Snakes and Ladders of shopping for a shitbox

Shopping for cars at the bottom of the market…. is as much luck as it is persistence and patience.

Having looked at few options already that quickly busted the $1500 value cap upon inspection with required repairs.

Given any repairs contribute to the value of the car, it doesn’t take much to turn a potential $800 bargain shitbox into something that easily blows past the value criteria – see this post for more info

It has become apparent that time finding these things out quickly adds up.

Finding vehicles

While there are a ton of potential vehicles around – on Gumtree, eBay, the auction sites and marketplace, there is also risk involved.

You are also competing with the “cash for cars – we remove unwanted cars” people advertising who are looking for cheap vehicles to make money from parting them out. Depending on the vehicle, some cars are

Gumtree

You need to have the time to go see a vehicle, but also equally a lot of ads the car in question has already been sold but the ad is still up. Also a lot of the cheaper ads are actually not ads for cars for sale but in fact ads for cars being parted out too. Mostly identifiable by a strange dollar value like $1234, $333 , etc but you need to read the ad – which takes time and is also impossible to filter out in the search.

So you might have 150 results, but only 23 are actual cars, 7 of which were sold weeks ago.

Auction sites

Not exactly known for disclosing everything one should know before purchase. There are often several hundred dollars worth of fees on top of the bid which means a realistic bid cap of about $800. All are sold without rego which makes test drives difficult. Checking something out a few days before the auction closes can be a complete waste of time too as the lot can close above the cap (as is the nature of an auction).

Which means – how many cars do you want to spend time checking out before hand or taking on risk of buying sight unseen and hoping it doesn’t have an undisclosed transmission, wheel bearing, brake or airbag problem?

FB Marketplace

Is similar to Gumtree but with more scammers wanting pre payment due to apparently another interested party. Often you can pick the scam ads because they seem like too good a vehicle for the price advertised. You also need to be able to go see the vehicle pretty quick – which depending on where can be a few hours – the trip there, time taken talking with the seller, doing any REVS check for writeoffs or finance owing.

Managing the value cap

Trying to find a vehicle that doesn’t have disclosed or undisclosed repairs needed to be done which push it over the $1500 value cap is a challenge.

So when searching, one needs to be quite vigilant with almost a 6th sense/gut feeling for things.

It’s useful to have ballpark part costs to make quick evaluations of whether or not a potential shitbox candidate will in fact comply or bust the cap meaning you’ll have to start again.

Ballpark aftermarket part costs.

Luckily we can fit parts to any potential shitbox if needed. Each vehicle obviously has slightly different specific part costs up or down but as a generality,

• Battery – $150
• Wheel bearing $200
• Alternator – $200
• Starter – $250
• fuel pump – $120
• brake rotors – $150 each
• brake pads $80 set (front or rear)
• clutch – $250+
• Radiator $200
• Coolant hose $15-$200 depending on how model specific it is
• Airbag – potentially just a wire. Potentially $Thousands
• Gearbox problem…. depends. Sometimes all they need is a $100 solenoid and 60 minutes to fit, others require complete gearbox disassembly to get to a $100 part which even if you do it yourself kinda isn’t a fair if it takes you 2 days to do it.

Sometimes with wreckers you can save a bit on a used part – sometimes not.

Then there is the time cost.

Each ad considered takes a few minutes to evaluate. Look at the photos. Work out if it is legit. Read the words. The longer the ad the better as it can help detail any pre existing problem.

Contacting and chatting with the seller. Making a time to check it out if the pre questions check out. And we tell them what we want to use the car for so some sellers don’t consider their car to be a shitbox and wont sell it to you. Others are very happy for their car to potentially be used to raise money for a great cause.

You could spend days and days looking, evaluating options, etc. And obviously there is other stuff that needs doing in life like work, cooking, kids yadah yadah.

Grey bits

There is a large area in the rules for interpretation.

The grey area of the definition

Where it gets quite grey is the line which reads “The Shitbox can be worth no more than $1,500 if you were to sell it in the open market/privately”

This is a vague…..

Value of a car if often a reflection of what it is, relative market demand for the model, body style, how expensive fuel is vs relative fuel consumption, the supply of new cars, the market perception of reliability. Then there is the condition of the particular car in question condition – scratches, dings, scrapes, peeling trim, cracked rubbers, does it smell bad? are the seats ripped? how well it is cleaned inside and out, how it is presented,

A lot of sellers will have been given a low trade in price from a dealer when buying another car, and go to sell it on the private market for that much or more.

And a large dose of value comes from how much time a seller can wait for the right buyer. How motivated the seller is to sell it because a car sitting around still costing more money, taking up space or some other complicating factor.

Which boils down to timing. To get a good deal as a buyer a lot depends on being ready to pounce when something comes up. Or looking for a car that has been advertised for a while but is still unsold, or one that has just had it’s price reduced.

Inversely, the other side of the shitbox definition, with most cheap used cars there is room for value adding – a good thorough clean, make it smell pretty, nice photos, good honest description, having plenty of time to sell a car can easily increase the market value of the car without doing anything much else. Many people do this all the time for a living known as used car dealers or as a side income known as car flippers.

So in order to conform with this value, this can only really be as valued at the time/conditions of the sale/acquisition.

The grey area of excluded costs

Rego/CTP and tyres are excluded costs. As is a radiator flush and pressure test, decorations and few other things.

This means that if you buy an unregistered vehicle for $1400, that requires a set of tyres the total cost could potentially be up to a total cost of around $3500 before you get to the starting line for a shitbox you aren’t going to keep.

Inversely if a potential car has a set of new name brand tyres fitted and lots of rego, it’s only fair and reasonable to evaluate it apples to apples by applying some sort of reasonable proportionate value.

So lets say a $2500 car with long rego and new tyres. Minus the cash in value of the 10 months rego ($750-800 cash back) and what your could reasonably sell the tyres for (lets say $400) – the car would be worth less than $1300 working the equation from the other direction.

In many instances if you take a dirty car you manage to negotiate to $800, clean it up, add tyres and rego to it, then you could likely sell it for more than $2000.

With this in mind, we hope get to the rally’s starting line spending a total cost of less than $2500 for car, tyres and rego. The intention being closer to or even below $1500 the better.

New strategy to make it through the 3 dimensional minefield of options and variables

Having looked at a few cars over a few weeks, time is adding up. It is apparent we need to search smarter. A couple of rudimentary discoveries have guided our new revised search criteria.

I am sure there will be exceptions to each one of these criteria but it reminds me the scene in that George Cluney movie Up in the air when they are discussing choosing which airport line to queue in – something along the lines of “I stereotype, it’s faster’.

• Classic cars are usually too expensive – even very rusty Valiants, Holdens, Fords, Datsuns, Kombis etc are asking way above the shitbox value definition threshold. Especially as they then need a pile of stuff to get functional/roadworthy. Therefore we can put a reasonable oldest year cap for the search of newer than 30 years – so 1994.
• The age where cars start appearing in the shitbox value category without also having major repairs attached to them appears to be around the 15 year mark. Anything newer than 2009 that in the value range as too much risk of expensive problems.
• Paddock cars – ie those that have obviously been sitting for years need a lot in terms of seized fuel pumps, mouldy interiors, things not working. Will need a blueslip, almost certainly tyres and other things which will probably bust the $1500 value cap without careful evaluation. So it is easier to rule them out.
• I haven’t come across a car in searching advertised for less than $500 that wasn’t either already sold already, or needing lots of parts, or a write off that can’t be registered in NSW or a scammer. So a minimum search value of $500
• It make a lot of sense to buy a car with enough rego to get through the rally. Thereby avoiding any potential repairs unearthed during the check for roadworthy. And that in itself is worth something. Therefore a filter of $2500 max and registered

Even with these criteria there is a lot of junk results in with the reasonable candidates.

The biggest, simplest tell-tale sign of something hidden when checking a used car..

This is true at whatever price point of car – the brand of tyres fitted to a car will almost certainly reflect the maintenance habits of the previous owner.

Good name brand tyres = likely to be maintained.

No-name tyres are usually priced very cheaply in whatever size of tyre. Therefore there is a large probability that when the previous owner of the car in question has cheaped out on tyres, that the car probably has other undisclosed issues and/or corners cut on maintenance and is being sold quickly for whatever reason.

Cheap no name tyres may for all intents and purposes look like functional tyres with plenty of tread. But in many peoples experience, mine included, they struggle to have safe traction, especially when conditions turn damp. Nor do they last particularly long and can often make horrible noises at highway speeds.

There is no way to put a search filter on for tyres fitted, however sometimes you can see it in the photos, and have it as a rule in or rule out question for use when contacting the seller prior when arranging an inspection.

The search continues….