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.

The Most Minimalist Car?

Not that it’s a competition, but…

I spent last week writing about how much money I’ve lost over the years by buying vehicles I don’t need. (I still haven’t sold my truck yet!) So over the past year and a half I’ve been really looking into what we really need in our vehicles. At a bare minimum: Four wheels, a steering wheel, brakes, an engine big enough to move the car at a reasonable speed, no unnecessary seats or cargo space… and that’s pretty much it.

It’s hard to get that in any new-ish car. Most cars come standard with power windows, air conditioning, a stereo, and a bunch of other features that are secondary to getting you where you need to go. These types of cars are great; don’t get me wrong. But can we do a little better? Can we get a little more minimal?

To me, all of these little features are things that will eventually break and are hard to work on yourself. I like working on cars, so if I’m given the option I’ll drive a car without air conditioning versus paying hundreds of dollars later on to fix something that doesn’t directly contribute to me getting to my destination and that, in some cases, is impossible for me to fix myself.

My solution to this problem hasn’t been to get a new car, or a slightly used car, but a VERY used car. Old enough to not have air conditioning, power steering, or even fuel injectors. It gets about 30 mpg which is reasonable, and it’s very easy to work on. It’s an old Volkswagen Beetle.

I know, I know, this approach probably isn’t everyone’s cup of tea. Not everyone wants to cover themselves in grease every weekend with the almost constant tinkering a classic car requires. But bear with me for a minute! Buying a classic car financially makes at least some sense. In most states, registration is a fraction of what a regular car costs. Classic car insurance (in some situations) is less as well. Depreciation on your asset has already happened, so you can generally sell a classic car for at least how much you paid for it, regardless of how long you own it. And “classic” generally only means “old”, so a 80s Toyota is just as much of a classic, legally, as a 69 Camaro. If you only need it to get around town and aren’t taking crazy long road trips, it might be viable!

For me, at least, I’ve found the Beetle to be a great vehicle. It’s easy to work on, it doesn’t have power steering or power windows or locks or air conditioning. It doesn’t have any luxury or frills of any sort. I’ve found that these are all things that can break, and the fewer options a car has, the less likely it’ll be in the shop. The car doesn’t have fuel injection either (it’s easier to work on carburetors) and therefore doesn’t need an ECU (computers are found in 100% of modern cars in the US, and are prone to failure… something that is not user serviceable). This car doesn’t even have a radiator! It’s so simple!

Also, the Beetle turns heads. It’s great fun to drive.

My classic Beetle aside, researching modern “minimalist” cars was actually pretty difficult. There was this great take on how to make your current car minimalist, but in general it doesn’t seem like there’s a whole lot of clamoring for small, simple, and cheap cars. I’d probably point my finger at our consumer culture which demands more features, more buttons, and more space… all at the expense of mileage. An article at autoblog.com had this great quote in it:

 “People say, ‘I only want basic transportation, I want the price to be low, and I want good gas mileage.'” said Brunner, who did market research for the smart car, “But then you ask them what they are going to buy, and it’s not that kind of car.”

Our culture proves my point. Sit in a 90s Honda Civic and you’ll be shoulder-to-shoulder with your passenger. Sit in a brand new Civic and 90s you will think you’re in a Cadillac. Sit in a brand new Cadillac and… well, you get my point.

While the autoblog.com article mentions the Volkswagen as a minimilist vehicle, and another great article called The 10 Greatest Minimalist Cars of All Time features the Volkswagen Thing (mechanically identical to the Beetle) as one of the best, what we truly need now is a return to this style of car. Four wheels, brakes, and a steering wheel. Although today’s emissions and safety probably won’t allow for something quite as spartan as an old Beetle, it’d be great to use it as inspiration.

Photo: One of the 60s ads for the Volkswagen Beetle. Along with the famous “lemon” ad, these changed the automotive and advertising landscape for quite some time.