Finance & Savings

Is having a car worth it? Do you know your options? Want to know a secret?

This week I really want to bring to light one of the big changes I have made in my life to not only consolidate my debt but to feel good about the journey I am on for taking control of my financial health and how I will Save Thousands of dollars this year and next!

Did you know that according to Edmunds.com the average monthly car payment for a new car is $479 a month and for a used car is $352?

This equates to $5,748 a year for a new car and $4,224 a year for a used car!

Add in the average monthly premium at $183.00 a month and that’s another $2,196.00. So almost $8,000.00 of your income for a vehicle? Is this our only option for obtaining a vehicle for transportation?

No, and I am going to share what I did to lower the cost substantially!

I knew that my vehicle was one of the biggest expenses I had and that if I was going to make a difference in my income and financial wealth I needed to make a change.

So, for all of you that have the inner do-it-yourself follow along for something that honestly could change your life.

About 2 months ago I started my journey of debt consolidation as well as this very blog. I have been a nervous wreck because I want to make sure I am providing the most efficient information to my readers. P.S. YOU DESERVE IT! So, about a month ago I made it my mission to rid one of the highest bills I had- CAR PAYMENT!

I searched high and low for alternative measures of paying a $333 car payment a month not to mention it was a sports car so tag on another $85 for insurance. Not terrible but not needed. I looked into options for leasing a vehicle, well that was a bust I drive 50 miles one way to work…..no place runs a leasing program with the amount of miles I drive.

I considered rideshare but knew with my schedule and distance it would be a challenge. I could not find any low mileage car at a dealer for under $10,000.00 and with me having roughly 26,000 miles a year on my vehicles buying new would be such a bad investment. I was really losing hope I would find a solution but then it hit me.

My neighbor used to be a mechanic and I watched over the course of the four years I’ve lived next door he would buy and sell salvage vehicles. Now for those of you who don’t know what a salvage vehicle is, it is a wrecked or slightly wrecked car that an insurance has totaled out. We have all heard the stories that some companies just total them out because the bids they received for the repairs exceeded the amount the car values at.

Well this is exactly what my neighbor was doing but for his wife. He would buy a salvaged title vehicle for her, he would put a new transmission in it or do body work and she would have a new car for about 6 months then he would do it again. Sell the one he fixed take that money and buy another salvage titled vehicle. I had seen him do this at least ten times since I lived there and knew he was saving thousands a year doing this instead of buying a new car each time she wants to change it up.

Well I decided that if he could do it so could I, I went on the search! I looked online for junk yards that would buy cars that needed minor repairs from auctions. After about 3 days I found ONE! So here is what I read:

2013 Ford Focus SE Hatchback, had front end damage and listed the parts that were needed- radiator, front passenger fender, hood, headlight assembly, windshield wiper reservoir, lower ball joint, front bumper, and front bumper valance.
Price: $2,900.00 Miles: 49,000
Runs & Drives, Will Start, Sale Final
Two thoughts run through my head-
  1. Wow! 49,000 Miles for $2,900.00
  2. I need to make a part list and start pricing the parts out.

Let me also note- I have a very limited background in vehicle repair. I.E. I can change my oil, I can replace my air filter, put a headlight assembly in, very small background and that background came from using Youtube as a learning tool! But I had watched many other people buy a Hanes Manual and take an entire car apart so there was no reason to limit my capabilities.

The search began- I used Amazon.com to purchase quite a few of the parts including the headlight assemblies, I used Rockauto.com & partgeeks.com as well!

In total the parts that were listed was roughly $600, I was excited that I was really cracking into something! Well I decided I needed to call the junk yard and ask some questions, being that my neighbor had done some business with him I name dropped a few times. After a few long hard conversations the price of the car had been negotiated down to $2,200 and I was buying an almost new car with less miles on it than anything I have ever owned and I was feeling great about it!

After I found everything I needed I began ordering parts, and the things I was unsure of I looked for the model number on the parts hanging off the car itself. After about a week I had 50% of the parts order and at my front door just ready for me to tackle!

I started with taking off all of the damaged parts and laying them out on the driveway. I used a TON of Ziploc bags to separate the bolds and nuts I was taking off of certain pieces which is imperative because a lot of the new parts will NOT come with the hardware to affix them to the body of the car. Piece by piece I was repairing the car and seeing such a difference!

The car still smelled new she was just looking for a little TLC. We are now 3 weeks into the project and completed. My sports car is listed online so I can rid myself of that $333 payment, I will be taking my ford to get a safety inspection and after that I will be driving a 2013 Ford Focus with 49k miles that gets 38 mpg for only a GRAND TOTAL of $3,400.00.  This is when I realized I would SAVE THOUSANDS doing this! My current car I paid $21,000.00 this is  a fraction of that cost.

I will admit there were some hiccups I was not expecting throughout the course of this repair but I can assure you this………..IT WAS WORTH IT! I am going to show you a breakdown of my yearly cost difference between the two cars and you will be astonished.

Look below to see how I was going to SAVE THOUSANDS!

PONTIAC G8 GT:

COST PER YEAR : 1st Year-$7,876.00  2nd  Year-$7,876.00

  • Payments: $3,996.00
  • Insurance: $1,020.00
  • Gas Cost: $2,860.00
    • Gas on Average is $2.20 a gallon:
    • Driving 100 Miles Round Trip a Day x 5 days
    • 20 mpg -gas tanks holds 19 gallons
    • So roughly $55.00 for 500 Miles a week x 52 Weeks= $2,860.00

Ford Focus SE:

COST PER YEAR 1st Year-$5,448.84 2nd  Year-$2,048.84

  • Initial Investment: $3,400.00
  • Insurance: $480.00
  • Gas Cost: $1,568.84
    • Gas on Average is $2.20 a gallon:
    • Driving 100 Miles Round Trip a Day x 5 days
    • 38 mpg -gas tanks holds 12.4 gallons (471 Miles per tank)
    • So roughly $30.17 500 Miles a week x 52 Weeks= $1,568.84

In one year I will cut the cost of my ownership by 38%! Saving the $3,400.00 the second year, and saving 31% between the first years difference of both cars!

No one can imagine how excited I am for this journey and how far I have already come and I want everyone to understand this came from minimal knowledge of working on cars. I recommend finding a mechanic that is willing to help you if you get stuck! We used the family mechanic when there was something we did not know. I also can tell you I relied heavily on the manual and Youtube and it all came together!

Cars are nuts and bolts it comes apart one way and goes back together one way. I can say this as well I did get a quote in the beginning to see what it would cost to have a mechanic do all of the work and the quote was roughly $2,900.00. So even if you purchase the car and parts and had a mechanic do the install you would have a 2013 car with 49k miles for $6,300.00. Which at that price point the car values still values at $9,100.00!

There are a few more steps when getting a salvage titled vehicle licensed and titled but the process is pretty simple. If you find that this is something you are interested in and have any questions please do not hesitate to send me an email! I would love to help you cut your vehicle costs!