Have you heard of writer Mindy Kaling’s blog Things I Bought That I Love? This is the Yin to the Yang of that blog. For another shopping mistake check out my terrible suede blazer purchase.
My intentions were innocent enough. I needed a car. I was trying to work full-time and get back into training for rowing. I needed a vehicle to get to the lake for early morning workouts. I had $2000 saved and I applied for a $6000 car loan. I figured I could get a decent used vehicle at this price.
My previous car experience was a few years driving the family kid’s car: a rusted out VW Rabbit that leaked when it rained. It rains a lot in Vancouver.
I knew very little about cars or how to buy them. Neither did my boyfriend. His previous car experience was leasing a new Honda that he eventually offloaded to his mother when the car payments were above his means.
After discussing it with my boyfriend (please note: this is not the man I married) he easily convinced me that used cars were a bad investment. I should lease something new. Something that was under warranty. He sweetened the deal by saying he would split the lease payments and insurance with me. The small catch was that his credit score wasn’t very good so I would need to apply for the financing myself and have the car in my name.
The warnings were all there. Boyfriend advising me to do something he himself had done that hadn’t turned out well. A verbal commitment to split the costs but we never hashed out the details on what we would do if we broke up. Boyfriend advising me to spend more than I could afford on my own.
Despite all the warning signs I leased the vehicle. I was blinded by the Volkswagen’s looks, the smooth ride and how fun it was to drive. At the time I could fit the costs of it, the 50% that was my share, into my budget. I could pay for it but I certainly couldn’t afford it. I was working full-time, making the minimum payments on my at the time $9000 student loan and had a couple thousand dollars in credit card debt (debt that was in the US – another story for another day).
A year after getting the car I moved to Victoria, BC and my boyfriend moved to Toronto. I became a full-time athlete, essentially unemployed, and I had the full lease payment and car insurance to pay on top of my living expenses.
Never buy a car with your boyfriend.
It was my mistake. I don’t blame the boyfriend. I signed the lease and I decided to go for new instead of something affordable that would be paid off in a couple of years.
But what a huge mistake. Eventually I was getting an athlete stipend to live off of and eventually my athlete income went up when I won a medal at the World Championships. Unfortunately that was after a few years of struggling and a lot of credit card debt. Leasing a car I could not afford was a big part of that debt.
I’m not alone in making this mistake. You wouldn’t believe how many women I know who have a similar story. A boyfriend convincing them to get a car they couldn’t afford, promising to assist with the costs and then the woman is stuck with car payments and insurance that she can’t afford. Seems to be a hallmark of women in their early 20’s. If I ever have a daughter she’ll be warned.
Cars are money pits.
Cars are not investments. They are finite. They have a life span and maintenance costs. They depreciate in value with age.
When I finally sold the vehicle a few months after buying it out of the lease I made back a little above the buy out cost. I had no car but a lot of debt from owning one.
Can you see why being car-free holds such an appeal for me?
Anyone else ever buy a car they couldn’t afford?
My father is a car nerd (I say that with the utmost respect- he loves to fix cars, including mine), so I am very lucky in that respect. When I went to buy a car, I went to a used car for-sale-by-owner event and test drove the car home so that my father could look it over and make sure that they weren’t hiding any weird problems. I purchased the vehicle outright with cash from my savings account at the (fairly low) price of $3200. I am very lucky. My 1990 Honda Accord has lasted me through college, marriage and one child. Hondas, when taken care of properly, last a good long time. I plan to drive this car to its last combustion.
Of course, I am lucky. I live in a small coastal town in CA, and the bus system is amazing- I used it almost exclusively during college and now ride my bike to and from work every day (I even have a rain suit!). I spend very little on gas and car stuff, and our stroller has clocked many a mile on it since we tend to walk to the park. I am currently pregnant with my second child and am looking forward to getting myself a double stroller because other than my bike, we basically use that as our “daily” vehicle. However, we also live in a small one bedroom apartment, so we need to keep space-efficiency in mind as well.
I know that we are lucky and our situation is different than most, but it does go to show that talking to your parents (I was clueless about getting a car and mostly used my bike until I was around 19 and was about to transfer to 4 year college located over 3 hours away) before buying a car can really help. While not all parents are good at money-making decisions, it’s so much easier to hear advice and think about it logically from someone you’re not actually romantically involved with (ie: boyfriends/girlfriends).
Having my car paid off really helped when I was going to school and could really only afford rent and maybe a bit of food if I was lucky (my parents made me pay my living expenses completely but helped with the tuition). Even with a part-time job, it was hard to make ends meet. The bus system and the kindness of friends really helped me in my darkest hours.
In 2009, my husband and I bought a brand new CR-V because my parents said it was a good idea, and we were too lazy to do otherwise.
A few months ago, I bought a used 2011 CR-V, 9 months old, with a few dings but still runs great and has low miles. It’s essentially the same car my husbands, except we saved $5000 this time around by working a little harder and buying used.
I thankfully never had a boyfriend convince me to go into debt. But I did have one convince me to co-teach a Sunday school class of 3-year-olds with him. Guess who got stuck with the class when we broke up two weeks later. ME! I was only 17 and terrible with kids. I am thankful we all survived!
Thankfully we’ve paid for all our car 100% cash. Sadly, we borrowed way more then we could afford for a house… That’s a whole different incredibly painful story. We just didn’t know better.
Yes, but more debt-increasing was the education I bought and can’t afford. Love you honesty. (p.s. I can’t figure out how to subscribe to comments so I actually know you replied, any ideas?)
Thanks, Stacy. 😉
I’ll try and figure out the comment subscribe button. Can’t believe I don’t have it as I use that function all the time on other blogs.
I haven’t had a similar debacle with a car. I count myself lucky for that. Thanks for sharing, though. I think this situation is REALLY common (hence, those “repo” reality shows on tv).
Maybe some of you can help me out here…this post came at a perfect time. My husband and I have been car shopping for quite some time now and we are struggling with the decisions involved. New or used, navigation system? DVD? SUV or minivan? Money is not an issue, which in itself becomes an issue. We can afford a big new SUV, but does that mean we should buy it and spend the money on fuel and upkeep? We are a family of 5 with two dogs that travels a lot for various reasons – camping, family trips, etc. We want a car that we can own for a while that will satisfy ALL of our needs (hence the SUV with the 4×4 and towing ability). I feel like if we are going to put the money into the vehicle, we should get EXACTLY what we want or that I will regret it for the duration of the ownership.
HELP! I need my minimalist friends to help me with this one…other people just don’t see the conundrum I am having about it.
As a family of 5 that seem to live in our SUV, the one thing I would suggest is a diesel engine. It is more fuel efficient and is becoming more and more easy to find gas stations that sell it, even in rural Ontario Canada.
We’ve had ours for 5 plus years and have never had a problem with it!
Marissa, I would conseder the following:
– how much space you need (5 seater or a 7 seater)
– what roads do you drive on (SUV or estate)
– diesel or petrol
– how long do you want to keep the car (it might be worth getting a brand new or an almost new car if you want to use it for the next 10+years and drive into the ground)
– what make (I also have 100% positive experience with Honda, but I would also check the international safety ratings of a car too)
– other stuff like DVD, sunroof etc are things that you either would use or not. If you do and have the money , why not get them now rather then miss them for the next X years
So nice to hear people chiming in.
My 2¢: if you can afford it buy what will suit your life. Sounds like an SUV with some extras for hauling and such.
And yes, thumbs up for diesel.
I’ve just sold my fun sports car, which was cheap to buy, but was getting expensive to run- the £1200 bill to get it through its MOT was the last straw! (It was a 22 year old car, so tended to be expensive to maintain, and not that cheap to insure etc, and used a lot of petrol). Anyway, I’ve replaced it with a slightly newer little run-around- £750 with a year of MOT on it, plus the prospect of cheaper fuel, tax and insurance.
I’ve never understood getting finance on cars- like one of the posters above, my parents have always bought things outright and encouraged me to do the same. I think I’d resent paying to repair stuff that I was still paying the initial cost on!
Perhaps I am lucky that my boyfriend knows a bit about buying used cars, and his parents used to use the ‘bangernomics’ theory of car purchasing- buy a cheap car with a year of MOT/tax on it, drive it for a year, put it through MOT at end of year- if it passes, great, if not- buy the next banger! Apparently a very cheap way of motoring…as long as you don’t care too much what you drive!
Your piece is kinda funny — we’ve never had a car that was a mistake – but we were happy to be without a car for the first 4 years of our marriage! I am happy to say both of our kids have very sane approaches to debt (and cars)! Our son just leased a car for 3 1/2 years, which coincides when he finishes his PhD, and our daughter went without internet in her new apartment until she decided it would really be useful. (Son’s car is the new tiny Fiat, standard transmission, lowest rate available, no money down and he calculates his mileage every week!)
Oh cars… and leasing… sheesh.
In 1997, having moved to a huge, old, rambling (rented) house in the country and had a 3rd child, as well as a dog, we fell into this trap. We had two older cars that we owned outright: a large, rusting family car that was beginning to need repairs and a small runaround my husband used to get to his job. His career was just taking off and he decided he wanted something a little more solid and perhaps a little more classy, so he chose to lease a nice car that was medium range but spacewise not really suitable for a family. He encouraged me to lease a large family car, so I thought that was fine and was only too happy to choose one. If he said we could afford to lease two cars, then so be it.
My mistake. I don’t know now whether he was blinded by the fairly low leasing rates (and his steadily rising salary) but he seemed to fail to calculate the running costs as well as the higher insurance on these new leased cars with bigger engines and within a fairly short space of time, they contributed to our lives falling apart as we struggled to afford the lifestyle we had bought into and my husband could never understand why the more he earned, the more we needed and that we couldn’t seem to “manage” on our income… and I struggled to pay the bills yet not really buying into the partnership part of the relationship (or we would have discussed things properly beforehand, right?!).
When the leasing period was over, I handed my big car back and had to make do with public transport and friends giving me a ride – we lived out in the country. My husband needed his car, so we had that at weekends, and he did eventually buy it out of the contract and keep it for 10 years until it blew up on him, so I guess that’s something.
A year after this, we split up temporarily, and I was fortunate enough to inherit a small amount that enabled me to buy a tiny pink car popular here in Europe as a runaround: I paid for it in cash, and it costs peanuts in tax, insurance and maintenance. Nine years later I am still driving it, even though we are once again a happy family with a healthy income and it’s not “smart” by any stretch of the imagination. It will die sometime in the next couple of years – and NOTHING will induce me to ever lease a car again or to buy a car that is larger or more expensive than I need, quite apart from what I can afford!!
These days, we live in a small house we bought in a small town with a good infrastructure and drive two sensible and appropriately sized cars (my runaround, which I only use when I can’t walk, cycle or use public transport – we have excellent connections and a very punctual system, and my husband’s medium-sized family car that is actually his company car as he works further away and travels around a lot). Two of our daughters are married now and the youngest is just about to start her working life and will probably leave home in about 3-4 years when she is qualified. Our house is not so big that we will be rattling around and need to downsize – it is perfectly adaptable to our needs as a couple without kids but with grandkids (we already have two) and if we choose to take on a travelling lifestyle, it is so well situated and such flexible space that we will have no trouble renting it out.
We feel we have learnt so much by our mistakes – it’s hard to say if we would have been smarter if we’d known/realised, we can only hope our kids don’t make the same ones. Though they are bound to make their own! Sometimes you just have to do the hard work yourself.
Thanks for sharing here, Mel. I also agree, while the debt and stress weren’t good for me the lessons from owning a car I couldn’t afford were. While I made plenty more financial mistakes in the following years I stayed far, far away from cars.
I just won’t ever buy a VW again- those repairs cost me an arm and a leg! Having a Honda and then a Mazda after that convinced me to never go down the VW path again. Those things that make it fun also cost a lot to fix.
Not the point of your post, I understand, but that’s the first thing I thought of… My parents have always instilled buying used outright, so I’m lucky to have avoided the new-car/boyfriend trap.
As soon as the warranty was up the VW started to fall apart. Of course, it was right when I was trying to sell it. Engine lights came on, sensors broke and then, to top it off, some yahoo ripped off the driver’s side mirror. The dollars on repairs kept adding up as I was lowering my selling price. 🙁
Have never heard a complaint about Honda. Ever.
And well done to your parents. I hope we teach Henry the value of saving and buying used and just what you can really afford too.
My little Honda is 22 years old and still goin’ strong! Based on my experience (which is just this one car, because I’ve never needed another) Honda’s Rock!
Our Honda Accord is 15 years old w/214k miles. It isn’t pretty but the taxes and insurance are very little and it gets good gas mileage. Love Hondas and Toyotas are good, also.
As bad as your whole car-saga sounds, it is still such a great learning experience. I hope lots of (young) people will read this story BEFORE they make a similar mistake and have to learn from their own misfortune.
I hope so too. It is so easy, and so in fashion, to live far above your means as a recent grad or even when you are in graduate school. I remember hearing this saying from a friend: live like a lawyer when in law school and you’ll live like a student when you’re a lawyer.
:))) we live like students while DH is in lawschool and plan to live like students even after he is a lawyer until mortgage is paid off…
🙂 🙂 🙂
Ah yes, the unfortunate buying/leasing a car with the boyfriend rite of passage. Guilty here and no, it didn’t turn out well for me either. Lesson learned.
I think I would like to be car free but my large family and other circumstances don’t allow that. I’m happy that this time around I bought used and paid cash.
Big lesson learned. 🙂
If we buy a car over here we want to buy used and pay cash. Cars are surprisingly inexpensive over here so I think we could get something that we would be happy with for around £3000 ($5000).