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Kevin McKee Buys ANOTHER Car

You would have thought that I learned my lesson after the first car I ever bought was the worst financial decision of my life.

I don’t think I’m a dumb person. I just think I was a dumb person about three years ago.

When I graduated from college and started my job, I was making some serious cashola. I wasn’t “rich”, but I was definitely rich compared to what I was making in college.

I thought I needed a new car when I started my corporate job because I thought it would be embarrassing for adult coworkers to know I still drove a crappy old Nissan Sentra. To me, the car screamed “broke college kid” and that wasn’t the impression I wanted to give.

I didn’t have a budget at the time, so I played with the idea of a big car payment in my head. “I pay about $475 for rent, another few hundred for student loans… Yep, plenty left over for a big car payment!” thought the stupid little man.

350Z
I was hypnotized by the awesomeness. Stupid car.

I looked at a few cars and decided I wanted a Nissan 350Z or an Infiniti G35. I test drove a used 2004 350Z convertible and I was sold. Price tag: $20,000. I got a little credit for trading in my Sentra and ended up with a five year loan and monthly payments of $377 a month. I decided to pay $500 a month and pay that sucker off early! This plan was foolproof.

I was so happy to drive off the lot with that car. I threw the top down and flew down the highway at about 90 mph.

This. Car. Was. AWESOME!

But then it wasn’t. My insurance went up. I was getting 10 mpg less than I got with my Sentra. The trunk was so small I couldn’t even fit my golf clubs in the back. “Oh well,” I thought. “I’m still driving a sweet sports car.”

Then it got worse. The speakers in the radio starting cutting in and out. Some jerk keyed my car while it was parked at my apartment complex. The window started acting funny and wouldn’t go all the way up. My low-profile (aka expensive) tires wore down and had to be replaced. The convertible top had never been replaced and holes started randomly appearing.

And here’s the worst part: nobody at the office gave a rat’s patootie what kind of car I drove. 95% of them didn’t know what I drove, and the other 5% didn’t care.

By the beginning of 2010, this car was causing me as much trouble as that stupid 1962 Chevy Impala. And this one was costing me $500 a month! I wanted to get a new car but with all those problems there was no way I could sell the car for what I owed on the loan. Then something tragic (for some people) but awesome (for me) happened.

Accelerators were getting stuck in Toyota’s and nobody trusted them anymore. Toyota had to slash prices to keep selling cars amidst all these reports. I knew if I played my cards right that I could use this situation to my advantage. One of the local dealers was so desperate to sell a car that he gave me a pretty good trade-in value on my 350Z even with all the problems, and after some haggling I leased a brand new 2010 Toyota Camry for $232 a month (including GAP insurance).

My Camry has a bumper-to-bumper warranty for all three years of my lease. It gets about 30 mpg. Nothing is broken! I’m not excited about this car, but I’m happy.

I learned two seriously important financial lessons from this ordeal.

First, I will always maintain a budget. If I had a budget when I started my job, I would have never decided to buy that car. It was undoubtedly the second worst financial decision of my life. I have religiously followed a budget for over two years and my budget allows me to be in control of my money and tells me when I can or can’t afford something. Plus it helps me pick up chicks.

Second, I will never make payments on a car without a bumper-to-bumper warranty again. I don’t mind making payments on a car as long as I’m sure I won’t have to pay for anything repairs. I also don’t mind paying for repairs on a car if I don’t have to make monthly payments. I CAN’T DO BOTH AT THE SAME TIME!

Please feel free to make fun of me for re-living my worst financial mistake a second time in the comments below.

350Z photo credit: Martinliao

*Note: All stories this week are about why I’m not qualified to give you professional financial advice while I am qualified to make you laugh while I give my financial perspective that’s generally pretty good.

12 thoughts on “Kevin McKee Buys ANOTHER Car”

  1. Awe. I can’t really say anything because I got so pissed off at my 98 Toyota Corrolla that I ran to the car dealership and financed a Malibu. I like my car, aka Lorraine, but I really hate the car payment. I’m pretty close to finishing it so you think I’d be done for years and years. Nope. I’m really hoping to get a convertible when I graduate in two years with my Bachelors. In my dream world it would be a sexy 65′ Mustang but it will probably be a Solistice. Que Sera, Kevin, Que Sera.

    As long as your happy, your car is reliable and your within budget, you can be car happy. Maybe it could be your indulgence? 😛

    Serendipity

    1. I agree. I am happy now. It just took me so long to figure out that I was miserable with a car payment and paying for repairs at the same time.

      Maybe one day I’ll move to a really big city where I don’t need a car. That’d be a dream!

  2. It’s really easy to make mistakes buying cars. Why is it so easy? I don’t know, I think dealers pump their show rooms with car-buying pheromones. But at least you were able to fix it without too much pain.

    1. I’m happy with my situation now, but when I think about what I could have done with that $500 a month I would have saved if I kept the Sentra and never bought the 350Z, it makes me want to punch myself in the throat.

      I will say that the salesman gave me the “Some girl was looking at this car yesterday and said she’d come back for it today!” line and I totally bought it.

  3. haha, I love your posts so funny. 😀
    There are two kind of people in this world – convertible people and the others. I got a 98 BMW Z3 in 2001 and it lasted until this summer. We loved that car. I also learn that German cars cost a lot of money to repair.
    Now we are driving a more sensible vehicle and are no longer cenvertible people. 🙁

    1. I agree with you, and I’ll be honest; I wasn’t really a convertible person. I hate the added noise that comes along with a convertible. It was truly a horrible purchase all around.

  4. what you should have done is bought a big 4 door truck with a huge V8 and then jacked it up…oh wait that would have been your THIRD car buying mistake…putting money in a car outside of a classic (that people actually want) is rarely a good investment in my opinion…

    now I am interested in how a lease is a good idea when you can’t write it off? I have never understood how it makes sense financially for an individual?

    1. Great question. This could be a whole post by itself (and probably will be one day).

      Basically, the lease is just like financing the car but with lower payments and a guaranteed buyer at $14k in 3 years. The interest on my lease is 0% which is why the payments are so cheap.

      In my experience financing cars, I never pay off the full amount and always trade it in, in most cases with negative equity. To me the lease makes more sense if I have no intention of paying it off because the payments are lower and I never have to worry about being “underwater” on the car. No matter how crappy it is at the end of the lease, the dealer has to take it back.

  5. Your 350z story was an inspiration for me not to buy a luxury car when my 401k is at $0. I really really wanted sporty Lexus IS or Accura TSX but decided to go with a Corolla. Thanks for the acceleration problems, I also got a great deal 🙂

    1. That is awesome! If I had been smarter, I could have gotten a Corolla and saved another $30 a month. You did it even better than me.

  6. I know every financially savvy frugal person says to buy only used cars for cash. But, I don’t know much about cars and would not know a good used car from a bad one. So I have been buying new and driving them into the ground. My current car (Civic) was bought new in 1999. I have taken care of it and it has been a great car for me (with no payments since 2004).

    1. I agree. I could see buying a new car when this lease is up in three years because I’d like to know it has always been taken care of. Plus the warranty is such an awesome benefit.

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