I am a grad student and I have so far managed to live without a car for the 10 years since I moved out of my parents house, but I will likely need to buy a car when I graduate in about a year. I was wondering if anyone knows how to compare the insurance and repair costs for different models of cars so I can estimate the true costs of a car before buying it. I was hoping there would be a web site but didn’t find anything. Obviously one could not hope for precise predictions, but some clue would be nice.
The Car Talk product advisor recommended the Hyundai Elantra GLS, Hyundai Accent GS 3-door, Hyundai Accent Sedan GLS 4-door, Toyota Yaris Liftback, and Kia Rio Base for me. I’d be happy with looking at these models to start with when I look at cars and they appear to be within my budget to my knowledge, but I really have no clue how insurance and repair costs compare to used cars or what the relative insurance and repair costs of these cars are.
Maybe I can rely on the collective wisdom of these chat rooms and maybe people have some advice.
The questions I’d pose would be:
1. Should I get a used or new car?
2. Roughly what would the insurance costs for used vs new? Are there any makes that might have unanticipated high insurance costs? How does insurance for a compact compare to a sedan?
3. What are typical annual repair costs for a used car purchased in the $5000-8000 range? How often do they typically have to be unexpectedly taken into the shop (ie, not a tune up or oil change but a new transmission or shot brakes or engine trouble)? How does this compare to cheaper new cars?
4. What time of year should I try to buy a car, if I can be flexible about that?
5. Roughly what should I expect to pay for insurance? (I know I can’t expect precise predictions, but I don’t even know what’s reasonable.) Is there anything I can do in the next year which would lower that cost?
Below are my concerns and relevant facts.
Price and reliability are my chief concerns. I’d prefer a cheap option that meets my requirements, but do not want to spend a lot of time on repairs and don’t have the time or energy to fight with an unreliable car.
I’m a woman and have had my license for 12 years and was on my parents’ insurance for a couple years after moving out but have not been insured on a car in a very long time (8 years?), though I have driven intermittently. I have no accidents or tickets on my record. I would likely end up on Long Island. (If I were elsewhere, I probably wouldn’t need a car.) I prefer a standard transmission.
I should be able to save up $8k in the next year from teaching so I’d have money to either put down on a loan or to pay for a used car. The most I’d be willing to pay/be able to afford per month on repairs and insurance would be about $300-500, but of course lower is better. (I’m not including gas in this because gas is unpredictable.) An unexpected large repair would not be a financial disaster. I’m uncomfortable getting lots of savings by cheap insurance that wouldn’t leave me well covered in case of an accident. I have very good credit. If I got a loan, I’d rather pay it off earlier (no more than 2 years) and be on the high end of my budget range than later and on the low end. I would get a loan for a used car if it were a more reliable car than a used car I could get without a loan.
I also am and would be very busy and place a premium on a car that I would not have to fix frequently, even if it meant paying more up front. For that reason I am very seriously considering a new car. I would be more than comfortable with a used car, but I have mostly seen people’s experiences with junky old cars (<$3000) up close and that experience is not desirable, both because it does not appear that the savings are that big in the long term and because it is very stressful to have an unreliable car. If I got a new car, I would plan on owning it until it died.
If possible I would arrange things such that I could either carpool or ride a bike for daily commutes, although in a worst case scenario I would have a round trip commute of about 20 miles (round trip) daily. Gas mileage is important. I could come to terms with a lower gas mileage if a car were cheaper but ideally would like a compact standard transmission car that gets at least 30 mpg. I would hesitantly go with a lower mileage car if I could get a bargain from someone selling a used gas guzzler if the savings on the purchase price weren’t canceled out by increased gas expenses. If I’m going to have a car, I would also like it to be reliable enough to take on long (2000 mile) car trips without worrying about getting stranded on the side of the road. I would also likely end up transporting others short distances so having at 4-5 seat belts is desirable (killing Smart Car) but the car only needs to be comfortable enough for long distances for two people. The only insurance comparison web site I found put all cars of this type as “worse than average” which was not exactly useful for comparing cars. Safety’s important and all, but, you know, I don’t want to drive a tank.
Thanks in advance!
My advice before purchasing anything is get insurance quotes for a model in your eye. Given you have not had any insurance in your name the rates are simply going to be excessive for a “new driver” in the eyes of insurance actuaries.
Have a trusted mechanic(ask around) check it over before purchase. Small used cars now demand a premium. You may be better off with a mid size and the MPG is not that much less and the comfort level is magnitudes better.
Start shopping now going to various dealerships when you can. Do not go into a dealership with the “I need a car yesterday” attitude, you’ll only wind up getting reamed because salesmen can smell this. Tell them you’re looking for test drives and make sure they know that you are not looking to buy yet, and if they balk, walk. Carry a pen and paper with you as well and if you liked how one drove or felt good sitting in, write down the VIN of the car and take it to your local insurance agency and tell them you want to know how much it would cost to insure, you can also do this without even visiting a dealership by looking at dealer inventories online and getting the numbers from their website. Eliminate a car before you step out of the house. Though you’d be surprised at how cars can vary in rates just by getting the quotes from them. I did this awhile back and a Mazda RX-8 was actually more expensive to insure than a Corvette convertible, though I think the actual difference was like $10 for 6 months, it’s the principal of the idea. 
Since you have a year…many cities have car shows. It’s a great way to look at a lot of different cars at the same time. When ever we look to buy a new car we always go to the Boston car show. Several times we’ve eliminated a couple vehicles from our list after viewing them at the car show.
In general buying a 2-3 yo car is going to be cheaper to buy and cheaper to insure. But since you’ll be new to to car ownership you’re going to be in the highrisk pool. Don’t be surprised if your insurance is double or triple what your friends pay who’ve owned cars for several years. As Andrew said…call around about different cars insurance. Many banks will even have this information…mine does.
Good advice so far; a low mileage 3 year old used car is normally your best bet cost-wise. A Hyundai Elantra is excellent value for money; good reliability and low cost. A Volkswagen Golf would be the other end of the scale; high purchase cost, and high repair/maintenance costs combined with lower reliability. Mazda 3 would be another good choice.
Car operation over its lifetime (if the car was bought new), excluding insurance, breaks down to approximately 1/3 gasoline, 1/3 maintenance and repairs, and 1/3 capital depreciation. The average US driver pays about $1200 per year in maintenance, repairs and tires.
Agree with others that your insurance cost, initially, will be high due to the lack of driving history. Being female and over 25 are definitely advantages in purchasing car insurance.
All good advice. I’d also get the Consumer Reports car buying issue/guide, it has lots of good pointers for someone in your situation, lots of info on used car reliability. As for buying a used car, it seems like a place like Carmax would be a good bet for you, with a good selection, no-haggle pricing and clean recent cars the only ones on the lot.
If you look at Hyundais, I’d stick with the Elantra. I haven’t looked at them much lately, but the Accent had very little rear seat room and significantly worse crash test ratings than the Elantra the last time I looked.
The Hyundais have been quite reliable in the past 8 years or so. My daughter has an Elantra that is now about 6 years old and had its first big repair recently when it needed clutch master and slave cylinders (probably $500-$600 at the dealer). Before that she was covered by the 5 year bumper-to-bumper warranty and didn’t pay for any repairs, and there were only a few minor things during that time anyway. So, for keeping repair costs down buying a new Hyundai is good with their nice long warranty. On the other hand, Hyundais depreciate rapidly and buying a 3 year old used one might be much cheaper with little risk of higher repair costs. The bumper-to-bumper warranty is only valid for the original owner, so buying used you’d lose the protection. Buying used, for cash, means you can cut back or eliminate the collision portion of your insurance. That could save you a bunch of money on Long Island.
As someone else suggested, you should talk to an insurance agent (or 2 or 3) and price out a specific car make and model. It’s easier if you have a VIN, but just make and model should be enough. There are 2 big pieces of the cost to insurance. First is liability, which pays other people for damage you cause with your car. That piece is mostly dependent on you, and with no recent insurance in your name it will start out fairly high, but should get better in a year or two barring any accidents. The liability is also affected by owning big, high powered, cars. That should not be an issue for the type of cars you are looking at, but there will be some variance if you get something perceived to be “sporty.” The second big chunk of insurance is collision and comprehensive. This covers damage done to your car if you are at fault in an accident. This part is directly affected by how expensive your car is, where you live, and how high a deductible you can afford. Higher deductible means a lower insurance bill, but puts you out-of-pocket for the deductible amount if there is a crash. Any bank that gives you a car loan will insist on collision and comprehensive insurance, but if you buy outright for cash you can totally eliminate those. The problem with doing that, of course, is if you are in a wreck or a tree falls on your car you are stuck paying to either fix or replace your car.
Note: some of the above may be different if New York is a “no fault” insurance state. That changes some of the rules and issues about collision coverage. Talk to someone local about that.
I hope this helps.
For the combination of price and reliability that I think you’re describing, look at a car that’s two years old. The first owner will have taken the major depreciation hit, but the car should be reliable for a while and it should have some warranty left.
Do not buy any used car without an inspection by your mechanic.
I wouldn’t pay a premium price for anything that’s cosmetically perfect. In the New York area, it’s not going to take long to get dinged up.
Watch the bulletin boards around your university. There are always faculty members going on sabbatical. You may find a car that is a good fit for you at a reasonable price and can obtain the history of the car.