Should I purchase a second vehicle?

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Brandon Wright

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Jun 23, 2007
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Location
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For many, having a "daily driver" in addition to their newer vehicle is a no-brainer. However, I am a student on a pretty tight budget. I am lucky my job allows me to afford a new vehicle, but I feel like I am tearing it up every night I work. Here is my case:



I am a Merchandiser for Pepsi and drive about 140 miles per night roundtrip from my apartment to seven rural grocery stores. Currently, I am driving my 2007 4.0 Sport Trac for this arduous commute and already have 26,000 miles on the truck. I am considering purchasing a 2nd vehicle to use for work and commuting to school, and trying to decide if the long-term benefit is worth the money upfront. I am looking at a 5-speed 1989 Honda Accord for sale for $1345 with 145K miles. Based on fueleconomy.gov, I figure this would give me an average of 30 MPG. My Sport Trac averages 19MPG - 80% Highway, 20% City with a Zabteck throttle body :)



My calculations are as follows:

33,600 miles/year; Sport Trac MPG 19; Accord MPG 30; Fuel Price $2.59

Sport Trac Annual Fuel Cost: $4580

Accord Annual Fuel Cost: $2900

Attitional Honda Yearly Costs (Insurance+Registration+Inspection): $630



My annual savings would be just over $1000. My warranty ends on the Sport Trac at 75,000 miles - I am already 1/3 out of warranty!! If I can slow down the mileage rate I can utilize more of my warranty since it will last 5 years. I also figure tire replacement, etc. would be cheaper on the Accord. On the other hand, I could potentially face repair bills on the Honda. People always say Hondas can last 300,000 miles well taken care of, but what if my luck ends up being otherwise?



I appreciate your input!
 
If you can afford to do so then I say purchase the 2nd vehicle. I just did the same thing, about 3 weeks ago I purchased a 5 speed 1994 Honda Accord as my daily driver as opposed to putting aimless miles on my 07 V8 ST.

It's good to see that you have taken the time to calculate your potential savings. In addition to what you calculated, also keep in mind that as you continue to rack up miles the value of your Trac could decrease to the point where you owe more than the Trac is actually worth.
 
Hey Brandon,



My ins co offers a second car discount and if you change the ST to a leisure truck and set the second car as the daily work vehicle, I was saving more then that, My ins payment actually went down, and I saved the gas as well...



Just remember that an older higher mileage vehicle will need maintainance, reg, ins and the Uh ohh factor.....



But I got my escort for $50.00, put $300 into it and for the 12 months I had it I saved over 20K on the ST and put some nice money away..... Then the head gasket blew, and yes I repaired it my self, But if I had to pay, I would have lost more money, SO just be careful on the second car you pick...



Todd Z
 
Your Trac is going to depreciate awful fast if you keep putting on miles like that. Last year I bought an old Neon to go between my offices after I opened second one. Ended up spending more than I paid for the car on repairs, but that's another story. Traded it on a nice 2004 Focus wagon recently. Basically I use the Trac to get to work and the Focus to run around in once I'm there. I figure I save about $300 a month on gas.
 
I have been considering the same thing with my 40 mile round trip daily commute. Since it's in all stop and go traffic, I'm only getting between 15-16 mpg so the difference would be that much greater. Plus, I think we are more likely to see gas prices continue to increase over the next few years rather then decrease.
 
bigwtx,



I did some similar number crunching last year, and made the decision to get the second vehicle (1998 Ford Ranger). I think it was well worth it (and I say that despite the fact that I currently need to put a new starter in the Ranger). The depreciation rate on the 2nd vehicle won't be nearly as fast as it will on your Sport Trac.



Rocks
 
It looks like the dollars work out in your favor, so I'd say go for it. I use my truck for work as well, but my company pays for my gas, so better mileage wouldn't help the equation. Otherwise I'd be doing the same thing!



P.S. It also helps to have a backup vehicle for work.
 
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Bigwtx,



You need to figure out TCO (total cost of ownership) for driving both cars for your route over the next several years. The Accord will cost you, to purchase and to maintain, as well as fuel and keep insured and registered.



A car with 145k miles, even a Honda, will not be maintenance free for the next few years.



Also, I think BOTH your MPG estimates are rather high given the cars and rural type driving.



I tend to buy me vehicles so I can drive them, and it is a rare case where someone can buy a 2nd vehicle to save money, especially if the vehicle they are offsetting is new, with payments, and the vehicle they are buying they intend to be their main vehicle (which is what it sounds like). That second vehicle has to be really, really cheap, and maint free.



You may get it to work for you, but don't discount the maint on the Honda. Car insurance is just too darn costly where I live. I would love to be able to insure a car for $600/year. Just the cost to insure another car typically eats up all the savings one would get.



Good luck.



TJR
 
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If you can keep the car maintained for a reasonable amount of money, then it's a no brainer. Those engines are easy to work on.



Even if your insurance runs 600.00 a year on it your going to save that in fuel in 90 days.



I say buy it.
 
As for insurance, I'm in Michigan -- I don't know how other states work -- and when I bought by 1998 Ranger I made that my primary vehicle on my insurance and my other, newer vehicle a "leisure" vehicle (not typically driven to work or school). My Insurance is only $50 per year higher insuring both than it was insuring just the newer car. (Other car is a 2005 Toyota Matrix, so it is not like that is a really expensive vehicle)
 
Learn how to do repairs yourself and save yourself some money. As TJR said, you need to be prepared for maintenance.



My Wifes Explorer with 140,000+ miles on it just got new hoses and waterpump. (Did not need it, but I had everything apart and I would have been an idiot to keep running it)



We are using the Explorer as the second vehicle and driving it everywhere. I can do 90% of any repairs I need to do. So far, we have owned that Explorer about 8 months and put 10,000 miles on it. Total repairs, not the ones I did from day one to bring it up to snuff, but maintenance and repairs are...as follows.



Brakes. Front and rear rotors, pads, ebrakes, and brake cables.

Belts. Tensioner, Idler pulley, and belt.

Hoses. Upper, lower, heater, bypass, and waterpump.



Total cost for all of that, about $750.00. To have a repair shop do all that, you are looking at about $3,000.00 at a minimum, in repairs.



Buying a used car is a great way to save money, but no matter the brand, all can give you issues. A friend got an Accord some years back. IIRC, it was a 1984 Accord with 101,000 miles on it. She drove it about 2 months when she noticed a loss of power. Compression checks showed 50% loss on compression in 2 cylinders and 75% loss in the two others. I was not going to touch that car to fix it, so she then traded it on a 1986 Escort GT. That vehicle went over 170,000 miles before she traded it on a Lincoln Town Car.



Knowing how to do repairs yourself is invaluable when buying a cheap used car. When might be cheap might end up being a money pit.





Tom
 
Unless I missed it, there. If you are driving your vehicle, then they should be paying you for the wear and tear on your vehicle plus the gas you use while on the job. All the companies that we do business with either furnish there people with a vehicle or pay them additional for the use of there vehicle. RC Cola is just across the river from us and they furnish the vehicles and they are a lot smaller than Pepsi.
 
Thanks for all the quick replies! Pepsi pays me 49 cents per mile, but I still have to drive my own car. I could make more money off those miles with a more efficient car. I think even without the efficiency factored in, I would be better off in a 2nd car than depreciating my Sport Trac.
 
I'm considering the same thing. In two years, I have put 47K on my Trac. The reason I didn't get a second vehicle earlier is I thought my job would be changing, but here I still am running up the miles. There are several good options and I think I could save money in the long run so I guess I'll wait and see what I could work out.
 
big, I did this years ago... wife was driving our conversion van to work as my beater did not have ac (I carpooled to work, so only drove the van once a week). i figured the cost of her driving the van every day, plus our running around in it, and i bought a used neon for us to use instead. When all was said and done, I ended up with about 100.00 extra a month in my pocket.... insurance stayed the same, even going from liability only to full coverage on the second car since it was newer and safer. The van got about 7-9mpg (heavy beast with a 351) around town, the neon about 28.



If you can afford the second car, i say go for it. I would if I was in your shoes, but thats me. YMMV.
 

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