 |
| Gold on beige, baby! |
No, I’m not talking about the Moving Average Convergence Divergence. I’m not a stock trader that follows charts. I’m an investor that follows the fundamentals of companies. No, what I’m talking about is the Mother of All Car Deals!
It turns out in life that often it’s not what you know but who you know. And this was definitely one of those cases. My girlfriend had heard from a former co-worker that her neighbor knew of a cheap car for sale. I wasn’t particularly interested at first, because I had already committed to my Frugalmobile. However, after hearing a little more about this car I realized this was a rather unique opportunity. I’d hate to say this about any material object, let alone a depreciating asset, but the deal almost seemed to good to pass up.
Apparently the former co-worker’s neighbor is a caretaker for an elderly woman on Siesta Key. And this 87 year-old woman is unfortunately suffering from cancer. To add to her woes, she recently had her driver’s license revoked. So her car was of no use for her any longer.
Well, this car is a gold 2006 Toyota Corolla with a beige interior. Boring is beautiful! Even better, this ride only has 21,000 miles on it. But it gets even better: the price. She was only asking $5,400 for the car! Now I’m very interested.
 |
| Yes, that mileage is correct! |
Well, needless to say I jumped at the opportunity to take a look at the car and take it for a test drive. So, I met the caretaker and the car owner at the owner’s condo and all three of us hopped in the Corolla and went for nice test drive. It drove beautifully, much tighter than my 1997 Escort. I checked the fluids, looked over the whole car and took a peek underneath. Everything seemed to check out okay. The car is a bit rough around the edges, as it looks like the elderly woman had a hard time making the corner into her carport a couple times over the years. The front seats are also a bit worn. So the car isn’t pristine, but it’s still a deal I couldn’t ignore.
I paid cash money for this car, and I’m now the proud owner of a 2006 Toyota Corolla with just over 20k on the odometer. The elderly woman I purchased it from was the original owner, and I verified that the car has been meticulously maintained at the local Toyota dealership. Good stuff!
I contemplated flipping the Corolla for a quick profit, but I’ve since decided to just keep it. I’m still in the early stages of my journey to financial independence and I’ll likely have need for an extremely reliable car for at least the next 10 years. And I anticipate this wonderful specimen of a car to last that long, or perhaps even longer. I then realized I had to sell my ’97 Escort and put it up for sale on Craigslist. 24 hours later and it has already sold for exactly what I paid for it. One of the joys of owning really cheap cars is they’re easy to sell!
I think calling this the mother of all car deals is pretty fair. I ran the numbers on Kelly Blue Book (KBB) and the fair value on the car came out to just a little over $10,000 in ‘Good’ condition. Even if you think the KBB numbers are way off this car is likely worth at least a couple thousand dollars more than I paid. So the depreciation is already factored in with plenty to spare.
I actually originally wanted to find a great deal on a nice Corolla or Civic when I disclosed that I was car shopping. I ended up settling for the Escort because I couldn’t find any decent Corollas that were fairly priced. There were many that had well over 100,000 miles, were in pretty rough shape and the sellers were asking over $4,000. I just couldn’t do it. I wanted a Corolla because they’re usually at or near the top of many “most reliable cars” lists, like this one from Mr. Money Mustache. I finally get to see what all the hype is about!
Furthermore, this car is rated for excellent gas mileage. Per the EPA, it’s rated at 26 city and 35 highway for a combined rating of 29 mpg. I’m digging that!
I’m hoping to be able to drive this car for many reliable years and maybe even eventually sell it for not too much less than I paid for it. Wish me luck.
Much like when I was setting aside money for a car before I made a purchase, I’ll be including the costs associated with the purchase of this car in monthly increments, as I “make payments” on this car. Even though I paid cash I’m going to amortize the transaction out over the course of the next few months or so to smooth out any unfair disruptions to my budget due to such a large one-time expense. It should also be noted that this transaction tapped out most of my available capital, so my stock purchases for the foreseeable future might be a bit light until I can replenish the capital reserves.
So what do you guys think? Did I land the mother of all car deals? How about you? Ever land a great deal on a car or other big-ticket item?
Thanks for reading.
DM,
Look at you – buying 2 cars with a few months? Aren’t you Mr Fancypants?
You made the right choice on which car to keep.
Not only would flipping the car for a profit be bad karma, it would likely anger the “who you know”
Good Choice
Roger H
Congrats on the new ride! Sounds like you got a smoking deal… You should easily be able to put on a few hundred thousand miles on that car. My former co-worker had a Corolla that had over 200k miles… I’m guessing this car will still be going strong by the time you reach FI!
wow looks like you came out winning on both the old and new ride. Great job!! good luck to you and your new ride.
DM,
I sold my 2002 Echo in November of 2011 for $4200. It had 109,000 miles and was in good condition. Corolla was a step larger than Echo which was replaced by Yaris. When I posted it on Cars.com I got a dozen calls the first day. I probably could have gotten a bit more money for it but I only paid $12k and drove it for 9 years. Based on this, you got a good deal and that KBB sounds about accurate.
-RBD
What a deal! I sold our 10 year old Corolla with over 130k miles for $4,300 so yeh you got a great deal on a reliable car.
You go (200,000 miles), dude!
lol MACD, good stuff
Nice!
I just got a 2008 gold on beige, it has around 45k miles on it. You got a great deal.
Trade out a Corolla for an Escort???? Any day of the week and twice on Sunday! Great job. That car will go 200k easy. Probably 20 years for you, DM. Smart!
Good job. The Corolla gas mileage plummets on models newer than 2008. My current car is a 2008 Corolla with lots of miles, but that works for me because I won’t be adding many miles myself. Oh, and it cost me more than your car did, but, as when you got your Ford, it was such a relief to find something I actually wanted.
My best deal was a 10-year-old 1984 Nissan Sentra wagon with 86K miles for $1600 (obviously back in 1994). I loved that car. I now wish I had tried to fix it after someone rear-ended it. Still, it lasted me 10 years, was very well designed, and I normally got around 38 mpg on that car. Sadly, modern Sentras are not as reliable.
You ripped off an old lady dying of cancer. So nobody felt the need to inform the clueless seller about a fair price for the vehicle?
Oh wow. Good deal. Everyone dreams of getting a car deal like that.
My best deal was a 25 year old Subaru. I paid $500 and drove it locally for a few years, then sold it for $500…
It was a death trap though.
Maybe the old lady was trying to pass on some good karma. She can’t take the Corolla with her.
Congrats on upgrading your vehicle at a minimal cost. It sounds like you could drive this car for several years and get back all the money you paid for it if you wanted to. Plus this car should be more reliable as you mention. It was definitely a deal you couldn’t pass on.
What the heck is an old lady, dying of cancer going to do with a car? I would think researching a fair price would be the last thing on her mind about now. Don’t act all shocked like you wouldn’t have done the same either.
Exactly! I bought my home from a couple going through a nasty divorce at a huge discount, because they just wanted to split assets quickly, and never see each other again. I call that answering the door when opportunity knocks.
Not so different from stealing thousands of dollars from her, and gloating about it. Who cares right, she is going to die soon, and won’t miss the money.
From a couple of Toyota lovers, you got the Mother of all deals! We drove our 1995 Corolla which we bought used for $3200 (70,000 miles), until it had close to 300,000 miles. That was on Wisconsin’s snowy, salty roads. No major repairs, just lots of new tires and brakes a few times. We recently landed a 2005 Corolla with 52,000 miles on it for $8400 and thought that was a great deal. So we’re really jealous about what you just scooped up. My husband is commuting with the new car and getting 42 mpg in the Minnesota subzero temperatures! It’s cut his gas bill in half from the Honda CRV he was driving ( made it to 350,000 miles and sold it for $1000). You inspire me DM!
I know a thing or two about cars and this is an excellent deal Jason !!
keep it up !! You can keep this car for 10-12 yrs with low maintenance. You probably will hit your financial independence by the time you would have to flip it.
Jason,
Well done, buddy. This car will last you 10 years or more, easily. Very well done. And I’m glad to see you paid cash for it. I like how you said, “it tapped out most of your available capital”. Imagine that, you can buy a car with 21,000 miles on it with a couple months worth of “extra” capital. If only the rest of the country had that kind of awesomness going on. Keep up the great work!
Let’s chat again soon! I’d love to tell you about my latest project(s).
P.S. Would you mind switching your blogroll link to me from YCL over to CMI? Thanks!
Roger H,
I am indeed a Mr. Fancypants lately! I feel like I’m living a life of luxury these days. I have a car, and one with power windows and locks, no less. I have health insurance. And I’m eating healthy. Life is really good! 🙂
I agree with you on flipping the car inviting bad karma my way. Probably best I chose to keep it.
Hope all is well!
Best regards.
FI Fighter,
Toyotas have built a heck of a reputation over the years. I’m hoping this Corolla is no different.
Thanks for the kind words. I do think this might be the last car I purchase before FI, and perhaps even the last car ever if I’m able to get by without a car in FI. We’ll see. 🙂
Best wishes!
FFdividend,
Thanks! I got lucky here. The Escort sold quickly for what I paid, and the Corolla was a great deal. Sometimes you have to have luck along the way.
Take care.
RBD,
The Echo is another legendary car. Super reliable and they usually go for a great price based on the value. Nice job driving a great car like that for only $8k over 9 years. Smart move. 🙂
Cheers!
insourcelife,
Thanks. The price your Corolla fetched was right about what I was seeing around here. And it wasn’t just the mileage, many of them were kind of beat up. The really clean Corollas usually had a $500-1,000 premium on them. The car I picked up isn’t super clean, but I could fix the minor cosmetic issues relatively cheaply. Just not a priority right now.
Thanks for stopping by!
Take care.
Anonymous,
Thanks! I’ll keep you all posted as this thing gets older. 🙂
Best regards.
Buy Smart,
Ha! Glad you liked the title. I thought it was funny. I told my girlfriend about the title and the meaning behind MACD and she just rolled her eyes. I just said: “inside joke”.
Best wishes!
dividendgamer,
Nice job! A gold on beige Corolla isn’t on any posters, but a cheap, reliable car will help us reach our dreams.
Glad to see we’re driving the same car. I hope they rock for us!
Take care.
Pay off my rentals,
Haha. I hear you. I only hesitated because I had a few investments I was researching, and I knew this capital was already earmarked for that. But that’s okay. If this car can get me all the way to FI and beyond it was a great decision. I’m quite positive this car will serve to be much more reliable and cheaper over the long haul against what the Escort would have been. It’s an investment for the long term.
Thanks for the support!
Best regards.
Debbie M,
I wasn’t aware of the mpg issues with newer Corollas. That sucks! It’s funny how many old cars (like the Insight) get great gas mileage compared to what some of the newest models are bragging about.
Sounds like you got a great deal on that Sentra! To drive a car for 10 years after spending just $1,600 is phenomenal. That’s an average of just $160/year. Nice! As long as the repairs aren’t too much that’s much less than most monthly car payments.
Glad to join the Corolla club! 🙂
Best wishes.
Anonymous I,
It’s not my position in life to make sure all transactions I come across are fair. Just the same in stocks, I don’t pound my fist on the table when someone is selling me their stocks for less than what wisdom would say they’re worth. And how do I know it’s not some older lady selling the stock on the other end?
Furthermore, I didn’t set the price. She did. I just didn’t argue with her about it. And I don’t think many people out in the world would. I don’t know her situation. Maybe she needed the money quickly. Maybe she wanted to avoid the hassle of going through Craigslist and meeting a bunch of strangers. I simply facilitated a transaction she initiated.
Best wishes.
rb40,
Thanks for stopping by!
Nice move on the Subaru. Those are also known to be pretty bulletproof. You basically drove it for free. That’s awesome!
I’m hoping to accomplish a similar arbitrage where I drive this vehicle for the next 10 years or so and still end up being able to sell it for not much less than I paid. If I can spend no more than $300/year on “car payments”, I’ll be a happy camper!
Best regards.
Anonymous I,
Nice move there. Not all transactions are completely fair, where everyone gets exactly what they want, need or should. In fact, I’d be willing to bet most transactions in life aren’t that way. There is usually one party leaving more satisfied than the other. But that’s life, and it is what it is.
Great job buying a big-ticket item on sale!
Take care.
AAI,
Thanks! I appreciate the support. I hate to spend so much on a car, but I couldn’t pass it up. I felt like this was one of those rare moments in life when fortune shines on you. I’m hoping this thing lasts me all the way to FI! 🙂
Maybe I can race your S4 sometime? 🙂
Best wishes.
Wisgal,
That’s an endorsement for Toyota if I ever heard one. Maybe I’m working for the wrong car brand! 🙂
Sounds like you guys have done incredibly well with your Corollas. I’m hoping I fair even half as well as you guys. I’ll keep you updated as the years go on and as she ages a bit. I’m keeping my fingers crossed for just regular maintenance, tires and brakes.
Thanks for stopping by. I appreciate it!
Take care.
investlikeafool,
Thanks. I hope you’re right and this car lasts all the way to FI. Maybe I’ll get really lucky and this will be the last car I ever buy. A guy can dream, right?
Hope all is well with you.
Best wishes!
Kraig,
Thanks, bud. I appreciate it. Yeah, it’s amazing that I purchased a car that’s practically new mechanically for some spare cash in the checking account. Certainly not a position that most people find themselves in. For most, it’s endless borrowing. Not that I begrudge them that privilege, as long as they’re aware of the true costs of it all.
I’d love to chat again anytime. I hope you’re keeping warm up there. You guys are getting smacked right now. Brutal! Oh, and I’ll change the link.
Best regards.
I don’t remember when I bought it but I believe it was around 20 yrs old when I bought it and had a lot of miles on it. It was beat up but ran well. I paid something like $1400 for it to a guy who was going out of town forever the next day! It was a 1973 Toyota Corolla sedan. I drove it for 7+ years with only changing oil and did the front brakes once. It never failed me, I saved a lot of money using that car! Your car should last 20 years if driven nicely with oil changes and a few minor maintenance issues. Best regards!
Katz,
Sounds like we have another Corolla fan among us! I’m glad to finally own one and see how long it’ll last me. If I could get 20 years out of it I’d be thrilled. We shall see. 🙂
Cheers!
To the above comment about ripping off the old lady.I found a car like the one you got the car would not start all it needed was a new battery. We told the older couple about the battery if you have any guilt about taking advange of some body you will never enjoy having it. GOOD feeling pay dividends too. Im not saying you riped her off but if you did it will come back and bite you.
My wife would too. The same goes for when I make video game related puns.
Looks like you did well on both vehicles. Nice to upgrade at a great price. Best of Luck. I’ve had a 1994 Jeep for about 6 years now. I spent about $3500 at the time. It has been paid off from day one. Nothing jaw dropping, but nice to get from point A to B. Up to 133K miles. Gonna see how many more I can put on her.
Jason,
Thanks as always for sharing. You deserve a good deal on a car if for no other reason than all the good you’re doing with your blog.
Sorry you have to receive some mean spirited, self-righteous comments about “ripping off an old lady,” but I guess that kind of thing goes with having a popular blog.
I’d like to hold out another possibility worth thinking about — not saying it’s true, for of course I don’t know what was on the seller’s mind — but she could very well have wanted to find a deserving buyer, paying an old debt forward.
Congratulations on responding calmly. Those who are quick to judge are quick to anger.
Congratulations! The insurance will also be down-to-earth! Good buy!
That’s a great find and one I would have purchased in a heart beat! Some of the best deals are found on cars with meticulous mechanical upkeep and a little body damage! They’ll run forever and who cares about a few scrapes!
If you’re going to slam the guy because you believe he “ripped off an old lady,” at least have the stones to post who you are along with it. The internet has pros and cons, but one of the biggest cons may be the fact that cowardly people can openly criticize others, while easily concealing their own identity.
Nice find! Like you, I would have had a tough time deciding about keeping it versus flipping it. The benefit of keeping your older car, as you know, is that it won’t really depreciate. This new one will… Either way, great buy!
I’m glad you were able to find a Corolla. If I remember correctly, a Corolla was your preferred option all along. I think you’ve made the right move, you can view it as an investment of sorts for years to come. It’s kind of like the wardrobe investment you recently made, you won’t have to worry about that aspect of your finances for a long time. My wife had a Corolla for years and it served her well, so I think you won’t be disappointed.
Anonymous,
I think you made a great move there. I wouldn’t feel good ripping someone off outright. I honestly don’t think I ripped the elderly seller off. I simply paid the price someone asked for on a good they didn’t want anymore. Sometimes there are good deals out there, and sometimes there are bad deals out there. If everyone were afraid of “ripping others off” there would never be a deal on anything in the world because everyone would be paying more than an asking price.
She wasn’t catatonic or anything. I met her and she spoke clearly, understood what she was selling and explained why. I paid her full asking price and both parties left happy.
Best regards.
foreverdgi,
Great job buying a car in cash. Paying interest on a depreciating asset is a horrible financial decision. Sounds like you’ve done very well so far! If you figure you could get $2k for your Jeep right now that means you paid about $250/year on your “car payment”. Good stuff!
Best wishes.
Anonymous,
Thanks for the support! It’s much appreciated. 🙂
I understand where people are coming from. I don’t really get angry with detractors very often. Everyone is entitled to an opinion and has a right to express it. I only get upset when people repeatedly and forcefully express their opinion. You’ve gotta have thick skin to have a blog!
Perhaps you’re right about paying it forward. Maybe I’ll even do the same when my time with the Corolla is done many years from now.
Thanks again for the support!
Take care.
moneycone,
I’m with Geico right now, and the insurance is exactly the same as what I was paying on the Escort. I’m going to be shopping for cheaper insurance this weekend. 🙂
Best regards!
Cash Cow Couple,
Thanks for stopping by!
You’ve got it right. This car is mechanically immaculate, but does have some dings and scrapes. But who cares about the dings? As long a the car runs beautifully my wallet is very happy. 🙂
I can’t say I have a car even older than you guys anymore, but I hope to still have this car when it turns 20. 🙂
Best wishes.
CPA,
Yeah, the depreciation was something I thought about. The depreciation on the Ford was almost complete, whereas the Corolla still has some to go. However, I think it’ll be many years before the depreciation catches up to my purchase price, and by that time I will have had a reliable car take me around town for free. It was a fair compromise.
Thanks for the support!
Take care.
wes mantooth,
Thanks! I hope you’re right. I’ll make sure to keep you guys updated maybe once a year or so. I’d be happy if it lasts at least a decade in a reliable manner. We’ll see. 🙂
Cheers!
Spoonman,
You’re right. I was originally shopping for a Corolla. They tend to be a tad bit cheaper than Civics and seem to be just as reliable. Plus they have a timing chain, and not a belt (less maintenance). However, they were all expensive. Any that were less than $4k were just plain worn out. I know they’re reliable, but getting a 12 year-old specimen with more than 200k on it was just not what I was looking for. This one was a perfect buy at the perfect time. 🙂
Glad to hear your wife had great luck with a Corolla!
Hope all is well.
Best wishes.
What a fantastic deal DM! That car should serve you well for years to come.
The repairs were the cheapest of any car I’ve owned (2-year-old Ford Escort, 10-year-old Honda Civic) except for my current still-quite-new car. Congrats again on your find and on not passing it up just because you’d already gotten a car!
A bloody good deal there old chap!
Must laugh at what you guys think is good fuel efficiency though. I currently want to get rid of my car because I’m “only” getting 30 mpg. Going to upgrade to a diesel model of the same car which should get me double that. Now that’s a good investment! 😉
The only downside is you lose creditability in stock selection if your only transportation consists of a 2006 Toyota Corolla ! No status at all. Anyway – good luck.
FIREstarter,
I wish I could see 60 mpg with a car. The closest thing to that would probably be an electric car.
I did, however, see wonderful gas mileage with my 49cc scooter. I was getting 100+ mpg with my Honda. That was great. $4 fill-ups that lasted for more than week. 🙂
Cheers!
Anonymous,
I guess it’s a good thing I don’t care about status symbols. If I did, I wouldn’t have been riding the bus for the last couple years, or live in a small, modest apartment. Of course, I also wouldn’t have a six-figure portfolio to my name. 🙂
Best wishes!
You will love that Corolla! I bought my first Corolla in 1974 and have owned one (not the same one, mind you, but that is not the Corolla’s fault–the last one I had died when an antelope jumped out in front of me as I was cruising at 60 mph–did not do much for the animal or the Corolla!) ever since. My present 2005 model–bought with 30K on it in 2007–has 240,000 miles on it (I drive over 30K miles per year), gets close to 35 mpg, and is rarely in the shop–just to have the oil changed and to replace things that would wear out on any car, especially with 240K miles. There is no better FRUGALMOBILE!
Carmen,
Thanks for stopping by and sharing that! Appreciate the endorsement. 🙂
Super glad to hear you’ve had such a great experience with Corollas. I’m hoping I can have even half the luck you’ve had.
Glad to hear you’re okay after hitting an antelope at 60 mph. That had to be scary!
Stay in touch. And keep rocking that Corolla.
Cheers.
Thanks for your reply. My wife and I were unhurt but definitely scared!! I am much older than you but have the same outlook on life as you do (probably coming from a different place, though, as it mostly came from living with parents who remember the GREAT DEPRESSION). I have 3 kids who I have tried to teach about living not only within ones means but also in a frugal way. I recently read a book by John Robbins called THE NEW GOOD LIFE which you probably already know about but fits your outlook very neatly. I highly recommend it. I am going to put my kids on to your blog!! Thanks, Carmen