We bought a car

My wife said the 5 words I dread to hear: “We need a new car”.

We already had a 4 year old vehicle that I thought was fine so my heart sank.

I thought my wife had all of a sudden fallen prey to a sexy new car. Damn those marketers!

My wife is a great match for me. She is careful with her money and doesn’t spend wastefully. That is why I was surprised. I thought a new vehicle would be a waste of money since we already had one in a near new condition that was getting us from A to B no problems at all.

I kept my composure, and instead of shooting from the hip, I asked the question.

Why a new car?

I hadn’t really thought about it too much, but my wife said our old car was bringing us discomfort and it was no longer functional.

“Discomfort” I said. “Do you want heated seats?” replying sarcastically.

She meant discomfort in the figurative sense. To our lives. We are both moderately tall, I have a bad back (am now 11 weeks post surgery) and we have a 8 month old daughter with a car seat.

Reason one: The old Mazda 3 had a car seat in the back and would not allow the passenger seat to go back very far. This created a uncomfortable riding experience for any passengers.

Small car.gif

Reason two: The vehicle did not have a huge boot for cargo. If the pram was in the back there wouldn’t be any room for anything else. We traveled four hours north a few months ago, for a one week vacation. The car was so full of our travel gears. Boot, back seats, passenger seats and floors all full of of our travel gears. We utilised every single inch and to be honest I had trouble seeing out the rear of the vehicle thanks to all the cargo. That is not ideal and quite frankly, a bit dangerous. We intend to travel more often as our daughter gets older too, and who knows there may be a brother or sister at one stage in the future, making a bigger car even more necessary.

Reason three: My back. The bigger car we were looking at had higher seats which makes getting in and out much easier for me. Having lower seats was no good for my back and my wife hated seeing me in pain. Bless her.

Reason four: It’s always a good reason to agree with your wife. That is tongue in cheek though, I really did agree with our reasons.

So there you have it. That’s why we bought a new car. After my wife explained her thoughts I was fully on board.

The decision

We decided on the 2017 Honda HRV Sport pictured in the blog post image. It ticked all our boxes, plenty of interior size for our baby and her entourage of accessories. High and comfortable seating for my back, and fuel economy for my wallet. It was also being sold at a competitive price based on our research.

Could we have bought a cheaper large vehicle? Maybe, but then we would have been buying a older vehicle that may need more maintenance and is not as economical on fuel. This is definitely our car for the next 10 years now (I said that about my last car we only had for a year ahem), so it made sense to get slighter newer, knowing we can spread the cost over many years, while getting to enjoy lower annual fuel bills, low maintenance and repair bills, and less frequent Warrant of fitness checks.

The purchase

We paid $29,900 for a 1 year old car that costs $39,900 brand new, meaning that the first owner paid the bulk of the depreciation for us. Sure, we will pay some depreciation, but definitely not $10K in the next year.

Just like anything, as long as you have it in your possession for the long term then things work out fine. Time helps spread the cost out.

We tried to sell our Mazda 3 to the same car yard that we purchased the new Honda from. They had a look at the car and said $15,000. We knew it was worth at least $17,000.

I think they are used to customers taking a small amount for used cars because the customer wants a new car and can’t afford to buy without selling first. So the customers sell their current car for much cheaper than they could on the market, just so they can have their new car now.

I am sure this would be a common scenario as it is convenient. It is extremely difficult to sell your car BEFORE buying a new one. Because then you are left without a car. Conversely, it is also difficult to buy a new car and then sell your old one later due to lack of funds.

That is where having a emergency fund or back up savings can come in handy. Having money puts you in a powerful position.

Because of this we didn’t have to accept the low ball offer. The car yard weren’t willing to negotiate on this price due to their stubbornness.

So we went to the private market and listed it online. Within four days it was paid for in cash by a private buyer for $17,500. $2,500 more than the car yard in Wellington offered. Turned out a car yard up north in Hamilton bought the car. By being in a financial position to own an extra car we were able to net ourselves an extra $2,500.

Final Thoughts

Their are three morals of this story:

1/. Having F U money, puts you in a strong position. It allows you to have more flexibility in negotiations. You are able to walk away if you want. That is a nice position to be in.

If your employer knows you could walk out the door at any moment, they may be more willing to negotiate with you on better conditions.

So keep building up your fund, and slowly but surely you can tell anyone who low balls you F U too.

2/. Be intentional with your spending. Yes, we upgraded cars and spent $12,000, but we thought about the decision. It was intentional and not a spur of the moment decision. We researched vehicles and we had the money. Buying the car fulfilled a purpose. It was not purchased for short term happiness or spur of the moment. It was purchased purely for function - size and safety.

3/. Happiness is more important than being cheap, but happiness does not have to cost an arm and a leg. We could have kept our old car, but we would have become miserable and slowly resented the vehicle because it wasn’t meeting our needs and it would have got worse over time as we travel more and the family grows. You have to be careful here though. It is easy to think that material things bring happiness, they generally don’t. They need to serve a long term function that align with your goals. Think long term function, not short term feelings.

4/. Oh, and listen to your wife.

The information contained on this site is the opinion of the individual author(s) based on their personal opinions, observation, research, and years of experience. The information offered by this website is general education only and is not meant to be taken as individualised financial advice, legal advice, tax advice, or any other kind of advice. You can read more of my disclaimer here