Save thousands by choosing 2WD

If you love SUV's and pick-ups (like I do) and want to save a fortune, choose a two wheel drive model over the four wheel drive. As a used car guru, you're looking for a model that is not popular on the used market - that's where the bargains are found.

Two wheel drive vehicles get better fuel economy and require much less in the way of maintenance and repairs (no expensive transfer case to deal with). And the best part? You can make a two wheel drive perform as well as a four wheel drive.

Unless you know you will be doing some serious off-road driving (and most people plan to do so but never do), you won't miss the 4WD.

How? Simple, one word: tires. Buy 2 sets of tires.

One set of aggressive tires for gravel roads, getting to the cabin and so forth. Something like a BFG/AT or Bridgestone Revo would do fine. These tires can get you through any backroad (serious mudding aside). You'll be shocked how far you can go on a quality set of aggressive tires.

For winter, a good set of winter tires will make your rear drive vehicle extremely competent in the snow and ice. For example, in a recent post we spoke about the rear-drive Crown Victoria/Grand Marquis, which are used in all Northern States and in Canada throughout the winter using only good sets of quality snow tires. The technology is so advanced that unless you need to drive through very deep snow in uncharted territory, these tires will do wonders for your rear-drive vehicle.

Here's a good article on how snow tires on 2WD can beat 4wd with all-seasons in the snow and ice.

Both tire sets will last twice as long (i.e., using one set in the summer, the other in winter), so there is no extra cost over the longer term.

So why are you -- a budding used car guru -- paying more for 4WD when there are bargains to be had with the same model in 2WD?

An awesome family hauler

So many families automatically trundle down to a dealer and pick-up a minivan without thinking. Problem is that minivans are overpriced, underpowered and notoriously unreliable (Caravan transmissions, Windstar headgaskets, Sienna sludge). Well, my dear friend, those folks are not used car gurus in training.

As a budding guru, you should be looking for that diamond that no one else is looking for. And for a family, that diamond is a 1998+ Grand Marquis (or Crown Victoria, which is the same car without some of the fancy doodads).

"But that's a grandpa car," you say.

"Have you ever driven one?" I ask.

"Uhh, no," you say.

When you see cops chasing down criminals on high-speed chases on TV, what car do you suppose they are driving? Yes, the mighty Crown Victoria. Would cops use a grandpa car to chase crooks?

"But cop cars are different," you say.

No, they are not. They have some heavier duty brakes, shocks and starters, but they are the same car as the civilian model. The one that seats 6, has one of the lowest fatality rates of any vehicle, and can withstand as many miles are you can put on it (400,000 miles on these cars are not unheard of). Ever ride in a cab? Yup, Crown Victoria, check out the odometer -- big, big mileage, and the cab companies buy their cars from the cops when the cops are done with them!

"But it has a V8 which is hard on gas," you say.

Well, you've never driven one, and I can vouch for the fact that they get near 30mpg on the highway, and a good 17-18mpg in the city, better than most SUV's and equal to most minivans (with a lot more power and comfort).

Oh yes, the comfort. Drive a this full-size American beauty and enjoy the smoothest, most comfortable ride you've ever had.

Remember from the last post: gas is one of the cheapest thing to go into your car!

And for us, dear used car gurus, the best part: the Kelley Blue Book value on a top condition 1998 Grand Marquis with all the bells and whistles is a mere $5,000. And you could negotiate that down to $3500 by reading this blog. And your family (and especially your kids) will love you -- more space and comfort than they've ever experienced.

So let me see, a $30,000 minivan (with taxes, fees, etc), or a $3500 Grand Marquis that won't die for 400k miles, no payments, and an extra $26,500 to invest...hmm...I wonder which one I want....

If you said that in 5 years, that Grand Marquis would be worth $2700, and the van will be worth $13,000, you get extra guru points. You'll eat about $700 in depreciation on the Grand, and $17,000 on the shiny new van (your figures may vary, but not by that much).

What's the most expensive aspect of running your car?

When I ask people what's the most expensive aspect of running their vehicles, I get the following top 3 answers:

1. Gas

2. Repairs

3. Insurance

Guess what? All 3 are incorrect. The most expensive aspect of any new car is depreciation, something people never consider as a real cost but it is real indeed. The average depreciation for a car driven 13,000 miles per year is 20% the first year, and 12% thereafter. So a $30,000 car is worth roughly $13,000 in 5 years (if you're lucky and have no accidents, scrapes, big dings, etc.). So that's a $17,000 loss, or $3,400 per year. Gas is roughly $1500 to $2000 per year, insurance about $1000, and maintenance about $1000.

Here's more: that $17,000 has what's called "opportunity costs" meaning the cost of doing something else with that money other than paying for depreciation. So for example, in this bull stock market, $17,000 would be $34,000 in 5 years. So that shiny new car you paid $30,000 had a real cost to you of $34,000 in 5 years.

Ouch! In posts to come, we'll talk about how to avoid that financial sinkhole.

Used cars can change your life

I've started this blog to encourage people to purchase only used cars. In the coming months, we'll explore the endless advantages of used cars, including:

- How used cars can build your investment portfolio
- How used cars are good for the environment
- How used cars can make you money
- How used cars can let you drive in style
- Which used cars are the best buys (hint: not Toyotas)
- Which used cars are best for families
- Much, much more

So subscribe, enjoy, debate, and join the used car movement -- it can change your life!