How to Get Rich by Driving Crappy Cars
I’ve touched on the topic of cars in my previous post, How to Not Buy a Car, and I even mentioned my 2007 Nissan Versa (pictured above, in all her glory). Honestly, this is my favorite car I’ve owned, and frankly, it’s not even close. In this article I’m going to explain how I made over $10k on a car and how I came to buy this car, and why it’s my favorite car out of an extensive list of vehicles that I’ve owned.
So, around 2 years ago, Mrs. RRR and I had disposable income and weren’t really interested in saving yet. What do we do? Exactly what every other naive and inexperienced young person or couple does, we rationalize to ourselves that we need a newer car. Admittedly, a catalyst for this decision making process was that my BMW (#douchemobile) that I owned at the time was giving me a lot of electrical problems. Even then, I guess we were a little more apt than the typical consumer, so we were looking for reasonable cars around the $10-12k mark.
Luckily, around this time was when VW was announcing Diesel-Gate (synopsis: all their diesel cars were putting off more emissions than they were tested for.) and all the VW’s were depreciating at an astronomical rate. They hadn’t announced yet what the resolution to the problem was, so everyone that owned one was getting a little skittish. So, we took advantage of the lack of information, and the eagerness of the owners to get rid of the stress and we picked up a 2012 VW Golf TDI with around 50k miles for $9 grand. Which is still about $4k less than KBB says the same vehicle is worth today, two years later. After a few months of owning our car, they announced the plan for a buyback program, which was going to be based on vehicle mileage (which is the main reason I started biking to work). After a full year and a half of us driving this car, we sold it back to VW for $12k more than we paid.
About a month before our scheduled buy-back date, I began looking for replacement cars. I tried to convince Mrs. RRR into us going down to 1 vehicle, but she wasn’t thrilled by that idea. She was already upset that we were getting rid of the VW because she had learned how to drive stick on it, and had even gone so far as to suggest that we keep it and just forego the money (….she must’ve been drinking that day).
So, my criteria for a “new to us” car was a Japanese hatchback, preferably stick-shift, as cheap as possible. I combed through page after page of the Lists of Craig looking at Scion’s, Toyota’s, Honda’s, Nissan’s, and Mazda’s within a 150 mile radius. I finally stumbled upon this ugly Nissan Versa that had 150k miles for $2,500, but it was in Nashville, TN (about an hour and a half away). So I contacted the seller, and let him know that if the vehicle was up to my extremely high standards, then I would be willing to part with $2k in exchange for this chariot of the gods. And, you guessed it, a few hours later I was cruising home in my new Nissan Versa, adoringly named the “Cash Cow”.
Now, Cow was missing a hubcap, the battery was dead, and it clearly has a mismatched hatch, but none of that mattered to me. I paid $2k for a 10 year old 6 speed hatchback and got $21k for selling a 5 year old 6 speed hatchback back to its manufacturer. The best part is that I’m no longer stressing about the appearance of the car.
On my VW, I got a free trunk mounted bike rack with a bike I picked up at a yard sale (found on Craigslist of course), and when I sold the car back to them, I took the bike rack off, and there were two spots where the paint had been rubbed off because the rack was touching the car. I kindly gave that bike rack to Mrs. RRR, and we mounted it on her car. I got another one for free (Craigslist again) and mounted it on Cow, and I could care less if it scrapes off some paint. The damn thing is mismatched anyway. Cash Cow, true to its moniker, is also cavernous inside. I’ve fit a futon inside, an oversized chair, and countless other things inside. Not to mention, I put a couch on top of it, which I would never do with a car that I had paid a ton of money for.
Cow is my favorite car I’ve owned because not only is it the cheapest car I’ve owned, but it’s been incredibly reliable despite its good looks, it’s durable, it gets excellent gas mileage, and it keeps me grounded. If/when I ever need to get rid of it, because I bought it so far down on the depreciation scale, I won’t lose much money, if any at all. I admit that my scenario is oddly specific and hard to replicate with the recall, and all that jazz. But, by recognizing an opportunity, and taking a small risk we had a pretty large payout, which is something that practically anyone can replicate. And even if you don’t want to take as much risk, anyone can downgrade their car and pick up a cheap car that will get good fuel mileage, maintain some degree of reliability, and depreciate very little which would save you thousands in car payments, cheaper insurance coverage, and fuel costs over the course of a couple years.
Now, I’m currently in the midst of a little “hypermiling” experiment, so here’s an article about how myself and Cow are getting crazy mpg numbers, along with a guide to replicate my results and boost your own mileage.
Love the seatbelt tie-down straps on that couch! Classic. My current ride is a ’07 stick-shift Accord that was totaled by the previous owner’s insurance company due to hail damage. 100% mechanically sound, 50% off book value, and 10% better fuel economy due to the golf-ball aerodynamics… (just kidding). You’re totally right about the peace of mind, not worrying about each scratch and ding… and, of course, the thousands of extra dollars that can be invested in appreciating assets rather than depreciating piles of metal and plastic.
Thanks, Kevin and Allison! I had to get a little creative when trying to secure the couch. I’ve since tossed a couple of ratchet straps in with my spare tire so if this situation arises again, I’ll be a little more prepared. I have to admit that I’m jealous of the hail damage car. We almost bought an ’09 stick shift Scion xD with hail damage and no other issues to speak of, but it was a couple hours away and ended up selling pretty quickly. Keep up the good work of pumping your money into investment assets as opposed to useless status symbols that become less and less valuable after each day and every mile!
Hmmmm…. okay I’m listening. As much as I love my 2011 Santa Fe…. you make a great point about driving alone. It’s almost always JUST ME in the damn car. 17 MPG. Ugh. I do like feeling safe in the winter in an 4×4 AWD vehicle, that would be the only drawback to getting a smaller car. But that savings though. Alright, I’m going to look into it!
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