Hey it’s a new year and I wanted to share with all of you a great article I found on the CNN money website. It is the consumer reports best value cars for 2012 and further leading into 2013. How many people were surveyed for this test, 1.2 million people aka subscribers. Thats a lot of info to dive into and dissect. Well check it out below:
Hey does this topic excite you and intrigue you at the same time because of the rising concern of prices at the pump? Do you have a long commute and just want to do better on your miles per gallon going forward in the future? Well you have stumbled upon the best post on how you can save money on gas. You do not have to drive like Miss Daisy, but at the end of the day driving at reasonable speeds does help save your gas.
Quit Pretending is a phrase financial guru Dave Ramsey says all the time and I get a kick out of it. I like the hard in your face advice he gives his readers and listeners. (Radio show / Books) What is the premise behind this Quit pretending thinking? It basically means: Stop Living a False life people. Driving a brand new SUV or the many other vehicles while buried under debt is not a good life. Stop trading in those vehicles every three years and continually adding to your debt and financial mess by not holding a car for more than 4, 5, 6+ years. Research shows that as soon as people pay off a car the wanting kicks in and those same people begin to find another new car to replace the old car that was recently paid off. Just doesn’t make any sense.
I crack up when people tell me Hey why are you driving an old car? (1999 Camry) I tell them because that is what I want right now in my life and I do not need anything else to get me from point A to point B. I hate having car payments and debt. I rather save and save instead of making the banks and the car dealers richer. But what will happen if your car breaks down? I’ll go and buy another old car, maybe a 2006 vehicle with better fuel economy than my Camry or maybe another Camry. Ha Ha. I do not want to seem like I am preaching to a bunch of frivolous living people, because that’s how I sound to those people, but if I don’t say something then nobody else will. I am only expressing what I see and hear out there in the streets and social media. Granted nobody is perfect in this life but with small steps you can be closer to it than many others.
Behavior modification takes a lot of work and it all starts by just being content to say “No”.
-Say NO to Yourself and avoid lifestyle inflation.
-Say NO to your Co-Workers who go to happy hour every Thursday and Friday
-Say NO to your Family who doesn’t see the big picture of money management.
-Say NO to the Credit Card Companies hounding you to open a new credit card.
-Say NO to the Dealership sending you junk mail that you are approved for a brand new Car.
-Say NO to your Friends who buy enough Liquor to fill their bathtub up with Booze.
-Say NO to Anybody who is keeping up with the Joneses or the Smith’s.
I hope you can see the big picture of how the Quit pretending lifestyle is really like. That new Mercedes or BMW you recently spotted someone in, statistically 75% of the time that car is a lease. Now we all know the real truth. A lease is one of the worst money mistakes you can make in personal finance. (Unless it is used for a business expense and Tax write off) Because research shows that the people that can really afford those types of cars usually go out and buy a used 3-4 year old version and avoid the depreciation factor of the new car.
We all can enjoy life by doing things the right way financially. Money management takes a lot of effort and dedication to staying on the right path. Doing things in moderation is better than doing everything under the sun and regretting how much you spent along the path. To sum it all up if you are always intrigued with doing everything and being everywhere, then you are not fulfilled / happy in this life.
Let me know by commenting on how you avoid lifestyle inflation and the Quit Pretending lifestyle.
Rich Uncle EL
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| Image by Fastcoolcars.com |
Have you ever wondered which car is the cheapest car to drive. Well you might think hey my car only cost me 15K so that price is pretty cheap, but you need to look at more than just the price of the car. Fuel is a big component of how much your car will cost you over time, in addition to a few other fees. I will provide you with a list of cars that won the cheapest award in every category.
This current list of cars is being provided by Kelley Blue Book Value. I always was curious to find out which cars after 5 years of owning them are cheaper when compared to other cars in their class. What are the fees associated with this 5 year auto expense figure? See the list below:
Fees by %:
Fuel – 26%
Maintenance- 5%
Insurance- 9%
Financing – 6% (If you didn’t pay cash for it)
Repairs- 4%
State Fees-6%
Depreciation- 44%
So these are the average fees for every car owner and the biggest piece of the pie is depreciation. The standard definition for depreciation is – how well the vehicle holds its value over time. In the examples listed below, the depreciation was calculated by taking the gap between what you paid for a car and what it’s worth in 5 years. Example Car price is 20K but after 5 years it’s worth 10K then the difference is 10K. Then that 10K is added to all the other costs listed above like fuel over 5 years. Thus giving you the grand total of what a car costs you after 5 years. Then to break it down further you can divide that by the amount of miles you drive giving you what your car costs you per mile. Hope you are not confused, and if you are read it again and go to the KBB website for some excellent pictures and graphs on each car listed below.
The 5 year cost to own list in every category:
Sub Compact Car: 2012 Nissan Versa S- $29,763.00
Compact Car: 2012 KIA Soul- $30,924.00
Mid Size Car: 2012 Honda Accord – $37,529.00
Entry Level Luxury: 2012 Lexus CT 200H – $39,212.00
Mid-Size SUV: 2012 Jeep Wrangler Sport- $40,036.00
Minivan: 2012 Mazda 5 Sport- $40,538.00
Sports Car: 2012 Mazda Miata MX5 Sport -$42,524.00
Full Size Car: 2012 Ford Taurus SE – $46,876.00
Luxury Car: 2012 Audi A5 2.0T Quattro Premium – $57,559.00
Full Size SUV: 2012 Toyota Sequioa SE- $59,984.00
What do you think about the fees for all the categories? Given the fact that these cars are considered the cheapest in each car class. I left out pick up trucks as I feel they are mostly used as business vehicles. I am surprised because I didn’t expect the fees to be almost as high as the total purchase price of a new car. For example the subcompact car winner costs about 12 thousand dollars brand new, but the 5 year cost to own is almost triple the purchase price. That is just ridiculous. I think situations might vary as you might drive less than the next person, but remember that these figures are based on tests and statistical facts being done for each category.
A month ago I wrote a post on a future car purchase for me The Mazda 3, do you want to know what the 5 year cost to own is on that car? The magic figure is $34,403.00 with a purchase price of about 18K. The grand total is basically double the amount of the new car price, wow. I think this just makes my decision that much more difficult. So given the facts of how these fees work and how they can affect your bottom line. Do some research before buying any new car, and take into consideration how well it will do in this 5 year cost to own test.
RichUncle EL
Image above is the Ford GT and it’s 5 year costs is probably 200 thousand dollars.
In this post you will learn why I might consider buying the new Mazda 3 with Skyactiv technology. I recently read a review in Car & Driver magazine about the Mazda 3 with skyactive technology. It stated it is a fun, fast, reliable car with fuel efficiency to boot. But am I really ready to trade in my car and get this car? Will I be better off waiting a year or two and getting it used as this is a new technology that was recently released this year. As you can see from the picture the car is sharp looking and it comes with some stylish accessories also. The car and driver review rated the Mazda very high in its ride, handling, and fuel efficiency. It placed 2nd out of 6 compact cars in a recent comparison test. One of the editors even described it as a budget based BMW due to it’s excellent ride and feel. Consumer reports also gives this car two thumbs up with high reliability marks. This just makes me happy that my radar is on point in picking high quality yet frugal products. On the other hand I definitely do not want another car payment and I do not want to add to my car Timeline total . What a dilemma I am stuck with?
2012 Mazda3 i Grand Touring SkyActiv-G Sedan
Base price (with destination): $23,095
Price as tested: $24,495
(Options include $1400 tech pkg)
Engine: 16-valve DOHC I-4
Displacement: 2.0 liters
Power: 155 hp @ 6000 rpm
Torque: 148 lb-ft @ 4100 rpm
Drive: Front-wheel
Transmission: Six-speed automatic
Fuel economy: 28/40 mpg (city/highway)
Car Review provided by Automobile Website: Mazda 3
As you can read I am leaning towards getting it because it will be a better / safer mode of transportation and I can recoup some of the costs by driving with great fuel efficiency for many years. My current commute is about 25 miles each way to work and home and if this car really puts up the numbers as mentioned by Car and Driver I can most likely cut my gas bill in half. After doing a fuel savings test for both cars I will list a few money savings stats below:
Camry | Mazda 3 | |
Fuel / Price per gallon | 3.15 | 3.15 |
Average MPG per Car | 27 | 40 |
Miles Driven per Year | 13,000 | 13,000 |
Plan to own my car 5 yrs | ||
Annual Fuel Costs | 1,517 | 1,024 |
Cost Savings per Yr | 0 | $493 |
Cost Savings for 5 yrs | $2,464 |
After 5 years I will save $2,464 in just fuel costs at the $3.15 current price at the pump. If gas happens to sky rocket to $4 dollars per gallon my savings will also increase with the new car. In addition if my commute time goes up in the future I will not be worried as I have a more modern, reliable, and greener car. On top of that I will be going back to my roots of Mazda products, as my first two cars that I ever owned were the Mazda RX7 and the 626. In part two of this post I will discuss negotiation figures with Mazda dealers to give you more details on the new car development and also I want to test drive it soon.
Here is a link to another Mazda 3 Auto guide car review: MZ3 Skyactiv
At least once in your life you have heard this word called negotiate, but how effectively have you used it. I have had success with this word in several occasions and I will never make a major purchase or accept a new job without using my negotiation skills carefully to benefit me. How can you implement this word into your life you ask? Well its simple do not be shy to stop a conversation to say: Can you do better? These 4 words are the deciding factor for you saving or making a few thousand dollars. The used car you want to get is listed for $8,500 but most sellers jack up the price in preparation of the negotiation tactics that they will have to deal with. The offer you should make is $6,500, granted you might not get this price but maybe both parties will settle on a 7 grand sales price.
I am one of those people who will not settle for paying more than what I am comfortable paying. So sorry to burst you bubble Mr. Salesman by me not accepting your sales pitch wholeheartedly. All of the moneywatch101 readers should be the same way and negotiate till you get tired. Houses, cars, a new job, jewelry, watches, vacations, gym memberships are all examples of things that can be negotiated. Money you will save and money you will earn when you’re facing and confronting both sides of negotiation talks.
Any way you look at it negotiating things like this can pay off in the long run. $$$
Strategies for Car purchases:
-Always email car dealers prior to getting new / used cars with the details of what you’re looking for.
-Have financing established before going to the dealership and if they offer financing ask them why you should go with their terms.
-Go to Truecar.com and printout the MSRP and price most people are paying for your future car.
-Visit only those dealerships who responded to the email with good prices.
-Walk away the first time you go to the dealership if they do not meet your needs and see what happens from there.
-Have a second car option in a competing dealership, print out the details, show it to the sales man at the 1st dealership the next time you meet to discuss business.
-Once the dealership counters with a price for the car but it is still not the price you asked, attempt to get a better rate if you are borrowing through their financing company.
-If they finally will not budge on the price you want, walk away as you will find the car you need at the right price.
A car is a vehicle that can take you from point A to point B and it doesn’t have to be a thing that will break the bank or put you in debt for 7 years. Whatever your preference is used or new, please know that you will be adding about $350-750 on average of new monthly expenses for your precious vehicle. (Car payment, Insurance, Gas, Maintenance) Personally I hate having a car payment, but I understand that they are a necessity for some as getting to work might require having that mode of transportation. Also if you have a 19 year old car then maybe you are the right candidate to get an upgrade. In any event shop smart and see below for a few of my tips that I always think of before making a major car purchase.
A few Tips I live by:
-Never Lease as it is a waste of money
-Always get financing for only 3-4 years (5-7 years is too long)
-Look at 3 year used car prices first and compare that to current model prices
-Do not rush into buying- When you find the perfect car, think about it for a few days
-Always go car shopping with a second car minded person ( Who can give you feedback)
These tactics will help you watch your money.
Pic courtesy of Tesla : Model S
Have you ever calculated the amount of gas per gallon it takes to run your car? Miles per gallon is the gauge that most people use to find out how many miles your car runs per tank. This simple test can be done with simple math. Why you ask?
1. To effectively know how many miles your car can go per tank. (MPG)
2. To find ways in the future to improve your cars gas efficiency.
3. To detect when your car is in need of repair.
4. To Compare your current MPG with that of your future Cars MPG.
MPG Calculation :
1. Fill your gas tank and reset your odometer trip A to Zero.
2. Jot down how many gallons it took to fill up your tank. (14 is the average)
3. Drive normally as you would drive and when it’s time to refill look at the odometer reading.
4. Divide the number of miles you drove by the number of gallons your car took to fill up.
5. The result is your cars MPG as an average of city and highway miles.
My car MPG is 27.2 miles per gallon on 16 total gallons of driving is 435 total miles. I think that’s pretty good but could I do better of course just have to find some smart ways to drive more efficiently. Imagine if you had the new Prius which goes about 50 miles per gallon, with a full tank of gas (12gallons) you could possibly go about 600+ miles before refilling it. That would be an efficient car if I must say.
Now if you could, do the same test on your own to get an exact MPG for your car. Comment below if you already know what your cars MPG is and how do you attempt to increase the miles and possibly tweak out more miles from your car.
By increasing your MPG you can watch your money.
*Update- I tweaked 440 miles out of my car on 1 tank of gas increasing my MPG to 27.5 mpg.
*Pic is the sharp looking Subaru concept Impreza that will never be released. (So Sad)
