Frugal ≠ Cheap: Your car

It’s always important to remember that frugality is not the same as cheap. Frugality embraces getting the most out of your money (think: return on investment) while cheapness is all about not spending money. In this edition of Frugal ≠ Cheap I am going to talk about something we rely on nearly every day—your car.

I’m not going to get into a discussion about buying versus leasing a vehicle as that is a topic for another day. I will be discussing the difference between buying a frugal versus cheap car and why I think this is a prime example of getting what you pay for.

If you’re looking to be frugal, a used car is the way to go. Period.

We’ve all seen the used car ad on craigslist—LOW MILAEGE, NEW TIRES, NEW BRAKES, EVERTYHING WROKS, ONLY $1500!!! You might be thinking, “Sure it has a few more miles than the one from the dealer and it’s a couple of years older, but it’s $9,000 cheaper.” With new tires and new brakes, how could you go wrong?

Reliability

This is probably the most important thing you need to know about any used car you own or buy. Although I only have anecdotal data, a $1,500 car is nowhere near as reliable as a $10,000 car. The only car that wasn’t able to get me to work was my $1,500 car. As a pharmacist, we have relatively high paying jobs and that day of lost wages would have been a big chunk of change if I didn’t have another ride. If your car can’t get you to work, you will lose money. Your vehicle is the perfect time to be frugal but not cheap.

If you’re looking to replace that cheap car you have, I recommend using rank lists (like this one) to give you an idea of what to look for. Notice how Toyota, Honda, and Subaru dominate these lists? New cars come with the cost of depreciation while cheap cars come with the cost of repairs. Buy a reliable car in the $8-12,000 range for the most frugal option. One last bit of advice: when buying a used car, $1,000 worth of brakes, tires, and fluid changes does not make a $1,000 car worth $2,000.

Oh, and safety. Don’t forget about safety features.