Driving A Car For Free
October 1, 2004
By Scott Lewis
This month I want to tell you a plan I have for driving a car for free. And no, I do not plan to slap a bunch of ads all over my car.
I came up with this idea while looking at new cars. At present I am not making a car payment for the car I drive, and I am having a hard time wrestling with the idea of making payments on a car that loses value constantly.
The Kelly Blue Book value on my 93 Camaro as a trade-in is $2,075. Eventually that may go up. I don't know how long it takes before a car is old enough to start going up in value, and mine may never get that status. Regardless, it is paid for so it doesn't matter if it goes down in value even more.
1967 Camaro RS Convertible
Long time readers of my site and this column know I used to have a 1967 Camaro RS Convertible. I bought that car in the summer of 2002 for $13,000, and sold it in the summer of 2003 for $14,500. No, I did not make $1,500 profit. I put about $1,000 into the car to replace a transmission and added an electronic ignition with a complete tune-up. So I made about $500 profit.
I drove that car about 3,300 miles during that year. The big question is... what would have happened had I driven it 15,000 miles? Would I be able to maintain its condition so that I could sell it for about what I had invested in it. That is the topic this month. Can you drive a classic and maintain its condition well enough that you can sell it without taking a loss.
During my usual searches for classic cars on the Internet I have come up with a few that look like they would make neat daily driver classic cars. Let's take a quick look at these cars that I have listed in my Classic Car Watch column, or am getting ready to list.
I realize that an SS 396 might not make the best daily driver. Gas mileage would suck. I am not sure I want to put up with single digit mileage in this day and age. I wouldn't mind seeing what kind of mileage I could get in my heavily highway based driving. I get about 19 mpg now, so if the big block could pull down 15 mpg on the highway I could live with it.
This car has air conditioning which is essential to daily driving here is South Central Texas. CPI rates this car at approximately $13-22K in good to excellent condition. It was priced at $14,900. Could we buy this car, drive it for a year and still sell it for around $15K?
Here is a car that is fairly plain. It was listed at $6,850. CPI puts this car at about $5,550 to $7,625 in good to excellent condition. Could we drive this car for a year and still sell it in the $7K range? Based on my 2002 CPI guide and the current prices listed on their web site this car has risen in value about 16% in the last two years. Could we expect another 8% increase during the next year. This car has one bad point... it does not have air conditioning. This would make it a difficult car to enjoy driving. Let's assume we can get an aftermarket A/C system working in this car and keep the investment to $8,000. The big question is, could we sell this car for eight grand, or more, after a year's time.
This was a super clean Road Runner. It did have a couple of things going against it. First was a 318 engine. Not the best engine for a Muscle Car. Next it had a bench seat with a column shift automatic. CPI puts this car at roughly $7,975 to $10,850 in good to excellent condition. However, this car has risen in value over 25% in the last two years. They were asking $9,950 for this car (we will round this to an even $10K below). I certainly felt it was worth it. The 318 should be able to get decent mileage (compared to an SS 396 Chevelle or a 383 Road Runner). So this might make a great daily driver. In fact, I think this car has the best chance of proving my point.
Making the Case
The Road Runner was equipped with power steering, power brakes & air conditioning. All the basics for a daily driver. The car also had the original numbers matching engine, a big plus at resale time. This car did not have the original wheels, but the rest of the car looks extremely clean and original.
Can we drive this car for a year or so and resell it for the same price, or slightly more to cover maintenance costs during the year? I think we could. With careful checking of the condition of a car, and its level of originality, at purchase time I think we have an excellent candidate for a car that will definitely hold its value even with an additional 15,000 miles on the odometer.
My brother-in-law is a fanatic about keeping his cars clean. My wife has taking on this trait. I am a little lax since I am driving an eleven year old car that will not get clean enough to make enough of a difference.
Taking care of a classic like our Road Runner here is the key. Can we keep it clean. The number one trick to keeping a car clean is to never bring food into the car. And I mean never, ever. If you want to keep the outside clean never drive it in the rain.
The Next Level
You didn't think this was the end of this idea, did you?
Let's take this to the next level. Let's say we do this in lue of buying a new car. Let's assume a couple of things. 1) We are going to pay cash for the Road Runner. 2) We set aside $300 a month for a "car payment." Even though we are not making a payment we still put the money aside, just in case we need to make repairs or such.
Using this plan we will have at the end of one year a car plus $3,600 in the bank. If we sell the car for what we paid for it then we have $13,600. Now we can buy a slightly higher priced classic car. Again, we take good care of it and a year later sell it for the same money. Like magic we have $17,200 after two years because we are saving $300 a month. As we continue we could work our way up to buying a new car for cash. All the while we are basically driving cars for free. It just the initial investment that needs to be main... and made from savings.
I like this idea. It makes more sense than driving a new car and watching it go down in value.
To make this work we would need to have a backup car. In my case it would be my 93 Camaro. It is very reliable, and would be put into service anytime a classic car was down for repairs, improvements, or just to protect it from bad weather.
There you have it. My plan for driving cars for free. Granted, this plan assumes you can find a nice condition classic and can pay for it without financing it. Other than that it really is a matter of picking a car that has the best chance to maintain its value. Better yet, we will pick a car that will go up in value, which means we are increasing our "money load" faster than we can save it.
What do you think?