We bought a new car!

Okay, not a new car, but a new-to-us car. If you’ve been following our financial journey, then this probably isn’t a big shock, as we’ve been saving for a new vehicle. We still had a long way to go until we reached our goal amount and we didn’t buy the type of car we had originally planned to buy.

But I’m very happy with our choice.

First, I’ll explain what our car situation was and why we were in the market for a new car.  Then I’ll talk a bit about the goal that we set and why we decided to stop short of our original goal. Finally, the exciting part is what we bought, what it cost, and how we expect it to impact us financially!

Our Car Situation

For the past while, we had been driving:

• 2005 Dodge Grand Caravan (7 seats, 20 mpg)
• 2007 Chevy Express 3500 (15 seats, 12 mpg)
• 2007 Honda Odyssey (8 seats, 19 mpg)

When we had both minivans, our gas spending was $650 to $800 per month. The Odyssey felt like the transmission was going to go out any day, then in April it got a flat tire about a mile from our house. We had already decided not to renew the registration when it came due the next month, so we drove it home slowly, then donated it for parts.

That meant our two cars were a mini van and a BIG van. With three drivers in the family, it wasn’t unusual to have to drive the 15-passenger van with just one or two people because the minivan was already being driven by someone else. Suddenly gas spending got really expensive. In May, the month after we got rid of the Odyssey, we spent $1,139 on gas!

Thankfully the summer brought less driving. In June, our two older kids were gone for 2 weeks and I was gone for a week, so we spent $805 in fuel for June.  Then in July we were out of the country for 16 days, and spent just $496 on fuel.

But the school year was quickly coming and we knew we needed to do something or we’d be pushing $1,200 per month on gas again!

Our Goal

We had long been debating what to do about our car situation, even before the Odyssey was out of the picture. Driving older vehicles, we knew that one of them would need replacing soon. We weren’t sure which vehicle would go first, but in January we started saving for whatever our next purchase would be.

Should we get a van that seats our whole family of 8? We have very few options for mini vans that seat 8. Newer ones are more fuel efficient, but also much more expensive. It would be nice to be able to drive our whole family around in a more fuel efficient vehicle for the times when all of us are together.

Should we get an even more fuel efficient smaller car and use it whenever possible, then just use the big 15- passenger van only when we have 8+ people to drive? Thinking through our normal travel, there are lots of times when 5 seats is enough for running people here and there. Even when we go to church, we always take two cars because Mike and I have various meetings before and after church and we always have a few friends we pick up on the way.

We set our car savings goal at $20,000. By the end of July we had saved $8,217.

The Search

If you remember from our May budget update, we looked at several cars that sounded good on paper and in CarFax reports (which cost $65 each), but after getting pre-purchase inspections (which cost about $190 each), were all a clear NO for us. It was frustrating to say the least. We decided to lay aside the search until after our Guatemala trip.

Mike made an in-depth spreadsheet comparing purchase price, age, miles traveled, and fuel efficiency on different years and models of cars and vans. He used online listings of actual used cars to calculate an expected total and annual cost of ownership from their current mileage until estimated retirement at 200,000 miles and 250,000 miles. Adding expected insurance and maintenance costs gave us a good picture of the economics of the purchase.

It was clear that over time, the increased fuel efficiency of newer cars quite often made up for their more expensive initial costs. Still, their high price tag meant saving for much longer, leaving us with a high fuel budget for longer. As tempting as it may be, we did not want a car loan. Also, I didn’t want to get a new, expensive car that will be driven by our soon-to-be TWO teen drivers.

When we returned from Guatemala we decided to look into getting a car instead of a van. Mike’s spreadsheet consistently pointed toward an older hybrid, the Toyota Prius. For a high efficiency 5-seater at a low initial price, a Prius beat out almost everything else. Anything newer enough to have significantly improved fuel efficiency cost so much more than an older Prius that the total annual cost of ownership never got close. And with Prius reliability we could reasonably expect lower maintenance cost and better longevity than most other cars we saw.

The Purchase

Mike found a 2008 Prius in San Diego with 111,00 miles on it being sold by the original purchaser. The seller was willing to take it in to a local mechanic for a pre-purchase inspection. We found the mechanic and paid for the inspection, and the seller dropped the car off there and picked it up after. As a side note, the inspection cost just $85, less than half what the mechanic shops in Sacramento generally charge.

There were a few minor things like replacing spark plugs, changing oil, brake service, and replacing the stabilizer bar control links, but no major mechanical issues. The quote to fix the issues was fair, so we talked to the seller and decided to split the cost, adding our half into the purchase price of the car. Like the inspection, the repairs were quoted at about half what it would cost to repair in Sacramento.

The seller used the Autotrader platform to list the car, and Autotrader adds their own documentation fee along with the handling other taxes and registration.

Mike and our oldest daughter flew down to San Diego in the afternoon, picked up the car from the seller, finalized the online transaction, and started driving home. The car was in the driveway and they were in bed by 2:30am the next morning.

Total Cost:

Listed Car Price: $6,999

Pre-purchase inspection: $85

Half of the repair cost: $435

Sales Tax: $545

Title and Registration: $311

Documentation (AutoTrader): $85

Other Fees: $38

Flight to San Diego for 2: $218

Uber from the airport to seller’s house: $ 42

Total: $8,758

At the end of July, we had saved $8,217  so we had to add another $541 in August (which we weren’t planning to do, but we made it work by not contributing to all of our normal sinking funds, as you’ll see in our August budget update coming soon).

We are also taking into account that the hybrid battery may need to be replaced (~$1,800) in the coming years. We will save for that in our “car repair” budget category so we are ready for that cost when it comes.

The Financial Impact

I am very optimistic about how our new ride will impact our family finances. The 2008 Prius is rated at 48 mpg around town and 45 mpg on the freeway. With our sixteen year old car, even full of five passengers much of the time, we’ve been averaging around 43 mpg. Using the method explained here, here’s a look at the cost to drive one mile in each of our three vehicles using $4.50/gallon as the gas price:

2008 Prius: 43 mpg– 1 mile= $0.105

2005 Grand Caravan: 20 mpg– 1 mile $0.225

2007 Express Van: 12 mpg– 1 mile $0.375

That might not look too shocking, but let’s look a driving to school and back. Both schools my kids attend are about 6 miles away and with different start and end times, sports, and activities, I go back and forth several times a day.

So, if I’m driving to school and back four times, at 12 miles each round trip, fuel costs just for school runs on a typical day would be:

2008 Prius: $5.04

2005 Grand Caravan: $10.80

2007 Express Van: $18.00

Now can you see why I’m so optimistic?! It costs less than half as much to drive the Prius instead of the Grand Caravan! The Chevy Express cost 3.5 times as much as driving the Prius!

In the three weeks that we have had the Prius, we have driven it more often than not. In that time, we have only driven the big van once (to bring our whole family and our Ukrainian friends to visit Mike’s parents who live 30 minutes away).

I can already notice the difference in our August gas spending and we only had the car for 9 days in August! I’m excited to see what our September gas spending looks like!!

But wait! Priuses aren’t cool!

Do I care that Priuses are known for being uncool?

Nope! Did you read the list of our current vehicles? Clearly cars are not our status symbol of choice.

In the days before and after buying our Prius, we heard some classic Prius comments from teens who didn’t know that we had one on the horizon.

One teen was pouring money into making a dead car into a functional car that he could eventually drive. A girl of the same age told him that he should just buy a Prius because it would save him lots of money. He replied, “I wouldn’t be caught dead driving a Prius!”

I was chatting with another teen boy who drives an old Jeep. I asked him what sort of gas mileage it got. He told me, following up with, “but I’d rather spend more in gas and have fun, than drive a boring Prius!”

And that’s how priorities work. To each his own.

I don’t drive because it’s fun or cool. I drive because I need to go places. For me, there are lots of things I’d rather spend my money on than gas or an expensive car. I’m thrilled with our new-to-us Prius!