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By the author of the FREE online course Growing Self-Sufficiency: The Whole Picture
I recently heard a story from a friend about her daughter. She was facing a CA$2,200 repair on her old but not ancient vehicle and decided to get rid of it under pressure. She is in a two-income household, relatively secure. Both she and her husband have decent jobs. (A similar thing happened to Daisy.) When I heard what ended up happening, I thought to myself, “There’s an article here that I hope could be helpful to folks.”
For those of us driving more mature vehicles, this story made me think about the importance of having a plan regarding car repairs. As well, it underlined the importance of looking out for your own best interests.
This is a cautionary tale that I hope will inspire some thought for each of us about our situation and what we would do if something similar happened to us. To avoid expensive litigation (I am a Frugalite after all!), I will not be sharing the make and model of this vehicle. No, not even if you contact me and ask nicely!
What happened to Sherri
I will call her Sherri. When Sherri found out about the cost of the repair for her seven-year-old vehicle, it sounded to me like panic set in. She drives a fairly long commute each day to a city, around 45 minutes or so.
According to my friend, Sherri did not want to pay for the repair. However, in order to solve that problem, she ended up buying a new (yes, actually brand new!) car that she didn’t want in a color that she didn’t like. The car is too small to tow her treasured trailer on vacation, too.
How did this happen? And could it happen to you? Dear Frugalite, I certainly hope not!
Weighing the factors
It can feel very urgent when the decision of whether to bail on a car needs to be made. Here are some of the factors that need to be weighed:
- how big is the repair bill, especially in relation to car payments?
- how quickly do you need something?
- what financial resources can be accessed to support your decision?
- is it the car that you want?
- what are your alternatives for transportation in the meantime?
- do you have any leverage with the dealership you are dealing with? (If you do deal with dealerships; I do not, but Sherri did)
- how motivated are you to NOT have a car payment?
In my opinion, Sherri had a lot going for her, even though her car needed an expensive repair. Her husband had a car. They work in the same city. She could have borrowed a car from her mother for a time. She had bought the first vehicle new from that very dealership. To me, that meant she had some leverage there.
What ended up happening to Sherri and her vehicle
The initial repair estimate was CA$2,200. When I contacted my friend again to check in on the situation, I got a big shock: the repair estimate had more than doubled to over $5,000! How could this happen to a relatively new car? The type of engine failure in Sherri’s car was so common on this make and model that there are no used engines on the market!
In addition, the dealership flat out refused to even take a trade-in on Sherri’s now-dead vehicle. (Which she had bought from them brand new only six or seven years ago!) They forced her to remove the car from their lot at her own expense.
In the end, Sherri still bought the new vehicle from them in a color she did not like and a size that would not allow her to tow her holiday trailer on her camping vacations.
What lessons can a Frugalite learn here about vehicles?
I call this a cautionary tale for a reason.
In my humble opinion, I am not sure that that dealership could have offered me a deal that would have kept my business there. Even if they had offered me the new car at half the sticker price, I would have been hesitant, given the mechanical failure of their product and (my opinion again) their lack of goodwill.
My feeling would be to run, not walk out of that dealership. At the very least, I would have demanded a loaner car from them so that I could secretly shop for a new vehicle….elsewhere!
Here is a list of my thoughts after hearing Sherri’s story:
- Have a vehicle failure/major repair plan in place – Talk to friends, family, or co-workers, “Hey, I was wondering…if something happened with my car, could we rideshare for a couple of weeks?” Weigh your factors from the list above before any problems arise. Decide on your maximum allowable repair cost. Do your best to arrange backup transportation if a repair should arise. Know the market for good used vehicles (if that’s your target, like me) and where to buy them.
- Not having a car payment is worth a lot of money – I would be willing to spend a fair bit of money to repair my car, at least $1,500. Why? Because I’d rather spend that money (if my vehicle was otherwise reliable) and pay it off in a year or two, rather than have a car payment for the next six years. Buying the new version of my car would cost more than $20,000 for the base model, and that’s at seven percent interest over six years! For the financing offered by a dealership, the payment would be a whopping $300 per month.
Will you ever see me buy a new car? Nope. My most recent car, Lucky, cost me around $3,000. These days, I could pay that off in around 1 to 2 years, leaving me payment-free for the remaining 4 to 5 years of a car loan term.
- Clarify your relationship with your garage/dealership – Do you get a loaner for a major repair? Why or why not? If you’re not getting the deal you want, be ready to take your business elsewhere.
- Having an emergency fund gives you options. It’s worth putting away a bit every week to get one going. Here are some great tips from Daisy around that.
- Buy only vehicles with solid reputations for reliability, not trendy new ones. I bought my current vehicle, Lucky, after multiple recommendations from mechanics and someone who had owned one for over a decade.
- Be prepared to get multiple quotes on major purchases and take your time. PERIOD. Make it clear everywhere you go that you are shopping around. No one else is going to look after your interests in a transaction. Make them earn your money. That’s what they’re there for.
- Make a dealership earn your loyalty. Don’t give it away. Be ready to walk if you don’t feel you’re getting what you deserve, and then walk if required. If you are shy or don’t have the negotiating skills for a situation like this, bring along your bulldog friend and treat him or her to lunch after the meeting.
Could it Happen to You?
It can be much harder to stay frugal under pressure. Could you see yourself considering any of the factors or tips offered here? Do you have your own catastrophic car repair story you can share with us? Please tell us in the comments below.
Colette is passionate about sharing her knowledge of thrifty living and self-sufficiency. She has developed her skills in self-reliance living in the suburbs, the city, and more recently, on her own Half-Acre Homestead. Colette lived five years completely off-grid and without running water in an eight by 24 foot tiny home while designing and building her own 18 by 24-foot eco-cabin. Her website, Half Acre Homestead is attracting followers from around the world who want to become more self-sufficient. Colette invites you to stop by the Homestead and check out all of the great resources including the practical How To Guides, A Tiny Home Resource Center and her organic gardening stories on her blog. She shares her wholistic model (body/mind/spirit) for achieving self-sufficiency in her Free Course, “Growing Self-Sufficiency: The Whole Picture.” Stop by the Homestead today to register free of charge!