by Vicky Monroe
Recently our car hit an unwelcome milestone—150,000 miles. We’re a one-car household and own a red Ford Fiesta that probably dates back to 2012. It’s needed more frequent repairs lately, so we’ve had to sink about $1,300 into it in the past few months. Because our Fiesta is starting to have some issues, I’ve been reviewing our finances and looking into our car replacement options more seriously.
My partner drives about 20,000 miles per year for work, and I’ve seen estimates that say this model only lasts for 200,000 miles. Although I’d love to get 250,000 miles out of it, that’s looking like less of a possibility. We decided that we’re going to budget as if we’re replacing our car in two years so we’re prepared if it dies.
Status of Our Car Replacement Fund
Right now I have $10,000 specifically earmarked for a new vehicle. We have a separate car maintenance fund that has $3,000 in it, which we could potentially dip into. We also have an emergency fund with about eight months of expenses, but we don’t want to touch that unless absolutely necessary.
Initially we thought an adequate budget for a used car might be $15,000. But after further research, it seems like the market has gone bananas and that’s not enough to get a reliable vehicle anymore. It’s looking like we’ll have to spend $20,000 to $25,000 to get a car with the specifications we need, such as all-wheel drive to navigate through the extreme amounts of snow we get.
Our current vehicle doesn’t have it, and my partner has felt unsafe at times driving down gravel roads during the winter without it. Ideally we’re also looking for something lower-mileage that will last us for a while because we hate car shopping!
Plans to Add to Our Fund
I’ve calculated that I need to save at least $700 per month toward our car replacement fund. This will enable us to avoid taking out a car loan or dipping into our emergency reserves to buy our next car. Luckily this is doable since I was already saving, albeit at a slightly slower rate because I didn’t think a car would cost this much!
I’ll have to bump up my savings rate by cutting some extras from our budget such as eating out. I’m also going to route any extra money we get toward the car fund. My partner is expecting to receive $2,500 thanks to a bonus and an upcoming extra paycheck month, so that will help get us closer to our goal.
Car Recommendations
Right now my partner and I are considering getting a Toyota Camry. One of my family members who also lives in a snowy climate has one and likes it, but I’d love to hear your thoughts.
Are there any other cars with AWD that are a great value and handle snow well? Is $20,000 the right budget for a reliable used vehicle? I’d also welcome any car shopping tips since I’m not the most experienced buyer!
Read More
Are car warranties a wise investment?
How To Use $6 Black Gorilla Tape to Fix Minor Bumper Damage
Can You Have Two Car Loans At Once?
Vicky Monroe is a freelance personal finance and lifestyle writer. When she’s not busy writing about her favorite money saving hacks or tinkering with her budget spreadsheets, she likes to travel, garden, and cook healthy vegetarian meals.
You do not need AWD for snow. You need snow tires. These will do wonders, and if you choose an economy car just leave 1 or 2 of the summer tires in the trunk for some extra weight. Get them on separate rims so you can swap them out yourself or with a normal 20$ tire rotation. Definitely cheaper and just as reliable as a midsize car with AWD.
If your Fiesta has one of those junk PowerShift dual clutch auto transmissions it’s a wonder it’s still running. But if it’s got a manual transmission then these can, with proper care, indeed last well above 250,000 miles.
The reality is unless you do what I did when I was younger than 20, and start learning how to work on your own vehicle, there’s not enough money in the world to own a frugal vehicle. Today I own a home with a garage and driveway and the garage is half full of tools including an engine hoist. To me, a reliable vehicle can be purchased for $2k.
What you need is to understand a fundamental here which is that you CANNOT save money unless you are an informed consumer, and you are absolutely NOT an informed consumer as your piece against Electric Cars in MSN clearly demonstrated. Writing about stuff you don’t understand isn’t the way to understand it. Choosing a car just because a family member has one is also foolish. Is this family member EVER going to say “you know I hate this new car i dumped $40k into I was stupid?” NO. They are going to sing its praises, so they don’t look stupid.
Buying a car because you think it will save money because a newer car is more reliable is the oldest lie out there. All machines even new ones can fail unexpectedly. And the automakers have used fear of a car dying and leaving someone stranded for decades as a way to sell new cars. Since you have decided, you don’t want to have a garage full of tools, and you don’t want to learn anything about what’s likely the second largest expenditure in your life, and you are hell bent on buying a used car, the best advice I can give you is find a good local independent mechanic shop and start frequenting it, and let them know you are in the market for a used car.
You have easily enough money now saved up to keep your Fiesta running for another 100K. And if your partner can’t drive that’s her problem, she can go to driving school land learn to drive in snow. There’s no amount of money that can buy a car that’s safer to drive for a poor driver who isn’t willing to learn.