Our New $6,000 Car

Since moving to Utah we’ve been trying to figure out what to do about this whole car thing. When we got to town, we had two cars: a 2012 Mazda 6 S and a 2013 Scion TC. Our past lives in Orlando required two vehicles to stay sane and cut down commutes in opposite directions. Since moving to Salt Lake City, we’ve had to rethink what we need from our transportation.

The easy reliance on public transportation to make it to work led me to drop my car back in May. That decision was easy since we rarely used both cars at once. We still absolutely needed one if we want to make it up to the mountains or go anywhere out west (things are seriously far apart).

As we’ve explored more of Utah there’s one thing that keeps coming up – unpaved, bumpy roads. We encounter them when hiking, camping, on state parks and national ones. If you haven’t tried going up an intense unpaved incline on the side of a cliff – good, don’t do it.

For us though, we decided we needed something that would help us better explore Utah while feeling a little safer. Cue to us researching the best cars to get in Utah. After way too much reading, watching YouTube videos and test driving anything we found remotely interesting we settled on a used, 2016 Fiat 500x. It checked all the boxes for us and at a great price: $17,000 (minus trade-ins).

What We Need

Our needs in a car aren’t severe. Both Mrs. Minafi and I walk or take public transportation to work when we can. The primary use for this car would be recreational. Here’s the rundown on how we’d use it:

• Estimated driving of around ~6,000 miles a year (most likely less).
• Can drive on offroad areas around hiking trails and campgrounds.
• Can get to ski slopes in the winter (and be able to carry skis).
• Reasonably priced. We set a max budget of $25,000 initially.
• The smaller the better. We don’t want a massive SUV.

All-Wheel Drive

One of the common beliefs is that all-wheel drive is all you need for driving out west. This just isn’t true. If it were, then you could just pick up a Subaru Impreza and call it a day. All-wheel drive isn’t going to matter much in the snow or determine if you can make it up a gravel road. What it will do is help on the off-chance your vehicle ends up on two wheels and can’t get any traction. This isn’t something that’s ever happened to me, but it’s good to know.

Instead, the best thing you can do is have good tires. Putting on snow tires for part of the year is a good idea if you’re planning on being out a lot. Earlier this year after a heavy snow, I found myself driving to work. I made it about 6 blocks from my apartment before I realized it was ridiculously difficult and dangerous to drive without the right equipment. I turned around, headed home and caught the train to work. For next year I’ll be more prepared.

Ground Clearance

One understated feature we hadn’t thought much about ended up being essential: ground clearance. This makes the difference between needing to slalom up a road filled with big rocks and being able to drive right down the middle.

We went camping over the summer on public land here in Utah, but the drive up to the campground was abysmal. Our low to ground, front-wheel drive Scion TC felt every single bump and stone we drove over. Whenever a large rock was in our way (and by large I mean anything larger than a coffee mug) we’d need to alter our path to make sure it didn’t hit the undercarriage of the car.

With our new Fiat, we have a LOT more clearance. It feels amazing and much less stressful to drive. We haven’t taken it off-road yet, but we’re looking forward to putting it through the paces.

How much Should I Spend on a Car

Mrs. Minafi and I talked a bunch about how much we wanted to pay for a car ahead of time. At the time we settled on a price of nothing more than $25,000. Even that was crazy high – more than I’ve ever paid for a car in my life. After we drove a few new cars in the $25,000-$30,000 we started to realize that we could get the same ones used for quite a lot less.

When deciding how much to spend on a car, how do you even tell what makes sense? If we can buy a $3,000 used car that lasts 10 years, then that’s a much better financial decision than buying a $30,000 vehicle. Likewise, if we have millions of dollars saved up does that give us “permission” to buy a more expensive vehicle?

For us, it came down to the opportunity cost of that money. If we spend more on a car it means we need to work longer to make up the difference. This is to key to determining how much to spend for us. If $10,000 is the difference between working an additional 2 months or having that time off it puts the comparison in stark terms. I love this idea of earning time and using that comparison when making large purchases.

The Decision

The main decision was between a 2018 Subaru (~$25,000) or a 2018 Fiat 500x (~$27,000). The Subaru was really nice, and did have some impressive features – but just about everything was a nice-to-have. Apple/Android CarPlay, rear-view cameras, leather seats, Bose speaker systems: how much are those worth to us? We’re getting this car to be able to explore more of Utah, and those wouldn’t help with that goal. Also: how much could we save by getting one of these used?

We wanted something we loved and enjoyed driving that is also a good financial decision. If the only requirement was transportation we would’ve bought a 15-year-old used car. We decided we liked the Fiat enough to pay a little more and started hunting looking to find one used at a good price.

One showed up almost immediately when we started looking. We booked a test drive and went to check out a 2016 Fiat 500x Trekking with all-wheel-drive for $17,000!

The test drive went well, and the entire car felt almost exactly like the 2018 model. The media package was nowhere near as good, but it still has the ability to connect via USB or Bluetooth. There’s no rear-view camera or “amazing” speakers, but those weren’t deal breakers.

We ended up buying it right there and came home with a new car in mid-August! The total price tag was around $20,000 after taxes and a 60-month CarMax warranty. Luckily with the car I traded in earlier this year, coupled with Mrs. Minafi’s car, we got close to $14,000 back, for a total cost closer to $6,000.

One of the advantages of doing it this way is that we won’t need to pay state taxes on the sale of our old car, since it’ll go towards the tax on the new car. It’s kind of like how you generally want to sell and buy a house in the same year.

We had the cash on hand, so we decided to skip financing. Getting $20,000 from my online-only bank account (Simple) to CarMax prooved… challenging. They have a $6,000/day limit on debit card transactions, which made this tough. We ended up just financing it, which gave us 3-days to pay off the loan while it can still be withdrawn. I just drove back to CarMax each of those days (3 times total) and maxed out our allowable debit card use. Who would’ve thought it’d be so hard to give people money? Luckily the CarMax is right by my work, so it was a quick stop in to make a payment.

Takeaways

$6,000 is still a lot out of pocket for a purchase, but it’s a lot less than the $25,000 we budgeted for. Just that pause between “we like this car” and “can we get a used version from a few years back?” ended up saving us at least $8,000. The novelty of buying a new car is just that — novelty. The cost of novelty is higher the larger the purchase.

If you’re looking into a large purchase, look into other options! Can you get it used? Are there features you don’t need that could be removed to cut the cost? What about time – if you wait a bit will the cost go down? What purchases have you made, or would you make that can be optimized?