Edmunds.com Concludes 'Debt-Free Car Project' $3,800 Car Comes in Under Annual Repair Budget, But Strains Driver Peace of Mind
SANTA MONICA, CA--April 8, 2013: Car buyers can avoid expensive financing charges by purchasing a low-priced used car outright, but they should be aware that there will likely be maintenance and repair speed bumps along the way. That's the key takeaway from Edmunds.com, following its year-long "Debt-Free Car Project," which tested the theory that shoppers can find a reliable used car for under $5,000 without the burden of monthly payments.
Last year, Edmunds.com purchased a 1996 Lexus ES 300 for $3,800 (after tax and title) and editors tracked the car's fuel, maintenance and repair costs, and reported on the experience of driving it on a daily basis. Over the course of 13 months, Edmunds.com spent $3,286 -- or about $253 per month -- in maintenance and repairs. The costs came in well under Edmunds.com's budget of $365 per month. Nevertheless, the year-long project led Edmunds.com editors to recommend a "debt-free" car purchase strategy only to certain buyers.
"Buying in the sub-$5,000 price range, you will drive a car that will probably have repair issues, so if you have a trusted mechanic, or if you are capable of doing the repairs on your own, it could be a solid choice," says Edmunds.com Consumer Advice Editor Ron Montoya. "But if you get overwhelmed dealing with mechanics and repair shops, or if you worry excessively about potential breakdowns, you may want to save enough money to prioritize reliability over cost-savings in your next car purchase."
Edmunds.com editors drove the car over 18,000 miles, including a cross-country road trip and a cruise through Death Valley, in addition to putting it through the demands of daily commutes and errands. It performed generally well, but the vehicle left Edmunds.com editors stranded on two separate occasions and generated a number of costly and unavoidable issues and repairs. But, as Montoya notes, "There's no guarantee that a newer car also won't break down."
At the conclusion of the year-long project there was no shortage of interested buyers for the vehicle. Edmunds.com sold the Lexus to a company employee for the True Market Value price of $2,668.
To learn more about the Debt-Free Car Project and some of its key takeaways, please visit Debt Free Car Project .