People have all kinds of different hobbies—like shooting guns, waiting in eager anticipation to read Hillary Clinton’s emails or putting up pictures of their half-eaten banana on Instagram. I have mine. I like driving different cars, so I have decided to buy, enjoy and sell cars as frequently as I can. But there’s a little more to it than that.
I also want to partake in this activity in the cheapest possible manner. You might be thinking that trying to be cheap while buying and selling cars is like eating Burger King every day and hoping to lose weight. That’s generally true, in that, after the 4th consecutive Double Whopper, you’ll want to stop eating forever, thereby instantly shedding the pounds. With buying and selling cars, you don’t have to go broke if you play the game correctly. You’ll just be filled with regret for not spending your money more wisely.
What I’m doing here is essentially creating my own used car subscription program where I’m paying some amount of money each month to be able to go through a couple of different cars a year. This carefully designed program has only one member—me. And my goal with the used car subscription program is to pay the least amount of money possible to drive cool cars. I’ll admit–this isn’t easy, but it can be done.
So, how do you get this right? An unforeseen maintenance issue on a high performance machine while you own the vehicle could easily set you back thousands of dollars. Your transmission could fall out of your car one day as you’re driving, or maybe your car’s electrical system decides to permanently shut down. Although you can’t stop bad things from happening to your car, you can take steps to minimize the chance that you will see your front right wheel roll away as you’re driving at 70 mph on the freeway.
My used car subscription program began with the 2009 BMW 335i which I bought and held onto for roughly three months. After I sold it, taking into account taxes and maintenance costs, I paid a little less than $300 a month to own the car. That’s not bad. If that was going to be my monthly subscription payment to the used car program, I could live with that.
With my next car, a 2008 Lexus IS-F, I had hoped to continue paying about the same amount as the 335. But after selling the car, I calculated the cost of ownership to be a little over $600 a month which was higher than I would’ve wanted. There were a few mistakes I made along the way, so it looks like my used car subscription program will need some tweaking and optimization to keep the costs low. Here’s what I’ve learned so far.
Don’t overpay for the car
Of course, this goes without saying, but I still failed to heed such common knowledge. I paid $28K for the car in an act of desperation which was about $1K more than I should’ve paid. I lacked the patience that I needed and ended up pulling the trigger on an overpriced IS-F. This was my biggest mistake.
Buy cars that are in high demand
To be able to sell the cars quickly it’s important to own something that is highly desired. I was completely wrong about the amount of interest people would have in the IS-F. When I put the IS-F up for sale, I thought it would be a matter of days before an auto enthusiast would call me and say: “How about $10K and a broken iPhone?” But, I didn’t even get much of a chance to ignore them.
The only inquiries I received came from existing IS350 owners or Lexus fans who said “my mom drives a Lexus and loves it.” No one else was interested. I guess I was one of the few who wasn’t a prior Lexus-lover but found the IS-F cool enough to drive it for while.
Don’t be in a rush to sell
The only way to make my subscription program sustainable is to make sure I can sell the car for almost as much as I bought it for. I wanted to sell the IS-F for $26.5K but realized that IS350 owners and people whose parents loved Lexuses were willing to offer only $25K. There was one person who came close to buying my car at $26.5 but backed out at the last minute due to the lack of a warranty. I couldn’t convince him that this was probably the only high-performance car he could be perfectly fine owning without a warranty.
So I waited for a few months and wondered why nobody was calling. It was like going on a bunch of first dates and then….crickets. My autotrader stats were dismal for the IS-F—over a thousand views with only 3 emails! Why didn’t anyone want my car? It was terribly disappointing.
Finally, Craigslist came to the rescue as it always does and I found someone who paid me $25,750 for the car. If I had more time to wait, I might have found the right buyer at the price I was wanting. But, I was running out of time. That’s because I ran into a problem...I was starting to wear out my tires and brakes too much which brings me to my next point.
Make sure you buy a car with newly replaced tires and brakes
When I bought the IS-F, the tires and brakes had about 50% of life left in them. When my car was up for sale, that percentage of life remaining was much lower and replacing them would’ve cost me $2600. That would’ve definitely disrupted my used car subscription program since I wouldn’t be able to put that much money into the car and then immediately sell it.
$1200 a month for a subscription payment? Hell no.
Besides, I would want to enjoy driving the IS-F for a while longer with brand new tires and brakes.
All this means that my next car must have newly replaced tires and brakes so I don’t run into this problem again.
Get a pre-purchase inspection
This is a no-brainer. The inspection will help reduce the possibility of something major going wrong while the car is in your possession and will help keep the cost of the program low—which is the key to this whole thing!
Buy a car that’s at least 7-8 years old or get one with a warranty
There is a tradeoff here. An older car means the depreciation curve will be flatter but it also means that warranties will be harder to find. So either you lose money on steeper depreciation with newer cars or you lose money on repairing a car without a warranty when the alternator breaks, leaving you stranded in the middle of a thunderstorm. Take your pick. Something’s gotta give with either option, unless you’re able to find a great deal on an older car with a certified warranty—now that’s hitting the jackpot!
Don’t buy a car in one year and sell it in the next
I purchased the IS-F in Dec 2015 and right when the year turned over, I noticed an immediate dip in the value of the IS-F I owned. Suddenly my car went from being a 7 year old car to an 8 year old one making me wish I had thought of that before I bought the car. An easy, simple mistake that I shouldn’t have made.
Now that I’ve sold my IS-F, it’s time to learn from everything that went wrong and do things right this time. I’ll be delighted if I can stick to $300 or less a month to continue driving high performance used cars with the ultimate goal being $0 a month. I’m hoping I can follow my own advice but it’s hard because I really want to pull the trigger on this orange Raptor. But the dealer won’t budge on the price and I can’t break the first rule, which is by far, the hardest one to adhere to.
I guess I must wait...
Or change the rules!
Torque Affair is about exploring my fascination with cars. I’m always on the lookout for things that interest me in the car world.
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