We finally did it. We didn’t want to do it, we delayed it, we put it off, we even bought a Subaru instead. But the realities of rural living caught up with us and we finally capitulated to the fact that… we needed to buy a truck. And so, this month, we did. I don’t have anything against trucks except that they’re so BIG and non-fuel efficient and, well, truck-like, which is exactly why we needed it!
I won’t keep you in suspense, we bought a 2010 Toyota Tundra for $15,300 and we paid cash. For comparison, a brand new 2018 Tundra, similar to the one we bought, costs circa $37,000.
Fear not, all details are below! Also, don’t worry if you hate cars, this’ll still be a fun post to read. I did, after all, once write a post about replacing a storm door that people thought was hilarious, so hey, this at least sounds more interesting than that one did, right?!
The Frugalwoods Fleet
Longtime readers will be familiar with our car ownership changes over the years, but I’ll give a quick rundown for folks who are new to the journey.
Mr. Frugalwoods and I were carless in the city for many years, which is a great way to save money! The embodied costs of car ownership are pretty high when you consider the purchase price, taxes, registration, plates, annual inspections, parking, gas, insurance, maintence and repairs. Oh my! We remained car-less as long as we felt able to since it is certainly the cheapest way to go. It’s not, however, the most convenient nor is it feasible in most non-urban area. But if you can rock it car-less, DO IT! There are few other ways to save so much cash money on a single line item.
Then we had the beloved Frugalwoods-mobile, our 1996 Honda Odyssey minivan, which served us well for a number of years. That car, however, was not suited to rural life in the least as it lacked both things we prize out here: all-wheel drive and good gas mileage. Since we live remotely, a car needs to have at least one of those things in order to be of use.
Frugalwoods-mobile was a great city car (ok “great” might be stretching it, but it was just fine). When we moved to the country, however, we quickly realized that the absence of both AWD and good gas mileage made Frugalwoods-mobile suboptimal for our new life. And so, we sold it on Craigslist for $1,000. As anyone who has read my book can attest, Frugalwoods-mobile put in a stellar performance on our driveway the day we closed on our homestead. And by “stellar,” I mean that she got stuck and rolled backwards. Not ideal, in case you’re wondering. More on Frugalwoods-mobile’s life and times here: Ode To An Old Car: Our Money-Saving Machine.
In spring 2016, we replaced Frugalwoods-mobile with a 2010 hybrid Toyota Prius and a 2010 Subaru Outback, both purchased used for cash. We reasoned that the Prius would achieve our goal of excellent gas mileage and the Subaru our goal of all-wheel drive.
As I’ve previously discussed, our rural existence–and inability to walk anywhere and absence of public transit–means that we unfortunately have to be a two-car family. We loved having a single car back in the city, but that was only tenable because we were able to rely on walking, biking, and taking the subway or bus to get around. Out here, however, the only option is to either own a car or to not go anywhere. More on these two cars here: Our Frugal Solution To The All-Wheel Drive Conundrum.
The Prius: Our Dream Car (for the most part)
We absolutely love our Prius as the gas mileage is outstanding and it has proven to be a reliable little machine. We don’t have daily commutes and we do a lot of things hyper-locally as many of our friends, Babywoods’ preschool, the library, the playground, etc are all within just a few minutes’ drive of our house. However, when we need to go to the grocery store, the doctor, the dentist, etc, our drive time is in the neighborhood of 35-50 minutes each way.
Given this, having a fuel-efficient car is a priority to us for the cost savings and also for the decreased environmental impact. A sidenote for parents: I am delighted to report that both car seats fit perfectly well in the backseat of the Prius and I think we are team Prius For Life.
What the Prius lacks, however, is all-wheel drive, towing capacity, and cargo space. It’s big enough for us to get to the airport with suitcases, for example, but totally incapable of hauling, for example, lumber (we’ve tried; it’s just too short). In terms of lacking all-wheel drive, we’ve been pleasantly surprised to find that the Prius is actually just dandy approximately 355 days a year! It can gamely climb out of our quarter-mile long gravel driveway and navigate plowed roads with aplomb. What we’ve discovered is that having the right tires–in this case, snow tires–makes all the difference. We have studded snow tires on our Prius, which makes it much more durable in the snow. Do not underestimate the power of good tires. I will tell you that we’ve had people with all-wheel drive, but WITHOUT snow tires, get stuck on our driveway whereas we in our itty bitty non-AWD Prius are fine thanks to our snow tires. But even great snow tires have a limit…
Mr. FW and I have each gotten the Prius stuck on our driveway once this winter (due to icy conditions), which is a good indication to us that we do, in fact, need to own an all-wheel drive vehicle in order to be able to safely and reliably leave our home during the depths of winter. And since winter lasts until, oh, May out here, that’s a pretty significant consideration.
Why A Truck?
Our all-wheel drive solution was the Subaru Outback and, as a car, it works great! No complaints! However, it’s not designed to have the hauling capacity of a truck. Much as we tried, we just couldn’t fit everything in there that we’ve wanted to haul. As I discussed in comparing the costs of living between urban to rural, we’ve found we need a lot of tools, machines, equipment and lumber out here. All of those things take up quite a bit of cargo space in a vehicle. The Subaru has a decent trunk and, with the back seats down, we were able to fit a lot of things in there, but other stuff–such as our wood splitter–required that we borrow a friend’s truck. Mr. FW and I realized we were delaying a huge number of projects around our property because we didn’t have the ability to cart home supplies. We have been able to have a lot of this stuff delivered to us–for a price of course–but that didn’t seem like a viable longterm solution.
Several readers asked about a cargo trailer for the Subaru and so I’ve edited this to add that we looked into getting a cargo trailer for the Subaru, but learned that the engine and transmission of the Outback aren’t meant to tow the weights that we need to pull (such as loads of manure, gravel, sand, etc). We also have a fair number of hills out here and apparently that puts a lot of strain on a trailer-pulling Subaru. Plus, we didn’t feel comfortable pulling the trailer in the deep snow and mud that we have much of the year. But, I think it can be a good solution depending on your vehicle and terrain.
Another major consideration is the fact that we’ve had to pass up some excellent deals on tools and equipment at garage sales because we have no way to transport the stuff home. Bummer! The list of projects prefaced by “we’ll need a truck first,” was mounting and having our own truck will alleviate the issues related to transporting supplies/materials and will allow Mr. FW to kick off his spring season of projects. Top of the list is building a wood shed and he can now get the lumber home!
The truck’s other main attribute is that it’s four-wheel drive and so will be able to navigate our driveway and the roads when conditions are either too icy/snowy or muddy for our low-clearance, non-AWD Prius.
Why A 2010 Toyota Tundra?
When we saw the writing on the wall last year that truck ownership would be in our near future, Mr. FW started a year-long research campaign and landed on the Toyota Tundra. We like Toyotas in general and the Tundra has a good reliability record. We also considered the Toyota Tacoma truck, however, it’s a smaller vehicle and is so wildly popular that used Tacomas are almost the same price as used Tundras! Since Tacomas are smaller, they do get better gas mileage than Tundras, but that’s not our primary consideration with this vehicle. Since we primarily want the truck for its cargo and towing capacity, we decided we wanted the bigger truck (with a bigger bed) since the used prices are about the same.
Mr. FW selected a 2010 versus a 2009 (or earlier) because Toyota changed their rust-proofing system for the 2010 models, making them more resistant to rust. Since rust mitigation is a major consideration up here in the Northeast, it was worth it to us to get a 2010 or newer. By keeping an eye on the market, Mr. FW learned that 2010 also seems to be the sweet spot of depreciation vs. value where you’re still getting a relatively new vehicle, but it’s not too expensive. He noted a significant jump in price for 2011 and newer Tundras.
We got the 4.6 L V8 smaller engine because we don’t need to tow anything massive and so don’t have a need for the bigger engine. We also selected a Tundra with the smaller double cab as opposed to the larger crew cab, because both of the kids’ car seats fit just fine in the double cab and the bed of the truck is 6.5 feet as opposed to the 5.5 foot bed of the crew cab. Again, with hauling stuff as our primary goal, we wanted the bigger bed. The backseat of the double cab is really quite roomy and a third person will be able to easily sit back there with both car seats. Unless you’re transporting an NBA team, I think it’s plenty spacious. We initially thought we wanted a Tundra with a long bed (which is 8 feet long), but Mr. FW test drove a few and found them to be too huge and unwieldy for his taste. The long bed models also aren’t as common and were more expensive, so we decided that the 6.5 foot bed would suffice.
Why This Particular Tundra?
The Tundra we landed on has 139,000 miles, which is somewhat high mileage, but, it was very well taken care of. These trucks are also known for running well with high mileage as long as they are properly cared for. Plus, the higher mileage meant it was less expensive
The previous owner had it serviced at a Toyota dealer, so we have a detailed record of its repairs. The service record was important to us because it allowed us to know it was maintained to specifications. Additionally, the previous owner did small things such as apply touch-up paint to dings and dents and dielectric grease on the battery terminals. These little repairs demonstrated that the truck was well looked after.
Perhaps most crucially, the frame is in great condition, which is somewhat rare to find in New England. Mr. FW looked at a lot of trucks where everything seemed fine until he looked underneath and saw a horror show of rust. Rust is a truck killer up here and so we wanted something with minimal rust damage. We surmise it’s probably in such good condition because the previous owner regularly washed it and had it undercoated. It also has a spray-on bedliner in the bed, which is a nice touch.
Crucially, before buying it, Mr. FW took the truck to our trusted mechanic who put it up on the lift and checked it out. This was $36 extremely well spent! If you’re buying a used car, I highly recommend having your mechanic–separate from the used car dealer or the private seller–take a look at the car before you make your final decision. Our mechanic concurred that the truck was in great shape and appeared to have been owned by someone who took good care of it and knew how to maintain it. Taking it to our mechanic also gave us a great excuse to take the vehicle on an extended test drive and to keep it overnight.
The Fate Of Our Subaru Outback
Since we don’t need three cars, we will be selling our 2010 Subaru Outback. It’s such a great car and I hate to see it go, but the high carrying costs (taxes, registration, insurance, maintenance, etc) of having three cars make it impractical. Plus, if we were to hang onto it, it would just continue to depreciate every year and we wouldn’t be able to sell it for as much as we can now. We drove the Subaru relatively little–about 4,000 miles a year–so it’s clear that the Prius is our primary machine.
Thus, the new Frugalwoods fleet consists of the smallest and the largest vehicles that Toyota makes. Apt, I think! Also an example of calibrating our car ownership to our precise needs. I don’t want to own any more or any less car than we need to. Since there are so many expenses associated with car ownership, it makes sense to be judicious and thoughtful about the vehicles we own.
How To Buy A Used Car
After I wrote my initial post about buying a used car a few years ago, I was flooded with requests for more specifics on the process. And so, I shall do my best to outline the tactics we use! I discussed why to buy a used car in the aptly titled, Why We Buy Used Cars And You Should Too, and here’s a quick excerpt to give you a sense of the why:
Buying a new car is like shooting yourself in the foot not once, not twice, but three times. Here’s why:
- The mark-up on new cars is astronomical.
- The opportunity cost of buying a new car–even if you pay cash–is profound.
- Most car loans have interest rates, which means you’re spending even more money.
A financial triple whammy. Cars lose value the minute–nay, the second–they’re driven off the lot. Hence, you’ve paid a price that you will never, ever recoup (unless it’s a vintage/antique car situation, which is not germane to this conversation). Unlike a home–which sometimes, hopefully increases in value–a car is almost guaranteed to decrease in value. A car is not an appreciating asset. Hence, you’ll never re-sell a new car for anywhere near what you paid for it. A raw deal, to be sure. With a used car, however, since you’re paying a price stripped of the brand new dealer mark-up, you won’t sell it for what you paid for it, but the margin is likely to be much narrower and will help offset the purchase of your next (used) vehicle.
Our Used Car Buying Process
1) Know the market.
As with all major purchases, it pays to know the market. Similar to the many years Mr. FW and I spent researching real estate markets before buying our first home, we spent a fair amount of time–about a year–researching used trucks.
The goal of doing this is to put yourself in the position of being able to look at a vehicle and know whether or not its a good deal. You want to have a robust sense of the model year you want, the price that’s reasonable, the common maintenance problems of that make/model, etc. The more you know, the better a negotiator you’ll be and the more likely you are to find a good deal.
A few resources we found helpful:
- Cargurus.com has a good valuation tool that allows you to see a graph of prices for a make and model on the used market. This is where we found our truck, although in the past we’ve also found cars on…
- Craigslist, the holy grail of used stuff, is a great way to familiarize yourself with the market and get a sense of supply and pricing.
2) Take your time.
If at all possible, avoid rushing into a purchase. This isn’t always possible if you’re in a crunch and need a car ASAP. Ideally, you want to test drive a number of different vehicles in the make/model/year you want. This’ll allow you to test your assumptions about both that make/model/year of car and also each individual vehicle.
3) Test out your whole family in the vehicle.
Have dogs? Kids? Large iguanas who need transportation? If you can, test out everyone in the vehicle to make sure that all car seats and paraphernalia will fit comfortably. Pro tip: the kids don’t have to be in the car seats, just the seats will do. We did do one test drive in this truck with the whole family, just to make sure we all fit as expected, but the initial research was to have Mr. FW put the car seats in sans kids.
4) Calibrate the car to your needs.
If you have six kids, a Prius is not going to fit all of you. If you’re empty nesters, an SUV is probably unnecessary. If you live in the city, you’re going to prioritize a smaller, more efficient vehicle that’s easy to park whereas if you live in the country, you likely need all-wheel drive and cargo space.
Know what you need for the stage of life you’re in. The beauty of buying used cars is that, when your lifestyle changes (as ours did), you can sell your previous used car and buy a new-to-you used car without the near-catastrophic loss you’d experience with new cars. Someone recently pointed out to me that when our kids are in high school and we’re transporting the entire soccer team, the Prius might not be large enough. Well, if that’s the case, we shall reassess our car ownership needs at that point in time. No sense in owning a car for your future or past life. Own the car that suits your needs right now.
It’s also OK to be wrong with used cars. Since you’re spending less, you have a greater margin for error. We were wrong with the Subaru–we probably should’ve just bought a truck to begin with. But, we hadn’t lived out here on our homestead yet and we wanted the slightly better gas mileage of the Subaru. However, after testing our needs through two years of rural life, we realize our error. But again, since we bought the Subaru used, we’ll likely be able to sell it for just a few thousand less than we paid for it.
5) Check out both used car dealerships and individual sales.
Deals can be found both ways! We ended up getting our truck from a used car lot, although we looked at trucks being sold by individuals as well. This truck just happened to be the best value and in the best condition. One thing we found is that the certified pre-owned vehicles from the Toyota dealership were much more expensive.
Here again, you want to know the market so that you’re comfortable with the deal you’re getting, whether it’s from an individual or a used car lot. We also considered the possibility of getting a truck from out-of-state, in particular from the south since rust is less of an issue in warmer climates. Mr. FW checked out Craigslist and e-Bay, but ultimately decided that it wasn’t worth the hassle.
6) Negotiate with the seller.
Don’t fear the negotiation! I received tons of questions on how to handle used car negotiations following my initial used car post and my best advice is to know the market. I know I sound like a broken record, but it’s pretty much tactic #1.
If at all possible, you want to pay in cash in full for your used car because: 1) it simplifies your negotiations since you’re not negotiating a trade-in or financing terms, 2) financing will saddle you with an interest rate, which is not cool. One of the key goals of frugality is to save for huge purchases like a car so that you can–in the end–spend less overall. It’s a great illustration of the virtuous cycle of frugality: the less you spend, the more you save, and thus the greater the deals you’re able to leverage, which means you spend less… you see where I’m going with this. Of course there is a great deal of privilege associated with having the ability to save up enough to buy a car in cash, and I delve into that topic in greater depth here and here.
When you present yourself as an all-cash buyer, the seller is likely more motivated to work with you because they don’t have to go through the hurdles and uncertainties of you securing financing. Make sure to point this out to the seller!
I also don’t recommend trading in an existing vehicle because it’s highly likely you’ll get a better deal all around if you buy a used car with cash and then sell your existing car on the private market. Again, by knowing the market, you’ll know what a good deal is both for your new-to-you car and the car you want to offload.
7) Negotiate the “out the door” price, not anything else.
Something I learned with buying this truck is that, when you’re paying cash and not trading in an existing vehicle, the only thing you’re negotiating with the seller is what’s called the “out the door price.” Remember the phrase “out the door price” because that is the actual bottom line cost. You don’t want to negotiate the price of the vehicle vs. the “out the door” price. You want to negotiate the bottom line of what you’re going to pay, so make sure to use the words “out the door” price, which is literally the amount you’re going to write a check for and walk out the door with the car. This is particularly relevant when buying from a used car lot.
By negotiating the out the door price, you’re forcing the seller to negotiate all of their fees as well. At a used car lot, these fees include taxes, registration, license plates, and inspection (basically everything but your insurance). This varies by state, so make sure you know what the out the door price includes in your state. The other key is knowing the market and knowing what a fair price is (oh man, I said it AGAIN!!!)
In the negotiations themselves, be confident, be friendly, and be reasonable. For this truck, we knew what the market was and that the truck was priced fairly. But, we also knew that things are always up for negotiation. Even with a fairly priced vehicle, it never hurts to negotiate. You really have nothing to lose.
The other great thing with buying a used car is that you can negotiate for repairs to be made, just as you would when buying a house. For our truck, we negotiated that the seller take care of sanding rust off the tailgate and painting it, fixing a small chip in the windshield, and fixing a noise in the blower motor. The original asking price for our truck was $16,800 and Mr. FW was able to negotiate it down to $15,300 (including the aforementioned repairs).
8) Take your time while negotiating and phone a friend.
It’s likely the seller will try to rush you through the negotiation process and make you feel like there’s another buyer breathing down your neck. Keep your cool. Discuss the price and the repairs for as long as you want. And then, go outside to phone a friend. During the negotiation for our truck, Mr. FW told the seller several times that he needed to call his wife to talk things over.
He then went outside, called me, and we chit-chatted for awhile just to keep the seller in suspense and make them think that perhaps “the wife” was not interested in the vehicle. I was, in fact, very interested in the car and Mr. FW and I didn’t really have anything to discuss, but, it gave him some time to mull things over and let the seller reconsider their offer as well. So whether you call a spouse, a friend, or no one at all, build this breathing room into your negotiations. Even if you don’t need to discuss things with another person, it can’t hurt to have a few minutes to assemble your thoughts while you pretend to talk into your phone ;).
9) Have your mechanic check it out.
Take the car to your mechanic–not the seller’s mechanic–and ask them to check the car over. Have them look for any common problems with that make/model/year and also do all general and routine checks like making sure the wipers, heat/AC, windows, and blinkers all work properly. Well worth the cost to ensure you’re getting a good vehicle!
Buy Used And Prosper
Buying your cars used and for cash is a fabulous financial decision as it means you spend less overall (no interest rate, no brand new car mark-up) and also avoid the steep depreciation that all new cars endure. By not having a monthly car payment, you’ll be able to save at a higher rate every month, which means you’ll be able to make your next large purchase also in full and with cash. Never forget the compounding value of frugality!
Cars are not status symbols. Cars will not make us feel better about ourselves. Cars will not increase our confidence or make us more popular. Cars are tools to get us from point A to point B. Do not allow yourself to be lulled into the consumer lie that a new, shiny car will bring you happiness and success. Things are not stand-ins for human emotions and the only thing a new car will bring you is a lot less money. Ignore appearances and buy a used car that’s safe, that’s reliable, and that fits your needs. P.S. have no concern for the color of the exterior or the interior. Our Prius was cheaper because it’s white and apparently white is an unpopular color for cars in the Northeast. Bingo! Frugal gold right there my friends.
What are your tips for buying a used car? And particularly for negotiating the price?
P.S. This month’s Reader Suggestions question is up on the Frugalwoods Facebook page now! Head over there to respond!