Dhoo! Cars!

Why do we pay so much to end up here?!

Why do we pay so much to end up here?!

Dhoo!
Cars!

Unfortunately, if you have a family and you like travelling and outdoor activities, it is difficult to live without one, no matter how heavily you use your bike or public transport.

In Woodpecker’s case, we drive a Ford Mondeo station wagon, main criterium was a big rear trunk, limited costs, low fuel consumption.

To be honest, the car is great, but we could have done much more frugal. Unfortunately we bought the car three years ago, and that was before seriously entering the downshifting path.

I mean there is plenty of stuff around on frugal car choice and frugal driving, so I won’t go into detail here.

But let me highlight two issues from my own painful experience:

1) It goes without saying tha you must never ever buy a new car! But also never buy a “Jahreswagen” (a one year old car)

In Germany, “Jahreswagen” are heavily advertised as a reasonable compromise between enjoying an almost new and up-to-date car, that will run reliable and without hassles for many years to come, and the avoidance of the ridiculous high costs of a brand new car.

I owned a high variety of damn old junkers myself before:
First one was “Amadeus”, a nine-year old Ford Focus (a very economical car at low price in my view). However, the 3rd gear of the car was broken, so you had to switch from 2nd directly to 4th. And at startup, typically only three out of four cylinders were working with the 4th powering up sooner or later, dependent on the weather. In one word: It was a mess, but a lovely mess, like a living creature with bad moods, varying state of health and all – it was my first car!Another pearl was a 13-year-old, 60 PS Nissan Sunny, that I bought for 500 EUR only to drive it 3 more years. It was – often loaded with 4 grown up guys plus mountaineering equipment – reliably the slowest car among everyone on any mountain pass in the Alps.And same for Mrs. Woodpecker
So this time, now having a salary at disposal I would never have imagined normal 15 years ago – we decided: “No more bloody junk-cars, no more breakdowns on highways or during holidays. We want something that works!”

So we were taken in by the “Jahreswagen” idea: A car for about 19.000 EUR, half the price of a new one, yet only one year old! Great!

And what we would save now that we don’t have to do the repairs anymore! After all, each of the old cars before costed at least 1.000 bucks per year for repairs.

Sounds good?
…but isn’t. Because a “Jahreswagen” comes with its own very high running costs:

  • First, there is depreciation. OMG, the car lost about 2.200 EUR per year initially. Obviously, depreciation slows down later, but at second and third year, it is still that massive! No, I don’t want my Nissan Sunny back, but there depreciation was around 200 EUR p.a.
  • Second, for a car that new, you basically need “Vollkasko”-Insurance (comprehensive insurance, LDW). Obviously, for a car as big as the Mondeo, this is pricy. The best online rate I got (HUK24 insurance) was around 600 EUR p.a. (Cancelled it by now and reduced it to mandatory cover)
  • Third, and I really hate me for having overseen that point: The new car needs all this bloody regular service, otherwise your guarantees will void and resale value will decrease sharply. And this services are a genuine rip-off, at least here in Germany. The Mondeo “needs” one EVERY year, some around 350 EUR (the “small” one), and every second year around 600 EUR (the “big” one). No idea why this has to be that expensive, but I guess this is a cross-financing of a relatively cheap sales price.
  • And: Repairs, parts, oil, tires, tax, everything will be much more expensive for a big and more upscale car.

So let’s make a quick and rough comparison:

  Nissan Sunny “the Junker”, 13 years old, 60 PS, normal fuel Ford Mondeo “the luxury family carrier”, 1 year old, 130 PS, gasoline Ford Mondeo “the compromise”, 4-5 years old, 130 PS, normal fuel*
Pro No one would ever steal this car. Space for everybody plus tons of luggage or equipment. Lot of nice extras. Perfect family/holiday car. Same as to the “luxury version”.
Con Uncomfortability taken to a new level!Not really suitable for more than two persons. You start to care about really stupid things, like “this guy  nudged my car when parking in” You might find someone elses peanuts under the seats.
Depreciation p.a. 200 EUR 2.200 EUR 1.100 EUR
Repair costs p.a. 1.000 EUR 0 EUR 500 EUR
Tax 100 EUR 260 EUR 120 EUR
Insurance 200 EUR 600 EUR 300 EUR
Service+Oil 50 EUR 450 EUR 200 EUR
Fuel 20.000 km 1.8000 EUR 1.750 EUR 1.900 EUR
Opportunity Cost for Bound Capital (5%) 30 EUR 950 EUR 600 EUR
Annoyance Level Very high Low Still low
Total 3.380 EUR 6.210 EUR 4.720 EUR
*Gasoline in Germany is only interesting if you drive >20.000 km per year, as it’s price is lower than normal fuel, but the tax on gasoline cars and car price itself is higher. Woodpeckers come in around this mileage, problem is we do almost 1/3 of this during travels outside of Germany – and guess what, gasoline is NOT cheaper there.

Phew: Today we pay around 6.200 EUR annually for our luxury car!

This is competing heavily with our also luxurious travel budget for rank two in family spending (behind housing).

It is 520 EUR per month.
Hm. The compromise solution would be 390 EUR per month, a saving of 130 EUR. Being a family of four with many travel and outdoor interests, I would go for this one next time as a trade-off between low annoyance level and reasonable price. Invest a bit of the saved money in a general reconditioning of the car, and it will occur to you pretty new anyway.
Apart from that, I am not unhappy with the Mondeo, at least in Germany one of the more undervalued cars and no “sexiness price markup”. Also service, repairs, parts etc. can even be much higher for stupid “sexy” cars like BMW, Audi, Mercedes.

However, as a single, as a student or somebody seldom using his car or with no need for huge luggage, I’d move much further in the direction of the “Nissan Sunny Junker Solution”. Not quite to the Nissan mayhap, but given the saving: Who knows?!

2) Repairs / Spare parts / Service

Some days ago, coming back from a grilling events with the university sailing club (these mad guys grilled a whole saw for 4 hours): When parking I hit a little stilt that squeezed in the front fender. Half of the bump I was able to push out again with my bare hands.
With what was left of the bump I went to the local authorized Ford Garage, not expecting a great offer, but just trying anyway.

What did I get:
“Well, we can’t do much here. We strongly recommend to change the whole front fender. Including working time, this comes in at around 700 EUR”

What?! Do I have something with my ears, or did I hear right?!
700 EUR? For a small bump, half of which I corrected without the use of ANY tool?!
And if they say 700 EUR, effectively it’s going to by 800 EUR + tax, thus 1000 EUR are a likely outcome!!

Wait a minute, for 1.000 EUR I bought a whole car more than once in the past.

I dare say:

All major authorised car company garages are gangsters!

There is absolutely no attitude there to find a good and frugal solution for the client. The only goal seems to be: Replace and throw away as much stuff as somehow possible.
This is a nightmare for every sane person, from a financial as well as from an ecological perspective!

In that respect, the car industry now resembles most other consumption good industries:

Things are touchy, and if they break, throw them away!
Do not attempt to repair anything or even fix it in a provisional way.
Just buy new! It’s so great!

[/rant mode off]

Needless to sa, that we downshifters have to refuse and fight this trend decisively!

As with all other goods it is self-evident: you have to find a way to tackle your car more economical, as a tool that delivers transportation and less like a precious ancient chinese vase.

In the end your car is a bloody lump of steel that shall get you from A to B.

It is not your lover nor the face of a luxury celebrity or a football star’s knee that has to be pampered up and down no matter what cost.

Thus I’d advise:

  • Repair only at independent and practical oriented garages (the real car lovers will curse me, I know). Surveys show (at least for Germany) no difference at all in service quality compared to authorized garages while prices are 30-40% lower.
  • Or even much better, do it yourself or by friends in return for help you offer them.
  • Service intervals of one year are stupid. If you are planning to run down the car yourself, most people who are good at cars told me: Do only security relevant stuff, and some wear parts plus frequent oil changing, and brake fluids when needed. You can cut service costs by another half that way.
  • Do you really always need original parts? Even for non-critical, non-security relevant parts?
  • Never ever do one of these stupid holiday checks or whatever. Your car dealer will find something that you have to do “for the sake of security”.
  • You might even consider fixing things while being abroad. I had some fantastic car repairs in Turkey – great service, great fun, and incredibly cheap. I will save the bump in my fender for these guys!

Cheers,
Woodpecker

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9 comments on “Dhoo! Cars!

  1. Half-Borg says:

    I love to share my story of my first garage visit:
    The engine light went on, I drove to a garage, they told me the lambda sensor was faulty and it would cost 400€.
    I read up on it on the internet, bought a OCD Scanner for 75€, figured it had to be some tube, found the tube (was the first one I looked at) and fix the issue with 10cm of duct tape.
    Since then my car has never seen a garage again. (Except for a LPG modification, but that’s no repair)
    I just to everything myself, buy parts and tools on the internet and enjoy the work.
    Last week I replaced braking discs and pads for 200€ including tools. Garage offers are at 600€.
    Sure it took my 4 hours to figure it out (Damn rusty screws!) But the next time I know how to do it.

    I save money, I learn stuff and I don’t need to spend an hour driving to a garage, get to work by public transit, get back there and pick up my car, since all repairs are done on weekends.

    • mrwoodpecker says:

      I love that story!
      Actually I am about to do the same, as I really hate that you are fully in the hands of the garage people once you droped your car there. This is even worse than with doctors or lawyers!

      Do you do all of this in a simple garage at home or do you have some facilities available?!

      Cheers,
      Woodpecker

  2. anonymous says:

    Hello, txs for this nice article. However, the various costs of the Nissan Sunny sum up to 3,380 € – considerably more than the 1,480 € in your table. The higher total confirms your message that (very) old cars are not really a good deal.

    • mrwoodpecker says:

      Thanks for the hint – corrected it rightaway!
      A car for less than 1.500 € per year would have been to good to be true probably.

      …I hope the calculations for my retirement planning do not contain similar summing up mistakes 😉

  3. AJ says:

    In your description, what is “gasoline” and what is “normal fuel”. Normally gasoline IS normal fuel. Do you mean diesel for one of them?

    • mrwoodpecker says:

      Thats right, where I put gasoline it should be diesel. Reason for the differentiation: In Germany diesel fuel is much cheaper but diesel cars are subject to higher tax, thus pay only for heavy drivers.

  4. everydayordinarygirl says:

    Great post! I frequently think about upgrading my 12 year old Subaru….posts like this make me happy to continue driving my car. I forget about all of the other costs associated with driving a newer car.

    • mrwoodpecker says:

      Yep, probably better keep it and enjoy the savings you have each month! You might even put the saved bucks in an envelope every month – feels great to see them piling up this way.

  5. […] car loss damage waiver. In fact you shall only insure against events that can wreck or seriously harm you financially. A […]

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