When my mom announced that she was going to retire, she showed me the annuity information she downloaded from her employer's website and asked me which monthly annuity payout I thought she should take. She might have said, "What do you think?" or something else a little too casual given that she was asking for advice on what would be a life-altering decision.
Around the same time, she started thinking about a new car. The timing wasn’t great, but she was unhappy with her four-year-old, gently driven Chrysler PT Cruiser. It had caused her more trouble and cost her more money in expensive repairs than she could afford now that she was about to retire.
If you’re retired or know someone who is approaching retirement, you know that the biggest change isn’t that you have more free time to travel. For most people, it’s cutting back on expenses, meaning a new-car purchase is a delicate issue for those soon to retire.
Eager to help, I started looking for information on the smart way for retirees to approach a car purchase. There’s no shortage of advice on the most popular cars for retirees (basically, anything that’s classified as a sedan and has a long wheelbase), the stress of buying and maintaining a used car in your old age (it’s stressful at any age!), and even reducing your expenses by getting rid of one car if both you and your spouse are retiring.
Having been divorced for quite a while, Mom laughed at that one. “What do you do if you’re single? Chop your car in half?”
My advice to my mom, and anyone else in her situation: Know the answers to three essential questions before you enter a dealership.
1. What Kind Do You Want?
“What kind of car do you want?” might be easier asked than answered, considering how many choices are out there. In my mom’s case, she has had a car motto for her entire driving career, and she was sticking by it now: “I don’t want anything big!”
She smiled as I snorted in reply. “I know. I sound like a broken record.”
Luckily, she knew what she did want: “a small SUV or at least a solidly built car.” She explained that she didn’t want a base model, which is what her PT Cruiser was, but she didn’t want a luxury car, either. The car needed to be affordable. According to Mom, the snowfalls we get now aren’t nearly as heavy as the ones she experienced as a little girl and later as a young driver (“Those were real winters,” as she is fond of saying), but her new car had to be capable in rain, snow, ice, and slush.
It’s worth having a long conversation about actual driving wants and needs. That way, you won’t waste time wandering through dealerships, and you won’t find yourself lured, either by salespeople or enticing displays, to a car that’s not right for you.
2. Who Will You Be Carrying, or, What about Grandma?
If you’re a parent with multiple kids, you know that how your family fits is a top priority when considering a new car. The same thing goes for those who have to haul dogs and kennels, as Jean does with her Volkswagen Jetta wagon; or those who travel with large musical instruments; or those using their cars as work tools, as my dad does, and carrying bulky tool boxes or bags. We always recommend you take as many of the people or things along as you can, to make sure a car you’re trying will work for your everyday needs.
In my mom’s case, it would be a deal breaker if a car couldn’t accommodate her parents. Both my grandmother, who never learned to drive, and my grandfather, who can no longer drive, rely on Mom for transportation. So whatever car my mom buys has to be able to accommodate them comfortably.
They have limited mobility and need to be able to enter and exit the car easily. I suggested to my mom that she rethink her “no big cars” plan. A larger vehicle would be more practical; it would allow my grandmother, who likes to sit in the back, a little more room to get into the car. My suggestion? The Subaru Outback. My parents are former Subaru owners, and my mom has never gotten over her infatuation with the small red GL station wagon that she and my dad bought in 1980. Given that, the easy back-seat accessibility, and the standard all-wheel drive, I thought the Outback would be a perfect choice for Mom (I’ll admit that I wouldn’t mind having one myself), and she was thinking about it—until she saw one up close in a dealership.
“I don’t want anything big!” she exclaimed.
3. To Lease or Not to Lease
The third and, in some ways, most important question is whether to lease or buy. She said she had to figure out if she wanted a new or used car first.
Mom strongly considered buying a certified pre-owned car, thinking about getting something in the $15,000 to $16,000 price range.
“I’ll have some of the same protections I would have if I were buying a brand-new car, but at a lower price. I will also at some point want part-time work, which means a commute could be involved.”
However, her decision to buy a car was short lived. Prices for certified pre-owned SUVs with reasonably low mileage were starting about $5,000 above her budget. And, understandably, she was opposed to taking on a car loan now that her monthly income would be reduced. Mom decided that a lease, even with its annual mileage limit, might be better for her. A monthly payment of $300 to $400 for a purchase wouldn’t be feasible, but a monthly lease payment of $150 or $200 would be, especially if she leased her next car from Chrysler, a company that has a proven track record with her. “I’ve had success with leases in the past, and that was when I actually did have a commute,” Mom said. “The mileage limit shouldn’t pose a problem now, and it will allow me to be prudent with my car expenses.”
I dragged my mother off car shopping the second weekend in January. I managed to talk her into looking at the cars her Chrysler dealership had on the lot. We parked next to a light blue Jeep Patriot parked at the far end of the lot. After peeking in the windows to see if my grandmother would be able to get in the back seat without any problems (I concluded that she could) and having the trunk opened to assess the amount of cargo space (there was plenty), my mother test drove a Patriot.
A note was left on her salesman’s desk telling him that Mom had stopped in. On Monday morning, he called her, told her how much a three-year lease would cost, and asked her if she had a particular exterior color in mind. Then he told her that she could pick it up that evening.
The End of the Search
She ended up with a black 2013 Jeep Patriot Latitude. It’s actually everything my mom was looking for in a new car, and it allowed her to cut back on her monthly expenses, too.
“What I wanted was essentially in my own back yard, so to speak,” Mom told me. “I didn’t have to go to a different dealership, the car gets better mileage than the PT Cruiser did, it handles in the snow, it holds all of the groceries, it costs about $150 less per month than the Cruiser did, and the insurance is lower. It even has big side mirrors and heated seats, which I didn’t think I wanted. I’m extremely pleased.”
After this lease ends in three years, Mom will most likely lease another Jeep, not only because she likes them, but because her continued customer loyalty will result in better new lease and pull-ahead deals in the future, which is something to consider when looking for a new car. But right now, one month into the lease, Mom doesn’t need to think about that. She can enjoy her retirement with one less thing to worry about.