Beater Edition: Rent, Lease, Sell or Keep

Friday, May 25, 2012

Beater Edition: Rent, Lease, Sell or Keep

A 1997 Ford Escort is not exactly a rolling testament to the dreams of auto enthusiasts.

But for $300, it beats the ever loving snot out of a Schwinn.

This LX model was a trade-in from one of my customers. Did I rip them off? No. Not at all. One of the cylinders was dead. The interior was as dirty as Hugh Hefner's mind, and with 221k miles coupled with a 5-speed, it wasn't about to go on the front line.

But where should I put it?

Rent: Yes, people like small cars and you can always give a good detail to any dirty car. But 5-speeds? I did offer one, and only one, as a rental back in the day. It was a 1995 or 1996 Geo Prizm. I would only rent it out to older folks and would sit with them for a long test drive around town before letting it be sent out. Just to make sure that they knew what they were doing. It worked out real well. But unless I replaced the engine on this Escort, the rental idea would be a non-starter.

A small car like this would typically rent for $20 a day or $105 for a week. Miles don't matter. Fuel economy certainly does in a semi-rural Southern town where folks have more distance to drive than money in their pocket. So it is possible to make this a rental. Except for one thing.

Lease: A good engine for these things is about as tough to find as a popular American car in South Korea. An inordinate number of these Escorts end up having engine problems between the 120k to 150k mark. Why?

Click here to view the embedded video.

The Escort has an unusually high compression ratio for an economy car. A low tolerance for bad gas, and an engine diagnostic system which is pretty much the worst I've seen in OBDII history. In short, these engines don't last unless you put at least 89 octane in them and 'listen' for issues. This particular one had no check engine light blinking even though cylinder one is now more defunct than an old parrot in a Monty Python sketch.

Lease? $500 down and $50 a week once the repairs are done. But only if I could find a good engine with a prancing unicorn next to it.

Sell: Perhaps, but to who?

There are three types of prospective beater buyers. The 'cheap keeper'. The 'cheap flipper' who would try to nickel you down even if you were selling the car for fifty cents. And the 'cheap old guy' who really isn't in the market for a car at all. But wants to call you up anyway and share stories about his once great ride.

The cheap keeper will sometimes have what I call Craigslist issues. For example, the title of your ad can read.

1 OWNER 1997 FORD ESCORT – 5-SPEED – COLD AIR – RUNS BUT NEEDS ENGINE WORK

And the top three questions you will likely get are…

1) Is it a stick?

2) How many owners?

3) Does it need repairs?

if you live in a major city you will also get…

4) Can it pass emissions?

This is where it pays to know someone who already has a good use for this type of vehicle. In my case, I have a friend who owns one of the largest junkyards in the state. Since all the doors and interior components are in good shape, he will likely get a decent return out of it. I also know a few mechanics who are always looking for a cheap ride for the wife, ex-wife, daughter, son, or the friends they play poker with on Friday nights.

I can sell it quick for $450.

Keep: How cheap am I? Not at all these days. I used to always drive the most fuel efficient car on the lot or the 'wore out mop' that I bought for a low price. These days the small things start to get to me pretty quick. My commute may only be all of 5 minutes when I'm not heading to the auctions or other dealerships to load up on cars. But I have found that driving a car that encourages conversation can offer returns far greater than a wore out beater. The 1st Gen Insight will stay due to it's popularity. This Escort needs to be gone.

So should I fix and rent it? Pray for unicorns and lease it to a stick smart buyer? Sell it to the more gritty elements of automotive commerce? Or keep it as a rolling version of chick repellent?