The Cheap Drive

I wrote the other day about stepping off the debt escalator. About the freedom that comes with not having to make payments. Car payments in particular. For every dollar you pay, you acquire perhaps (optimistically) 50 cents in fungible value – i.e., what the car will be worth to someone else once you’ve paid it off.

This is not a good deal.

There are better deals available. But you have to be willing to do some unusual things – which is why most people do not usually do them. And so end up getting 50 cents on the dollar for their “investment” . . .  if they’re lucky.

So what can you do to get that better deal?

* Buy a car at auction –

These are cars up for bid, often with a reserve – a minimum price – but sometimes not. If not – an absolute sale – you might be able to buy a car for next to nothing, literally. Either way, you should be able to get a car for much less than you’d have paid retail, either at a used car lot or via an individual private seller.

The cars being auctioned typically range from trade-ins and just-off-lease cars (dealers often run these cars through auctions to clear inventory quickly) to “repos” – cars repossessed by a bank after the person stopped making payments –  cars seized by the government during drug raids and also ex-government vehicles (usually trucks and SUVs but also sometimes passenger cars, including ex cop cars).

Some auctions do motorcycles and equipment as well.

The company will typically publicize a list of the vehicles scheduled to go up for bidding a couple of weeks prior to the auction itself. To find these auctions, just Google search for them in your area; they are usually easy to find.

The auction process can be a little intimidating if you’re new to it, in particular the pig in a poke aspect of it. Meaning, you’ll have to make a relatively split-second decision about the bid – what you’ll pay for the car – and will probably not be the only person bidding.

But the good news is – contrary to what you might think – you don’t have to make a split-second decision about the car. At most auctions, you will have the opportunity to physically inspect the vehicle prior to the auction or on the day of the auction. Most of the time, you’ll be allowed to start the engine and while you probably won’t be allowed to take the car for a test drive, many auctioned cars will be “green lighted” as to their mechanical condition – that is, the auction company will attest that the car has been inspected and no major mechanical issues were found. Some auction houses will agree to cancel the sale or refund your money if the car turns out to have a major problem discovered immediately after the auction.

Other times, the car will be sold “as is/where is” – meaning, it’s all on you if the car isn’t what you hoped it would be. But the same is true when you buy a used car from a private seller – and often, when you buy a used car from a dealer. Just be aware of all this before you dive in.

Some auctions require a dealer license to bid – or to bid on certain cars (in my state, Virginia, the law requires that cars lacking a current/valid state safety inspection be sold only to dealers who are licensed by the state to perform inspections) but you can end run this by finding a friend who has the dealer license.

Also, there is usually a “processing fee” (of course) that you’ll pay the auction company on top of the price you agree to pay for the car itself. And you will usually have to make that payment – in full – within a few days or so of your winning bid. This usually means cash or bank check, fyi.

You should only bid on a vehicle knowing in your head exactly what you’re willing to pay – and what a given car is worth “on the street” (retail) before you start bidding. Research retail values prior to the auction and factor in such things as miles and condition.

Those caveats aside, auctions are a great place to get a car on the cheap. And once you’re hip to the way they work, they’re no more scary – or risky – than buying from a used car lot or private seller.

In some ways, less so.

*   Buy an old car – 

As distinct from a merely used car.

Ideally, an ugly one that most people aren’t interested in.

And by “old,” I mean one that qualifies for antique vehicle registration – which will save you a lot of money by eliminating annual registration fees (these add up) and also the hassle of having to take your vehicle in for an annual or semi-annual “safety” inspection. In most states, an antique vehicle – defined as 21 years old or older, usually – is exempt from both of these things.

Now, technically, a vehicle registered as an antique is not supposed to be used as a daily/regular-use vehicle. But you can usually “get away” (the verbiage is ridiculous; you are simply avoiding obnoxious government edicts designed to separate you from your money – and your liberty) with driving the car regularly. Just be discreet about it.

Even better is even older.

A car built before they began to outfit cars with air bags and computers – which would be mid-early ’90s for the former (air bags) and pre-1980s for the latter (computers). An older car with a carburetor and without a computer may need minor adjustment more often, but these adjustments are typically performed with a screwdriver and other such basic hand tools and can be done by almost anyone with a little patience and the ability to read a basic shop/repair manual.

This (self-service) can save you a lot of money. It is also empowering to be able to keep up your car yourself.

Another plus – old or older – is that insurance and property taxes (if you have to deal with those) will be rock bottom. An ancient – and paid for – “beater” that has a book value of next-to-nothing can be insured for next-to-nothing (liability-only, the bare minimum) and the rapacious paw of government can’t steal much in property taxes on a car that’s worth next-to-nothing.

*Buy a motorcycle –

This is a hard-core option, but it’s definitely a way to save coin. New – or used.

Or old.

You can buy a new bike for less than $10,000. About half that, actually, will buy something like a Kawasaki KLR650 – which will also give you better fuel economy than just about any new car. And more fun, too.

About $3,000 should be enough to buy a very nice used bike. Much less for one that may not look nice but which is nonetheless mechanically sound.

Bikes are also cheaper to maintain and (unless it’s a new sport bike and you are a young guy) cheaper to insure. They fit places cars don’t – including inside your house or apartment.

The only (and obvious) downsides being zero protection from the elements and not much protection from the idiocies of other drivers.

But, a great way to save money on getting around.

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