My used mini cooper and the power of saving

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 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.

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!

More about...Budgeting, Transportation

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ObliviousInvestor
ObliviousInvestor
11 years ago

Congratulations! Working toward a goal and reaching it is always fun. Personal finance is no different. 🙂

Cath
Cath
11 years ago

Wow! Congratulations! This is exactly the reason to get our finances together. You earned that “instant” euphoria, since you’ve been working so hard to save and pining for it for so many years. To pay cash for a dream without sacrificing other goals or going back into debt, it is something we all hope to do someday. Please have no regrets – just enjoy the fruits of your labor!

Chase
Chase
11 years ago

Congratulations! I love the feeling of purchasing something that I have been saving up for.

I watched the Ramsey car plan, and it’s quite logical, though I would add that the 12% return rate is a pretty darn high estimate.

Jennifer
Jennifer
11 years ago

Awesome! I don’t even know you and I am proud of you. We paid cash for a new to us car last summer and it was such a great feeling! We are currently saving again for a new minivan. It is amazing how fast the money piles up when you stay focused on your goal.

Lauren
Lauren
11 years ago

Hooray! Congratulations! I’m so excited for you.

Michelle
Michelle
11 years ago

I have my eyes on a Kia Soul Diva Color Gold.

Sally
Sally
11 years ago

Congratulations! Why someone else buying a car should feel so exciting I have no idea! But it does! If I had to guess it might be because it’s so good to see someone realising their goal- which makes them happy AND that they achieved it in the way they wanted – which makes them perhaps even happier – esp when that way involved a big change in how they go about doing things!
AND your car is such a happy colour !

Erica Douglass
Erica Douglass
11 years ago

Congratulations! This has been a long time coming for you.

It’s also a hint that an hour or two spent really learning negotiating would pay off in spades. 🙂

-Erica

Lexy
Lexy
11 years ago

Congrats JD 🙂 I’m pants at negotiating too… it’s the cost of being a generally accomodating person.

J.D.
J.D.
11 years ago

@Erica (#8)
I think you’re right. I actually have a book about salary negotiations here on my desk. Maybe I should read and review that, eh? I’ll bet some of the principles are applicable to other situations, as well — like buying a car! 🙂

KAD
KAD
11 years ago

Congrats, J.D.! A well-deserved 40th birthday present.

Don’t kick yourself too much about not having shopped around very much. Part of the joy of being in control of one’s finances is the ability to capitalize when opportunity presents itself. That is precisely what your saving and planning enabled you to do.

Now, enjoy the secret thrill of pleasure that runs through you every time you step into the car of your dreams, which you own outright!

Jay
Jay
11 years ago

Congratulations JD! Don’t feel bad about paying 800 dollars too much, most people would have spent that in the first 2 years of financing the thing. You should probably frame the title and hang it in your office. =)

guinness416
guinness416
11 years ago

Wow, I played around on that Mini site for a few minutes. You’re right, the things aren’t cheap and they make all the “options” seem very attractive.

Congratulations on the new car, JD! Long may you enjoy it. Now you need a new goal/running joke for the site.

Jenzer
Jenzer
11 years ago

Congratulations!!

I think your story is a strong testimonial not just for the power of focus and discipline but also for the power of visualization.

RM
RM
11 years ago

Buying a car with cash is exciting. One question (ok, 2): did you get the car inspected? What are your thoughts on the pre-purchase inspection?

Pam
Pam
11 years ago

Oh my god! This is amazing! What a wonderful Easter Sunday story 🙂 Congratulations and hope you have a blast driving it around this summer!

Greg
Greg
11 years ago

Congrats on the Mini (I own 2, so I understand the appeal). the extra $1500 is a perfect amount to start the next stage of mini ownership after purchasing… Customizing 🙂

Mary
Mary
11 years ago

Congrtas on the dream come true. Now I have to ask – you wrote “If I bought used, I could avoid the instant depreciation associated with a new car.” Given this, why are you so interested in purchasing a new car?

J.D.
J.D.
11 years ago

@RM (#15) I did not get the car inspected, but I think it’s a great idea. I don’t know how to go about doing it. Now that I own the vehicle, I do plan to take it up to the Mini dealer, though, and ask them to do an inspection. I realize this is backward. @Mary (#18) When I buy new (which is usually), I drive the car a long time. The Focus I just got rid of, for example, was my vehicle for 9-1/2 years. I just feel much better about buying new than buying used. If this purchase… Read more »

Austin
Austin
11 years ago

Hey J.D.

Congratulations on achieving one of your most sought after goals. Although, it is sad to see the conclusion to J.D.’s comical quest for his beloved Mini Cooper. 🙂 I don’t know the details about your Ford Focus, but did you consider trying to sell it on Craigslist? Also from what I remember many used car buying guides recommend getting a carfax report. A good website to check out is edmunds.com (especially their tips & advice section)

Gwen
Gwen
11 years ago

Congratulations!

RM
RM
11 years ago

In central Texas, there is a service recommended by our credit union : http://autopi.com/ . It costs $129, which is a chunk of change especially if you have multiple cars inspected before purchasing. Carchex (from carfax) offers another service : http://www.carchex.com/inspect/order/ .

cate
cate
11 years ago

Congratulations! You FINALLY have a Mini Cooper!!!! That’s a really nice color too.

Kevin
Kevin
11 years ago

Congrats, J.D. – I think you did just fine!

Adam Steer - Better Is Better
Adam Steer - Better Is Better
11 years ago

There’s a lesson or two to be learned from every experience – good or bad. But in this case I think you should just…

ENJOY YOUR PURCHASE!

You earned it. 😉

Cheers,
Adam

KathyA
KathyA
11 years ago

Congratulations!! Great job and what a great inspiration! Enjoy.

Kelley
Kelley
11 years ago

Congratulations JD!

Maybe you should keep the $1500 leftover for repairs just in case unless you already have money set aside for that.

That’s awesome that you paid cash! What an amazing feeling that must be. We’re also planning on “driving free”, well we are right now, but we’ll never finance a car again!

Cassie
Cassie
11 years ago

Congratulations! You are such an inspiration to me. I can’t wait til my husband and I can do the same thing! Enjoy your purchase. You’ve definitely earned it! 🙂

quinsy
quinsy
11 years ago

hey congratulations!!!

I agree, the money you still have will be important. I just got a ‘new’ used car and the costs have really added up including new tires, new brakes, etc., registration, insurance, inspection etc. (it failed emissions at first and took a little more work)….

plus my new used car has XM radio, a new toy to pay for. 🙂

jtimberman
jtimberman
11 years ago

Congratulations JD, I’m glad you bought used and paid cash :-).

Dealers don’t make money on new cars paid for in cash. They make money on reselling finance paperwork (more on a lease than traditional payments, too), and in the service garage. They also make money on trade-ins, especially on cars more than 8 years old.

S
S
11 years ago

Congrats, JD!

Beth @ Smart Family Tips
Beth @ Smart Family Tips
11 years ago

This is excellent, J.D.! I’m so glad you finally got your Mini. Even better that you paid cash . . . I bet that felt great.

Funny this post came up today — my husband, our daughters, and I were driving home this afternoon from a family dinner and passed 7 Minis in a row on the small road to our house, definitely an unusual site. After we got home, I went online and found your post! 🙂

Benton
Benton
11 years ago

Hooray! You finally got it! Purchasing used seems to always make the most financial sense, so I think you made the right call.

SingleGuyMoney
SingleGuyMoney
11 years ago

Congratulations on finally getting your Mini and Congratulations again for being able to pay cash!

I’m sure you are probably riding around in it right now!!

Brittany
Brittany
11 years ago

As a fellow MINI owner, I have to say – welcome to the club! The more I drive my MINI, the more I love it. Now the important question is, have you given it a name yet???

Elizabeth
Elizabeth
11 years ago

JD, your blog is such an inspiration to all of us. I’m sure you can tell by the positive response you get when you tell us you’ve pruchased your dream car– we’re jumping for joy as much as you!

I think it’s because your example shows us our dreams are also within reach. Today, you’ve gotten your Mini due to your patient persistence. Tomorrow, some of our dreams will come true–it’s not just a childhood fairy tale. Thanks for showing us that!

And congratulations!!!

Heather
Heather
11 years ago

Welcome to the club 😀 I love love LOVE my Mini – I’ve never driven another car that is so much fun. Just make sure you wave at the other Minis when you pass!

Susan
Susan
11 years ago

Congratulations! I am a newbie to your blog, and I have really enjoyed following your financial tips and this story! It’s inspirational and I’m happy for you!!

Gina
Gina
11 years ago

Okay so I want to say “good, you’ll finally STFU about the MINI.” But the truth is I’ve really enjoyed the many MINI posts along the way.

Congrats J.D., enjoy the ride.

Kristia@FamilyBalanceSheet
11 years ago

Congratulations! You are an inspiration to many people and have set a good example of diligence and hard work.

Ryan2
Ryan2
11 years ago

Congrats JD. You earned it, and you ought to enjoy it. But here’s an idea for a post that you should write exactly one year from today: How great does it feel to get behind the wheel of that car one year from now, after you’ve gotten used to it for a year? How much has the experience changed for you? I don’t mean this in a negative way at all, but in my own life I’m always amazed and a little disappointed in myself how I so quickly “get used” to something that I wanted for so darn long.… Read more »

AGDM
AGDM
8 years ago
Reply to  Ryan2

I can identify because I’m the same. If I see it and I want it and can purchase/afford it I will buy it. And these are items that I personally research for some time not purchases made on a whim. Even still, delayed gratification or necessity (lust/must have), after acquiring the item I get so used to it about a month. So I started making sure I bought things I needed and prior to, I just ask myself “Do I really need this”… because at the end of the day all it boils down to is consumption. I also began… Read more »

eto
eto
11 years ago

Congrats on your MINI, JD. If you have a MINI dealer near you, give them the VIN to get the service and warranty history. MINIs have three years of dealer service plus a four year warranty. The pre-2005 Coopers were notorious for the transmissions imploding, so hopefully that has already happened and you’ll get information regarding warranty replacement from the dealer.

Also, depending on how far you want to take this, get in touch with a local MINI club. They’ll be able to give you lots of great tips on maintaining and enjoying your MINI.

Joey
Joey
11 years ago

Two things: 1. Congratulations. I haven’t read for very long, but it’s been long enough to become accustomed to your Mini-pining posts, and it’s always nice to see someone get something they’ve worked for. 2. Ryan2 has made, AFAIC, the comment of the day so far. You really should write a 1-year update (or even a six-month one for starters) on how you view the car, your life, etc, at that point. I’d be willing to bet that it would be one of your most introspective entries yet. Everyone always dreams of getting the one thing they want most, but… Read more »

Joel
Joel
11 years ago

Congratulations!! Way to go with reaching your goal!

leigh
leigh
11 years ago

congratulations!!! what’s the next financial goal/obsession? 🙂 always gotta have a goal! if you’ve wanted one for this long and knew what you were getting into, then i think you made a good choice financially, even if you paid a couple extra bucks over what kbb says. the joy of having the exact car you want is that you will love it for years. we got mine on st patty’s day 2005 after much research and waiting, and i love it as much today as i did then. (we didn’t pay in cash, as you wisely did, so there was… Read more »

Cathy
Cathy
11 years ago

Congratulations, JD!!! I am so happy when people reach their goals!!

I just found the car that I want to replace my 2001 Jeep, and I’m saving much the way you are to buy it. I have a car savings fund, and putting any ‘found’ extra money towards it. Hopefully I will have enough near the end of the year to buy it with trade in, and no car loan!!!

I will definitely do my research on negotiations too. Not my strongest point either.

Baker @ ManVsDebt
Baker @ ManVsDebt
11 years ago

Thanks for setting an amazing example!

Bob
Bob
11 years ago

CONGRATULATIONS!!!

Tootie
Tootie
11 years ago

Congrats on the mini! I’m excited for you! It looks like a great car – and best of all, no debt! 🙂

Chiot's Run
Chiot's Run
11 years ago

Happy Motoring fellow MINI owner. (you’re better off buying an older version as well, the engine is better).

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