Is a Classic Car Cheaper than a New Car?

I’m a big proponent of buying an antique car if you need a vehicle get around. As long as you take your time and pick a model that’s known for reliability (hint: no K cars!), and look at a lot of cars to make sure you don’t get a junker, you can get a great deal. Of course, you’d probably like for someone who is advocating something as unusual as this to put their money where their mouth is, and that’s exactly what I’ve done. I’ve bought a classic Mercedes to use as my daily driver.

Until recently, I was driving my motorcycle every day, and it was great! Motorcycles are a great combination of exciting and cheap. And, in certain situations, the risks can be mitigated well enough to enjoy the 50+ mpg that most motorcycles will give. I recently took a new job in an overdeveloped and poorly-planned section of suburban sprawl in South Florida, however, and while it’s much closer to work I felt that the risks of driving a motorcycle every day were unmanageable in that environment.

On the plus side, though, my commute is about 20 miles per day closer to my home. The math tells me that I can drive a car that gets around 30 mpg in order to spend about the same amount of fuel as I was spending on my motorcycle.

I also wanted something that’s decently safe. My old Beetle is fun and cool, but there’s little more than sheet metal protecting me from any impacts. At least on the motorcycle I’m wearing a helmet. Anyway, I remember one of my friends in high school had a diesel Mercedes from the 80s and T-boned an SUV with it. The SUV (which a lot of people would presume would be safer) had a higher center of mass and rolled over, while my friend walked away without a scratch. I know this is anecdotal evidence, but those old Mercedes really are built like tanks.

I’ve had my eye on a Mercedes station wagon for a while. It’d be much easier to transport surfboards and building materials in a wagon than in a sedan, but that wasn’t really in the cards for me. The wagons of that era are about three times as expensive now, and pretty rare to boot (British pun intended). Since I needed a car pretty urgently to get me off of my motorcycle, I settled on the sedan. A 84′ 300D turbo diesel, to be specific.

These cars are notorious for going hundreds of thousands of miles without needing major engine work. Diesel engines are built much more robustly than gasoline engines are. They have even been known to go a million miles, in which case Mercedes has been known to buy the car back and put it in a museum, or at least give the owner a cool badge to put on the grill. They’re over-engineered in pretty much every area which gives the driver the illusion of driving around in a bank vault, and so far this has been my experience.

I looked at a few before picking one up, and none of them were perfect. But it’s unreasonable to expect to buy a 30-year-old car and have it be flawless, unless you’re buying it for tens of thousands of dollars out of someone’s showroom. This Mercedes cost me just north of $2k, which is what I would have put down on a new car. But it did need a little bit of work.

The obvious things were the tires and the battery, so I estimated about $500 right there. It had been sitting for a while, so I knew it would need all of its fluids changed sooner rather than later. The most pressing of these is the engine oil, which is especially important in high-mileage engines in general and diesels most of all. So I took care of those things, and then a couple other things popped up.

The car snapped one of its alternator belts when the alternator bearings seized. The cab filled with smoke from the broken belt rubbing against the other belts, but really this was no big deal: I just changed the alternator and the belts. Then the glow plug relay stopped working, which meant that the car was likely to kill the battery trying to start (it’s a quirk of diesel engines, since they don’t have spark plugs). The car also needs new fuel filters. But after all of that cleared up I seem to have a pretty good vehicle on my hands. It doesn’t burn engine oil, there’s no coolant in the oil or vice-versa, and it gets 31 mpg which means I could go about 600 miles on a tank of gas.

The car’s still not perfect, but for just north of $3k I have a very capable tool to get to work. That’s only slightly more than a down payment on a new car! Not to mention that it’s a stellar ride that turns heads. But there are a few more quirks that may or may not get fixed. Neither the odometer nor the fuel gage work, so it’s difficult to tell how much fuel is left in the tank (not to mention calculate my mileage). The air conditioning doesn’t work, but I don’t need air conditioning to get around; it’s just a luxury to me. It also has some rust on the body. If you get an older car, it’ll have a few quirks like this that you should be prepared to either live with or pay to fix. I have a tendency to go with the former option.

Mechanic work aside, I created a spreadsheet that will document all of my expenses with this car. Hopefully it’ll end up being cheaper than a new car, but right now that’s not QUITE the case.

Purchase 9/19/2015  $2,300.00 total
Registration/sales tax 9/21/2015  $   199.35  $3,875.75
oil/filter 9/21/2015  $     51.91 per-month cost
insurance 9/21/2015  $   285.00  $1,937.88
voltage regulator 9/22/2015  $     51.93 hypothetical monthly payments
glow plug relay 9/27/2015  $   116.59  $1,391.40  per mo
fuel filters 10/2/2015  $     52.50
tires 10/3/2015  $   411.20
alternator 10/5/2015  $   144.68
battery 10/9/2015  $   154.84
belts 10/9/2015  $     43.75
diesel purge + fuel cap 10/12/2015  $     64.00

I’m counting everything I spend money on except for fuel. So far it’s just parts because I do most of my own work. This is a key to owning a classic: if you’re not willing to get your hands dirty it’ll be orders of magnitude more expensive to take it into a shop every time something goes wrong. Especially if it’s something small like a belt or an alternator.

The “hypothetical payments” cell is what I’m keeping track of. I want to see how the costs of a classic car would compare to a repayment schedule on a loan for a new car. First, I deducted $2,000 from the total (to account for a hypothetical down payment on a car) and I deducted the cost of insurance and registration (because I’d have to pay those on a new car anyway). Then I divided that number by the number of months I’ve owned the car. This gives me a per-month cost that approximates what “payments” I would have had to make on a new car to equal the amount of money I’ve spent on this old one. Right now, if I can go just four months without anything major happening, I’ll have broken even with “hypothetical payments” around $280. It might take a little bit longer to “break even” in this fashion because I think I’ll have to replace the brakes pretty soon. But even assuming I spend $1,000 on the brakes, it’ll only take me about four more months to pay that cost back down.

After one month I have a “monthly payment” amount of $1,400, which is the same monthly payment I could have had on a 2016 Mercedes S-550. After two months, though, I’d be down to driving a 2015 Mercedes E250 for about $650/month. (How does anyone afford a car like this in real life? It’s crazy!) Hopefully after a few more months I’ll be hypothetically driving around in a Honda Fit, and then every month after that is a month that I paid less for my cool, old Benz than I would have paid for that Honda.

I hope that this car will save me some money in other ways too. For example, it’s crazy slow. I would estimate the 0-60 time to be anywhere from 30 seconds to a week and a half. (There’s some work that I need to do on the fuel delivery system, which might improve its pickup a little bit. It’s criminally slow now though.) I’m counting its snail pace as a feature, however, considering how much trouble my 300ZX and my Miatas got me into. Tickets (and crashes) cost money too! It does cruise really nicely on the highway, though, although I haven’t figured out how to turn the cruise control on yet.

I also haven’t figured out how to lock the doors, but my solution to this is to make sure the cab is empty and all my valuables are in the trunk. The trunk locks independently from the rest of the car, so I think this is a cheap and effective solution. Oh, and one of the windows is stuck and won’t really roll down, but it’s one of the back ones so who cares?

Part of the fun of a classic car is getting in and having it start up. It really makes me appreciate having a car that works! It’s too easy to take a newer car for granted. But (mostly through paranoia) I’ve mistaken a number of things for sounds that my car was making since a greater possibility exists for it to break down from time to time. These include, but are not limited to: a squeaky minivan passing me, someone else’s stereo, a jackhammer at a construction site, a nail gun being used in a house in my neighborhood, a train on the tracks beside me, and an ice cream truck.

I have the motorcycle if it needs something done to it that takes longer than an afternoon, and I wouldn’t recommend a classic car as a daily driver unless you have some sort of safety net like this. You could even use public transportation in a pinch (maybe). But if you have the right mindset and a set of wrenches, a classic car can be a cheaper, cooler, and more unique alternative than sitting in a boring new car.

It’s Saturday, October 17th!

…and I’m back from a brief internet hiatus. But lots of other things have happened in the past month that are worth looking into:

This is What a Real Bomb Looks Like by Adam Fabio, hackaday.com. Definitely not anything to do with minimalism or financial independence, but in the wake of the “bomb” incident in Texas, some perspective is in order.

Why Your $80,000 Car Doesn’t Impress Me Any Longer by Steve, thinksaveretire.com. I work for a Fortune-500 company, and these cars are everywhere. But I also see people who have no other purpose in life except for their job, so I guess it kind of fits in certain situations. Not for me though!

From zero to $15,000 in dividend income in 8 years, dividendgrowthinvestor.com. I’ve become a big fan of this blog because it gets into the specifics of (at least one way of) how to become financially independent. I’m in this guy’s shoes circa 2007, but dividend investing is looking more and more appealing to me as I research it.

BONUS! What I’m listening to this week.

Any guesses why? Hint: it’s in the first verse!

Photo: Another hint. 

Best of Craigslist

One of the best tools of most minimalists is craigslist, a free online classifieds page where you can sell anything. Quite literally, anything. I’ve used it to sell countless things in order to declutter my life, and it continues to be a powerful tool for me personally. I occasionally even buy things from it! But usually it’s just surfboards, and only when I find a really great deal.

But to some people, craigslist can be daunting. It’s all up to the two parties to agree on a price and a meeting location, and sometimes it can get… weird. But I’m here to alleviate some of that anxiety by sharing my best (and worst) craigslist stories! I firmly believe that most people are pretty normal, and the odds of you entering into a dangerous situation via craigslist are less likely than meeting some crazy on the street.

First, let me quantify “anything”. You can put anything up for sale on craigslist. Provided the price is right, it’s almost guaranteed to sell. For example, when I bought my first house there was some leftover junk that the previous owners left behind. Namely some cheap plastic planters on the front porch and a bunch of cheap wire shelving in the garage. But rather than cart it to the curb, I listed both things on craigslist. The shelving sold for $10 and the pots sold for another $10, and I didn’t even have to take the time and energy to carry this junk to the curb. I also sold a bird bath from the front yard, which I promised the previous owner that I’d keep. However, bird baths are little more than mosquito breeding grounds here in South Florida, so I sold it for $15 to some middle-aged folks who were looking for an Easter present for their grandparents, rather than keep it and shell out money for bug spray.

Not everything is as simple as selling junk from your house, though. When I started my senior year of college I didn’t have a bed (long story) but 6’3″ me decided on a whim to see if there was a such thing as an “extra long” mattress. Turns out, there is! I was in a little bit of a time crunch, but the seller of this “extra long” full-sized mattress agreed to meet me that night… at 10:30. In Easley, South Carolina. (If you’re not familiar with that area then I would describe it as a place where Southern stereotypes are born.) Anyway, a buddy of mine and I piled into his truck and headed out, only to pick up this mattress and box spring out of some farmer’s shed in the middle of nowhere in the middle of the night. But it didn’t have bedbugs (luckily) or smell weird or have any weird stains, and I used it incident-free (sort of, but that’s not related to craigslist) until I sold it four years later for exactly the same price I bought it for. All made possible by craigslist!

I’ve bought two motorcycles, a truck, and my classic Volkswagen Beetle on craigslist too, so it’s not limited to used junk or low-priced items either. I’ve sold just as many vehicles on the site as well. But I recently had a small debacle over a very nice American Fender guitar, which was resolved once I realized the guy was just jerking me around. Just remember: the ball is in your court if you’re buying or selling. You are under no obligations, and you can back out anytime if you feel that something’s amiss.

And sadly, the one downside of craigslist is that most people tend to be flaky. I’m helping a buddy sell an old Kia right now, and maybe one out of ten people who ask about it actually show up.

I’ve had some weirdos buy things from me and then ask me for their money back, but never for a legitimate reason. I’m always very honest with the things I sell, so I’m extremely hesitant to meet anyone once I’ve made a sale. After all, I’m not running a business, I’m just clearing out clutter. Anyway, one guy bought a stereo amplifier from me, and even tested it in my house before buying it, only to text me about an hour later in a rage because it didn’t have a radio antenna. I told him he could buy one for $2 from RadioShack, but when he got more belligerent I just blocked his number.

Probably the worst craigslist interaction, however, had to do with a small motorized bicycle I built as a fun side project in my garage a few years ago. It was basically a beach cruiser with a weed wacker motor on it, and that’s also exactly what it sounded like when it drove past. Unfortunately in Florida these vehicles are not street legal without a moped tag, so I was restricted to off-highway use only. But I’m an engineer and I like to tinker. (That’s my excuse for a lot of things!) Anyway, I got tired of it and put it on craigslist just to see if there was any interest, and someone wanted to buy it within a week of me posting it. Unfortunately, despite asking me multiple times for a manual, they refused to read the manual, especially the part that detailed the oil to fuel ratio for the two-stroke engine. After one day, the engine seized on them and they demanded their money back. Since it was their fault they turned a great motorized bike into a piece of scrap metal, I did not oblige. I did make $40 though, after buying the bike, repainting it, and fitting the motor to it, so it wasn’t a total loss. At least, not for me! Read the manual, kids.

Oh, and I should mention that I use pseudonyms, a fake email address, and a Google Voice number on craigslist to protect myself, and I generally try to meet at a location that isn’t my place of residence unless it’s inconvenient (selling furniture, vehicles, or other large house-bound items). Just remember, ALWAYS meet in person, ALWAYS deal in cash only (no matter what), and TRY to take a friend with you, or at least tell someone where you’re going (but that rule is true of pretty much all parts of life). That last one I definitely made sure to follow when, a few weeks ago, I sold a motorcycle windshield to a bus driver… IN THE MIDDLE OF HIS ROUTE. But anyway, If you follow these rules, you’re pretty much guaranteed to have a pleasant, safe experience on craigslist, all while being well on your way to a more minimal lifestyle!

Photo: My motorized bike, on its first official test drive. By “official” I mean that it was the first test drive after I remembered to put the lock nuts on the engine mount (the first test drive the motor almost fell off) and also after the other test drive where the carburetor fell off while I was going down a hill. It takes a few tests to work out the kinks, but the rewards are worthwhile!