|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.