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.

My Other Minimal Vehicle

A while ago I extolled the virtues of driving a classic car instead of a newer one. Fewer features means fewer things to break, not to mention that classic car registration and insurance are often much cheaper than those of a more modern car. However, if tinkering in the garage every weekend maintaining your 25+ year old vehicle isn’t up your alley, there’s another option that I think is often overlooked: motorcycles.

Motorcycles cover all the bases that I look for in transportation. It just has to get me where I’m going at a minimum of cost. There are some tradeoffs that I’ll get to in a minute, but in general a motorcycle is a great way to do this. They’re orders of magnitude cheaper than a car. Additionally, and like a classic car, motorcycle registration and insurance is often much cheaper than a modern car. They’re also (generally) simpler vehicles to maintain, and are much more user-serviceable than a comparably aged car.

My daily driver is a small-ish but comfortable cruiser, and I’ve been driving it to work and back for about a year and a half now. You can pick one up for much cheaper than any comparable used car. My motorcycle is great on long trips, great at carrying a passenger, and has been extremely reliable for me. I’ve put quite a few miles on it and have only had to change the oil, air filter, and tires. And there’s two fewer of those than on any car, too.

Motorcycles also get amazing mileage. My first motorcycle, a Kawasaki Ninja 250R, got over 70 mpg. My first employer let me ride it for business and reimbursed at $0.59/mile, which works out to over $30/gallon that I was getting in mileage. It’s great! Even my current heavier cruiser-style motorcycle gets 50 mpg which is amazing because my commute is over 50 miles per day. When compared against my truck, this is a yearly savings of around $1,500 in fuel alone.

Let’s get to the elephant in the room, though. I know motorcycles are dangerous. I was in a pretty bad accident on my first motorcycle when an SUV pulled out in front of me and I collided with a 4000 pound hunk of metal at about 40 mph. I woke up in the hospital a few hours later with no memory of the entire day, and various slings and tubes attached to my body. However, I believe the risk can be mitigated in some circumstances. I can’t recommend riding a motorcycle as a daily driver in a climate where it rains a lot. I also wouldn’t recommend it if you’d be driving a lot at night, or if you live and commute in a crowded city. Or if you live in a college down that is dominated by drivers with little driving experience. My commute, though, is 25 miles into deserted university-free swampland in central Florida on a divided highway, so except for the occasional afternoon shower I believe my risk is pretty well mitigated. If I took another job that wasn’t in the middle of nowhere, I’d probably get a little car to commute for safety reasons.

Additionally, most motorcycle accidents happen because a rider has overestimated their abilities. Ever see a sport bike rocket in between traffic on the interstate, and the rider is only wearing a t-shirt and shorts? Statistically, those people skew the statistics. And a large percentage of motorcycle accidents happen to riders who have been riding less than six months. I always recommend new riders get a 250cc motorcycle as their first bike because they are much more forgiving, and we all make mistakes. But in general: stay within your limits, ride safely, always wear your helmet (and jacket, boots, gloves, and pants), and don’t go out unless it’s a beautiful day.

Safety, economics, and practicality aside, though, motorcycles are fun. Almost everyone asked me how I could get back on one after my wreck, and this simple answer is the best one I have. The first time I rode one over 10 mph I thought I was flying. It feels kind of like a bicycle, but there’s no way it should be going that fast! It’s crazy! And that feeling hasn’t gone away for me, either. I always get a thrill out of riding one, even if it’s just to the store for a loaf of bread. If I didn’t need my Shadow for my commute, I’d consider selling it but I’d keep my old Yamaha just so I can scratch that itch every now and then. If I sell them both, I know I’ll end up with another one in the future anyway because I’ll miss the excitement too much. Life is too short to sit around eating ramen and driving a 10-year-old beater car, and motorcycles are cheap enough that they’re a much more enjoyable alternative for some minimalist lifestyles.

But, since we recently had a bit of a storm scare in South Florida, I’m obligated to remind you that neither a motorcycle nor a classic Volkswagen is particularly suited to any hurricane weather or post-hurricane disaster relief. Or evacuation. So you should probably take my recommendation with a grain of salt!

Ride safe, my friends!

Photo: My daily driver, an ’06 Honda Shadow. A great bike for making it look like you ride a Harley, except this one is reliable. If you want to see my unreliable vintage bike head over here and scroll down. 

My Most Expensive Weakness

I have a problem. I’ve spent way too much money on cars. When I first started my adventure into living a more minimalist lifestyle I knew this would probably be a big hurdle for me. I’m an engineer, and I like getting my hands dirty working on cars on the side. I don’t want to give this up entirely, but I’ve taken some steps to make sure that I’m living the most efficient, simplest life I can without completely eliminating my cathartic hobby.

First, some background:

My first car was perfect. It was old when I got it, no AC, no power anything, a very basic car. Then I decided I’d buy a motorcycle. I had always wanted one, and I was 21 at the time, so I bought a 250cc sport bike that was cheap for a motorcycle. I crashed it (through no fault of my own) and used the insurance money to pay off some of my student loans (great idea!) and to buy myself a bright red sports car (horrible idea!). I was a college student with two cars. And a speeding ticket. How did this make any sense?

I crashed the sports car. That one WAS my fault. I was out about $2000 from that, and ended up getting a truck. Still had that old car, though, but I towed it to my first real job in Tennessee with the new (well, new to me) truck. My commute in Tennessee was 45 minutes, one way. Mistake. Then I decided I’d buy another sports car, and also keep both my truck and my old car. I got bored of the sports car and sold it, at a loss of about $2500. Later on I found a motorcycle on craigslist for $700 that I thought would be a fun project, but right after I bought it I moved to Florida and sold it and about broke even.

When I got to Florida I sold my old car for $500 to a mechanic. I was sad to see it go but I was realizing that it was time to let it go gracefully. The mechanic took great care of it and I like to imagine it’s still on the road. But then I got dumber and decided to buy ANOTHER sports car. I got bored of that one and sold it for a loss of about $3000. By that time I just had my truck, which after spending a bunch of money on upgrades over the years was boasting a respectable 16 mpg.

At about this time I started thinking about what the perfect vehicle would be. I used to work on old Volkswagens with some of my friends, and they are truly great cars (more later). So I found a ’72 Beetle on craigslist for pretty cheap and bought it, and it’s probably the best car I’ve ever owned.

But the Beetle isn’t the greatest daily driver for me (I drive about 50 miles a day to get to my office which is in the middle of nowhere), so I bought a motorcycle. This is also a great vehicle, it gets about 50 mpg and I got it used at a great price. If I can take care of some of the underlying issues with the Beetle (water leaks, etc) then it might be a pretty respectable daily driver, and I could sell my motorcycle.

But I still have that truck. It just doesn’t fit my life anymore. Not to mention the fact that when I bought my house, it came with an antique motorcycle, and now I have four vehicles. None of us is perfect, but this is clearly not minimalist!

I was justifying keeping the truck because of all the home repairs I had been doing lately, but justifications only last for so long before you realize that you’re just fooling yourself. My truck is now up on craigslist, and I plan on using the money I get from it to buy an index fund (more on that later). I’ve probably spent $12,000 on the truck, including oil changes and repairs (and adding a huge steel bumper and winch which I’ve never really used), and in the end I’ll probably only get about $3,000 for it. It used to be fun to take offroading in the mountains in South Carolina and Tennessee, but there aren’t mountainous trails like that around here in South Florida.

I’ve owned it for six years though, and $1500/year isn’t too bad for all the adventure I’ve had in it… until you consider that I’ve put about 100,000 miles on a vehicle that only gets 16 mpg. Then if you count the ~$8k I lost on other cars, I’d love to have all of that money back, but it’s sunk now. We can only move forward, so selling it is the right decision, even if I’m a little late to the game.

I’m trying to balance the enjoyment I get from working on cars and motorcycles with my minimalist lifestyle. I’m going to keep the Beetle; it’s quite possibly the most perfect car ever made. It’s a very simple car, and I was also inspired by another blog post about turning a small car into a big one, so I’m going to make it work for me.

I’m going to keep the motorcycle too, unless my job moves to a closer location. I’d like to live closer to work, but it’s physically impossible to live any closer than about 20 miles from this office. Since I drive about 250 miles a week, it makes sense to have a simple vehicle for commuiting that gets 50+ mpg. (Filling up costs me about $7. It’s awesome!)

And, about the antique motorcycle: It came with the house, so I didn’t spend any money on it. It has a surfboard rack, so I can get to the beach (which has notoriously difficult parking for cars) and park in subtle places very easily. In Florida, you don’t necessisarily have to have insurance on motorcycles, so the motorcycle is free for me to operate (except about $15/year for classic motorcycle registration). I’m guessing it gets a respectable 30 mpg too, but I can’t tell right now because the speedometer (and trip counter) don’t work. I can sell it for probably $1500, so why not? I like working on motorcycles too!

So that’s my plan. Selling the truck will save me over $1000 a year, and that’s money I can put into my house or to paying down my student loan. I have two other simple vehicles that I have fun working on, that work for the lifestyle I have, and that are crazy cheap to own and operate. I think I’m doing better! And I also have to remind myself not to fall for the sunk cost fallacy, and also that it’s not too late to stop wasting money on vehicles. I just hope no potential buyers are reading this blog.

Photo: My 1972 Volkswagen Super Beetle, using the surf rack to carry a ladder. My truck had been in the shop for four months, and this was taken during that time.