It's quite simple, really. Buy as little car as you can make do with under normal operating conditions, but buy the best you can afford without stretching.
For many years, we did not own a car. We did not have to carve out chunks of our flesh to make ridiculous insurance payments and we did not have to worry about owning an "asset" that was, in fact, a heavy, moving, depreciating liability.
Then John finished his articles and started searching for a job. The job he eventually landed was in Conception Bay South, Newfoundland. While working there was not a problem, we decided that we did not, in fact, want to live there.
Our reasons are many; lack of a development plan for the community, there being no coherency or centre to it, it effectively being a bedroom community for St. John's and it being west. The last reason may have some of you scratching your heads, but I've come to the conclusion that there are sunrise people and sunset people. We are of the sunrise variety (we like sunsets, but we're morning people at heart), so we need to be east. Sunset people are more westerly. Just a weird theory of mine. A short segué: we eventually moved to Torbay for this reason, as well as because we love being a five-minute walk from the East Coast Trail and living on some of the most spectacular coastline in the northern Avalon. Plus, property taxes are a lot lower than in town.
At the time at which John took the job, we lived in central St. John's, where I could do handily sans vehicle during the day. It's about a fifteen-minute run from St. John's to CBS over moderately decent highway, for the most part. Most of our family, friends and life are in St. John's. We decided that, rather than moving house out to CBS, we would stay in St. John's. Even if we did live in CBS, we knew that John's job would require his/us having a car, as court was in town and he'd have to get back and forth. So he took the job, we lived in St. John's and bought a 1999 Toyota Tercel. A nice, little, blue compact car. Cost us, even with gas prices skyrocketing and John driving 3000km a month, $35 a week in fuel and virtually nothing in maintenance (except oil changes, tuneups, tires, etc., but no major work).
Then it "got smooshed," as Katherine so aptly puts it and we found ourselves looking for a new car. Only by this time, we live in Torbay (about a half-hour's drive from John's work) and now have three dogs. So the car guy, being no mean fool, tried to sell us a Matrix. He almost succeeded, until I got home and crunched the numbers. Now we went in expecting to buy an Echo, or possibly a Yaris. Small is better in our world. But the Matrix really isn't much larger on the outside. it's a bit taller than a Corolla, but is basically what the old Corolla station wagons were in size and is actually a really nice car. very well-designed inside.
I calculated the difference in costs for us between operating an Echo, a Corolla and a Matrix, all of the same year and condition and here's the scoop:
gas – 35 weekly
insurance – same as before
payment – 25 less than before monthly
Bottom line – costs us roughly the same as before, has a higher suspension than the Tercel and is better-designed.
gas – 42 weekly
insurance – 20 more monthly
payments – same
Bottom line – would cost us an extra $30 a month for a car that was only slightly larger. Not worth it. If we need more than an Echo, we need a Matrix.
gas – 45 weekly
insurance – 20 more
monthly payments – 75 more monthly
Bottom line – 140 more a month for a car that carries one person most of the time, except on trips or vacations, which we couldn't afford if we bought this car anyway.
Maintenance is hard to judge, but a bigger car means bigger tires and more body parts taking more wear and tear, so the Corolla and Matrix would likely need more maintenance. Also, the Matrix has more bells and whistles which would probably require more replacement and fixing of clappers and reeds when things start to go.
So you see, when the dealer says, "Oh, we can arrange things for you so that that car only costs you on a per month basis very nearly what your old car cost you," it's smoke and mirrors. There are hidden costs. What they're selling you is an image of who you'd like to be. We'd love to be able to afford the Matrix, but we can't and buying it wouldn't make us more able to afford it. Perversely, that's the philosophy under which most salespeople work. Toyota is actually better on that score than more, but they're still working with the general premise of the consumer. This seems to be, "buy more than you can afford so that you'll look like you can afford it." Stupid, really.
A car is a hole into which you throw money. My feeling is that the smaller the hole, the less money it can absorb. The better quality the car, the shallower the hole. The smaller the vehicle, the smaller the aperture of the void.
So this is it. This is what we're getting. It's a 2003 Echo. 63000km. In good shape.
We may be able to pick it up today. Phew.