Car Buying: A Compromise Approach to Get Value for Your Money
This is the second in a two-part article on car buying.
As of now, there are only Mercedes cars in our garage – an R107, a W211, and an S211. For those not familiar with MB’s “Baureihe” or “build series” nomenclature, those translate into a 450SL convertible, an E550 sedan, and an E55 AMG estate. In my opinion and experience, they’re all fantastic cars: engineered right, built well, inconspicuously excellent. The AMG eats tires, however – I don’t understand quite why…
All my current cars were bought used – but not abused. Here’s how and why I bought them. I’ll share my “secret” formula with you.
No more driving off the parking lot instant depreciation for me. I look for low-mile cars above all else; this is more important to me than having the latest model style. Oddly, the price markup for low miles is underpriced in the market place (in my opinion) and conversely, high milers aren't hit with the penalty they should have. Cars wear out, and once a car is off warranty, all too many owners defer maintenance. Which is why it’s safer to go with low milers.
Additionally, the miles should have been on West Coast or at least Southern roads. I will not buy anything from the salty North and Northeast. I don’t care that all cars are zinc-coated or otherwise rust-proof these days. Nuts and bolts still corrode, and so does all the aluminum everywhere. It looks bad and will make it much harder to maintain.
The build year is critical. Stay away from the first year of a radical redesign. Preferably, buy one of the last two years of a build series. This ensures about as sorted of a car as you can get. Additionally, buying a car that is the “old” or previous model results in a solid discount, which those of us who don’t feel a need for the latest design are quite happy with.
About the price – as a “civilian,” you’re not getting the “real” Blue Book that dealers use; you’re getting a consumer version. You can use Edmunds, KBB, or NADA – they will all be different. Personally, I prefer looking at various sites, like Autotrader (AT) for example, to see what cars with given options, miles, and year models are going for. You develop a bit of a feel for the range that cars go for – and you will see crazy outliers on both ends. I think of those the way I view supplier bids in a sourcing event – why is this supplier coming in so high or low? You learn to sense when something isn't right.
In my opinion, Germans (including their automotive engineers) are probably the most skilled drivers in the world, so their cars are good as well. I find the Audis overpriced, and I’m not into BMWs (the Bangle design doesn’t work for me) – and most Porsches are too small (although I might reconsider once the Panameras start to come off leases) and although good, a Cayenne (the Porsche SUV) just seems wrong.
In other words, I am biased toward Mercedes, and for those looking at Mercedes, I’ve purposely avoided the Chrysler era cars. I wouldn’t buy any 1999 to 2003 vehicles that didn’t have a clean history, which leaves about five good cars from those years, so buy one of those if you can find it. Seriously, the large V8 equipped E-class cars outside those years are solid. Sadly we’ll soon see nothing but V6 engines in the non-AMG versions.
How did I buy the cars? Not at Carmax. I find the cars available there to be disappointing – in features, condition, and price. It’s Econ 101 really – the worst examples will not make Carmax’s standards, and the best ones are sold elsewhere because they can command a premium. I’ve actually bought all my current cars online – two without pre-purchase inspection (PPI), one with. I’ve used eBay and Autotrader to find the cars.
I bought the old SL via eBay from a dealership in Silicon Valley. There I had accidentally come across the previous owner (PO) at a Mercedes discussion forum, which gave me an inside angle on the car and allowed me to confidently bid higher (on eBay) than the others. The car was transported without problems across the country in an enclosed trailer.
The wife’s sedan was an off-lease Cali car with 25,000 miles. I found that one on AT and bought it after I got a third party to do a thorough PPI, which cost me $200. It’s now at 65,000 miles, trouble-free and going strong.
My low-mile AMG station wagon was also discovered on AT, listed by the original West Coast owner. I was the first to call him, around an hour after he placed the ad. When I discovered that the 70-something owner had three other AMGs in his garage, I just said, “OK, I’ll buy it.” It’s one of only around six Designo edition E55 wagons brought into the U.S. (out of around 200 in all), so prevarication was out of the question. The car now has 40,000 miles and runs like clockwork, a very fast clock.
As an aside, from a financing point of view, I strongly recommend working with PenFed – they have a fantastic system with a streamlined no-hassle process to finance any car. Get your membership (it’s a credit union) as soon as you can; despite the name, anyone can become a member. There’s no need to be a federal employee. However, unless you don’t care about your money and absolutely have to have the latest car every other year – stay away from leasing!
My “system” mostly relies on being prepped. Do your research on the car you’re looking for, know the price levels in the market, and don’t hesitate to walk away if the car seems wrong. Much like corporate sourcing!
A final note for the minivanners and the “less CO2 emitted is better “folks – the heavier and stronger-built car wins in an accident. And that’s when it counts. Minivans are fundamentally structurally flawed. And the high MPG cars are tiny. E = mv2/2 meaning energy equals mass times velocity squared divided by two. 8,000 miles per year with a 20 MPG car versus a 40 MPG car is a 200-gallon difference, or $650 at the moment, which turns into only around $50 per month. It’s more if you drive farther every year but still not much to pay for the added safety and capacity. Which is why I want my wife and family to travel in solid cars – especially in Atlanta traffic!
I realize many look at cars as a way to get from A to B, but to me, cars should also be fun to drive, so the above is my compromise approach to get value for the money. Get a car that puts a smile on your lips! If you have to be in it every day, make it a pleasant experience.