I bought and sold my first ever car in a span of 8 months.
Four months of that was spent trying to sell the car to recoup the money I was bleeding since its’ purchase.
Want to know how to waste $1961.06* on a car ?
- Buy a car in a rush. I got an offer out of the blue for a second job that seemed to be a great gig (it was not, more on that later). The only obstacle between me and a flexible schedule, $22/h in my field job was a car. Not seeing this as a very valid reason to turn down the position, I ‘researched’ and bought a car in the span of 2 weeks.
- Trust a stranger about inspection, safety checks and overall mechanic integrity of an eleven year old car. In my haste (see point 1) I was so excited about seeing a car that was A. In my price range B. Able to actually test drive and C. Seemingly working. I pretty much jumped to offer him my money. He handed me a ‘passed’ certificate of ‘inspection’ that later look me almost $1000 to obtain through a legitimate mechanic after vital repairs.
- My ‘budget’ was 75% of the emergency savings I had taken 11 months of working to build up. That totalled $2000. Not a lot, even for a bike. Next to nothing for a car. Barely nothing as an emergency fund, especially the $825 that remained in my account after I purchased it.
- Have no concept of maintenance costs on a car, especially a used car. After I nearly emptied my savings, I had barely enough to cover insurance, let alone the $1400 of repairs I needed in the next 8 months. This included $925 for repairs I needed to safety inspect this car that had a ‘perfect inspection’ 8 months and 200 kilometres prior.
This does not include the fairly decent $568 I paid in insurance during that time.
I purchased a car for $1875 and I ended up spending
an additional $2529.06 in maintenance and insurance.
In case you were curious this great second job netted me a total of $860 in the three months I actually worked.
The car eventually sold for $2000, which was amazing, but did not come anywhere near of offsetting my total costs for this car.
This was the first ever job that ended up costing me $443 a month, or a total of $3544.06. Even with the $2000 sale price, I lost a total of $1544.06 .
For further context, during this time my net monthly pay was $1575.
Please learn from my mistakes and be sure to calculate the total costs of car ownership before jumping into huge debt on wheels!