Buying Reliable, Safe Cars with Cash

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Buying Reliable, Safe Cars with Cash post image

Last week, Ian wrote over 3,500 words about his new home purchase. But he skimmed over what might have been his greatest motivation for buying a big place– wrenching on an endless parade of cars and bikes (and finding somewhere to put them all). Every time I visit bossman, he’s got a new toy.

Seriously, the guy goes through cars like I go through t-shirts.

He’s built a car that was featured in a magazine, stood on the podium at many motorcycle and car races, and even teaches aspiring racers how to go faster at the F1 track in Austin.

Way back in 2006, we first bonded over upgrading my crappy car stereo in my first car– a Mitsubishi Eclipse. I bought it with a few hundred dollar down payment, a co-signature from pops (thanks Dad!), and a big ass, high-interest loan.

Our mutual love of cars has brought us many good times, including a wonderful interview we’ll be airing this week from the the hilarious co-founder of Regular Car Reviews. If you aren’t familiar with that channel, I recommend you check it out before you listen to the episode. Even if you’re not into cars, you’re still bound to find something to laugh about. The videos feature dirty jokes, commentary on American culture, and even literary references. Here are some of my favorites: Ferrari, NSX, DeLorean.

Back to Ian: he’s bought so many cars, that he’s become something of a master at identifying good buys. His article called “The Top 10 Used Cars Under $5,000” is one of the most popular on this blog. Well over 100 readers have proudly shared their fully depreciated, fully paid-for cars with us via email, Twitter, our forum, and the comments section of this blog.

So when it came time to buy my second car, my first one in nearly a decade, I knew I wanted an entreprneurmobile

Here’s how Ian defines that:

A vehicle that has almost fully depreciated. They are reliable cars that are generally inexpensive to maintain and fix. They can often be sold several years later for the same price they were purchased for… these vehicles free us from a prison of payments and allow us to focus on real wealth and asset generation.

With Ian coaching me, I spent a bunch of time thinking about exactly what I wanted in a car:

  • (Almost) fully depreciated.
  • Great for road trips.
  • Comfort.
  • Able to carry my friends and family around.
  • Must be a great ‘bike’ car, since I want to use the car to find new places to ride. (A cyclist is encouraged to have a more expensive bike than car).
  • Something useful for my family to use when I’m not around.

And after much searching, this is what we landed on…

Fits bikes… (captain’s chairs for friends, and fold-down bench seat for even more people).

Yes, envious readers, your eyes are feasting on a 2004 Honda Odyssey with a leather interior.

I figured the thrill and ‘cool’ of owning a sporty car would wane quickly, whereas the perennial utility of a mini-van could be felt for decades! :D

So, what’s the damage?

I paid $5500 in cash, and $500 for fresh tires.

It had 117,000 miles on it, and full documentation.

I’ve already driven it from Texas to PA to NYC, and my family has used it for numerous outings. (Most) all of them made fun of me for buying a mini-van, and now I make fun of them for borrowing it :D

Four generations of my family, and many close friends, have gone out to eat in style and comfort. It feels cooler than a sports car for now!

Today I’m preparing for my next road trip, so thought I’d post it.

As always, we love to see your entrepreneurmobiles.

Cheers,

Dan

PS, I know…. what’s happening to this blog!? Last week, mortgages. This week, minivan. What’s happening next? Definitely baby photos…

Published on 09.13.16
  • http://benhebert.com/ Ben Hebert

    Funny that when I moved to Austin and bought a car that I got an SOP from Taylor Pearson and then hands on help from Ian :)

  • http://www.tropicalmba.com/ Dan Andrews

    haha, he’s got this giant network of car buyers circling him. :) at one point we actually sat down and recorded hours of him detailing his theories and strategies on tape, we never got around to doing anything about it except buying a bunch of cars :P

  • http://stankavich.com Mike Stankavich

    I thought that photo looked really familiar… :)

    I bought an 07 Odyssey a couple months ago myself. Just one note on those pre-depreciated vehicles – make sure the maintenance is current or that you negotiate a concession on the price. 117k is right around when you should change the timing belt.

    I made the mistake of not checking on that and ended up spending ~2k on timing belt, tires, brakes, shocks, etc. I’ll be good now for ~80k miles, but I could have done without the extra hit.

    And yes, I just moved to Austin. Was good to see the boss man at the last Junto.

  • http://www.tropicalmba.com/ Dan Andrews

    Hey van-brother, honestly the Mitsubishi eclipse version of myself wouldn’t have been able to cover the 2K (and part of the reason I was on payments), even in a worst case scenario not that bad with an affordable car. Also: thanks for the heads up! :D Timing belts are always a critical part of the conversation with bossman, and it seems that something so simple actually drives people into much bigger purchases.

    Anywho, enjoy Austin!

  • http://www.r32media.com EricTimmer

    I have been waiting to pull the trigger on a brand new car (2017 Toyota 86/ Subaru BRZ) but something keeps telling me not to do it….and then you go and post this article….lol.

  • http://www.tropicalmba.com/ Dan Andrews

    haha ball out if you like, but pay in cash! :D

  • http://salesability.co Damian Thompson

    The LBP Boys are all growns up! Oh & I got your baby photos!

  • http://www.tropicalmba.com/ Dan Andrews

    ahhh too cute, knew you’d come through! :D

  • http://TimConley.co Tim Conley

    With banks practically giving money away, paying cash would be a poor choice. Many banks are lending around 1.9%, with some specials at 0.0%. You could make a small down payment and invest the remainder of your cash in a reliable corporate bond and profit 1 or 2% after taxes. If you want to get riskier, you could invest in an index fund and pull 4 or 5% after taxes.

    I would recommend that the value of the car someone purchases is a small percentage of their net worth and/or net income. To accomplish that, they would obviously have enough to be able to pay cash.

  • http://www.tropicalmba.com/ Dan Andrews

    that’s fair enough, although it might have to be a very expensive car for the the admin/thought expense to make any difference? I amend “pay in cash” to be ‘if you wouldn’t be willing to just plunk down the cash’ then probably not a good idea.

  • http://TimConley.co Tim Conley

    Agreed. Still need more cash in the bank than the cost of the car.

  • http://www.tropicalmba.com/ Dan Andrews

    For sure, actually, that’s probably Ian’s fundamental point, not sure if he said it outright in his original post. I believed it ‘in theory’ but actually going out, buying, and driving a $350 car (somewhat against my will) drove his point home. I wanted to buy something ‘reasonable.’ I’m glad I took his advice, that ‘reasonable’ was something I could ‘afford in cash.’

  • Bunty

    Honda’s man, they’ll take you far and wide for the most off-the-beaten path of bicycling adventures. I’ve had my 2000 accord for over 10 years now. With a good pair of snow tires, I’ve taken that beast up mountains all over the US.

    I always wanted a truck to carry MORE bike and camping gear/toys, but as I approach the minimalist lifestyle, I’m choosing to keep what I have.

    Let me know if you ever need to carry your bike *outside* of your car and want a good recommendation.

    (photo was at the end of a 40 mile dirt road, Escalante, UT)

  • Paul Bleisch

    I’m still waiting for the follow-ups promised in LBP 040. :)

    (I think that is what all those hours were recorded for anyway.)

  • http://www.tropicalmba.com/ Dan Andrews

    niiiiiice! :D I defo put a lot of weight on the ‘carry bike inside without major disassembly’ category, because i hoped to do so with some friends in tow, which disqualified a lot of traditional cyclist mainstays like hatchbacks.

  • http://www.tropicalmba.com/ Dan Andrews

    I’m pretty sure we actually posted it on one of these blog posts! Now to see if I can dig it up……

  • http://martijnreintjes.com/ Martijn Reintjes

    I can see the resemblance Damian!

  • http://www.TropicalMBA.com/ Ian

    Hi Walter,

    I would stick with the Japanese brands, either Toyota or Honda. Dodge products in my experience are subpar and also do not retain their value. Good luck in your hunt!

    Ian

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