How To Think About Properly Servicing/Repairing A Vehicle

carrepairThis is coming at you from a (former) industry insider.

I worked in the auto industry for approximately nine years. Over that time frame, I worked at a variety of car dealerships. One thing I’ve realized is that they pretty much more or less all work the same, which, I believe, gives me some insight.

And I’m going to share some of that insight with you readers today. This is a great topic, but I’m actually writing this now because a reader asked me not too long ago via a comment to put something together on this, so that’s what I’m doing.

Now, I don’t own a car anymore. I truly believe, if you can do it, a car-free lifestyle is absolutely the best way to go. You’ll not only likely save a lot of money, but you’ll reap a number of other benefits as well.

However, that lifestyle isn’t reasonable or realistic for everyone, which is something I can understand.

So what I’m going to discuss today is the way I’d approach servicing/maintaining/repairing a car if I still owned one.

Acquiring Your Vehicle

Just a few quick notes here on how to think about acquiring your vehicle in the first place.

As someone who saw how things worked from the inside, I generally recommend to buy a used vehicle from a private party. There are massive profit margins built into vehicles sold on the lot – especially used cars –  even if you think you’re getting a deal. Every dealership I worked at had a dealer fee, so you were $500 to $1,000 down before you even took a test drive. And with the way depreciation works, you really shouldn’t be looking at new vehicles.

Since two of the biggest advantages a dealership has over a private party is access to new vehicles and financing, you won’t need a car dealership. That’s because you’re too smart to buy a new car and you’ll likely have the cash necessary to buy a used car outright.

I was privy to special deals that were available to employees, and the used cars I would come across on the lot still often didn’t make financial sense compared to what I could acquire in the private market. So there you go.

Get yourself a five-year-old reliable vehicle that’s priced right and solid on fuel economy (used Toyota and Honda sedans often fit the bill) and you’ll be way ahead. Just make sure to get it checked over before you buy.

DIY Is Best If You Can Hack It

I’m not particularly handy. That’s why I was a service advisor, not a technician.

But if you’re able to throw on some pads and rotors, change your own oil, and replace the occasional window regulator, good for you. You’ll be richer for it and you’ll be in a position to make sure the job is done right.

The economics here only make sense, however, if you’re actually handy, generally enjoy fixing cars, and already have the tools on hand.

If you’re not handy, you might end up causing more issues than you started with, costing you more money in the end. I can’t tell you how many cars I’ve had towed in over the years because someone thought they were fixing something when they were actually destroying something else. So that’s something to be mindful of.

In addition, tools are expensive. If you have to buy a bunch of tools just to try and save money by fixing your car yourself, you have to question whether that’s the right way to go. A quick look at a calculator will quickly tell you whether or not you’re going to come out ahead there.

Lastly, it’s not exactly a thrill to change oil for most people. So if that’s not something you like doing, you might be better served just having someone else do it. Oil changes/simple maintenance for most vehicles is something that’s generally not terribly expensive. We used to run $9.95 oil change specials on domestic vehicles back a few years ago as loss leaders, so I’d seriously question whether or not spending the money on oil and a filter, and then spending your time to actually change the oil, is worth it.

But if you’re handy and enjoy fixing cars, you might already have a stable of tools on hand. So if you can hack it, DIY is the best way to go for the easy stuff.

Simple Mechanical Repairs Generally Do Not Require A Dealership

Every dealership I worked at charged labor rates that were higher – sometimes much higher – than smaller, independent shops in their respective areas. Parts were often more expensive as well. Of course, dealerships almost exclusively work with OEM parts. These can be expensive. If your car is old, aftermarket parts might be the better way to go. Just check the respective warranties.

Now, these premium labor rates make some sense when you think about it. You’re getting access to the technicians that are trained to work on your specific vehicle(s), the machines and software designed to communicate with your vehicle(s), the access to service bulletins, the checking of recalls/service actions, and high-quality service.

However this premium is most likely not worth it for simple mechanical repairs.

Think brakes, air filters, tires, the battery, mechanical switches/knobs, wiper blades, and leaking seals. Those are just a few examples.

Most often, any shop with decent technicians can handle basic repairs/service. I would recommend checking into the shop before you take your car there, however, just to make sure they’re on the up and up. But if they have a decent reputation, you’re probably going to be better off having the local independent shop replacing your brakes and tires along with taking care of the occasional mechanical repair. This is especially true for domestic cars.

One quick tip I have is to get a detailed quote before you authorize any work. The auto industry is one of the few industries left where haggling is common. If they give you a quote of $1,000 to put on a set of tires, shop around. Get the name of the tires, the amount of labor they’re charging, and find out where every penny is going. Then look at what those same tires cost from, say, Tire Rack. You’d be surprised at how much wiggle room you might have.

Also, make sure your repair isn’t covered by warranty. Not only do you have the typical limited new vehicle warranty, but there are a number of other warranties that cover parts like the catalytic converter. On top of that, it’s frequent for other parts to have extended warranties if there is some kind of frequent issue there. So give a call to the dealership and get the full scoop before authorizing a repair.

One more tip is to get a look at any repairs recommended. See the issue(s) in question for yourself.

Complicated And/Or Electrical Repairs Should Probably Go To The Dealership

Check engine light on? Take it to the dealership.

Car intermittently doesn’t start and you’re sure it’s not a battery? Take it to the dealership.

The transmission isn’t shifting properly? Take it to the dealership.

Issues like these are where that premium is probably worth paying up for.

I would regularly write up repair orders on vehicles that came from other shops – independent shops – because the check engine light was on or something else was wrong with the car and after spending hours (which the customer is paying for) trying to diagnose the issue, they gave up and sent the car our way.

What happens here is that the customer would end up spending more money. The customer had to pay the local shop for the time they spent looking at the car to futile results. And then they had to pay us to actually fix it. Not only that, but we sometimes would have to charge more because we’d have to backtrack what the other shop did or put things back together.

The thing is this – the dealership is where the buck stops. An independent shop can give up, but the dealership can’t. I never ran into a car we couldn’t/wouldn’t fix. Sometimes the proposed fix would exceed the value of the car. Or sometimes a customer would lose patience with us. But we couldn’t/wouldn’t just give up and send the car somwhere else.

As I mentioned earlier, the dealership has access to machines, experience (combined and individual), and software that independent shops usually lack. On top of that, dealerships have access to the factory if something is really complicated. It wasn’t totally uncommon for us to open trouble tickets on cars and put a call into the manufacturer for assistance. If it was something really crazy/unusual, they’d send a representative out to look at the problem and get it fixed.

And just like with the independent shops, get a detailed quote. Know where every penny is going. Find out how many service hours they’re billing you and then see if that’s commonplace for that repair. Call around. Look up the repair online. Take a look at the parts. Is there a lot of markup? Is it possible to use aftermarket parts? Again, you’d be surprised at how much wiggle room there is, especially on bigger repairs.

Are Recommended Services Necessary?

I’m not going to tell you to skip factory recommended services. I don’t want to be the guy getting an email when your car breaks down.

But I would implore you to look at exactly what you’re paying for. The majority of my work every day revolved around regular maintenance. The technicians loved this – they would call it “gravy” – because it’s light work. You’re typically paying for a lot of inspections, maybe a filter or two, an oil change, along with maybe spark plugs or something else at major inspections. A lot easier and more profitable for technicians than warranty work (the factory can be stingy) on an alternator.

Again, though, what are you paying for? How many hours are they billing you? Is three labor hours necessary to check over your entire car? What’s the split between parts and service? If you’re paying $50 for parts and $400 for labor, you may want to get a hard look at that and decide for yourself if it’s worth it.

It may even be possible to piecemeal out the service or pay for things individually. If the factory recommended service calls for an oil change, an air filter, and a number of inspections, what would these things cost individually versus the maintenance? Are you actually getting a deal when it’s all packaged together? What would a 27-point inspection run by itself?

A dealership may try to scare you into paying for big services as part of keeping the warranty active. I’m not going to tell you that’s true or not true. I can only say that I never once refused to perform warranty work on a car out of concerns over the maintenance history, even when there were no stamps in the book or records on file. If you flat out don’t change your oil and blow your engine, however, that’s on you. Be smart about it.

Conclusion

I hope this article provides you readers some value, especially for those that have to own a vehicle or two.

I think it says something that someone who worked in the car industry for nine years no longer owns a car. I witnessed firsthand the massive amounts of money spent by people every single day. But I think some of that can be reduced slightly if you follow the tips laid out above. Buy a high-quality car that’s good on fuel economy and gently used, be smart, DIY if you can, always assume there’s a better deal, and only do what’s absolutely necessary.

What do you think? Are these tips helpful? 

Thanks for reading.

Photo Credit: supakitmod/FreeDigitalPhotos.net

Edit: Corrected grammar. 

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87 Comments

  1. Excellent post DM! I’ve been on both sides of the fence with doing the work myself vs. finding a reliable place I can take my truck to have work done. Since it is my work truck if something goes down and it’s peak season, I’m taking it to the shop, but if I know there is something that is coming up that I can do over a weekend then I’ll do it myself. I can’t say enough about having the preventive maintenance stuff taken care of and doing so consistently. My truck is 15 yrs. old and most of the work I’ve done to it has been due to neglect from the previous owners in taking care of the maintenance issues. It’s no different than owning a house, a little preventive maintenance goes a long way, and I know a thing or two about that as well. 🙂

    All the best Jason,
    The Stoic

  2. The Stoic,

    Absolutely. Changing fluids and what not as recommended in the manual will likely save you a boatload of cash (and some headaches) down the road. But “preventative maintenance” is a pretty subjective idea. Changing your oil and replacing important filters is definitely a good use of cash, but we would use that term fairly liberally in the auto industry. So you have to be careful there. In addition, paying $400 or $500 for what amounts to an oil change, a filter or two, and some inspections might not be the right way to go if you really take a look at it. Again, you have to be smart about it.

    Thanks for dropping by!

    Cheers.

  3. Thanks Jason, I thought them helpful…..and you certainly have an inside perspective. I do some repairs myself, but quite often the cost at the dealer is almost the same as doing it myself. It took a while, but I finally found a great person i trust at the dealer. I’ve been with him 4 years…..and always happy. He tips me off about coupons for required maintenance and reminds me about bulbs and stuff that I do my myself. I bet you don’t miss that lifestyle 🙂
    -Bryan

  4. Thanks for this Jason,

    My wife’s car is currently having brake issues which is really aggravating because we had all of the brake pads and rooters replaced less than a year ago and her and I differ on whether this is a repair to take to our regular repair shop or the dealership I think i’ll defiantly have her read this to help with the decision.

  5. Bryan,

    It’s really nice to have a good relationship with someone at the dealership that you’re confident is honest and forthright. I was always 100% honest and never tried to sell anything just to make a buck. But I’ve met some other people that were, well, different.

    Definitely don’t miss the lifestyle, though. I’d sooner spend down every red cent I own than go back to that industry. 🙂

    Thanks for dropping by!

    Best regards.

  6. Having been in the auto industry for many years, I can tell you what to buy, when to buy, and the amount of time you should hold onto a vehicle. Your 3 main expenses when it comes to a vehicle are depreciation, maintenance, and fuel. Every car has an intersecting point of where maintenance and fuel will start exceeding any depreciation cost. Lots of people think they should run a vehicle until the wheels fall off. Unfortunately, that’s the wrong way to run a vehicle and it will end up costing you more in the long run.

    I will tell you, don’t run a vehicle past 100,000 miles, it automatically loses 15% depreciation and your likeliness of costly repair bills are exponential. Not to mention, if you compare a vehicle from 2008 to a vehicle today, there’s over a 20% increase in just fuel economy. So people running a vehicle over 8 years old will be paying more in fuel and maintenance costs than a newer vehicle. I would advise the normal retail customer to buy a vehicle that just had tires/brakes put on, around 40k mile mark, 2-3 years old, and run that vehicle for another 3-4 years until the 80k mark. This will give you the overall lowest holding cost.

    Anyways, I can go on and on about his subject, since it’s what I do for a living so I better know my stuff ;). I also advise large companies on their existing fleet of vehicles to help them optimize their life cycles, and overall costs. Thought I’d throw in my 2 cents. 🙂

  7. Trevor,

    Thanks for adding all of that!

    I think some of it is situational, though. If you’re really good at fixing your own car and don’t experience a lot of issues, you can probably run a car a very long time. No two cars that ran through my service drive were alike, unfortunately. We’d get some people that just never had issues with their cars. Other people would have nothing but issues. And sometimes even new cars would come in all the time with issues that had nothing to do with preventative maintenance or anything else.

    But I agree that, generally speaking, driving it until the wheels fall of might not be the best way to go. You really have to consider the costs to keep it running that long. And at some point, the cost of repairs start to exceed the value of the vehicle.

    That is an interesting note there about fuel economy. Definitely something to consider. I owned a 2006 Toyota Corolla recently and I just compared it to a 2015 Corolla. Looks like the latter offers 1 mpg better in the city and the highway. Not even close to being worth an upgrade, but I was lucky to have bought that Corolla with super low miles.

    But, yeah, most people are probably better off in that middle zone where they drive and own a car at peak value and reliability. Even if it might save you a little bit driving it “until the wheels fall off”, the reduced reliability probably won’t be worth it.

    Cheers!

  8. So of course, I had to run the mpg on your 2006 vehicle vs a 2015, and looks like you can get even better than 1 mpg. 🙂 29 mpg for your 2006, 31 mpg for a 2015, 32 for a 2015 cvt transmission, and 35 for a 2015 eco cvt transmission. So yes, you could improve your fuel economy by 6 mpg. Not too shabby! Most new cars are coming with these new transmissions which is helping drive that additional fuel economy. Food for thought.

  9. Trevor,

    I compared apples to apples. Both 4-cyl vehicles with automatic 4-spd transmissions:

    http://www.fueleconomy.gov/feg/Find.do?action=sbs&id=21881&id=35499

    1 mpg better in the city. 1 mpg better on the highway. Again, not worth the upgrade for fuel economy. Would be a nice side effect if you had to get a newer vehicle, though.

    Edit to add: I’m pretty sure the CVT model is more expensive, potentially wiping out MPG gains. Depends on how much you drive it. In addition, I experienced by far more issues with CVT transmissions than any other type of transmission. I would never recommend anyone get one, if they can help it.

    Cheers!

  10. Hey DM,

    Great Article! Incredibly timely for me as well as I have just been considering buying a car. Being an aggressive saver as you know, I want to spend as little as possible, have as little maintenance as possible and get the job done. After some research it seems like Toyota and Honda are indeed favourites for used cars, so I was looking for something around 5 years old like you suggested.

    My main concern is that I see privates selling much cheaper but when it comes to cars I am completely clueless so I have zero confidence in myself to assess if the car being sold is in good conditions. To avoid the risk of buying a car that eventually will require lots of expensive maintenance, I have been leaning towards “Approved Used” sold directly by the brand. I can clearly see the extra price, but it does seem to provide peace of mind. What would you recommend in this scenario?

    Thanks a lot!

    PS: Looks like the stock market is cooling off, looks like we might be able to get some nice bargains 🙂

    Best,
    DividendVenture

  11. DV,

    Thanks for stopping by!

    That’s really a personal call there. I can tell you that CPO (certified pre-owned) cars were huge profit centers for us, if that’s what you’re talking about. The main advantage you have there is the attached warranty. As an alternative, you could buy a use car, get it completely inspected, and then buy an extended warranty for peace of mind. Keep in mind that a warranty company is in business to make a profit, as you know. If you do go this route, Fidelity was the best company I ever worked with. They were really a breeze. Never fought us on repairs/claims. Made it super easy for the customer.

    Hope that helps. 🙂

    Best regards.

  12. Fuel mileage gains are bogus since a newer car will be more expensive anyways unless you’re driving an insane amount of miles to actually take advantage of that lower fuel mileage.

  13. Sorry I strongly disagree. Any 4 cylinder Toyota, Honda, Nissan will easily run 300k with minimal issue did you maintain it well. In fact you should be buying your vehicles at 100k to take advantage of the 15% depreciation you speak of. My current Toyota is at 380k miles and I’ve replaced the alternator ($200). That’s it.

  14. Also Trevor don’t forget that EPA fuel mileage is chosen by the manufacturer and approved by the EPA. There’s no laws against sandbagging. My Corolla gets 36/44 but Toyota rated it 29/37. Also my 1989 accord (rip) got 37 highway and I could never touch that in a 2008 I tested.

  15. Mike,

    Yeah, looks like Trevor took the whole conversation in a different direction.

    But I agree that buying a newer car simply for better MPG would be a bad move. I don’t think anyone would actually do that, though. No one with any financial sense, anyway. But if you have to get a newer car, it might work out to be a nice side effect.

    Cheers!

  16. Patrick,

    That’s fantastic that you’ve had such good luck over there. Toyota and Honda both sport some pretty legendary reliability/durability there with the smaller cars, which is why I recommended both in the article, and why I owned a Corolla for my last car.

    But it’s also situational/anecdotal, as I mentioned. We used to have some diesel Golfs that would run well over 200,000 miles. I even saw one over 300,000 miles. But then we had some that had nothing but problems, even when the owner appeared to be taking care of the cars. I remember one had a few fuel pumps go in a row. Another had these EGR issues that seemed to pop up every 30,000 miles or so. Again, it’s all anecdotal.

    But, yeah, if I were to own a car again, I’d be looking for a lower-mileage Corolla that was maybe seven or eight years old. Preferably for sale from an older owner that doesn’t drive it much anymore. 🙂

    Take care!

  17. Interesting article and a great change of pace, I found it very interesting.

    I’m definitely not a handyman so I’m always taking my car in if there is an issue. I found an independent place nearby that has gained my trust after their “free inspection” with an oil change literally was free with no suggested repairs. Not even windshield wipers or an air filter!

    Do you ever miss it, even a little? I’m guessing from the post about hating it, probably not 🙂

  18. R2R,

    Glad you enjoyed it. This article came your way because a reader asked for it. I’m happy to oblige. 🙂

    If you have a great independent shop nearby that does right by you, that’s a great way to go. I’d only be careful if you run into something major and/or electronic in nature. I’m sure your shop is highly competent, but I can’t count how many cars we had to fix because another shop made things worse and ended up costing the customer more money.

    Do I ever miss it at all? Absolutely not. I mentioned in another comment that I’d sooner spend down every cent of capital before returning to the industry. Now that I’ve been away for as long as I have, I realize even more how much I hated it. If every stock stopped paying a dividend, no part-time job was available, and I lost all online income, I still wouldn’t go back. I’m prepared for total warfare.

    Best wishes!

  19. Nice post Jason, and thanks for sharing these insider tips. A lot of this is common sense, but I liked the point about the buck stopping at the dealership. You will pay more but they will be obligated to get it ultimately fixed.

    I’ve been lucky in the sense that since moving to Asia 9 years I’ve had a company provided car and driver in the 3 companies I’ve worked at, and fuel, tolls, and maintenance were all covered. So that’s a nice perk. But the times between not having a job, I didn’t own a car and that was fine by me too.

    Way to change it up, with this very cool post.

    -Mike

  20. Mike,

    Thanks. Glad you liked the change of pace. I used to write a lot more about this type of stuff – ways to save money, live frugally, etc. But there’s only so much you can really say about it. The last thing I wanted to do was start writing about coupons and what not. But this was a pretty good suggestion, with my background and all.

    Definitely agree it’s mostly common sense. If you’re smart about it and approach it as a consumer with a tight fist around your cash, you’ll likely be fine. I just cringe sometimes when people insist it’s always better to take your car to the local shop rather than dealer. Just not always the case.

    You’re in a great spot over there with the transportation. I quite like living without a car and hope to never own a car again, but I certainly wouldn’t mind a car and driver provided for me! 🙂

    Best regards.

  21. Definitely, Honda and Toyota’s have good reliability & resale value but American car brands are getting better by day. I had Camry but around 150K, it started giving few tantrums, though, I never had better experience than this 15 yrs beauty, even in newer and other expensive cars. Good tips, DM!

  22. R2R,

    Nice. Glad you had a great experience with the Camry. I’ve always preferred the smaller cars, but a Camry is a great choice as well. I think some had timing belts, though. I prefer staying away from belt-driven motors.

    Thanks for dropping by!

    Cheers.

  23. Jason! Great post and I am still addicted to your blog! Slowly but surely I have grown my snowball and received my first dividends! an amazing feeling to get paid for the first time for doing nothing! I can honestly say this is all down to stumbling across your blog last year and deciding your approach was the best out there! So thank you as always! This question is a bit off topic to the car post but nonetheless your the closest thing to a real life mentor for questions and I’ve learnt so much from your book! …….

    What is your thoughts on Glencore..,,,

    It has taken an absolute beating in price since its float and this year the share price has fallen by half!
    The company is now worth about $32.5 billion, down from about $75 billion at the start of July 2014!

    However it is committed to fulfilling its dividend policy and I cant really see things getting worse from here for the commodity market! If they have been able to commit to the dividend policy after posting such big misfortunes surely it is an absolute bargain if my plan is to buy and hold forever?

    I guess the question i’m really trying to figure out and still learn is if its a quality company effectively “on sale” or if the company i’m looking at isn’t quality but a sinking ship!

    Thank you for all your help and your blog as always! 🙂

  24. Jason
    Please don’t publish this because it really isn’t a comment but ,please edit this phrase in your text , is there a word missing?
    “I was privy to special deals that were available to employees, and the used cars I would come across on the lot still often didn’t financial sense compared to what I could acquire in the private market. So there you go.”

  25. Jason,
    As someone that worked for 2 of the “Big Three” automakers for a total of over 35 years, I find your advice to be very accurate. Now, if you could just get rid of the pop-up asking me if I want to sign-up for your email every time I visit…
    Cheers,
    Keith

  26. This is excellent food for thought, and I definitely agree that money can easily be saved by taking the car to an independent shop when the repairs or maintenance are relatively simple. We had the tires replaced on the CTS a few months ago and had that work done at Costco. Oil changes usually happen at a discount auto place because, like you said, the relatively inexpensive cost of an oil chance isn’t worth the hassle of doing it ourselves.

    Back when I had my supercharged Vette, that thing would see the dealership every so often because things would, naturally, break. It was a ’99, so it wasn’t exactly a new vehicle, and it was driven fairly hard, and the repairs were generally a little more than just “simple”. I definitely paid for that privilege, though.

    Glad that car is sold. 🙂

  27. I definitely caution against these one-size-fits-all approaches to running your vehicle. I think we can all agree that in some cases, running your car too long probably isn’t the wisest choice, but that certainly hasn’t been the case all the time with the vehicles that I’ve seen. In fact, there is an argument to be made that, especially when buying a newer vehicle with a top-notch dependability rating, that driving it LONGER can save money and help increase the value that you get when compared to an upgrade once it reaches the 80,000+ mile point.

    This is especially true if you get to know the car pretty well and get a feel for its quirks and tendencies. Buying a new car, you’ll have to re-learn a lot of that over again, which costs both time and money – and as we all know, time IS money. 🙂

    Life never conforms to these hard and fast rules.

  28. Great points! I would be interested to know your thoughts on routine service items pitched by the dealer but may or may not be necessary. EG – change brake, hydrolic, transmission fluids etc. I have read conflicting articles on the nature of say changing brake fluids.

  29. This article is a keeper! For those of us who need a car and are not an insider, the tips were eye opening. Thanks for posting!

  30. Thanks for sharing your industry insider knowledge! We’re still proudly owning and driving our 15 year old Honda sedans bought brand new while we were still in college. We do the easy maintenance stuff at home and defer to the shop or a mechanic friend for more involved stuff where we don’t have the tools.

    And we’re thinking of replacing one car in the next few years and looking at what you mention – 5-7 year old Hondas hopefully around $10000-12,000 or so.

  31. Good Day Jason
    a really good topic to talk about.You are very correct on tools they cost a lot to buy, and you have to have some where to store them(more cost). But if you can and want to fix the problem you can save some money on most repairs. But on the larger problems I send that out to a independent shop or on to the dealer ship. depends on the repair needed. Cars today with their expenses can consume a lot of money that other wise you could have invested. Yes its a necessary for those of us with cars, I have 4 of them to keep up currently (good for you on this one Jason no car) Some sound advise about Jason. thanks for a informative article.

    Cheers

  32. Jason,

    Are you telling us you would not go back to the auto industry? Don’t you miss the 10-hour days, 6 days a week? Early morning hours and needing to buy a car so you don’t look weird to your co-workers? Good times indeed! 🙂

    BTW – years ago as the controller I was tasked to buy 4 new cars for our company. The ownership wanted me to look at the ROI on Toyota Corollas and Prius. Based on the miles the employees would drive them, the ROI was too far out on the Prius to justify its cost. We bought 3 Corollas and the owner got the Prius, since he was trying to make a “green” statement to the world.

    Thanks for the insider view!

  33. Hi Jason,

    Great article! Thanks for sharing. I have a friend who recently leased a new car. I had grown up believing that leasing a car was basically throwing away money. However, he did his research and said it actually made sense for him. What are your thoughts on leasing cars?

  34. I bought my car a white opel astra 3 doors from 1996 for 1500 euros with 100.000 km on it.
    Drove it all the way to +-220.000 kilometers before it would cost more.
    Only costs I had was new tires (200 euro total)and new brake lines (40 euro) ( 8 euro usedwindshield wiper)and was driving 20.000 kilometers a year. 248 euro’s / 6 years = 41,33 euros a year maintenance. Could make 700 kilometers on 1 full tank of 50 liters. 14 kilometers a liter.

    That car made money for me 🙂

    Last year I bought the same model and gave the garage my used car for 350 euros that they gave me.
    Then I bought the same model opel astra 3 doors but not 1996 but from 1995 also with about 100.000 kilometers on it for 850 euros. As I received 350 for my used car it costed me in total 500 euro’s for about the same one but only difference is the color.

    Been driving it to 120.000 kilometers as its almost exactly 1 year ago and no expenses on it yet…. hope I can drive this one aswell towards 200.000++ kilometers.

    For me in Holland its better to buy a used car with about 100.000km on it then a new one. Replacement parts are VERY cheap for this OPEL car. For example a whole new exhaust, muffler would cost about 130 euros including labor. For a new car it would cost alot more plus new cars have electronics which is more difficult and costs more labor.

  35. Laurence,

    Thanks so much. Glad you enjoyed the book and you enjoy the blog. I’m truly blessed to be in a position where I’m able to inspire so many people across the world. When I first started writing and doing what I’m doing, there wasn’t a lot out there to serve as positive reinforcement. Not much where you could see something in real-time, anyway. Mostly just older books and what not. So I’m really glad that I’ve been able to give back a little bit.

    Unfortunately, I cannot help you regarding Glencore. It’s not available over here on our market, and so I don’t follow it. For me to really delve into a company’s fundamentals that I don’t follow and can’t buy just wouldn’t really make sense. But if you’re able to make sense of the fundamentals of a company, then that should scale for you. It should be a process/system you can repeat over and over again.

    Best of luck over there. Keep it up!

    Cheers.

  36. Keith,

    Hmm, that’s strange. I have that set to refresh every two weeks per visitor. It only pops up every two weeks for me, but I’m using the same computer. If you’re using different computers and/or using some kind if incognito browser, it may pop up every time. Sorry about that! 🙂

    Thanks for dropping by. Have a great weekend.

    Best regards.

  37. simpleisthenewgreen,

    Fantastic move over there. Going without a car is absolutely the best way to go. You not only save so much money and hassle, but you end up happier and healthier for it. If you’re not living in an area where it’s possible, then that might be a lifestyle you want to really take a look at.

    Thanks for dropping in!

    Best wishes.

  38. Steve,

    You made a great choice getting ride of the Corvette. Beautiful car, no doubt about it. But is it worth all that freedom you’re giving up? I don’t think so.

    Oil changes are one of those service items that almost always make more sense to have someone else do it for you. There are economies of scale in place there. In addition, most shops run them as loss leaders. So it’s easy to take advantage of that.

    I’m definitely glad to live without a car these days – I hope to never own one again. But if I were to own a car again, these tips would be those that I follow.

    Best regards!

  39. JayP,

    In my experience, some dealerships have financial relationships with certain companies that offer fluid exchange products/services. And many of these fluid exchanges not only aren’t recommended by the factory, but aren’t even sanctioned because these are third-party products. These can be huge money makers for the dealership (and for those selling the services). I’d stick to the manual.

    Cheers!

  40. I love the fact that you’re pointing out to not buy new, one thing to also consider is the area you live and work as it affect the insurance. A good way to keep those costs down is what Jason highlights with the age of the vehicle and the depreciation. Older vehicles mean cheaper premiums, just make sure you know the value of the car and carry comprehensive and collision as needed. Check NADA to find the value of the care. Also note that higher deductibles mean lower premiums, but you should have a deductible fund on the side. I used to be an adjuster for a major carrier and I can’t tell you how many times people didn’t have $500 to pay for their claim and had to put off repairs because they couldn’t afford the upfront costs.

  41. wtd7576,

    No problem. Glad to share what I know. Most is just plain common sense. If you go into it with a tight fist on your cash and research everything someone is trying to sell you, you’ll likely be much better off. 🙂

    Best regards.

  42. Justin,

    That’s awesome stuff there. The Honda and Toyota sedans are almost bulletproof. There are some other select makes and models up there that can compete, but it’s tough to beat some of Honda’s and Toyota’s smaller stuff across the board over the long term.

    I kind of miss my Toyota Corolla only because I knew that that thing was probably going to run for many, many, many years with minimal trouble. But I much prefer the car-free lifestyle.

    Thanks for dropping by!

    Best wishes.

  43. Michael,

    Definitely. Those that always recommend DIY repairs have to factor in the cost of tools and the storage of them. The technicians I worked around would spend a lot of money on their tools and toolboxes. So that was a massive sunk cost. Made sense for them because they were doing this stuff all day long. However, for the occasional repair, it’s more economical for most people to just take it to a shop.

    Now, some people just have tons of tools. They have hobbies that require tools. And for some people, tools themselves are a hobby. So DIY might make sense for those people. Never a one-size-fits-all answer for things like this.

    Have a great weekend!

    Cheers.

  44. Bryan,

    Ha! I would sooner spend down every red cent of principle before going back to the industry. I’m never going back. 🙂

    That’s interesting there on the Prius. I’ve come across similar numbers elsewhere. Always tough to say with stuff like that. You could do the math and come up with a Corolla being better and then find nothing but problems with the particular Corolla you get. But I did a similar calculation a while back and came up with the same answer – which is partly why I picked up a used Corolla (also got really lucky with the deal). But the premium on a Prius didn’t make sense.

    It was really strange in that we’d have cars that were the same model of the same year with similar mileage and similar owners, and yet the repair costs would vary wildly. Of course, you’ve always gotta go with the averages there and just hope for the best.

    Have a great weekend over there. Thanks for dropping by!

    Best wishes.

  45. Andrew,

    Glad to share what I know. Most is common sense, but I think there are some misconceptions out there about dealerships and recommended maintenance.

    As far as leasing goes, I can’t see how you’re better off doing that. You’re basically just renting a car over a lengthy period of time. I gave my best advice in regards to acquiring a vehicle in the article. Can’t really do any better than that. 🙂

    Take care!

  46. William,

    That’s awesome stuff there. The great thing about the used car market is that there are inefficiencies there that some are able to take advantage of. I’ve seen many cars in my day selling for far less than what they were worth – my last car being a good example of that. If you’re able to score a great deal on a reliable and fuel-efficient car, you’re in a great position there. Always makes sense to get it inspected first, though.

    Enjoy your Opel over there! 🙂

    Best regards.

  47. DD,

    Thanks for sharing that!

    Depreciation and insurance can kill you every month. Depreciation is a lot like stress and inflation, in that it’s a silent killer. But if you’re able to buy a car after the depreciation has mostly already been paid for, you’re far better off. You’ll have much less depreciation to worry about and you’ll be paying less on insurance and most everything else.

    That’s unfortunate there about the deductible. I read something not too long ago that discussed how most Americans can’t afford a $1,000 emergency expense. But that’s why I write what I write, do what I do, and share what I share. 🙂

    Cheers!

  48. It took me years to figure out what you just blogged about, thanks for refreshing it on my mind 🙂

    Btw, just reducing from 2 to one car with my girlfriend (because she found a job nearby taking care of kids) and never thought I’d feel so great about it: only half of the time going forward for changing oil, brakes, tires, …

    Thanks again for the post and being my Guiding Light towards FI!

    Btw2, per my strategy I’m about to buy 300 shares from the producer of Guiding Light (PG) because they are less than 0.5% away from their 10 year dividend yield high :))

  49. I just read today that they said they wouldn’t be against cutting the dividend to keep their credit rating due to the large amounts of debt on the books. I would advise looking into BBL or RIO if you want exposure to this industry.

  50. farrell,

    Hey, that’s a fantastic move over there downsizing to just one car. Half the hassle, half the costs. It’s just an immediate boost to your bottom line and quality of life. 🙂

    Appreciate the kind words there. I’m truly glad to be that shining light. It’s a blessing to be in a position to guide, inspire, and share.

    Let’s hope the recent volatility picks up and continues. The light gets brighter and brighter the cheaper stocks get.

    Cheers!

  51. I cannot go car free due to certain days that I must drive to training sessions or between job sites, I do ride my bike to work when the car is not needed. I have a small fuel efficient car and I can do alot of repairs myself since I am blessed with a decent amount of tools and some mechanic skills. I do find that I love riding my bike for the exercise and a change of scenery. I do ride my bike to work more often than drive. So my mileage per year is only 2-3000 miles on the car. I agree that if you do not need the car you will save alot of money overall if you can get rid of it. I bought a good entry level bike (not a typical Walmart cheapo) for $400. You get what you pay for it. It has only needed around $100 in repairs (tubes, gear shift cable) I more than made up for it by the gas alone that I save since alot of my driving is city driving.

    Some advice for those wanting to go the bike route. I know that saving money is the name of the game, but try to steer clear of cheap bikes. It will cost you more in the long run when the inferior parts break. Walmart and the like sell good name brands but the good name brands make 2 types of bikes. Cheap department store bikes and then their regular high end bikes.

    Plus the bike shop I bought my bike from gives me free tune ups and adjustments. I only have to pay for parts when/if needed. The funny thing is I can work on cars, but bikes give me fits. LOL.

  52. Jamieson,

    Thanks for the helpful tips on bicycling. That’s a great way to get around if you can swing it. A car runs on gas and keeps you fat/poor, while a bike runs on fat and keeps you rich/healthy. 🙂

    I did the bicycle thing for a while down here, but it wasn’t practical with the heat (showing up to work sweaty didn’t work). Now that I don’t work anymore, I don’t find the need to go anywhere that would require a bike. But it’s a fantastic method of travel.

    Keep it up!

    Cheers.

  53. Hi Jason,

    I know I should buy used, but for a multitude of reasons I bought a new 2012 Ford Escape a few years back. I also bought their lifetime oil change package for $180 extra. Seemed worth it since I typically hold onto vehicles for around 10 years.

    Here’s the kicker: the last 3 or 4 times I’ve taken my vehicle in for an oil change, they keep telling me that my “cabin air filter” needs changed. I usually do stuff like that myself, but in this case I didn’t even know where this filter was located. I did some google searches and discovered that people were saying that these Escapes usually don’t even come with these filters from the factory. Sure enough, when I disassembled the cowl as instructed, the cavity that was supposed to have the filter was missing it.

    Seems like a pretty dirty trick for dealers to wait 2 years and then start telling you that these sort of things need changed when you’ve never even had them to begin with.

    It certainly pays to do it yourself and also do a little research on things like this.

    Tom

  54. Fantastic article Jason!

    I drive a 13 year old suburban (Gas Guzzler) with 180,000 miles but have not had any mechanical issues yet (Knock on wood). This is a great reference from someone in the industry, as i expect some mechanical breakdown in the up-coming future. I’m hoping to drive it into the ground then buy a cash car after.

    Thanks again for the tips!

    P.S. I live in the Tampa Bay area as well (Clearwater/Palm Harbor). What a great place to live!

  55. I wouldn’t ride a bike to work — too dangerous. I read all the time in the news of cars mowing bikes down because they either don’t see them or just pure negligence. The same goes for motorcycle-riding with that mode of transportation being potentially even worse. I’d rather pay the money and live.

  56. My 2007 Toyota has check engine sign that is not going away. I already went to two local car shop near my house and spent $800 and $500 for each visit. I am going to dealership now. I wish this article came out couple months early. I would have learned and save some money in near team, but it will definitely help me going forward.

    I also have quick investment question, I am already invested in two rail roads UNP and NSC and thinking of investing in CSX as well. Do you have any thought on this?

    and

    If this correction continue and go deeper then I will be running out of money to invest so does it make sance to sell your little low quality stocks and trade up to higher quality stocks?

    Thank you.

  57. Tom,

    Wow. That’s really crazy. I’ve never run into something like that before.

    I’ve never personally recommended a cabin air filter all by itself. We just packaged it in with the regular maintenance services (from the factory), of which the cabin air filter was part of that. Now, does one REALLY need to replace the cabin air filter? Up for debate. And that’s why kind of why I mentioned the piecemeal idea. Some of that stuff could maybe be thought about independently and valued as such.

    But that’s really weird they recommended a filter that wasn’t even there. Always pays to do your due diligence. 🙂

    Cheers!

  58. Zol,

    Thanks! Glad you enjoyed it. It’s a nice change of pace. Came at you via a reader suggestion. 🙂

    Enjoy the rest of your weekend.

    Best regards.

  59. Andrew,

    Hey, neighbor! 🙂

    Yeah, those Suburbans are pretty brutal on gas. I don’t envy you there. But, hopefully, you get some more time out of that thing and then you’re able to move on to something significantly more fuel efficient.

    Let’s hope this hot weather is gone in the next month. Looking forward to some beautiful fall weather.

    Best wishes.

  60. AJ,

    Yeah, sorry to hear about that. The check engine light – especially on foreign vehicles – is just one of those things you’re better off paying up for right from the start. It’s way beyond just a “trouble code” these days.

    As far as CSX goes, I’m not sure if I really see the reason to own both it and NSC since they cover similar areas. But I discussed it a little bit recently here:

    http://dailytradealert.com/2015/08/21/these-31-dividend-growth-stocks-go-ex-dividend-next-week-4/

    I can’t really answer that last question for you. I personally avoid low-quality stocks, so I would have nothing to sell. I would recommend to not invest in such stocks in the first place. If I had exposure to poor companies that I thought were in serious long-term trouble, I would sell my positions in them irrespective of market conditions. But with the S&P 500 down only like 3% or 4% or something on the year, I’m not seeing much of a reason to go crazy on raising capital. I’m going to stick to my long-term plan through thick and thin. And that’s accumulating equity in high-quality businesses that pay and grow dividends. Very simple stuff.

    Have a great weekend!

    Cheers.

  61. I’ve only purchased cars new. I have been living by the ‘buy new, drive to the grave’ mentality. I have always heard or believed that how long a car will last is due to the break in period and how well the car was maintained in the first few years. If I bought used, how would I know how well it was taken care of? Kinda like the Seinfeld episode when he rented the car, they asked if he wanted insurance and his reply was yes, cause he’s going to beat the hell outta the car.

    I felt like I was doing the right thing, buying a car for what I thought was a fair price for both me and the dealer, usually starting from invoice. Then only having it serviced at a local trusted mechanic who would honestly tell me if things needed to be worked on or not, or if it was even worth fixing (when the power door locks went out on our 2002 Toyota Sequoia, it wasn’t worth the price to fix them when we can manually lock the door). That car, now 13 years old with over 250k miles is nearing its last leg. We have only put in money for normal wear and tear (brakes, oil, tires, etc.) and preventative maintenance (timing belt(s) at 90-100k). I figured we have spent about $225/month for the purchase price of the car $35k/156 months, maybe another $5k for the wear and tear/preventative maintenance or $32 month so around $257 a month. Gas and insurance will pretty much wash as it will have to be paid for any vehicle I own. Now I just have to determine if it was worth it or at least consider it as a regular monthly expense.

    If the average car payment is $500-600 for that type of car, I guess I have saved? Or it allows me to bank the difference $250-350/month towards the next new car. The problems I have seen is that new comparable cars are expensive, a similar Sequoia is $45k+ and when I have looked at 2-3 year old used cars they are only few thousand less than the new version. Is it worth the peace of mind knowing that the car is cared for in the first few years or does it even matter with new vehicles?

  62. ed69,

    It’s your money, bud. So you should really do that which you’re most comfortable with. But I can tell you from working in the auto industry and running the numbers, you’re most likely not better off buying new like that. You’re paying a lot of money in depreciation right off the bat. In addition, insurance isn’t a wash like you state. Insurance on a new vehicle compared to one that’s six or seven years old will be much more expensive. In addition, you don’t have to carry maximum coverage on a used car you paid cash for. Max out your liability if you feel more comfortable, but you don’t need everything else. That creates a pretty big delta right there.

    If you buy a used car that ends up being junk, then you could have a money pit on your hands. But most used cars that we did inspections on weren’t junk. People tend to take care of a car if they need it to get around reliably. If you’re smart about it, you’d be able to get a used, reliable vehicle that saves you a ton on depreciation and insurance over the course of its lifetime.

    But some people just don’t trust used cars. And so auto manufacturers and dealerships are able to capitalize on that and sell new cars like hotcakes. Again, it’s your money. 🙂

    Cheers!

  63. Wow! another great article Jason! I learned my own way on repairs. I almost sold my car due to worry about high maintenance costs through dealership until one of my clients suggested me a really good mechanic. Now I feel much better about keeping my car!
    Thanks for sharing your experience.

  64. Happy,

    I’m so glad you found a trustworthy tech to look at and work on your car. Finding someone reputable, competent, affordable, and local is a great way to lower those costs dramatically. 🙂

    Cheers!

  65. We probably share a lot in regards to taking care of automobiles, except for the fact that you don’t drive. I find no reason to go for the car dealership while my mechanic or I can fix a problem. However, I prefer consulting the car dealership for major breakdowns such as engine breakdowns.

  66. Chella,

    That’s great that you’ve found a local mechanic that can take care of most of your needs. You’re doing the right thing there being open minded to taking it to the dealership for major repairs, though. That’s especially true for anything electrical. You never know how it’s going to turn out, but sometimes the dealership is your cheapest option, all in all.

    Best regards!

  67. Man, car expenses are really annoying to me.
    Last expense I got a quote of €100 (from the portuguese dealership) for a piece that costs €49 online and I could replace it in 30 seconds.
    I bought it at a dealership (in Spain) so the job had some kind of warranty, and it cost me €77.

    I live on the frontier between Portugal and Spain and I can make some “gains” on a wide class of products that are cheaper on the spanish side 🙂

  68. By the way, tyres are really expensive around there!!! I replaced 4 tyres last month for about 280€… Car Volvo S40, tyres: goodyear

  69. Nuno,

    Nice job doing the research over there. If you can snag a part online for much cheaper, then go for it. I’d just be careful to inquire on warranties. If someone would bring us an aftermarket part they ordered online, we wouldn’t warranty the labor. So that’s just something to be aware of.

    Every penny saved and invested makes a difference. 🙂

    Cheers!

  70. Nuno,

    Tires are expensive everywhere. And it’s not like you can get away with just not replacing them.

    One more reason to consider the car-free lifestyle if possible. 🙂

    Cheers!

  71. Interesting post dm~ I still drive my 2000 civic with nearly 300k miles…. that I bought used in 2001 for $8,000. The beast has been smashed into by a dodge ram, rear-ended by a minivan, hit 2 deers and a raccoon, and still gets 32 mpg!

    My only complaint is the lack of a/c in the heat of texas.

  72. IE,

    Nice move there. Those Civics are absolute beasts.

    Tough break on the lack of air conditioning, though. I imagine that’s pretty tough in the summer. I’m all for being frugal, but I had to make sure every beater I owned had A/C. 🙂

    Cheers!

  73. Excellent post! I have noticed over the years if you need a major service such as 50,000 mile, if you call around to different dealerships you get huge differences in prices even with the same brand. I try to buy cars a couple of years old with low mileage that still have factory warranty.

  74. Ray,

    Definitely. Most dealerships are locally owned, so it’s very likely you’ll get different prices if you call around. Although, most places I’ve worked at were within a tight range there, so it would really depend on how saturated you are with dealerships that cater to your make. And that’s because it might not be worth driving 30 miles out of the way if the cost difference is negligible. But if there’s a significant price difference, you might be able to negotiate with the closer place and end up with a win-win. 🙂

    Like I mentioned, this is one of the few industries around where haggling is still pretty common.

    Best wishes!

  75. I’ve always bought new as I don’t know a thing about cars (except to check the oil and tyre pressure!) and my friends who bought used always seemed to have problems with theirs, which would be my nightmare.

    In the past, my cars have lasted around 7 years before they became mechanically too expensive to maintain.

    7 years isn’t long I know, but I was trying to be cheap with my repairs and maintenance and except for the first couple of services, never took my car to the dealership, even for the complicated stuff you mentioned – my bad!

    With my current car, I’ve decided to go for my dealership’s maintenance plan (purchased over 3 years, at 0% interest), which will cover all my servicing and annual motor tests. So I’m paying a bit more than what I’d pay at a local garage but getting the expertise you mention.

    I’m hoping that this will mean my car will last longer than 7 years, so I guess we will see!

  76. Weenie,

    Well, repairs can be expensive. But cars don’t typically start to completely fall apart after seven years. Not in my experience, anyway. But if you don’t take care of your car and let issues compound, then you’ll probably have a bad experience.

    Just remember that what you’re perhaps avoiding in repairs you’re paying up for in depreciation. The good thing about repairs, though, is that they’re far from guaranteed. If you’re intelligent about picking up a reliable and solid car from the start, you’re more likely than not to have a pretty good experience. Depreciation, meanwhile, is pretty much guaranteed. So you’re kind of stuck with that one.

    But for some people, the new-car experience is worth the price tag. And that’s okay. It’s just important to be mindful of that premium.

    Cheers!

  77. Nice post but as you mention in some of your replies to comments, varying results with autos are anecdotal, there are too many variables that can occur. I am a Car Freak and it’s part of my early retirement hobbies. I just love cars and have a blast with a couple of mine. I do a lot of my own maintenance and when I find a GOOD car that I like I keep it forever.
    In your post you recommend a Check Engine Light should be a trip to the dealer. If the Check Engine Light is solid- on (not blinking) I would suggest that you first go to any national chain auto parts store. Most offer a free diagnosis. Many times that Check Engine Light is on becasue of a bad or loose gas cap from a recent fill-up. If the codes says its something hairy then go to the dealer if you do business with them. I have a 2002 Chevy Tracker (Suzuki) that the Check Engine Light hates a leaky gas cap seal, a fan belt slip while driving in wet weather, and a number of other no-problem issues it takes to trigger a solid check engine light. When your Check Engine Light is Blinking, then that is super important to get to the dealer or… becasue something bad is going to happen.
    I have been happily driving a 1981 Toy PU since 1993 (340K miles, custom convertible, resurrected a couple of times), a 1999 Hard-Top Corvette (never a single problem, even racing, 64K miles), a 1990 Honda Civic Hatchback (335K miles), 02 Tracker (143K miles). 07 Chevy Impala (125K miles). For the most part if you take care of a good car it will last a long long time with only general maintenance expenses. If you end up with a bad one which can happen with any car manufacturer or model regardless of ratings, cut your losses as soon as you can. I will go down a car soon (Civic) and when I can no longer do maintenance myself I will go down to one or 2 cars. Right now I drive them for different conditions and my hobby/recreation. I still consider myself frugal. Although the Impala cost $14K and the Vette $15K, the others were $2K and under many years and many many miles ago.

  78. Tommy,

    I did enjoy my short time with my Corvette back in the day. But I also know it’s just a big piece of metal (and fiberglass) with four wheels, so it just comes down to that amount of freedom (the initial outlay and ongoing costs) against the joy you get out of owning a car. And that’s a personal call.

    Definitely agree with you in regards to the gas cap. Although it wasn’t particularly frequent, I’d sometimes see it. A lot of times I wouldn’t even charge someone for something like that. But if you think you didn’t screw your gas cap on all the way, then it’s something to maybe get a free scan on. Otherwise, I strongly recommend to not rely on those free scans from your local auto parts store. Can’t tell you how many times someone would rely on one of those free scans and attempt to fix the issue, not knowing the information was incomplete/incorrect. I’d even sometimes have people arguing with me because the free scan told them something different – as if our factory equipment was spitting out the wrong information. You get what you pay for a lot of times.

    Thanks for dropping by. Enjoy your rides! 🙂

    Cheers.

  79. Cars have just become a huge money grab for everyone in the business such as the government (seriously why do we need to pay for car registrations each year, maybe if you’re new to a state and need to register the first time I see the point & do an emissions test every 5 years but yearly renewals just seem like money pit).

    What about cops that tuck into a certain spot that is known for high traffic to get their quotas for tickets and if they didn’t have quotas why do so many of them do it? For the auto industry (in sales, repairs, maintenance) & the oil industry (it’s the new gold rush I swear!).

    Parking permits at my 4 year PUBLIC college are crazy expensive too, like who are these people to charge a bunch of mostly broke students so much money? This year I decided to do everything online if I can. This includes everything from online shopping, online banking, direct deposit, taking online classes when available, etc.

    I registered early and grabbed ALL online classes for the fall semester because why give one more penny to the college? I started getting groceries delivered this week. I don’t miss traffic jams, rude, impatient & accident prone drivers, etc. When I was younger I used to think cars were really cool but now I think of cars as big trinkets.

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