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Saturday, March 25, 2017

Opportunity Knocked

Posted by Tim Stobbs on September 13, 2012

I’m a firm believer in the idea that if opportunity knocks at your door you should at least answer it.  That doesn’t mean you have to take the opportunity, but you should at least explore the idea.  So with that in mind a few months back I setup a $100,000 line of credit secured by the house.  I figured that it might come in handy…oddly enough that happened last weekend.

I got call from from a family member who said “You know that 2007  Camry Hybrid that I got.  You expressed some interest in it a while back and I’m selling it.  Are you interested?”

It was rather like asking does the sun rise…I’m a eco nut at times so obviously I would be interested.  Yes I know the math on hybrids that you really never get your money back on gas savings (unless you keep it a very long time or gas prices get much higher).  Despite that fact I have toyed with the idea of buying a used hybrid for my next car, it was a complete ‘want’ item.  Yet it had been on my ‘want list’ for years.

There was just one little problem: I wasn’t planning on buying a new car until like 2013 or perhaps 2014. Our plans for 2013 were the kitchen renovation and our trip to Newfoundland. Yet my current car is 11 years old and has about 160,000 km on it, so looking at a replacement now won’t hurt.  So I agreed to stop over for a test drive the next evening.

Meanwhile the morning of the test drive I got up early and hit the internet in research mode.  I checked used car sites and gathered some price data I saw a few 2009 models in my area going for $18,500 to $21,000 with around 75,000 km. I checked insurance costs for my car vs the Camry.  Just over $80 a year more, but the in city gas mileage would likely more than compensate for that cost.  Then I Googled my way to some reviews of the car and found all its weak points: a much smaller trunk than the regular Camry and apparently there was a subtle shift when the car went from electric to gas modes.  I could likely deal with the shift in modes, but I would learn that on my test drive, but the trunk could be a deal breaker.

You see my wife and I had some previous conversations on what we would like in our next car.  We decided we loved our really cheap fuel bill, so good gas mileage was essential.  We needed a bigger back seat since as our boys grow up they will need more leg room.  Then lastly our current car was occasionally a bit small in the trunk during a few situations: one was going camping (a few things ended up in the back seat) and the other was visiting my mother-in-law for Christmas (she has been known to fill it).  Neither situations are common, but a bit more room would be useful.

So we decided to simulate our one situation: camping.  I decided I would load up all the bulky gear in my car when we headed over to the test drive.  If I could easily get all of that in the trunk with room to spare, it would likely be at least equal to my car, which it should because according to the manufacture specs the trunk in the Camry was almost the same size of my Echo (by the way, the Echo has a freakishly huge trunk given the size of the car).

As we setup the time for the test drive I remembered to confirm the mileage on the car, the answer was “38,000 km or so.”  What?!? I thought to myself, he is asking $18,500 for a car with half the mileage I saw online.  Mmm, my initial thoughts of wondering how much to negotiate on this deal started to vanish.  Apparently I was already getting the family discount.

So my wife and I arrived for our test drive.  I was given the grand tour of the car and was a little shell shocked since while the car is 6 years newer than mine I had forgotten that the Camry Hybrid was leading edge when it came out.  It didn’t help matter much the Toyota had obviously loaded the crap out of the car to make it appealing: leather heated seats, keyless entry and push button start, an excellent stereo system and of course a slew of menus to tell you all about how good your mileage was.  Yes, it was impressive, but I still had my truck test to preform.

So before even pulling out of the driveway we checked two things.  One I sat in the back seat to check leg room for an adult.  Yes it was much better than our car and even if my kids broke the 6 foot barrier they should be find back there.  The second was the trunk test: it handled everything I loaded in.  Yet there wasn’t a lot of room left over, overall it was about the same size of my current trunk so I wasn’t gaining anything there.

Then the next test was the drive.  First off the ride was both very smooth and incredibility quiet.  Yes a electric engine is quiet, but apparently Toyota also made the cab very well insulated for sound even when using the gas engine.  I heard the plastic in the car shift a tiny bit and my breathing while going down a hill.  Crazy.  The car also handled very well and could still accelerate well for passing.  Overall I was happy with the ride and would consider buying it.  My wife also had a drive and agreed.  Her only minor concern was getting used to parking a wider vehicle, but frankly that was likely to happen regardless of what we buy in our next car.

Overall it came down to the fact: can I live with not getting a bigger trunk?  Given our current car is fine like 95% of the time I decided I could.  So then I wrote a cheque for approximately double my current mortgage balance in less than 24 hours from when I first talked about the car.  I was impulse buying in a big way.

So much for being completely debt free by the end of October.  Yet I suppose that was the point of paying off the mortgage, being ready to handle opportunities as the came up.  Below is a picture of the ‘new’ car.  So what was your biggest impluse buy?

Comments

8 Responses to “Opportunity Knocked”
  1. SavingMentor says:

    Congrats on the new ride, it looks really sweet! I’ve been contemplating a new vehicle purchase mainly because I’d really like to have more space for kids and stuff when travelling. My other half doesn’t really see it that way and is continually applying the brakes to the process.

    As for big impulse buys, I can’t say I ever bought something so large that quick. I did kind of buy a boat on impulse but the whole process still took several weeks because I bought it out of the USA.

  2. Congrats on the new car. You will love it. With the recent spike in gas prices, I think you will end up saving more than you think.
    Even in gas mode this car is likely significantly more fuel efficient than your 11 year old car. Also your maintenance costs are likely to be a lot less. As you point out you are going into debt to purchase this but a HELOC is very cheap right now and for the next many years. You likely would have spent a lot more than the interest costs on another vehicle next year. AS I tell everyone – want or need? if it is a need – DOES IT HAVE VALUE? Sounds like there was great value for what you got and it does fall somewhere between want and need so enjoy it! No regrets!

  3. Sheryl says:

    Congrats on the car purchase!!!
    I hope you will keep us posted about maintenance and or repair costs. These electric cars are still so new,I haven’t heard much about what happens after they’ve been on the road for a while, such as how long the power cell / battery lasts and how much it is to replace.

    I know my van is a beast on gas, but I do get some of my gas expenses paid for through work. My van is 16 years old with 245,000 km, and still in great shape and reliable, so I don’t think I’ll be replacing it any time soon.

    Biggest impulse buy? My first house. We had to find a place to live quickly, started looking for a place to live, and purchased one within a week. In hindsight, I should have done more research, lived in a cheap place for a while to get a bigger down payment, made sure my marriage was more stable etc, etc, etc. As a comparison, it took me a month to buy a tv.

  4. George says:

    > So what was your biggest impluse buy?

    The house with 4 acres on a river (really just a creek) near the beach that will become our retirement home. For the interim, it will be a rental.

    Despite the impulse, it took a week or more to work through the details & guilt before making an offer. Due diligence was definitely called for!

  5. jon_snow says:

    I would love a new car, although my current 12 year old model still looks and runs great. Then again, a few months ago I invested about 70k (which would by a very nice car) in a Canadian gold company… and have made almost 20k on it in a couple of months. So instead of a depreciating asset, I bought an asset that is adding to my net worth, and helping to fast track my ER at 42. :)

  6. Tim Stobbs says:

    Thanks everyone…yes we are loving the car so far. I’ll keep you posted on operating costs on it.

    @George – Yes, I get property does require a bit more due diligence. In my case I was lucky. I knew the current owner and the history of the vehicle before every seeing it.

    Tim

  7. Robert says:

    Nice car. Congrats!

  8. Saloni Negi says:

    Your car was a good decision, not an impulse buy: you did lots of research, you and your wife had a test drive, you made sure it had enough cargo room and room for your boys. I guess what I’m saying is that quick decisions can be efficient rather than thoughtless or impulsive. That car at that price came along at that particular moment instead of waiting for you to pay off you mortgage. That’s life.

    I once bought a condo within twenty minutes of walking into a showroom. But then, I knew I could expect excellent quality from that developer, I knew the area was good, the views would be excellent (my purchase was based on a paper floor plan) and I knew I could find a tenant. I was right on all counts. Efficient, not impulsive.

    Some of my decisions have taken a long time have been just plain bad: there’s a reason why the brain equivocates. Our instincts are trying to warn us and we’re ignoring them.

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