Shopping for a new family vehicle is my latest financial expedition. I am very confident in my ability to repair vehicles, so I tend to buy and drive older cars with higher mileage.
For me that is fine. However, our current 1999 Honda Odyssey has 254,000 miles on it, and it is starting to see the limits of its useful life. Many small things are piling up that I figure will cost somewhere around $3,000. I can’t justify putting that kind of money into a 15-year-old vehicle with that many miles.
If this were a classic vehicle that my family didn’t need to rely on for trips, this might make sense. That is not the case. My family travels very often and with 3 kids in tow, I need to have a vehicle that I can trust for them.
I’ve always been pretty good at shopping for used vehicles, but this time around is slightly different. I’m looking to get a van with less than 100,000 miles and that is proving more challenging that I thought. Vans (especially the Honda and Toyota models) are very expensive used vehicles, particularly if they have less than 100,000 on the odometer.
There are four mileage ranges for used mini-vans:
- Brand New for $25,000+
- 40 to 60k for $13,000 to $25,000
- 130 to 160k for $5,000 to $13,000
- 230k+ for $2,500 to $6,000
Brand New for $25,000+
New vans are out of the question for us. The cheapest Toyota or Honda you can walk away with starts at $27,000. You can get a Nissan (wife thinks they are too ugly) or Kia for less than that. For van reliability though, Toyota and Honda are king. Dodge/Chrysler are the only domestic option. I’ve driven the newer model Dodge before as a rental car and it was not a pleasant experience. This leaves our family with used Toyota Siennas or Honda Odysseys.
230k+ for $2,500 to $6,000
Our current van is in the last of these mileage categories. It has been a wonderful vehicle to own, but has just turned over 254,000 miles. Anything in that last range is no better than our current vehicle. If we were to go with this range, we would just take $3,000 and put it into our current Odyssey. The reliability is too worrisome for the family trips that we take so often. This is out.
130 to 160k for $5,000 to $13,000
The middle range exists for a reason. Modern vehicles need a significant amount of service in the 150k mileage range. Timing belts or chains, brakes, tune-ups, tires, air conditioning work, etc. I’ve bought enough 150k vehicles to know to expect $1,000 to $2,000 worth of work within the first 6 months of ownership. Usually after this hump, you can get a good long stretch of trouble-free mileage, but you still have work to do from day 1 of ownership. Knowing this and the outrageous price of some of these vans, this option is also out.
40 to 60k for $13,000 to $25,000
The last option is to find a lightly used van in the 40 to 60k range for under $16,000. The Odysseys out price themselves because even a 6-year-old Odyssey with 100k miles is bumping a $20,000 price tag. That is simply unacceptable. I don’t care how many fancy features it has. All those mean to me are other expensive items that break. Not to mention that I have 3 kids who are outlandishly hard on a vehicle.
We found ourselves searching for Toyota Siennas. These are clearly the runner-up if you go by pricing as an indicator of demand. They are cheaper per mile than the Odysseys but much more than the other manufacturers.
I am not a fan of car debt. For that matter, I am not a fan of any debt. My wife and I are saving for a replacement vehicle. Honestly though, we didn’t have any clue how much we would need to save. I was still basing my pricing thoughts from 2006, the last time I looked for a replacement van. Oh how prices have changed in the used car market in such a short period. I don’t know if Cash for Clunkers was the sole reason for pricing increase in used cars, but it was certainly the start of it. I was following prices during that program and am constantly looking for used cars on Craigslist and other sources. It’s just something I do. I like cars. Anyway, this provides me a general feel for the price of used cars. They are expensive as hell now. This didn’t change that we needed a replacement van.
So what did we end up doing?
We actually bought a van through CarMax. Normally, I think the no-haggle price concept is a gimmick and don’t believe that you get the best value that way. However, in this case based on the availability in the private market and pricing from other local dealers, CarMax ended up having the best price.
We bought a 2008 Toyota Sienna (pictured above) with 54,000 miles for just under $16,000. At our average mileage based off our Odyssey of 17,500 miles per year, this van should give us 4 or 5 years of trouble-free service and 8+ years of overall life expectancy. The cost per year is around $2,100 which is middle of the road in cost of used vans. If interested in the calculation I did for getting a cost per year for each vehicle, let me know in the comments.
We ended up financing the loan with 2k down. We got a 2.95% APR over a 60 month loan duration. My plan is to pay this off in half that time.
We did not opt into the MaxCare warranty. I hate extended warranties and I didn’t see any difference here. My wife and I carry a significant Emergency Fund. Essentially this is our own personal extended warranty. The bonus is that if we never need it, we’re zero out-of-pocket.
If you have questions about buying vehicles, financing, or anything else related, hit me up in the comments. I’ll get back to you, or write a post directly to your question.