Au Revoir, Pomme-Pomme

Last week, I sold my 2007 Yaris Sedan, affectionately named Pomme Pomme. I did all the math (of course I did!) and confirmed that it cost a little more than Foxy Flair (my ’88 Jetta that averaged out at $300/month just in gas and repairs) but still under $500/month (my budget). Pomme Pomme served me well. It was an upgrade from a ‘starving student beater’ car to something that showed people I was actually doing well in business but it was still frugal and affordable (I didn’t want a $600/month car payment; I still had student loans!)

Purchased: September, 2010 for $11,500 (a smoking deal, the owner was leaving the country). Car was 3-yrs old with only 9,000km. The mechanic who did the inspection couldn’t believe it: "There isn't even any dirt underneath!".

Sold: October, 2012 for $9,000

Costs:

  • [$11,500 purchase, loan @ 6.75% (Sept/10)]
  • $1,380 HST paid in cash (Sept/10)
  • $5,778 car loan payments [$224.72/month  + an additional payment; $1,428 in interest]
  • $2,268.80 insurance costs (we moved so it got cheaper, but was aprox. $85/mo plus $34.50 to cancel insurance)
  • $1,750 gas (estimate based on between $50-$80/mo)
  • $440 servicing (a dream car to take care of, just oil changes and a check-up!)
  • $300 deductible for insurance claim (an inconsiderate hit-and-run)
  • [$9,000 sale; loan balance $7,150 (Oct/12)]

Total = $11,916 for 25 months of car driving = $476/month

I can write off some of the expense of the car as I use it for business. However, $475/month is still a lot of money.

We’ll be buying a new car soon (the Mini is great but babies and gear fit more easily into 4-door vehicles with trunk space) and are doing the research into the safety ratings, financing and all that jazz.

Ways to keep the costs of car ownership down:

  • Assess your car needs. Can you cycle? Take the bus? If you don’t need the car at work, inquire about pleasure-only insurance on the car.
  • Discuss your insurance needs with your auto-plan broker. I needed high liability coverage and business-use insurance but was aware what each component was costing.
  • Evaluate used vs. new and use cash when possible. My car loan at 6.75% was a little steep for my liking but I didn’t have any assets at the time to negotiate a better rate. Do the math on financing costs if you can’t pay cash.
  • Save an extra $100/mo in a side account or TFSA for repairs and insurance deductibles for the eventuality. Nothing is worse than getting hit with a $1,100 car repair bill.
  • Don’t sell in desperation. I had multiple offers for less than $9,000 in the last few months. However, it wasn’t necessary for me to sell the car so I waited.