Breakdown - Is Triple A(AAA) Worth The Money?

Posted on April 24, 2008

As we were driving home from watching some of our nieces and nephews for the weekend, I realized that pushing on the gas pedal of our Nissan Murano was not doing ANYTHING! I quickly pulled over and coasted to a stop. I figured I would try a restart and see if that fixes anything. Nope, the dreaded low battery cranking and then clicking. We were stranded!

Deep breath, stay calm. Call The Happy Boulderette(Mom) and arrange ride. Call AAA to get towed. Entertain The Happy Pebble and The Not So Happy And Hungry Pebble Jr. for about 45 minutes. Luckily we had a spare bottle that we heated with body warmth to keep Jr. content enough. All in all it was actually kind of endearing to see the family huddled together in the front seat making the best of a not so perfect situation.

Both my mom and the tow truck arrived almost he same time. We arrived home without incident and our car ended up at the mechanic. Got the car back today and it turned out to be the drive belt pulley and bracket to the tune of $400 with oil change and tune-up.

So no the real question, is AAA worth it……Yes. The trick in trying to analyze the whether AAA is truly worth the cost is to realize what you are paying for. For those that don’t know what AAA is or what they have to offer, here is the link to the benefits page of Mid-Atlantic AAA. People sign up for the emergency roadside services, and rarely use the discounts or travel planning from what I can tell. The point to remember is that you are buying insurance. Like most insurance the percentages and math say that it is isn’t worth it, but that doesn’t mean the protection, convenience, and psychological aspects don’t make up for it math.

First, if you use the discounts for things like movie theater, hotels, and other related activities, the membership will probably pay for itself pretty quickly. For the most part though, you can get similar or better discounts and planning on the web for free.

Second, the road services value will depend on the kind of car and driving you are doing, so these numbers will vary by family. For us, we have been paying the $150 a year for AAA Plus(150 mile towing package) for 6 years now. Including Sunday’s use I have used it 5 times. Two lock outs in the hectic time leading up to our wedding and three tows, two 5 miles and the other 50 miles. Mathematically the numbers are ugly. $900 paid and only about $350 in services used. I suspect that those numbers will be pretty close to the same for ‘most’ people.

Even though the math doesn’t work out in your favor, most people are still willing to pay for the insurance. They want to know that their wife can easily get out of a jam or that someone will be there relatively quickly with just a phone call when something does happen. Just from talking to people this aspect of the AAA coverage is generally accepted as well worth the money.

So, is it worth? I say yes, as long as you realize that you are paying for piece of mind and not getting a good deal on roadside coverage.

* Note - Some auto insurance policies provide emergency roadside clauses, but I have had to dig for information on my previous policies. I have now learned to call and ask.

» Filed Under Cars

Have Your Car Fixed For Free : Auto Recalls And My 2003 Nissan Murano

Posted on November 15, 2007

If you don’t get your car serviced at a dealership it can be very worthwhile to check the recalls that have been issued for your model vehicle. At SaferCar.gov The National Highway and Traffic Safety Administration(NHTSA) provides a simple tool for viewing and researching all auto recalls. Their website provides a host of information on all recalls, documents containing manufacturer communications to dealer, recall statistics, and even a complaint system. Click here for the NHTSA recall website. You should just be able to schedule an appointment with an approved dealer, if your vehicle identification number falls with the recall campaigns range. The dealer should fix the recall problems for free.

I hadn’t really given recalls much thought until I started to have some recurring problems with my autos. We have a strange electrical problem on my 2003 Nissan Murano that has manifested itself in some strange ways. A recurring check engine light problem, hesitation on acceleration after sitting in traffic for a while, poor idling, and the even a complete shutoff while my wife was driving.

The first repair was a cam sensor by an out of town Nissan dealer. They also fixed at least one recall without me having to ask. Within a few months the same problems existed again. I had the other cam sensor replaced at my local garage. After that I did some searching on the net. That is when I came across a recall for the exact problems I was experiencing. Here are the details :

Summary: ON CERTAIN PASSENGER VEHICLES, THE CIRCUIT BOARD FOR THE CRANK POSITION SENSOR OR CAM POSITION SENSOR MAY HAVE AN IMPROPER SOLDER JOINT DUE TO SOLDER DEFORMATION CAUSED BY HEAT STRESS ACCELERATED BY THE EXISTENCE OF FLUX RESIDUE DURING THE SOLDERING PROCESS.

Consequence: THIS COULD CAUSE THE “SERVICE ENGINE SOON” WARNING LIGHT TO COME ON, CREATE A NO START CONDITION, CAUSE REDUCED ENGINE POWER, OR CAUSE THE ENGINE TO STOP RUNNING WITHOUT WARNING DURING VEHICLE OPERATION, WHICH COULD RESULT IN A CRASH.

Remedy: DEALERS WILL REPLACE THE CRANK POSITION SENSORS. CAMSHAFT POSITION SENSOR(S), AND IN SOME CASES, THE VARIABLE TIMING CONTROL SENSOR(S).”

I called Nissan to at 1-800-647-7261 to see what they could do for me. They said that my VIN didn’t fall within the recall! What! After a week or so of phone tag and my continually pressing the issue, I finally got the Northeast Region Customer Service Manager. She treated me nicely only to tell me go pound sand. Ok, then who do I call to complain? She explained that she was the end of the line and told me to report my complaint to the correct governmental body.

They weren’t going to do anything. How great is that? I have the EXACT problem the recall is addressing, but Nissan could care less. One of the problems is quite dangerous; the engine could “stop running without warning during vehicle operation, which could result in a crash.” Nissan puts my family’s lives at risk, and doesn’t care one bit. That sounds like a huge lawsuit waiting to happen.

I dropped the issue for a while, until the car started doing the same things a month or two later. My mechanic said it was one of the newly replaced cam sensors again, and this time he noticed the recall too. He suggested I try a dealer to see if they will fix it. To really fix the Nissan’s flaws, he would need to buy the approved kit from a dealer and replace the full array of sensors, which could cost around $800. Now I am on the warpath again!

I tried another dealer again, with the same run around. I am not quite sure what the next step is, but I am considering a formal government complaint, a written letter to Nissan, and whining on a personal finance website. If anyone in the industry or anyone with similar experiences has any suggestions, I am all ears.

What I do know is this: I have owned multiple Nissan cars, but I won’t buy another one. The old adage is “don’t by a car that is the first year of a new model”. It is certainly holding true for the Murano.

» Filed Under Cars, Money Savers

4 Reasons We Rush Into Replacing Our Cars

Posted on September 26, 2007

Got an old car that is giving you problems? Scared that your junker is going to leave you stranded? Well, then you might be struggling with the question of when to let go of the old car and get a new one. It is a question I often see people struggle with, and one that people seem to make decision based on emotion or to justify their desire for a newer car.

Deciding that your current set of wheels is more hassle than it is worth isn’t an easy decision. I am not even sure that there is a correct answer, just like most personal finance questions it is a very personal choice. But let’s look at the top few reason people ditch their old cars two quickly.

The biggest mistake is to quickly ditch a car at the first major repair. If the car is in reasonable shape, it will almost always be cheaper to fix the car. From the outside it also seems that they are using the repair bill to justify our underlying desire to drive a better car. Evaluating our materialistic side and keeping it in check is a big key to making a wise decision.
We need to dispel our irrational fear of the car leaving us stranded. I have had it happen a few times, and it is not that big of deal. Today in the age of cell phones, you won’t be sitting helpless for hours upon end. You will be inconvenienced for an hour or two, but it isn’t the end of the world. There are personal factors like criticality of your job or income on the car that do make being stranded a lot worse.
People look at the future payments rather than the total cost of the situation. Paying $2000 a year in repair bills and a little hassle is still cheaper than getting a five year loan shiny new or used car. A $15,000 loan at 7% interest for 4 years will cost you almost $1000 in interest and $3300 in payments just in the first year.
The last big issue is lack of preparation. If we know our car is nearing the end of it’s life, it is extremely helpful to add a new car item to a monthly budget. If you can afford a $400 a month car payment, start saving that amount and you will be able to buy a $5,000 car for cash in a year.

If you don’t think a $5,000 car will last, think again. My Japanese made Nissan Sentra was 7 years old and had 50,000 miles on it when I bought it for $5,500. 6 years later I am still driving it without ever having faced a major repair.

Sometimes we need to let go of our cars, but often we sacrifice some financial success and prematurely rush into a new car purchase.

» Filed Under Cars, Materialism, Planning

Was Paying Cash For A Car Worth It?

Posted on September 25, 2007

Previously I shared how we paid off our $15,000 car loan and were able to pay cash for two more cars in the following years.

As I thought back through our story, I was left asking myself “Was it worth it?”.

We got a lemon of a car in the Ford Focus, so yes it was extra hassle dealing with that. The fact of the matter is that bad breaks happen sometimes, even if my research said the Focus should have been pretty reliable. I don’t think making choices based on a fear of low percentage what-ifs isn’t going to breed success.

The decision was close to being a wash in the strictest financial sense. If we purchased the Murano right out of the gate, we would have paid about $17,000 for a similar Murano. That would have left us with financing of $8,000 @ roughly 7%. Since we paid about $8,500 in cash after the Focus trade in, we would have had the loan paid off in a year. That would have wasted about $300 in interest, and about $150 in opportunity cost in savings interest.

The only other thing to factor in is that we would own a car with an extra 15,000 miles on it. Using a Kelley Blue Book estimate that is about $1,000 dollars or so in unrealized savings.

Most of the numbers were irrelevant though. We had spent 4 years digging out of debt, so going back into debt would have proved that we hadn’t learned any lessons. On the other hand, sacrificing the car we wanted for a year and paying cash continued to set the stage for us to win financially. Going into debt would have opened up the financing option again on all other subsequent purchases. This was a test, and we passed. We had the benefits of being debt free firmly implanted in our minds, and we were not about to give them up.

The intangible benefits we received from paying cash seem extremely worth it, what do you think?

» Filed Under Cars, Debt Elimination, Psychology of Spending

Our Personal Paying Cash For Cars Story

Posted on September 19, 2007

Last post we talked about changing the way we talk about car loan debt, now let’s talk about avoiding the debt in the first place.

The picture to the right is the car we own today. Ok, ours is just a normal bronze Murano, but you get the picture. In this post I wanted to outline the strategy we followed after going $15,000 for a 1999 black on black Toyota Celica.

First off, I didn’t realize it until years later, but buying the Celica was a mistake. My wife liked the car so much that she may disagree, but going into $15,000 of debt in the first few months of marriage was not a wise choice.

The payment was just over $300 dollars a month, but the loan was our highest interest debt and was paid off in two years. During that time we decided not to go into debt again. We had a lot more debt to pay off, so we snowballed the freed up money into other debt.

Fast forward two years, and we were just about out of debt and had a brand new baby boy. The ride home from picking him up was quite a sight. The rear bucket seats of a sports car don’t accommodate a car seat well. The Rockette was smushed into dash, just so the car seat would fit.

We needed a new car, and fast. We didn’t have the money for the nice lower mileage SUV that we wanted, so rather then going into debt, we traded the Celica and paid cash for a four door Ford Focus hatchback. After a year we were quite unhappy with the Focus; to us it was a cheaply made lemon.

With no debt, we had been stocking away cash at a good clip. Finally, we traded the Focus and paid 8k in cash for a 2 year old bronze Nissan Murano. We had the car we wanted, and were able to avoid going into debt while doing it. Next post I will dissect this strategy, and share some tips for staying out of auto financing.

» Filed Under Cars, Cash, Debt Elimination

If You Are Making Car Payments, You Don’t Own The Car

Posted on September 17, 2007

We usually talk like we own the car, but this is just a delusion. If you secure financing for an automobile, the bank or financing company probably owns your car. The person with the auto loan is most likely granted non-possessory security interest in the vehicle. Basically, the bank owns the car and you are not able to sell the car without the loan being paid in full.

The reason I mention it, is to clear up what I think is a major reason it is so easy to be in debt. The lending industry wants debt to sound rosy and cheerful, so that consumers will go into more debt. If we continue to fool ourselves into thinking we own things that are not actually ours, we will continue to by more things we can’t afford. Yes, I said it! If we are paying payments, we probably couldn’t afford the item. We delude ourselves by affording payments!

If you think I am crazy or sound foolish, you probably never received the title to a car in the mail after you made your last payment(or paid cash in full). It is just a piece of paper, but it feels so good for some reason. I would love the world to change how they talk about debt. Let’s talk more about the great feeling of working hard for something and paying for it in full, rather than tricking ourselves into thinking items that we don’t own are ours.

» Filed Under Cars, Materialism, Psychology of Debt

Hypermiling Followup - Save $466 Dollars A Year Or More

Posted on August 1, 2007

As I thought about some of the concepts behind hypermiling I felt they demonstrate the core philosophy we have here at The Happy Rock. If we change our attitude and relationship to world around us, our finances are also affected.

Let’s start with a look at how our finances might be affected, since we are talking about a good bit of money that can be saved. Assume an average of 12,000 miles driven a year, $3.00 a gallon for gas, 20 MPG average, and a 35% increase in MPG from improved driving habits. At 20 MPG that comes to about $1,800 a year. Increase your MPG by 35% and you only spend $1,333.33 a year. A savings of $466 dollars a year.

For me the change in attitude comes for these concepts that stuck with me from all of the hypermiling research :

I control a larger percent of driving efficiency than I give myself credit for. My impatience, lack of awareness, and even laziness can cost a significant amount of money.
At rest a car is getting 0 miles per gallon.
Pressing the accelerator uses gas to create energy and motion. Why then would I want to accelerate towards a red light, only to brake and dissipate the motion that I used gas to create. Yes, I am quite guilty of this, especially in our Murano, though my little 4 cylinder Nissan keeps some aggressive driving habits in check.

The idea is that if I change my attitudes and habits about driving I can save a bunch of money and even some stress. Here are a few simple changes I am interested in making habits:

Making sure my tires are inflated
Traveling smoother routes(less stopping)
Gradual acceleration from stops(I still have some 18 year old teen driving bravado in me)
Coasting more when I need to stop.
Part of it whole equation is breaking the rushing full speed ahead lifestyle that is particularly evident on the east cost of the US.

Here are a few tips that I already do:

Shifting into neutral on long downhills
Using the highway whenever possible
Drafting really close(10 feet) behind tractor trailers on highways. Just kidding, but I did see a Mythbusters episode that caused a significant increase in gas mileage. The risk is a little to high though.

Now that I shared a few areas that I want to work on and why it is worth it, I am interested in what areas you are thinking about attacking? What tips and tricks are you using to save a few pennies while driving? Let’s pool our ideas together to save some extra money!

» Filed Under Cars, Frugality, Money Savers

Cheaper Than Cheap Tip Of The Week #2 - Hypermiling

Posted on July 30, 2007

“Cheaper Than Cheap” is a recurring tip series about frugality. The idea is to provide helpful frugality tips that border on fanatical to the point of being humorous. Love them or hate them, let’s hear what you think.

Cheaper Than Cheap Tip #2 - Hypermiling

In the age of $3.00 /gallon gas we are bombarded with tips for increasing our fuel economy. I have mentioned how keeping your tires inflated can increase safety and fuel consumption. Other common tips for better gas mileage include using cruise control, avoiding traffic, and driving less aggressively. Hypermiling takes getting the best MPG to the extreme. Take the HybridFest 2007 in Madison Wisconsin as an example. The contest has competitors drive the same course and compete for the highest MPG. The winner Wayne Gerdes had an astounding MPG of 180 over the whole course. Hypermiling was started by hybrid car owners, but the tips are easily transferable to ‘regular’ cars. I am a novice hypemiler, but have learned a good deal through some simple research.

This article from May about hypermiling highlighted some of the most well known techniques. Some of my favorites are :

Ride on the paint to save from friction
Over inflate your tires
Place cardboard over your radiator, because a cold engine uses more energy
Drive with your windows closed and your AC off
Park at the highest spot in parking lots, so you can coast out of the spot
Shift into neutral or shut off the engine at stoplights or even on large downhills

Check out the full article for some other creative ways to save gas. Note that the safety and usefulness of some of these tips is definitely under debate.

Here is the list of other great resources I came across during my research.

Two news articles about the phenomenon @ CNN and Washington Post
Six steps to better fuel consumption @ hypermiling.com
Popular hypermiling sites : CleanMPG, GreenHybrid, and InsightCentral

Let us know what you think of hypermiling by taking part in the Cheaper Than Cheap poll.

Opinion Polls & Market Research

» Filed Under Cars, Frugality

Government Sometimes Save Us Money - Tire Pressure Monitors

Posted on July 23, 2007

The government always seems to be taking our money, but sometimes they do get things right and pass legislation that beneficial. US government legislation that has been in the works since the 2000 tire recall will require auto manufacturers to install tire pressure monitoring sensors on all new models for vehicle’s under 10,000 pounds. The bill, which affects vehicles for the 2008 model year, is being phased in September 1st of this year. The system is such that when the pressure of any of the four tire drops below 25% below the recommended pressure, a warning light will display on the dashboard. The consumer will still need to stop and fill up the tire though, tires are not yet self inflating(although that it is probably coming).

Tires are the most abused part of the car. We all know that we should check our vehicle’s tire pressure every 30 days, but most of don’t monitor it very closely. I probably check it once every couple months, and before long trips. This upgrade will only reportedly cost “manufacturers between $48.44 and $69.89 per vehicle”, a small price for the numerous benefits that come with properly inflated tires. I am all for technology helping us stay safer and live less expensive lives. The savings of properly inflated tires are this :

NHTSA estimates that 120 lives a year will be saved.
Better fuel economy/gas mileage
Decreased stopping distances
Decreased likelihood of tire failure. Majority of flat tires would be avoided with properly inflated tires.
Less skidding on wet surfaces.

Now for those of us with older cars, we should go out and get a huge interest only loan for a new car to take advantage of the new technology. Just kidding, my goal is to set a monthly calender date to start checking my tires. The motivation is coming from the increased gas savings and improved safety that my family will receive. If I make it habit, I should never have to worry about it again. To start, I just added it into my PDA as a recurring monthly event.

How often do you check your tires? Do you like the new law?

Source

» Filed Under Cars, Frugality

What do our cars really say about us?

Posted on June 3, 2007

I am going to show you a picture of a car, and I want you to try and picture the owner and their life.

What do you think this car says about the owner? Maybe that the owner has a lot of debt, low income, lives in a ‘bad’ neighborhood, and can’t afford anything better that a an old beater.

This interesting article from 2001 has some interesting things to say about what the color and model of our cars says. The color says that the driver is “cautious, conservative, often introverted personality likely to drive the good bargain.” The model says that the driver is an accountant and voted for George W. Bush

A car can speak volumes about who we are and more specifically what we value. My car looks almost exactly like the car in the picture(same pealing paint job and all). I am guessing that common sense gave you the wrong opinion. You probably don’t think that I have owned the car for about 6 years, haven’t had a payment in 5, have a net worth of well over $100,000 at age 28, live a quarter mile for million dollar homes, and earn an above average income. This little exercise leads us to an interesting observation that will aid our journey to freedom.

We are not our possessions – Materialistic cultures constantly bombard us with the idea that you are not somebody unless you have nice things. We often lust for better cars and houses, but those things will not bring us fulfillment. We need to redefine how we view ourselves to align with things that we truly value in this world, not with some external expectations. Things like families, your dreams, morals, and how we treat other are much better examples of ways to define ourselves. Remember that part of redefining ourselves require us to redefine how we view and value others.

The truth is that my car aligns with my values and dreams. I originally bought the car with debt, but I will never purchase another car with debt. I fight the occasional desire to upgrade, by framing the purchase in light of values. It has helped me to not care that people give you glances when a beat up car pulls into a nice restaurant. I know most of those people don’t even own a car, the bank does. Ultimately, I want my money working for my family and my dreams, not towards creating a false image of myself.

Just in case you are wondering, I have not had a major repair on this car yet. That being said, this car may not have much life left in it, but I have already chosen to start saving $4,000 - $5,000 dollars for the next reliable ‘beater’. This car is a ‘beater’, I call it my ‘debt beater’. Can anyone out there top this jalopy?