, 4runner.  But then again we purchased our main vehicle (Sequoia) to pull a trailer, and drive during snowstorms in the mountains to ski, and haul a bunch of people around town.  We don't do much day to day driving, I work from home and my wife walks my son to school. Gas mileage is irrelevant to us and my use case is probably different from most.

 

In the north the biggest determinant to how long you can drive a car is how rusty it is when you buy it.  Try to buy a used car with as little rust as possible.  My 03 Malibu (that I put 3-4k miles on a year) has a rusted through frame.  Thing is a piece of junk, maybe worth $500-1k if lucky.  If I replace it I'll be looking for something garage kept with zero rust, or just surface rust.  I had a cracked intake manifold on that thing at one point, honestly I'm shocked it hasn't blown the head gasket yet.  Chevy's and Nissan's are head-gasket time bombs.

 

If you're buying used get under the car and really check it out.  I look for rust, but also any fluid weeping or strange wet spots.  If you're buying high mileage take it to a dealer and have them compression test the cylinders.  Buy used from a private party and make sure they have the maintenance records.

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I drive a volvo certified pre-owned S80. Much cheaper than a new volvo. (new S80 costs 39k. 1 year old costs 25k) 7 year 100k mile bumper to bumper warranty. Reliability almost as good as the Toyota and Honda.

Fuel efficiency not as good as a Camry but given the increased weight and safety, I think it justifies.  :)

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Used Camry/Sonata/Altima is probably the best bet. Used only!

 

Used cars are a mixed bag...If you know what you are looking for (or have a trusted mechanic that does not work for a Stealership that can do an inspection for you before the purchase), used cars can be a pretty good deal.  However, I think the probability of  someone unloading a POS on you through a private sale is very high, and I generally don't trust the Stealership with used cars. 

 

I'd highly recommend new Toyota Camry's or Corollas.  I've heard good things about Tacomas also, but can't speak from experience.  The new Corollas and Camrys are relatively cheap, and ongoing annual maintenance expenses are fairly reasonable.  Most importantly (for me at least): (1) OEM parts are cheap and easy to find; (2) Most maintenance and most repairs can be done at home by DIY'ers, saving a bundle of money; (3) The residual value on these cars tends to be decent, even after 250k miles.   

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Why is there no talk of diesel vs gas? I would think that a diesle car would be one that people on this board would be pretty interested in due to the long term ownership that they can provide. After having one, I can't really see myself having a gas engine vehicle again, all things equal. When it comes time to replace what I have, I would think it will be either a diesle or an electric (because of where they will likely be, when that time comes).

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I bought a Hyundai Elantra in 2007, $15K brand new. It gets about 35 mpg (advertised as 38hwy, but I've never gotten 38). I've got over 170k miles on it now and the only things I've ever done to it are the tires, breaks, oil changes twice per year, a tune up once and the timing belt once. It has been great. I had a Corrolla before this which was also a great car, but the Ellantra is bigger, about half way between compact and midsize, and has more power better acceleration, and it is cheaper than the Toyota. It's 9 years old now and I don't plan on replacing it any time soon.

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Maybe a little bit smaller than what you are looking for, but you should consider a used Chevrolet Volt. With the big depreciation compared with new ones and very low operating cost, it could be quite a good deal for you, particularly if electricity rates are cheap where you live and if you can plug at home and at your work place. I'm gonna probably buy one waiting for the Tesla Model III myself.

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However, I think the probability of  someone unloading a POS on you through a private sale is very high, and I generally don't trust the   

I've had good luck with private sales, bad luck with certified preowned. Private sales you can talk to the person, understand why they're selling, review the records, etcs. Certified preowned is mostly off lease where the person has no incentive to treat the car well. CPO extended warranties can help.

 

Depending on states and tax incentives an electric car can be a really good deal. In Georgia there was a $5,000 tax credit for leases of electric vehicles although I think that got cut.

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You guys spend a lot on cars.  Let's see how many years I can drive for the same price you spend on one tesla.

 

2007: I paid $15K will drive it at least until 2017 (maybe longer):  2007-2017  $15K

2017: An Elantra is now about $18K: 2007-2027 $33K

2027: Probably about $20K now: 2007-2037 $53K

2037: $22K for new Hyundai: 2007-2047 $75K

 

So I get 40+ years of driving for the price of one Tesla or 20+ years of driving for the price of one $33K sedan or Chevy volt.  I know there is gas savings to be had, but it won't make up that much of the difference.

 

EDIT: If I add in the Corolla I had before the Hyundai it looks even better:

1996: $13K For the Corolla.    1996-2047  $88K for 51 years of driving.

 

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A few recommendations. 

 

The Honda Fit is a nice car - worth exploring it anyhow as the hatchback can fit a lot.

 

I would also recommend BIKING.  Here are the benefits.

 

1.  Out in the fresh air.

2.  Exercise - get the blood flowing so you can find the next 10 bagger!

3.  Super cheap. 

4.  Consider the incremental time to work.  10 min  by car 20 min by bike is only 10 incremental minutes.

5.  It is fun.

 

Cons

1.  None at all - just kidding.

2.  Night biking is dangerous.  If you do it, wear a ton of reflective gear and lights because it may be 10x as dangerous as during the day.

3.  It is extra time.

4.  Cold, raining, etc.  This will toughen up any remnants of an inner wuss you have.

 

 

 

 

 

 

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A few recommendations. 

 

The Honda Fit is a nice car - worth exploring it anyhow as the hatchback can fit a lot.

 

I would also recommend BIKING.  Here are the benefits.

 

1.  Out in the fresh air.

2.  Exercise - get the blood flowing so you can find the next 10 bagger!

3.  Super cheap. 

4.  Consider the incremental time to work.  10 min  by car 20 min by bike is only 10 incremental minutes.

5.  It is fun.

 

Cons

1.  None at all - just kidding.

2.  Night biking is dangerous.  If you do it, wear a ton of reflective gear and lights because it may be 10x as dangerous as during the day.

3.  It is extra time.

4.  Cold, raining, etc.  This will toughen up any remnants of an inner wuss you have.

 

+1 for biking.  I wish I lived close enough to work to bike.  Excellent option for the health benefits alone.  But it isn't practical all the time (It is 12°F where I am right now) And snows all winter long.  Even if I lived in biking distance to work it would only be practical for 6-7 months out of the year, so I would still need a car.  Even if you lived in a more agreeable climate and biked to work everyday you would probably still need to own a car to pick up groceries and for other things.  There are only a limited number of places you can live car-free in the US.

 

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Hey guys,

 

Thanks for all the great feedback.

 

I test drove a Nissian Altima yesterday. It's not known for reliability (per JD Power and carcompliants.com) but it had a lot of the features I was looking for at a lower price. It was fine, but I got up to 70 MPG the think starts shaking - not dramatically but enough to give me pause.  I just kept thinking of Buffett's saying - "Price is what you pay; value is what you get.: haha

 

Also drove the Honda Accord Sport and almost pulled the trigger...but the sales rep changed the price on me (we originally agreed to a price via email). She was really rude and said "I don't car which car you buy as long as you buy one." Ugh, no thanks.

 

Going to look at a Camry soon. Anyone have experience/thoughts on getting a certified pre-owned?

 

I'd love to bike but I wear a suit to work and it's about 25 minute car ride.

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I test drove a Nissian Altima yesterday. It's not known for reliability (per JD Power and carcompliants.com) but it had a lot of the features I was looking for at a lower price. It was fine, but I got up to 70 MPG the think starts shaking - not dramatically but enough to give me pause.  I just kept thinking of Buffett's saying - "Price is what you pay; value is what you get.: haha

 

Also drove the Honda Accord Sport and almost pulled the trigger...but the sales rep changed the price on me (we originally agreed to a price via email). She was really rude and said "I don't car which car you buy as long as you buy one." Ugh, no thanks.

 

Going to look at a Camry soon. Anyone have experience/thoughts on getting a certified pre-owned?

 

Altima/Maxima, Accord, Camry are all great. Still have 2003 Accord with 70K miles on it. Bought 2012 (I think, I can't remember) Camry with 36K miles couple years ago. It wasn't certified and buying experience was not great, but we like the car.

 

My friend is looking to buy a car and he loved new Camry.

 

However, I'll tell you the same thing I told him: there's a lot (A LOT) of new great features coming up. If you can, hold on for as long as you can before buying. I'm sure you'll get things like collision avoidance and adaptive cruise control ( or self driving superlite ) in two or three years.

 

But if you have to buy, you have to buy. ;)

 

GL

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