I’ve been side-tracked from my Spain trip travel log by blatant consumerism.
Late last week I was sitting in front of the TV one night finishing up some work between watching my favorite shows. (I love 30 Rock! I’m also fond of Parks and Recreation and glad it’s back on the air.) A commercial came on for a national Toyota sales event — 0% financing on the 2010 Prius — and my interest perked up. With a laptop so close at hand (when isn’t one pretty much attached to me these days?) I could investigate this a bit more online, and I did.
I started looking up the specs, which meant visiting car sites like edmunds.com since the Toyota site was featuring the 2011 Prius information by now. As I investigated more that evening and at odd times the next day I was getting a bit excited. A new car! A hybrid that would make visits to the gas pump a rare event! Fun features like Bluetooth for my phone! And that 0% financing…well, that was sweet!
My current car (a 2002 Saturn wagon) was purchased during a 0% financing event. Back then I was driving a Saturn S sedan that I had purchased new with financing somewhere around 8%. I had one year left on the loan and was glad to trade up to a more luxurious car and not pay any interest at all. I was in the dealership getting standard maintenance when I saw the 0% event and it didn’t take long for me to get very interested in one of the two remaining wagons they had on the lot. I ended up coming back the next day to buy the car. My credit was so good that I had no problem qualifying for the financing (over a 60-month period) and I declined to put any additional money down other than my trade-in. I’ve been quite happy with the car and made my last payment a few years ago. It’s nice being free of a car payment.
Over the past two years I’ve had to pay out a bit more for maintenance than the standard oil changes, tire rotations, and filter replacements. The battery died and the car had to be towed out of my garage to a mechanic so it could be replaced. The brakes were replaced. An oxygen sensor was replaced. The airbag light came on and some other sensor had to be replaced. I bought new tires last fall, and I’m now potentially looking at some power steering repairs that will be in the triple digits. For a nine-year old car, none of this is completely out of line, though. And let’s say it again: it’s nice being free of a car payment.
My driving habits are so minimal that I’ve actually considered living car free. My nearly nine-year old car has just over 40,000 miles on it. I live in a big city with public transportation and a dedicated bicycle lane steps from my house. I easily get to and from work on the train and only really need the car for trips to the suburbs to visit friends and relatives. I do enjoy the convenience of a car for shopping (I can buy all the heavy canned goods I want at the grocery store in one trip!) and for getting to places in the city at least twice as fast as public transit can move me there during non-peak traffic hours (at peak traffic hours public transit and private transit are pretty much equal in speed, with public transit trumping private transit on cost mainly because parking is so expensive in the business district). My dog walker gets by with just his bicycle all year ’round, and I have one friend who gave up her car over a year ago and gets by with public transportation and a car sharing service. (We have two in Chicago, iGo and Zipcar; unfortunately neither offers cars in my neighborhood.)
I was with some friends on Friday night and I floated the idea of me buying a new car to them. One of these friends purchased a new car just a few months ago. In her situation, it was a necessity: she has a reverse commute (from city to suburb) and her previous car was 12 years old with high mileage and getting more and more unreliable. She had done lots of research on cars and found that it was a pretty good value for her to buy new, so she’d taken the plunge. The other friend is driving an older car that is also starting to have lots of critical and pricey mechanical issues that are unaffordable for her to fix. Both of them had the same response to my idea: don’t do it.
But I kept digging and researching and learning what I could about the car over the weekend. Because I regularly read personal finance blogs I’m fairly well-informed about other people’s car buying experiences and what I can learn from them. While I understand that buying a new car is never considered an investment, my thoughts were turned to considering a new car mainly because of the unknown maintenance costs looming in my future. What if the timing belt needs replacing? What if the alternator goes out? What if the A/C stops working this summer? Buying a new car moves you away from concerns like this. (Yes, there are new cars that are lemons, but there are also warranties and laws to give you some protection.) The interest-free financing made the fact that I don’t have enough saved to pay for the car in full with cash a bit more palatable. I could pay some of the purchase price from a targeted savings account where I’ve been putting aside funds for car replacement and finance the rest without feeling ripped off.
So after thinking about it some more and talking about it some more, I decided to visit a dealer and go for a test drive last night. (Toyota’s free standard maintenance for two years or 25,000 miles was the final nudge, I think.) B came along for the fun, and also because it’s usually a good idea to have a guy with you when you’re a woman buying a car. (Sure enough, the salesmen went first to B, who graciously said “Talk to her.”) Yes, the technology on these cars is fun. B is one of those folks who really loves electronics and gadgets and he was into all the whiz-bang stuff like the navigation system and the back-up camera on the test drive model. In my research I knew that this level of gear blew the car completely out of my pricing comfort range, though, so I tried to concentrate on the driving and riding experience.
Then it was time to sit down and start the dance around pricing. I had sent out some emails to a couple of dealers — including this one — so I knew that it may be a little more difficult than I thought to nail down the trim level I wanted. The 2010 Prius came in several trim models, and I was interested in a mid-range one (referred to as a III) without the fancy navigation system and sunroof. While I was driving to the closest dealer for a test drive last night another one phoned me to tell me he had no 2010 Prii left at all, in fact.
The test-drive dealership had a III, but it had the navigation system and would cost more than a IV they also had available that did not have the navigation. OK, how much was the IV? Total price was just over $30,000 with all the taxes and fees. I looked over the estimate more closely. The base price was MSRP, a “documentation fee” of $760 was added on, as were floor mats and another mysterious “doc fee” of nearly $200. Then there were all the things that were pretty much set: taxes and registration fees. I pointed out that they were only showing the suggested price to me, and the salesman quickly showed me on his computer screen that their invoice price was only $1,000 lower. Right. (I had info from more than one source that the invoice cost was more like $2,000 lower.)
After a bit more back and forth where I basically said I just could not pay that much for a car and would check around with other dealers the sales manager came over and tried to fear sell me. Hadn’t I heard about the terrible tragedy in Japan? Didn’t I realize that this meant scarcity of these vehicles? I pointed out that I was looking at a 2010 model and that those were no longer being built. He countered with the increase in gas prices and how much more kind I’d be to the environment. I came back with how I drove so little that gas prices didn’t really affect me and that the environment was better off by me taking public transit every day and riding my bike. I stood up and closed up my coat. They threw out a bone: they’d knock $500 off the price. No thanks.
Maybe they will sell all of the remaining 2010 Prii (isn’t the plural of Prius sort of goofy?) now that gas prices are increasing and the auto manufacturing disruption of the earthquake and tsunami ripple through to affect the 2011 Prius production line. Maybe others will be willing to pay the suggested price plus the extra padding of “documentation fees” to this dealer. When it came down to it, I just couldn’t stomach paying so much for a car and again taking on a monthly car payment. Even if I don’t have any financing costs.