Posts tagged ‘cars’
We’ve done a pretty good job of cutting back on unnecessary expenses during this period of reduced income. ‘Magazine subscriptions’ seems like an obvious category to eliminate, right? Yet I kept mine. Here’s why: they save me way more money than they cost.
Consumer Reports
My first-ever magazine subscription, when I was 19 years old, was to Consumer Reports. Other ones have come and gone, but I’ve been a loyal nonstop CR subscriber for twenty years now, and I read every issue cover-to-cover. (The complete lack of advertising makes this a remarkably pleasant experience). I also pay extra for full access to their web site, because the search function is darn handy, and keeps me from having to store and sort through years of back issues.
A lot of what they report on is not of immediate use to me, of course — for example, we buy one car every decade or so. But every time we are ready to make a major purchase, I check CR. About 80% of the time they have a ratings list including feature and price data, plus a detailed explanation of how to assess quality of models not listed. In the past four years I’ve used CR to choose an oven, two televisions, a washer and dryer, a computer printer, a digital camera, and a gas grill — all of which have performed beautifully. That’s not even counting the small stuff, like comparisons of laundry detergent effectiveness, or — in the most recent issue — condoms! Plus they have frequent articles alerting readers to issues like credit card traps and health insurance pitfalls.
Cost: $42 per year ($23 print, $19 web).
Savings: several hundred dollars per year.
(If you want to be extra-frugal, get the web-only CR for $26 per year. I happen to enjoy the print magazine enough to warrant the extra $16, but the important information is all available online.)
Consumers’ Checkbook
A little over a year ago I added Consumers’ Checkbook to my arsenal. They’re sort of like a regional, service-focused version of Consumer Reports, offering both ratings and in-depth reports on various services. They’re only available in seven metro areas, but fortunately for us, one is Puget Sound.
So far this year I’ve used their ratings to select a veterinarian, a dermatologist, and a car repair shop. Checkbook doesn’t have a full report on doctors, so the dermatologist didn’t come with a price comparison or savings. But their feature on ‘doctors rated highly by other doctors’ did help me get someone good. I don’t know anyone locally who visits a dermatologist, so without Checkbook it would have been a crap shoot.
The vet and auto repair ratings, however, have arguably saved us hundreds of dollars this year alone.
Veterinarian:
I know plenty of people with pets, so finding a good vet has never been a problem. What’s harder is finding one that’s both good and cheap, relatively speaking. Here Checkbook’s price comparison between veterinarians was stunningly useful. It would have taken me many hours to do that research on my own. And look at the range!
There are big vet-to-vet price differences. For example, for spaying a 25-pound, seven-month-old dog, charges we found at local vets ranged from $90 to $532. Many of the lowest priced vets rated very high on our customer survey. It is possible to save money and also get top-quality care for your pet.
The vet I selected with Checkbook’s info turned out to be not just great but also very reasonable in cost. When our cat developed alarming symptoms earlier this year, it was worth a lot to know that I wasn’t going to be hemorrhaging money in tests and treatments.
Auto Repair:
Over the last couple of weeks, our trusty little 1999 Honda Civic has been exhibiting some alarming behaviors, such as a sudden loss of electrical function while going 60 mph on the interstate.
Car repairs scare me, because I know very little about automobiles, so it’s very easy to take me for a ride, so to speak. Fortunately, we have a car mechanic in the family — too far away to fix our problem, but at least he could make a long-distance guess at the cause and give me a rough idea of a reasonable charge for repairs.
His assessment: either the ignition switch (~$125 retail part) or the distributor ($450-$500 retail part). Either one would take, he guessed, about one to one-and-a-half hours of labor. (His shop charges $80/hour for labor, for comparison.)
Again, Checkbook reports wild variation in local costs:
There are dramatic price differences. For example, to replace the water pump and timing belt on a 1999 Ford Contour, we found prices ranging from $393 to $950. Hourly labor rates range from $60 to $140. There are many top-quality, low-priced shops. Indeed, we found no relationship between the prices shops charge and the quality of their work.
(Are you seeing a pattern here?)
Checkbook listed ten repair shops within five miles that earned their top recommendation for both price and quality. (Hourly labor charges in our immediate area ranged from $73 to $110.) Jak picked one on a direct bus route that had a $75 rate and customer comments extolling their ‘honesty and service’.
As Jak was the one to take the car in, I didn’t interact with them directly, but the results were impressive. The diagnostic mechanic couldn’t quickly determine whether it was the ignition switch or a distributor problem, but rather than suggest we replace both — which would mean more money for him, and the tack many shops would take — he persevered.
Ultimately he was able to confirm the fault was in the ignition switch, which he replaced. He charged us for one hour labor and — based on the information I got from Bill — something that must have been very close to his own cost on the part. Total charge: $120. It could easily have been double that at another shop for the very same repair; a lazy or dishonest mechanic might have tried the distributor and charged us $600 or more.
Cost: $14 per year (print and web).
Savings: several hundred dollars per year.
(Note that Checkbook subscriptions are for 2-year periods, and cost varies slightly among locations.)
It was a brief segment on NPR’s Marketplace last month that alerted me to the newest scary thing about credit cards: banks have begun to curtail or withdraw credit based on where you shop and what you buy.
Here’s one example: consumer Kevin Johnson had his credit line slashed by two-thirds despite a stellar credit score (764) and a flawless history of on-time payments. Why? Because “… other customers who have used their card at establishments where you recently shopped have a poor repayment history with American Express.”
Excuse me?
Analyzing his recent purchase history, Kevin came to suspect that Wal-Mart was the ‘establishment’ in question, but couldn’t get anyone at American Express to confirm, deny, or elaborate on their message.
A May article in the New York Times entitled “What Does Your Credit-Card Company Know About You?” shows just how absurd this has become (emphasis mine):
Most of the major credit-card companies have set up systems to comb through cardholders’ data for signs that someone is going to stop making payments. Are cardholders suddenly logging in at 1 in the morning? It might signal sleeplessness due to anxiety. Are they using their cards for groceries? It might mean they are trying to conserve their cash. Have they started using their cards for therapy sessions? Do they call the card company in the middle of the day, when they should be at work? What do they say when a customer-service representative asks how they’re feeling? Are their sighs long or short?
Information about exactly what businesses and purchases count against you is a closely guarded secret. The only specific data I have been able to find was in a single lawsuit filed by the Federal Trade Commission last year which cites one Visa card issuer for “an undisclosed ‘behavioral’ scoring model that penalized consumers for … cash advances and transactions with the following types of merchants”:
- Direct marketing merchants
- Marriage counselors
- Personal counselors
- Automobile tire retreading and repair shops
- Bars and night clubs
- Pool and billiard establishments
- Pawn shops
- Massage parlors
According to Marketplace, “splurging looks bad, and … scrimping looks bad”:
“Say Mr. Good Credit rewards himself with a rare trip to the spa? His card company might think he’s trying to relax because he’s stressed about money. And what if he decides to go bargain hunting? ‘Oh my gosh, maybe you’re about to lose your job. You’re starting to downscale to lower-cost stores.’”
Yes, even frugality can be considered a warning sign; one analysis found that “people who bought cheap, generic automotive oil were much more likely to miss a credit-card payment than someone who got the expensive, name-brand stuff.”*
What can you do? Not much. You can avoid or pay cash for suspected red-flag items like alcohol or therapy. But we are playing a game where the rules are not just secret but constantly shifting, and a behavior that’s innocuous today may be blacklisted tomorrow. “Many people don’t understand how almost every transaction they make today could trigger a readjustment in bank analytics,” says credit-card expert and consumer advocate Dr. Robert Manning.
At left: a six-minute segment on Good Morning America that aired this past January, profiling Kevin Johnson’s situation and the growing data-profiling problem.
Previously: credit cards part one and part two.
Next, in part four, I’ll cover the good news and the bad news about the recently passed CARD legislation. And finally, in part five: my personal response to the mess.
*(An aside: I buy a lot of generic groceries, and know that it only rarely makes a difference in quality, but I know very little about generic as applied to motor oil. I called my brother-in-law Bill, who owns and runs a car repair shop, to find out whether expensive name-brand oil is actually any better than cheap generic oil. His answer, in brief: it’s a gamble; 9 times out of 10 generic is the exact same oil, rebranded. That tenth time, though, you’re getting crap, and your car can suffer. Interestingly, in that brief conversation I learned enough for two whole posts on automobile frugality. Expect to see a lot more about cars on Pocketmint in the future as I tap this familial resource!)
(Photo by mjb84.)
A friend of mine has begun posting photos of gas pump digital displays after each fillup, which costs her an astonishing $70-$80 now. I noticed that she’s been consistently buying the middle grade of unleaded gasoline, labeled ‘Plus’ at the Chevrons she frequents. As someone who invariably buys the cheapest gas possible, I started wondering if the higher grade was strictly necessary.
Here’s what Consumer Reports has to say on the subject:
Don’t use premium fuel if you don’t have to. If your car specifies regular fuel, don’t buy premium under the mistaken belief that your engine will run better. The only difference you’ll see is about 20 cents more per gallon. Most cars are designed to run just fine on regular gasoline. Even many cars for which premium is recommended will run well on regular. We have found that the differences are imperceptible during normal driving. Check your owner’s manual to find out if your engine really requires premium or if you can run on other grades.
Next I looked up the owner’s manual for my friend’s late-model Ford sedan:
Your vehicle is designed to use “Regular” unleaded gasoline with pump (R+M)/2 octane rating of 87. We do not recommend the use of gasolines labeled as “Regular” that are sold with octane ratings of 86 or lower in high altitude areas.
If you are experiencing starting, rough idle or hesitation driveability problems, try a different brand of unleaded gasoline. “Premium” unleaded gasoline is not recommended for vehicles designed to use “Regular” unleaded gasoline because it may cause these problems to become more pronounced.
One more web search confirmed that Chevron “Regular” gasoline is 87 octane, and “Plus” is 89. In my friend’s most recent gas pump photo, Plus was listed at $4.639 per gallon, Regular at $4.439. That’s 20 cents per gallon she can save, just by switching gas grades.
If you’re currently buying a higher gas grade, double-check your owners’ manual to make sure it’s recommended for your particular vehicle. And even if it is, you might consider trying 87 octane gas anyway, since as CR says, “the differences are imperceptible during normal driving.” The savings will add up!
(Photo by glenn.batuyong.)
Gasoline prices are on the mind of nearly every American right now. Here in Seattle, where gas is currently climbing past the $4.50 mark, we like our hybrid cars. A lot.
But Seattle had an environmentally ‘green’ culture long before the recent spike in gas prices, which suggests that a lot of those hybrids are being purchased by people who already had reasonably fuel-efficient cars.
Which is fine, but upgrading your existing 30 mpg vehicle to a 50 mpg hybrid won’t help nearly as much as upgrading from 15 mpg to 25 mpg.
Wait, what? Shouldn’t an increase of twenty miles per gallon be twice as good as an increase of ten miles per gallon?
Actually, no — in this case, it’s only half as good.
Turns out that our intuitive math is all wrong, thanks to the ‘miles per gallon illusion’. As explained last week on NPR’s All Things Considered, the number that really matters is ‘gallons per mile’.
Like this: a 15 mpg minivan uses .0667 (1/15) gallons per mile — or to make the numbers a bit easier, 6.67 gallons per 100 miles. A 25 mpg station wagon needs 4 gallons to go 100 miles. Trade the minivan for the wagon, and you’re saving 2.67 gallons per 100 miles. (That’s worth about $12 in Seattle right now.)
Now, a 30mpg sedan uses 3.33 gallons per 100 miles, compared to 2 gallons per 100 miles from a 50mpg hybrid. That’s a savings of 1.33 gallons per 100 miles (currently $6).
Or, only half the improvement of the 15-to-25 mpg upgrade.
The way cars are advertised in the States (the rest of the world, apparently, gets it right) leads people to make the wrong decisions about which cars to upgrade. A 3 mpg improvement hardly seems worth the bother … and if you’re already getting 30 mpg, it’s likely not. If you’re going from 12 mpg to 15 mpg, though, the difference is a lot bigger than you probably think.
I confess that I am periodically tempted to trade our 1999 Civic (rated as a respectable 24 mpg in-city, but in practice we get over 30 mpg) for a shiny new (or at least new-ish) hybrid. But even though we could literally cut our gas bill in half, it wouldn’t come close to making up for the roughly $16K more we’d have to spend to trade up to, say, a 2006 Prius. Gas will need to be a lot more expensive for that math to work out.
Update 14-Jul-08: Rick Larrick of Duke University offers a more thorough mathematical explanation of the problem.
(Photo by Casey Hamilton.)
