For the past two years, one of my top financial goals has been to save for a Mini Cooper. Just like a child with a toy catalog, I’ve spent hours on the Mini website playing with colors and options packages, building my own dream vehicle. Whenever I’m tempted to buy small indulgences, I ask myself, “Would I rather have this or a Mini?”

Until the beginning of last week, however, I thought I still had a long way to go before I could afford even a used Mini Cooper. Turns out I was wrong.

Savings success
Since the middle of last year, I’ve been saving like mad, attempting to accumulate enough money to buy a car. My progress has been outstanding:

  • After I built my emergency fund, I began to route my regular monthly savings to my Mini Cooper savings account. I’ve saved about $6,200 for a car during the past eighteen months.
  • I’ve also been putting “found” money into my car account. When I get a birthday check, it goes to my Mini fund. When I sell something on eBay, it goes to my Mini fund. That’s come to almost $700 in the past year.
  • In October, I won a contest at ING Direct. My prize was a $1,000 6-month certificate of deposit. It matured last week, and I promptly rolled the proceeds into my Mini fund.
  • We refinanced our house recently. The last payment on our old mortgage was made in March. Our first payment for the new mortgage is due May 1st. There’s no April payment! That means I can use that thousand dollars for a Mini.
  • Also as part of the refinance, we received a disbursement check of $1879.03, half of which goes to Kris and half of which goes to me. That’s $939.52 more for a car.
  • Finally, when I earn interest in my other high-yield savings accounts, I’ve been scraping that money into my Mini fund. This doesn’t amount to much, but every little bit helps.

All told, by the beginning of April I had managed to save just over $10,000 for a car. That’s not enough to buy a Mini Cooper — not even a used one. But then I found another chunk of change.

Tax refund
Because I’m self-employed, I pay quarterly estimated tax payments based on income projections I make at the beginning of each year. But because my business has been growing, these projections have been off. At the end of the year, I owe more than I’ve paid, and so have a tax bill due.

The first year this happened, it caught me by surprise. I owed a lot of money, and I didn’t have anything saved to cover the tax bill. Ever since, I’ve set aside as much as possible to prepare for taxes.

Note: For others with their own businesses, here’s what I do: Every month I transfer living expenses from my business account to my personal account. I keep these expenses as low as possible. I leave the rest of the cash in the business to save for taxes. After taxes are paid in April, I pull any remaining “profits” for the year into my personal account.

Well, I paid my taxes last week. When the checks were written, I was amazed to find that I had a huge chunk of cash left over. In fact, there were several thousand dollars remaining in my tax account, all of which was now available for my personal use. I transferred the money to my Mini Coooper account, and stared at the total: I had $16,768.98 in savings.

I almost had enough to buy a car.

New vs. used
With stars in my eyes, I dropped by the local Mini dealer last Wednesday to wander their showroom. I spent an hour talking with a salesman. He was awesome. He didn’t pressure me, but answered all of my questions. Though I loved the shiny new cars, the vehicles I really wanted were marked at over $25,000. (Most were around $28,000, and one amazing Mini was $40,000!)

“I don’t have enough saved to buy a car right now,” I told the salesman, “but I’d love to rent one for the weekend.”

He frowned. “I’m afraid we don’t do rentals,” he said. “I don’t know anyplace in Portland that rents Mini Coopers. Sorry.”

Then he added, “You know, Mini is offering 1.9% financing right now — if you have good credit. That’s a good deal.”

“Thanks,” I said. “My credit’s great, but I’m not wiling to take on debt. I’ll just wait and keep saving.”

Then a friend called on Friday. “J.D., have you been down McLoughlin lately?” he asked. “There are two used Minis for sale along the strip.” (I live next to a stretch of road that is home to more than a dozen car dealerships.)

I hadn’t considered buying a used Mini (I’m a new car kind of guy), but the more I thought about it, the more the idea appealed to me.

  • If I bought used, I could avoid the instant depreciation associated with a new car.
  • If I bought used, I could save the price difference for other goals.
  • And if I bought used, I could have my Mini Cooper now.

On Friday afternoon, I dragged Kris with me to look at the two used Minis.

The first vehicle was a 2003 Mini Cooper S marked at $13,800. It had 70,000 miles on it. On the surface, this seemed like a great deal, but the car wasn’t in good shape (even after being cleaned up by the dealer), and the salesman gave me a gitchy feeling. I decided to pass.

The second car was a 2004 Mini Cooper marked at $17,000. It had 60,000 miles on it. This car was more expensive, but from what I could tell, it was also in better shape. I took it out for a spin.

“What do you think?” I asked Kris after the test drive. “Should I buy it?” Though I’ve made tremendous progress with my personal finances, I still have a tendency to second-guess myself. I know I’ve done some dumb things in the past, and I’m afraid of heading down that road again. But Kris has always made smart choices. I trust her judgment.

“Do you like it?” she asked. I nodded. “Then you should buy it,” she said. So I did.

The negotiator
It’s been a long time since I bought a car. I had forgotten how awful I am at negotiating — and how much I hate it. I tried to do a good job on Friday, tried to remember the tips I’ve shared here in the past, but even knowing this stuff in advance didn’t help me. I don’t think I did poorly, but I certainly didn’t get a great deal, either.

I paid $15,600 for my Mini. Kelly Blue Book says that I could expect to pay $14,790 for this vehicle from a private party, so I paid about $800 too much. (It also says that I should expect to pay $17,240 from a dealer, so maybe I actually saved $1,600?) Kelly Blue Book also says I should have received $1,250 in trade-in for my Ford Focus. I got $550. Ouch.

In retrospect, I ought to have done this differently. Once I realized I had enough to buy a used Mini, I should have been methodical about my search, looking for the best deal. That’s what I do with all of my other purchases! Instead, I let euphoria take hold of me, and I bought the first acceptable vehicle that I saw.

I don’t regret my purchase — not at all! — I just don’t think I was as smart as I should have been.

The joys of personal finance
Time will tell whether I’ve made a good choice. It may be that my impatience has cost me money. Or it may be that the pleasure I receive from this little car is worth every penny. So far — after only two days — it’s all joy and no regret!

My favorite part of this transaction, aside from paying cash for the car, was that I didn’t spend all of my savings. I went into the deal with a budget of $16,768.98, and I spent $15,238.80 after taxes and fees. That leaves me $1530.18 to begin saving for something else.

Who says personal finance is no fun? I’m having a blast!

Note: I’m calling this my “starter Mini”. I plan to pursue Dave Ramsey’s Drive Free, Retire Rich program. I’ll continue to sock away money every month in my car fund. In a couple of years, I’ll be able to take that savings, sell this Mini, and upgrade to a higher-priced model. Eventually I’ll be able to afford a new vehicle!