“Can you write an article telling readers which cheap adventuremobiles to buy?”
I’m the office’s resident mechanic, so the other editors turn to me when they need to figure out a #VanLife article that’s more than just a photo of some hipster about to bump his head on an uninsulated metal roof. And sure, I can do that: If you want to save money and buy a vehicle that will take you to neat places, don’t buy a used Subaru on Craigslist. Lease a brand-new car instead.
Who am I to be telling you what to do with your vehicle budget? Well, I’ve been doing this whole write-about-cars-for-a-living thing for more than 15 years now. I used to be the road-test editor (the guy who reviews all the new cars) for one of the most popular car websites on the planet. I’m the guy all my dumb friends bring their broken cars to when they can’t afford to get them fixed at a shop. And my idea of practical transportation for my own life is a lifted 18-year-old Land Rover that averages 11 miles per gallon—a truck the internet hive mind has labeled as unreliable as it gets. In a former life, I was a professional carpenter and handyman. Fixing something is my idea of a good Sunday.
I recently gave this same advice to my buddy Mollie. It’s been raining a lot here in Los Angeles, and her five-year old Mustang had filled up with water. I told her it was a clogged drain in the well under her windshield and offered to clear it out. The job would’ve taken me an hour and cost her a six-pack, but it also meant taking the car off the road for the weekend and letting it dry out. The Uber fees for those two days were the final straw. She’s selling the ’Stang, and those IPAs netted her this advice: rather than buy a used car, lease a new one.
“But that’s not what you do,” she countered.
My answer? “I’m not you.” And that probably applies to you, too, dear reader. But probably not for the reasons you think.
Used Cars Take Work
Do you know how to perform simple maintenance tasks? Do you mind getting your hands dirty? Do you know how to change your oil? How about changing a tire? Hell, do you own any tools?
A lot of you will want to (ambitiously, I’d argue) answer yes, but when was the last time you did any of those things? Can you do them well enough that you can rely on your own work? Would you trust it with your life? Can you afford to take your car off the road for the occasional weekend, or even week, while you work on it? Do you have the space to do so?
Learning to do all of that stuff isn’t that hard, but it is time consuming. Do you really want to devote all that time and effort? I’m guessing most people would rather spend their weekends in the outdoors, not their driveway.
This is a real question a friend really asked me, followed by, “Can I borrow one?” I told him I’d come fix whatever it was.
Used Cars Break
Regardless of make or model, all cars are composed of a bunch of mechanical components that require routine maintenance and need to be replaced over time. Even if you have your work done at a mechanic’s shop, you’ll still need to keep up with that service schedule and proactively have parts replaced before they fail on you. Again, this isn’t rocket science, but it does require a little bit of time, organization, and dedication to learn the necessary steps. Most used-car owners fail to do this, and that’s how they run into issues with reliability.
Take my old Land Rover, for instance. Its head gaskets wear out every 75,000 miles. If one blows on me, my engine will overheat and possibly destroy itself. A new engine is $4,500 before the cost and/or time of installing it. Many a truck has been thrown in the junkyard because that’s just too much time and money to make a repair worthwhile. The solution? Replace that head gasket every 65,000 miles. A comprehensive parts kit is just $200 and takes a weekend to fit with the help of a friend. For me, that’s a couple fun days drinking beer with a buddy, but do you really want to do something similar every time your car needs fresh coolant, new brakes, or any other basic work?
Again, this is true of all cars. The motor in your Toyota will blow just as easily if you neglect it. Which leads to another issue: money. According to the Federal Reserve, 46 percent of American adults don’t have $400 of liquid cash on hand to deal with emergencies. A tow plus a day in a shop will easily triple that amount—and that’s if the problem isn’t serious. Owning an older car exposes you to potentially ruinous financial emergencies, in addition to the more common, everyday expenses assocaited with maintenance and minor repairs.
Used Cars Are Less Safe
Car safety has advanced by leaps and bounds in recent years. Don’t believe me? Look at results of the small overlap front-crash test, introduced in 2012. New model development hasn’t yet caught up with the new test. So, even in 2016, only one small SUV that was totally redesigned in 2015 was able to pass the test. Buying the most up-to-date vehicle possible is a proven method for maximizing your safety.
The maintenance and repair needs described above compound these issues. Are your tires in good condition? Do all four match? Are they inflated properly? Is your brake fluid fresh? Are your brake lines in good condition? Is anything on your car on the verge of breaking, potentially causing an accident? Maintenance doesn’t just keep your car reliable—it also makes it safer.
New Cars Are Incredibly Affordable Right Now
Want a car that’s won’t leave you stranded, is as safe as possible, and will deliver totally predictable costs? Lease a new car on the affordable end of the price spectrum.
Take the Subaru Crosstrek. It’s all the car anyone needs for daily driving, camping trips, or cross-country road trips, and it’ll haul your bikes, boards, or dogs with ease. It’s also one of the safest cars on the road today. How much does all that fanciness cost? Shop around and you’ll find 10,000-mile leases on a 2016 model for around $200 a month, with $0 down (taxes and fees mean it takes about $750 to leave the dealer). It may not be the fanciest, or most aspirational car out there, but it's a better ownership proposition than something nicer, but older.
In addition to insurance and fuel costs, your cost for driving that Subaru will only ever be $200 a month. In three years and 30,000 miles, you won’t need to pay for a new set of tires, a brake job, and probably not even a headlight bulb. In the unlikely occurrence that something breaks, the warranty will cover it, and you should expect your dealer to give you a free loaner while your car is being repaired.
Often, you’ll find the monthly lease payments to be lower, or at least equivalent, to the cost of financing a purchase. And leasing allows you to easily switch cars every three years with little to no financial penalty; you'll always be driving a new car, for a set monthly payment. Manufacturers are trying to move metal right now.
According to a Fox Business article on auto leasing, many car buyers who finance a purchase trade in their cars before they’ve paid off the loan, meaning they roll the negative equity on that vehicle into their new auto loan, probably at a higher interest rate. Edmunds.com found that new car buyers are rolling an average of more than $5,000 in unpaid debt into their new loan payments.
Right now, drivers ages 25 to 39 are keeping cars they purchase for about five years. Most warranties only extend three years. So you’re investing in something that loses value and something you’re going to have to pay not just to maintain, but to repair, too.
I’m not terribly good with money, but I at least understand that borrowing money to purchase a depreciating asset is a bad idea. And because I’ve driven nearly every new car on the market right now, I also understand that there are so many gadgets on new cars these days that you can absolutely expect to have significant repair bills once the warranty period is up. In contrast, leasing packages every cost (excluding gas and insurance) associated with driving into a single, set payment. I'd argue that the predictability of that payment is the main advantage leasing brings. As that $400 in emergency cash statistic from the Federal Reserve suggests, most of us live paycheck-to-paycheck these days; fixed costs are key to making that work.
The Bottom Line? Used Cars Just Don’t Add Up
When my editor asked me to write this article, I think the idea was that I’d tell you to buy some specific variety of $7,500 Subaru. Some mythical unicorn of a car that would get you most places, that you could live in the back of, and that would never break down. I hate to break it to you, but that car doesn’t exist.
Yes, you can find an old Outback or something on Craigslist. If you get lucky, it might run for a year or two without requiring much work. If you’re even luckier, you might find an honest mechanic, who, if they’re lucky, you’ll listen to and have the routine maintenance performed.
But it doesn’t take much for a big repair to end up costing you more in a year than 12 months of $200 payments will. Hell, a new set of tires will run you $800 once they’re on. And what if that big repair bill comes at a time when you can’t afford it? Can you walk to work while you save up cash? We’re talking about adventuremobiles here, so what if your rust bucket breaks down in the middle of nowhere? As you’re walking 20 miles to town, seeking a tow truck, I bet that monthly payment won’t sound so bad.
Worse: what if you crash that 20-year-old car? You’re not stacking the odds in your favor. Your tires are worn out, brake pads are paper thin, and brake fluid is low—and you don’t have the airbags, stability control, or energy-absorbing structures of modern cars working to keep you safe. And we all know what medical bills are like. Now is probably the time we should ask if you have health insurance: in an old car, you’re increasing the odds that you’ll need it.
Leasing a new car gives you a totally predictable financial commitment. It gives you the most reliable car possible, and one the manufacture will pay to repair if it does break. And it enables you to take advantage of the latest safety innovations. You don’t need to worry about service schedules, you don’t need to get your hands dirty, and you won’t even need to ask me to fix it one day, when you wake up and find three inches of water on the passenger floorboard. The cost of that car? After three years, leasing that new Subaru adds up to be cheaper than buying an old one. Almost as cheap, in fact, as your phone bill.
For the same monthly payment as her used Mustang, we’re leasing Mollie a new Cadillac. It looks way cooler, it’s much safer, it gets better fuel economy, it’s faster, and it doesn’t fill up with water when it rains. And the time I’ll save fixing it for her is more time I can spend working on my truck.
I drive that old Land Rover because I think it’s cool, not because it saves me money. It’s cool because it takes time and effort, making it something most people can’t or won’t own. If you’re smart, you’ll be most people. Being cool is not a financially sound endeavor. I’m dumb. You don’t have to be.
Another editor recently asked me to write an article telling him what car to buy. I’ll make this as easy on you as I made it on him: lease that new Subaru. This isn’t an article trying to get you to spend more money on a luxury car. It’s an article saying that leasing an affordable new car is the most practical solution possible for today's drivers.