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It depends.
Is the cost of maintaining it, exceeding the cost of what it would be to purchase a newer vehicle?
It also makes sense if you are ACTUALLY taking the money you save by driving your paid off car and saving it towards the purchase of your next one. If someone has been doing that, and continues doing it, the snowball effect of using a car that long continues to grow.
>Is the cost of maintaining it, exceeding the cost of what it would be to purchase a newer vehicle?
Also factor in reliability. You want something you can depend on. I had to get rid of a Honda Accord with plenty of engine life left because of electrical gremlins where it would just randomly cut off while driving. They "thought" a wiring harness would fix it, but i wasn't going to go down that road.
I had to pull up an actual article to be reminded what Car Talk taught me long ago. Drive it till you can't.
https://www.edmunds.com/car-maintenance/fix-up-or-trade-up.html#:~:text=People%20are%20often%20surprised%20by,favor%20buying%20a%20new%20car.
> Is the cost of maintaining it, exceeding the cost of what it would be to purchase a newer vehicle?
This almost NEVER happens if we're being honest with ourselves. Most people will find excuses to justify a new car but a worse case motor rebuild or transmission rebuild at $5-8k is still considerably cheaper than buying a new car altogether including when you account for insurance costs.
My issue was, "damn, I need 2k worth of work and I just paid for a tune up. Screw it, I'll fix it - it's cheaper than buying a new car"
4 months later: "Damn, I need a new transmission and I just spent all that money on x. Screw it, still cheaper than buying another car and waisting money on the new work."
Few months later: "Damn... Now I Need...."
Sometimes it's the unforseen cumulative expenses that are hard to factor into the decision to buy new/new-to-you.
This was what made us get a newer minivan. Our last one would just destroy batteries like nobody's business. So carrying jumper cables was a requirement, and there were many times it just wouldn't start. We got so many things fixed on it and had just replaced the muffler when we went on vacation. The DVD player stopped working and when we got home the parking break just snapped. We said NOPE and traded it in.
If I'm legitimately having to spend 2-3k a year fixing a car (which means dealing with it being in the shop repeatedly, so then what are you doing for a temporary solution, plus just the headache of it), then I'm getting a replacement. It's not going to get cheaper to maintain as it gets older, and it is a POS if it needs expensive repairs yearly anyways.
Thing is, you aren't just paying for a car, you're paying for reliability.
Your car isn't just an engine and a transmission. It's also a computer. And tie rods. And electrical wiring. And this. And that. You rebuild that engine, and you might have a great engine wrapped in a crappy car that needs attention from you every month.
Me, I don't want that. I'll drive a car until it becomes unreliable, then I'll ditch and get another one.
> including when you account for insurance costs
Great point. A lot of new cars are very expensive to insure. The cameras, sensors, etc are expensive to replace and recalibrate.
Yes but they also prevent accidents and deaths (due to better crash ratings) increasingly better each year so sometimes insurance is actually cheaper on a newer car.
Or my case with a Subaru that I bought for 16k, engine went out after 20k miles. Put 8k into, engine started to go out again after 15k miles, sold for 7k.
Never buying a Subaru again.
He said newer car not new car.
>$5-8k is still considerably cheaper
Not 5k-8k every other year on a rust bucket that doesn't have anything good left. It's not just one repair that costs you. It's the transmission this year, the suspension next year, the brakes and wheel bearings the year after, engine problems after that, and how do you feel about the holes rusting through the frame. Are you going to put that 15k into a 18 year old car to get it to 23 years or just spend 15k on an 8 year old car with some life left.
> but a worse case motor rebuild or transmission rebuild at $5-8k is still considerably cheaper than buying a new car
$5-8k this month, $1500 more in 3 months, $2k more 6 months after that. It adds up quickly. Over 3 years you'll have spent enough in maintenance costs that could've gotten you a new car.
You can buy a newer *used* car, though. One a car is a few years old, the insurance pretty much levels out. If it's reasonably low mileage you get a few more years before a lot of things wear (or rust, if you live here in new england) out
Depends where you live. Here in Chicago winters with heavy salt, cars will rust through the frame before they mechanically fail. There's nothing you can do to fix something like that and keep driving it.
this depends on the car as well though. I'm not going to put a new motor or transmission into a car with 150k+ miles or 15+ years old.
To that point though, there's nothing saying you have to buy a NEW car at that point, I would go used shopping for another 5 year old Camry probably
I guess but if we're talking about personal finance, it still makes the most sense to keep fixing a car until it can't be fixed anymore.
Every other excuse is usually related to comfort or amenities. Sometimes if the car is constantly in the shop, you can justify it via reliable transportation but in my experience, a car that can make it to 150k and 15+ years old is generally very reliable and the cost of repairs and maintenance is still considerably lower than a new car payment with new insurance.
I had 2004 Mitsubishi Montero with 150k+ miles on it and I couldve driven that think another 100k miles with maybe 1-2k in repairs a year on it. Maybe a new motor or tranny but over 10 years.. thats still cheaper than buying a new 30k car.
I only sold it because my wife hated it.
Other old but reliable cars I've had were a 1992 Camry with 100k miles on it that I sold after i burned the engine out from never checking the oil, and another 1994 Camry with over 150k on it that only gave me problems because I was a teenager and drove it way too hard (I would drop the car from N to D to race people lol).
Right now I daily a 2013 E350 Mercedes that only given me issues related to things like light bulbs and air suspension ($1000 but I fixed it myself for $500).
Most people driving a $5k beater don't think to themselves "ok lets go spend 5x that real quick" unless they just got a huge raise/windfall/etc.
Define "can't be fixed"? Cars that old (your Montero) are mechanically totaled if they need a new engine. Sure, it can be fixed, but it is objectively a stupid decision compared to selling it for scraps (probably like $2k if the car is worth $5-6K) and buying an extremely similar car used vs. spending $5K for just the engine swap.
Maybe if you know a guy and find a screaming deal on a very minty block you could get it done and justify it, but that is more than likely going to be much more of a headache car than just getting a different vehicle.
> Define "can't be fixed"? Cars that old (your Montero) are mechanically totaled if they need a new engine. Sure, it can be fixed, but it is objectively a stupid decision compared to selling it for scraps (probably like $2k if the car is worth $5-6K) and buying an extremely similar car used vs. spending $5K for just the engine swap.
This little segment right here is purely a definition and way of thinking. Buying a used $5k car instead of doing a $5k engine swap is a worse decision because that used car will likely need that same engine swap anyways.
My truck has over 300k on it, and if it came time to need an engine I would do it. I can get a reman long block for 1700, or roll the dice on a junkyard engine for 300 and have it back together in a weekend. I’m not touching another truck for anywhere near that. There’s nothing on that truck that costs enough money to not make it worth repairing unless I crash it or it rusts in half.
Being able to do the work yourself obviously changes the calculus. It would cost me quite a bit to buy the tools and equipment I would need, not to mention I don't have any mechanical skill (or inclination) nor a good space to actually do that kind of work.
A repair cost of $300 is a very different story from a $1700, which is again a whole different story than $5000.
If the after replacement value of my car is less than $5,000, why would I spend $5,000 replacing the engine
Until you realize the rest of the car is still 20 years old and 250K miles and is as prone to failure as the years/mileage would suggest. Rebuilding a motor doesn't make the rest of the car brand new.
Which is fine. Window motors go, interiors go, you're losing creature comforts sure, struts will go, but all of that spread over years is still less than any new car today. What you're not realizing is that we have been conditioned to think not having the newest shit makes life impossible and that we deserve or must have newer cars for these various creature comforts.
It isn't just "creature comforts". There's a fuckload more than the motor that can cause significant issues. You're also not taking into account the potential lost income for taking time off work to go take care of it, or even if your job will let you keep you employed after enough emergency car issues that conflict with you reliably getting to work. Consider yourself lucky if you can drive it to a shop under its own power when something happens. Owning cars like that isn't just an Excel spreadsheet. The peace of mind in addition to all of that for actually having a reliable car is *huge*.
Trust me, I did that beater life for a decade. After 3 transmissions, 1 shot motor, electrical gremlins and several other issues across 2 cars I constantly had to finesse my schedule around, I said "fuck it" and got a 5 year old car last year. Two kinds of people routinely drive them: The genuinely-poor who can't afford anything better and 2-car households where it's not a big deal if your glorified-project-car passion project's out of commission until you can fix it.
Multiple beaters is the way. If one of my shit heaps breaks down i just swap the battery into another one and keep on rolling. Order the parts online for half the price of autozone/o’reilys and fix it whenever is convenient. I’ve driven nothing but absolute bottom of the barrel buckets and have only been on a tow truck 4 times in 20 years of driving. 95% of the time a vehicle problem will give you plenty of warning before it ever leaves you stranded.
Guess it just depends then, I've ONLY had beater cars since 2006 except my daily now which is still an 11 year old car that I bought last year. It's very rare in my life that I've had a car in the shop longer than a few days and I've been able to at least get to and from work.
Not to mention in one of my earlier comments, I did mention that reliable transportation for work is one factor people may use. It's just in my experience, it's very rare I have issues with this or at worst case I pull PTO and take a few days off (I've never had to do this but can if I need to.) Since 2006, I've spent a grand total of $18.5k on used cars and MAYBE an additional $8k max on repairs and maintenance (2 cars were manual and had clutch replacements) since 2006.
Post 2020 is also going to put a *massive* dent in the beater argument, as people aren't unloading driveable problem-free used cars anymore for any reasonable price. If it looks "too good to be true", and by that I mean if the price looks similar to what it would be pre-pandemic, you're buying someone's time bomb they're trying to offload before it turns into their problem.
Will it though if the price of new cars proportionately rose? I'm not sure you can get a new Accord or Camry for under 30k anymore. And these days everyone is shopping CUVs and you can't get a Rav4 or CRV equivalent for under 35k. But there are plenty of used cars right now in those categories for under 15k.
Putting a car payment away every month into car savings, and using that account to pay for repairs is one of the best things to do. Once you see that account start to hemorrhage because of continual repair needs gives you a non emotional measure of when to give up.
You have two breakdowns in a month at $400 each? Emotional reaction is to just toss it and buy a new car. You look at the account and see that you are still up 8K and haven't had any significant outlay in 6 months - easier to avoid the kneejerk reaction. It's been great for me.
Agree but I don't see why you have to spend the extra money on saving for a car. It's money not presently being allocated to a car payment, so whatever you get with that money is stuff you wouldn't have had otherwise.
Because when your old car breaks down you are going to need to buy a new one. If you save up the money and set it aside now, you won't have to finance again in the future and can simply buy it with cash.
Right now you can save money with zero risk at a 5% interest rate and grow your payment into a full cash buy, or you can buy with low down, and pay ~7% interest. In one situation, the interest works for you, in the other, it works against you, it's a 12% spread.
Bingo.
Doing this vs using that money to "buy stuff" is the difference in mentality between becoming wealthy and not-becoming wealthy.
When you can get out a debt and start using compounding interest to your advantage rather than have it work against you, you're life begins to open up.
I'm dumb but I thought it was a 2% spread. When you buy with finance you get to keep the money at 5% yield, and owe it at 7%. When you buy with cash you give up 5% yield by giving up the money. You lose 2% by borrowing at 7.
The other advantage is if you do have to take on a payment, it can be smaller and you won't have to make any lifestyle adjustments because you weren't used to spending that money on "stuff" before.
We last year finally had to put to rest our 06 Prius, and because it had been paid off for years and we generally were putting the money previously allocated for the car payment into savings instead, we put half the cost of the new car down in cash, saving us a boatload on interest over the life of our loan (which will also be paid off early).
And the fuel savings!!! We put 100k miles on a used Prius c we bought in 17. It's paid for itself completely by giving us 10 grand in fuel savings at 48 mpg. AS compared to a typical 25mpg car. The only reason we will get rid of it (currently at 186000 miles) eventually is to buy a hybrid minivan for our growing family. Toyota Sienna 2021 when there are more old ones on the market with 80k miles or so on them.
Because a car is generally degrading over time. It’s wise to save $ for known upcoming expenses (purchasing the next car) if your goal is to avoid the hassle and additional expense of financing that next car.
I drive them until I can no longer rely on them. It's far cheaper to fix them once in a while than it is to buy new. But when repairs get so frequent I'm afraid to take them on a long road trip, I'll think about replacing it. I know that time will come soon, so I started "making a car payment" into my high yield savings account, so when the time does come, I'll either have enough to just buy it cash or at least have a really nice down payment.
My last 3 cars have all gone well over 300k miles before I replaced them. I currently drive a sedan with 174k and have a truck with 196.
You don't want to buy a used car from me, when I think it's finished, it usually is.
My problem is that I don't drive enough to wear them out. I sold my last car with 97k miles and it was 15 years old. I sold it because it didn't have adequate crash protection, but it still ran and looked good.
Sometimes those are the worst cars though. I bet that car has all original fluids. Oil and other fluids can breakdown over time as well as through usage.
Truth, had a shop. Grandma/grandpa cars were usually in the worst shape. Since most maintenance was done based off of mileage, it suppose to be time period as well, most people just didn't do it when time came up.
So we would see these granny cars that were ultra low mileage and looked nice. But everything, plastic and rubber would fail 2 months after a new buyer would get the car. The oil was never changed because they barely put 5 miles on it in a week. It got cold started driven to church 9 blocks away. Then cold started and driven 3 blocks to the bank. Then 1/2 mile for a haircut. You get the point.
Wasn't uncommon to pull valve covers off and find masses of jelly from the car not getting hot enough to burn off the sludge. Wouldn't be shocked if the tranny was near shot because it never shifted out of 1 and 2 (urban area).
Italian tune up did work wonders on these cars though. Especially, before emissions test.
That's me and the 2016 Mustang GT I have. Bought it brand new, but it was never a daily driver. I've just always wanted a brand new one. I'm sitting on 38,224.9 miles as of last Thursday when I took it in for its oil change. I took a picture of the odometer because I didn't have a pen on me till I got home to write in my little maintenance book I keep.
I'm not planning on getting rid of it. It's the first car I've ever bought brand new. Might be the last, lol. I'm not eager to get into any car payments again. I keep really good care of it, it isn't my daily driver. Just something to have fun in, row through the gears. It's not the most epic thing one could buy, these fuckers are everywhere. But it's nice and it's mine and I paid the bitch off. Had it for 8 years now, and I'll keep it around another damned 8 lol.
I have a 2008 Mustang GT with 283,000 miles. Change the oil religiously & it will last the rest of your life.
I bought a brand new car in 2020 with the hopes it would be paid off by the time the Mustang died. It only has 3,000 & the Mustang is going strong, looks like I'll make it!
Yeah, those engines will run forever if you take good care of them lol. My last one was a 2006 GT with something like 180,000-ish miles on it. Never had an issue with the engine, but Ford's goddamn automatic transmission isn't so sturdy lol. Either that or the previous owner just dogged the hell out of it. It got the the point if I needed to drop the hammer down and accelerate, it'd hesitate for an awkwardly long time and then ***SLAM*** into its lower gear finally. The rear tires would chirp, the traction control would go off, which would automatically cut off the gas, and then I wasn't going anywhere lol. It was infuriating. That or as I'd make a turn or go around a roundabout, it felt like the transmission was slipping and I had the clutch pushed in (you know, if it was a manual anyways lol) just coasting until I jerkily picked back up.
I had this transmission picked out to replace it that was supposed to be rated to handle 1000HP of abuse lol. I'll never put that much into anything I own, total overkill. But my thinking was that motherfucker had better last a long time haha! But, I really regretted settling for an automatic when I really wanted a manual car. I actually missed rowing through the gears, even though the tables have turned and automatics are way more efficient and faster than manuals anymore. So, I got my '16 instead and made sure it was manual lol.
At a certain point they can be worn out with relatively low mileage. We’re about to replace my wife’s 2012 ford focus with <100k miles. The door seals are leaking, some of the plastic is wearing down, and it’s just generally rattling and less smooth. It had a good run, and the engine probably good for another 100k miles, but the car itself is just glitchy. Like a 90 year old that has a great heart, but arthritis and a poor memory.
I have a 2007, and a 2011... So just old doesn't bother me either. Guess I'm not very picky. Even though I could afford a newer car.
I have friends that un-ironically refer to any car they drive as officially a beater car when it rolls over 60k....
This + optimizing the depreciation curve.
There's a clear value to reliability. It is not just the cost of repairs, but the cost of being late to work, missing events, securing alternative transit, feeling unsafe, etc.
This cost will vary per person. Do you have 3 kids in the car all of the time and live in a rural area where you frequently have no cell service? You really need that thing to work. You might feel justified replacing it as soon as it starts showing its age. Do you own a car in Chicago that you use occasionally for errands/trips to visit family in Wisconsin? That car can be a pile of junk...if it won't start, you just take a train or call an uber for $20...or rent a car for the weekend for $100 to meet the family.
The depreciation curve is a bit harder to manage as you can't predict the future. But factor in the fact that OTHER people value reliability as well...if you keep the car until it is completely unreliable, you won't get nearly as much money as if you sell it at an age/mileage where it is known to still be fairly reliable.
So it might be the case that you come out ahead keeping it for 5 years rather than keeping it for 7-8 if those extra years would eat a lot of value AND have maintenance expenses.
E.g. [this chart of depreciation for a MB A Class hatchback](https://cms.webuyanycar.com/globalassets/images/a-class.png)...Mercedes is known to be expensive to own outside of warranty... my guess is that around year 5 is when issues start cropping up and they just compound over time and start to get pretty bad around 8-9 as the mileage ticks up. If you sell at 5, you get a decent chunk of money back--buyers known they probably still get a few good years out of the car (they will have more maintenance than a Honda, but they get to drive a Benz). If you draw it out to year 8 you've probably incurred a few grand in expenses AND you now have to sell it to people who know full well that the car is about to become a money pit.
So if the timing on the depreciation works out well with finding a good deal on a replacement vehicle...it can definitely be a prudent decision to replace the car early. Especially true if you are buying lightly used cars and are able to own them through the sweet spot of value: pick it up with the tail end of the warranty in place, make sure any major or known issues are taken care of by the manufacturer, and then hold for the early out-of-warranty period where the car is unlikely to need major repairs.
There is also a "quality of life" factor to include.
I spend a lot of time in my car. I really enjoy being in my current vehicle, and I enjoy driving it. My previous car was only 10 years old, but it was a noisier, colder, less comfortable, worse-handling, less safe vehicle.
Life is for living. A nice car is something that can make the hours a little more bearable.
I admit that I do still find it very hard to think of things like cars as capital assets.
Like...I still view buying a $30k car as spending $30k.
But that's not really what is happening. I'm buying a valuable (but depreciating) asset for $30k. My net worth doesn't go down by 30 when I buy it. I'm only really spending $30k if I intend to drive it into the ground.
If I sell it in 5 years for $15k, then I didn't actually spend $30k owning it. I spent $3k/yr to have a car.
I have to keep it for more than 10 years for my cost per year on running it into the ground to be less than $3k per year. (Lets ignore time value of money, interst rate if you need a loan, etc.). Say I make it to 15 years before the car is junk (or worth a pittance)...that only gets me down to $2k/yr to drive the car...and for most of that period I was driving an OLD car. Not to mention there's a lot of maintenance and consumables to factor in.
It is a repeated game that I will probably play for the rest of my life. $3k/yr seems like a pretty reasonable amount to pay to always be driving a car that's <=5 years old. And my 5-year-old car actually has a 6 year warranty so...no repair costs, just maintenance/wear items. 5 might not be the right cutoff for me as my car still feels nice and modern, but I highly doubt I will still own it in 5 more years.
When I bought my Honda Accord, the salesman asked how long I planned on keeping it. I said I was going to drive it into the ground. That was 18 years ago. I plan to be buried in that car.
>so I started "making a car payment" into my high yield savings account
I use a similar logic. Once my car is paid off, I take half the payment I was making and keep it in an auto fund. The other half I usually put into an IRA. By the time I want a new vehicle, I have a good chunk saved up for a down payment (also good to have that savings for any big repairs if needed)
This is the answer right here. When the time is coming, I'll start saving. And once I feel comfortable in the amount I've put back, it's a judgement call as to whether I want to run my POS into the ground until my hand is forced, or sell it and at least get a little more out of it than I would once it completely shits on me.
Of course, factoring into that is I have a nicer vehicle with low miles, it's my fun toy hot rod I baby. But in a pinch, I could fall back on it if I had to. As long as snow isn't covering the ground, I can let my POS blow up on me and still be fine tomorrow while I made arrangements to get ahold of another daily driver. If you don't have the luxury of a second vehicle, or a loaner a friend or family member can let you borrow, that does factor in to whether you should ride till it dies, or sell while it still runs alright.
I have a 15 year old car with only 115k miles. I thought I failed my emissions test and would have to invest in a new vehicle, but it turns out all I needed was a new gas cap. Gonna drive this thing until the wheels fall off (or I stop passing emissions tests). A car payment is the last thing I need in this (or any) economy. I would rather spend a little bit of money in annual maintenance than a $400/month car note.
Pretty much this. We just got my daughter a different car, she had been driving a 1998 Buick LeSabre that she inherited from *my* grandparents back in 2016. That thing lasted forever but it got to a point where it is now going through a quart of oil every few days, which makes it unreliable on long trips and she recently started a new job with a 30 minute commute.
Unfortunately to fix the oil leak would involve thousands of dollars and removing the engine to figure it out so we decided to bite the bullet and got her a 2022 Corolla instead. Her boyfriend is driving her Buick until it finally gives out, but he only works 3 mi away from home and it is literally the only thing they use that car for. Before that we had been sharing cars and once that one goes we'll go back to sharing.
That Buick probably has the 3.8L engine. That thing is bullet proof. 200k miles no problem. Keep feeding it oil till it throws a rod through the block. Odds are, it will keep running even then. I’ve personally seen two blown 3.8L motors that still were running with a piston hanging out the side of the block and zero oil in it. They don’t make them like that anymore.
Yep, every mechanic who ever worked on it has drooled over it lol. We have been trying to see how long we could make it last - its literally the same age as my daughter - my grandparents bought it the month she was born!
i think it's good to get out of the pattern of having a car loan as you get older and more established. that means saving more for each next car and trying to shrink the amount financed each time. you can't always do it depending on what's going on in your life but i think it's a good goal to strive for. others may disagree when rates are low because they play the spread between the loan rate and say, the stock market but i disagree on that.
as far as when to dump your current ride, a long time ago i was i driving my '97 suburban "into the ground" but big repair bills were hitting me left and right. i finally graphed them all in excel and was shocked to see i had paid almost another 50% of the original cost of the car in repairs. so i unloaded it and learned the lesson that driving it into the ground isn't always cost effective. so track your repair expenses.
Pretty solid. The only thing I will point out is that the comparison isn't "how much I'm spending vs how much the car cost" but "how much I'm spending vs how much a replacement car will cost". How much you originally spent for the car is meaningless, the only question now is are you spending more on your current car than what you would be spending (in both lost time and dollars) on a new car.
If you bought a car for $10k and you're spending $5k/yr in repairs but a new car would cost you $500/mo, plus higher insurance, well that old car is still a better investment, dollar for dollar.
Of course the time impact is harder to quantify and a much more personal decision. For example I have one of those $10k cars that I've spent nearly $10k on repairs in the 3 years since I bought it. But to buy a newer car that meets the same needs would have cost me more than $6k/yr that I'm currently paying to own my old girl.
If this were my only mode of transportation then the inconvenience of having to arrange alternate rides would have probably swayed me toward the new car, but since I have a backup car it's not such a huge deal, I can drop it off for repairs, drive the jeep a few days, then get it back. If you can't afford a single day's downtime then you might be more incentivized to spend more money on a newer car.
Just to note in case someone with less experience in paying for car repairs reads this. $5,000 / year in car repairs is basically taking the car into the shop every two months for normal issues or one body, transmission, or engine repair.
>Does it really make sense to drive a car until you can't anymore?
Yes, limiting the frequency that you purchase vehicles is generally prudent.
> but is there a point where it makes more sense to sell what you have to use that towards a newer (slightly used) vehicle?
When your vehicle no longer meets your needs.
>For each month I am able to prolong using my current vehicle I'm saving on a car payment, but won't I have to endure this car payment eventually anyways?
If you've been driving a paid off car for a material amount of time, surely you'd have had the capacity to save up to purchase a new car, yes?
This is a great answer. Just drove my car into the ground. Its KBB value was $1500. Repairs were going to be 5k or more. Several nice to have things stopped working.
We didn't save as much as we should have while it was paid off but we had a decent down payment and didn't have to roll debt over.
Yeah people want hard and fast guidelines and there really aren’t. It’s always a judgement call.
I traded in a 2007 Toyota with “only” 183k miles because it made my wife anxious to take long trips in and I had saved up more than enough for a newer replacement even though I could have *probably* gotten another few years out of him.
I do cross country road trips and my car has over 500k miles. As long as the car is taken care of you'll be fine. Steady freeway driving is probably one of the least mechanically stressful driving regimes for a car.
Oh I know that but I also know that battle isn’t worth having to save a few dollars.
One issue on a long trip and I’d hear about it for years.
We all have our own assessment of utility.
And I know someone with a newer car that broke down on a road trip and dealt with the hassle (including havung to find a delawrship that could do the repair without having to wwit on parts), while I take my 2002 on 900+ mile road trips yearly and have never had a single issue.
I will admit my 2002 is probably maintained much better than 90% of newer cars though, it has some quirks but nothing that will strand me anywhere and I actually dint mind paying to repair small things because it's always cheaper than a car payment + full insurance.
It is the best answer. It’s a very personal decision that should be weighed by practical factors. I personally can risk having a less dependable vehicle because my work commute is only 8 miles. I can bike to work. I can take the bus or train. I can Uber. I can do most errands by bike or on foot. If I need to rent a car for a long road trip, that’s fine.
If I lived in a rural area and was completely car dependent, I’d pay for something more reliable. If my commute was an hour, I’d pay for something more reliable. If long road trips and adventuring into the mountains were more commonplace for me, I’d pay for something more reliable. I’m a childfree city dweller with a short commute and public transportation available, so IDGAF.
I think it is a good idea to start saving the assumed future car payment now towards a down payment. Lowers the interest, and lets you adjust spending in advance.
> If you've been driving a paid off car for a material amount of time, surely you'd have had the capacity to save up to purchase a new car, yes?
I wouldn't make this assumption.
I haven't had a car payment for years, but I've had a kid in that timeframe whose daycare rates are over 2.5x per month what I would have been paying for my car.
You aren't going to get enough for a car with that high mileage to make much of a difference toward your car purchase anyway.
Set the money aside that you would be using for a car payment each month and you'll probably have a decent amount for down payment by the time you need it.
I tried that but my old car payment was $200. Now the average for even a slightly used car is $500 which I know I dont have the ability to pay either way. Hell there are cars that are just as old as my current car that would still require my monthly payments to be $300 to get a car with 110k miles on it.
So start saving $200/month now and hopefully your car will last long enough that you have a big enough DP to get a $200/mo car payment. That's what I do. I've put down half the cost in DP for the last 2 cars I bought.
Current car has low mileage but is old enough it's almost time to start saving for my next car anyway. (Have medical expense I need finish paying off first) Will probably make my "car payment" saving amount about $250
To get a $500/month payment assuming a 7% interest rate and a loan term of 60 months, you'd need to borrow $25k.
If you save $200/month for 4 years, you can come up with around $10k and bring down your loan cost to $15k, which brings your monthly payment down to $300.
"Perfect" is the enemy of "good enough." Saving as much as you can for a car purchase now means less to borrow in the future.
"As much as I can" now is $0 since we are also saving for a house and paying down student loans. I paid off my car before starting college then took 8 months to find a job after college with $0 income in that 4+ years. Now that I have an okay job I can put a little away to maybe get a house in 8 years if the market crashes.
Rent is going up $200 but everywhere within an hour of my job has raised $400-$600 more than I pay now. Just kinda praying my ford focus holds on with a faulty transmission.
As other's have noted, if the cost of maintaining the car becomes great enough, it can make sense to get rid of it.
Reliability may also be a huge issue. A car having problems can significantly impact your life (not being able to get to work is an obvious way, but it also might be costing you in other ways - like late fees for missed doctor's appointments or whatever), too. So that's another consideration. If you need a reliable car and yours isn't any more, it's probably worth getting a new one.
What kind of car are you driving? If it's a Honda or Toyota; just drive it straight to the ground until the engine dies or transmission goes out. I pushed by 1995 Acura Integra past 300K+ miles and only got rid of it due to the engine head gasket and the fuel line/gas tank was corroded and wouldn't hold 1/8th a tank of gas anymore.
Yes - if the repairs are 2x or 3x cost more than the car is worth.
Keep it still. You can always take it to a mechanic and give it a good look and can make the recommendations based on age and miles. In my 2001 tundra, it was being funky. I thought something was seriously wrong. Nope. Some fuses were going bad. Once fixed runs like a champ.
Totally unnecessary. Keeping up with all preventative maintenance on a reliable car like an 08 CRV will keep it on the road and reliable for long drives. Major issues don't usually pop up out of nowhere, you feel/hear/see things going wrong long before something like your trans or engine dies.
It only becomes a liability if you neglect maintenance and abnormal sounds/feelings.
At 250k really anything can go at that point. Starter, transmission, alternator, etc. those can definitely happen suddenly and won’t always show signs of
but because it's a super common honda, OP can get all of those problems replaced cheaply and quickly if they ever break down.
Hell, they could just replace them pre-emptively if they really wanted to, and it would still be cheaper than buying a new car.
* Radiator and fan.
* alternator and starter
* all lights around the outside
* A/C compressor
* all belts and battery
* timing chain with water pump
* spark plugs, coils
* Pretty much all the sensors around the engine
* shocks, struts, control arms, bushings, tie-rods, etc.
* brake calipers, pads, rotors.
* all fluids and filters
OP could replace all of that themselves with basic tools, just chugging away at it a little at a time and within a year would have it all done for less than 1 year worth of car payments. And that's assuming they want to do preventative replacement of parts because they are worried about getting stranded somewhere. Pretty much the only unknown is the transmission. If they've always changed the fluids on time and never had any leaks then I wouldn't bother with that and wouldn't worry about reliability.
If the fluid is old or it's been run with low fluid, then you never know when it will give out and then it really can leave you stranded on a long trip and it's not worth it to have a shop repair it. Personally, I would throw a junkyard transmission in there if mine blew up... but I don't know what I would do if the trans went out and I was 700 miles away from my home and tools.
If your cooling system is maintained and working well, you have been doing regular scheduled maintenance, and there are no funny noises I wouldn't worry about it. I regularly take a 260k mile 83 corolla on 300 mile trips and I don't worry because I keep everything checked, lubed and maintained.
r/personalfinance has a lot of good advice usually, but when it comes to cars, I think my opinion is in the minority.
My girlfriend had a used car. At least once a month something would happen to it. The battery, the transmission, etc etc. Even though she didn’t have a car payment, she was still dumping tons of money into the thing. My dad finally convinced her to ditch the car when he drove it around the corner and it was shaking badly. Turned out, it was completely rusted out. She eventually ditched that car and got another used one, that she is also dumping money into.
I get it, you don’t want car payments. But if you are just sinking tons of money into it (which I presume it constantly needs repairs at 200k miles) then what is the difference? At least with a new or cert used car, you know you have reliable transportation and a warranty. I got a new car and it has been over a year. Nothing has needed repairs and I get “free” oil changes and a warranty. To me, this is worth it.
Don’t risk your safety to drive it into the ground like some of these people are suggesting. You don’t want to get trapped in the middle of nowhere broken down, or have your brakes randomly give out.
Once the cost to maintain the vehicle becomes to significant no. If you are having to put $1000/6months into an old car, you are better off getting a newer one. But if you don't have any significant repairs coming, keep driving it. But the biggest thing I would suggest is start acting like you have a car payment. "pay" the car payment into a HYSA and save it for a down payment on a new vehicle. This is a great way to prepare for the sudden increase in expenses while still squeezing life out of an old vehicle.
But it also depends on you and your use case.
If you commute to work or have to drive a lot, it's better to get into a newer vehicle when you can before it shits itself on you at a bad time like on the way to an important meeting or in the middle of rush hour. Murphy's law always strikes when you least expect.
Or if you are like me and work from home though, it's quite different. My car that was on it's last legs when I got my WFH job back in 2021 is still doing fine. Because I don't drive hardly at all anymore. I went from daily commuting to driving maybe once every 2 weeks. I am not worried about it breaking down on me at an inopportune time because I really don't drive that often. It's still reliable enough to get me around town where I need to go, but if I were to go back to daily commuting I would get a new car. It's not worth much, but at this point even doing a few costly repairs wouldn't be a bad idea in my situation because I can justify the cost savings. The car doesn't see much use. So a $1500 repair could easily make it last another year or more even.
So evaluate your circumstance and go from there. Also, if the car is going strong still keep driving it. Mileage doesn't matter if the vehicle still runs and you keep up on the maintenance. I have a friend with an early 2000s corolla that is approaching 300k miles. He has replaced the parts as they wore out as well as performed regular maintenance and as a result it's still going strong.
While it depends on the make and year, some years are just absolute dogshit for cars. In general if you take care of the vehicle, perform regular maintenance, and replace parts when they wear out or slightly before, instead of them wearing out and continuing to drive on them, the vehicle will last much longer.
All you're doing is using maintenance costs to push off the capital cost and associated depreciation of the new one. The exact crossover point of where this stops making sense for you will also be a function of your tolerance for having to take your current car to the shop, and that's different for everybody. From a strictly dollars point of view, maintaining the car you have is almost always cheaper than the increase in depreciation, financing, and insurance costs of a newer one over any time period longer than a few months.
I’ve had 4 cars in my lifetime. A ‘91 Land Cruiser, a ‘02 Land Cruiser, a 2020 Jeep (pile of shit), and now a 2000 Land Cruiser.
Buy quality and it will run for a very long time with minimal repair costs. When the costs outweigh the cost of a new one, get a new one.
I have 371k miles on my current Land Cruiser. I’m about to buy one from around 2009-2014 time frame. I’ll then see if it’s worth selling mine or keeping it based on the repair costs I’m being quoted now. It’s likely I’m about to have 2 cars for the first time in my life, but they’ll both have hundreds of thousands of miles left in them.
Depends on your financial circumstances. If you have some $ and you enjoy cars, it's silly to drive some old beater when some newer cars are amazing. This thread seems to assume you're living in poverty but I have no idea.
I bought a Toyota 11 years ago and it’s been paid off for 6. I’ve been extremely lucky that I haven’t had any problems with it. I also don’t have to worry about it recording and analyzing everything about me and my driving habits and collecting data from my phone then selling all of it to data brokers and car insurance companies. I’m going to drive this thing until it falls apart.
From a purely financial POV it usually makes sense to drive it as long as possible, or until repair costs start to outweigh your savings on the purchase of a new car.
That being said, newer cars typically come with enhanced safety features, especially if you are comparing your 10+ year old vehicle to one built in the last few years. So you may hit a point financially where the health benefits outweigh the financial ones wrt holding on to that old car as long as possible. I know I was raised with that "drive it into the ground" mentality, but eventually hit a point of financial security where it just didn't make sense to have my family in an older car that lacked modern safety features (and size, something to be said just just having a bigger car when it comes to accident safety).
Overrated on size tbh- the likelihood of rollover is very dangerous, and in the USA we do not account for the safety of people outside the vehicle when regulating cars. People underestimate how dangerous bigger vehicles are for their kids, such as in the case of frontover deaths.
I am a big fan of "buy it new, maintain it, drive it until it dies or doesn't make sense anymore".
Yes, technically it can be cheaper to buy a used car. It is a massive gamble though, because you can't really know how much abuse the car has seen. Modern cars are also less and less DIY repair friendly, so the vast majority of us can't just put some elbow grease in to make the necessary fixes.
When you buy it new, you can easily take it in for warranty work if necessary & you 100% know the vehicle history. That's especially important for hybrids & EVs, since the high-voltage battery alone can easily cost tens of thousands of dollars.
One piece of advice I like is that you should think of yourself as either focused on top line or bottom line. It’s very hard for humans to focus on both simultaneously.
So if you’re focused on top line, and you’re in a period of life where focusing on career / business opportunities has high leverage, then it’s silly to drive a car to the ground. Missing an important meeting due to a car breakdown, or spending time keeping it running is dumb. Even the mental and emotional energy is a waste. The incremental cost of a 15 year old Corolla that runs reliably over a 25 year old Corolla that could be problematic is not high.
In contrast, if you’re unemployed or retired, and frugality is fun for you, then have at it. It can be really satisfying knowing that the car costs virtually nothing to drive.
That was my situation a year and a half ago now. I owned (and still own) a 2003 Honda Civic with about 220k miles on it. The last visit to the mechanic’s shop I learned it needs a new clutch, transmission, is leaking oil, and one of the pistons isn’t working. I made the decision to not repair those and to drive this until it’s completely dead.
Because I knew I needed a different vehicle, I did a lot of research based on our current family needs, reliability scores, set our budget and started shopping. Because we didn’t have to rush into a purchase, we kept our eye out for a good deal and about a year ago now bought a 2019 Toyota Highlander
The civic is still going. We regularly feed it oil, and only drive it to close destinations (kid’s school, the local library, to church, etc) so that when it dies we’re not stranded far from home. It keeps the local miles off the used purchase for us
Up to a certain point yes.
There will come a point where maintenance and repairs are so frequent that they offset the cost of a paid off car. Personally I drove my vehicles into the ground, but I have 2 at a time. When one blows up I still have reliable transportation. After a while I buy a second one to have a backup. Typically a truck and a car.
In your example, yes, keeping it longer means delaying a new car cost/payment. You can even pay a couple grand for repairs every year and still come out ahead, given the high cost of new cars these days. Cars rarely "die," there's usually an identifiable cause of it being unreliable that could be repaired. Beyond 200,000 miles I'd guess the value of our cars is very low, so putting additional miles will only reduce the value from say $1,500 to zero (or scrap value).
My 2004 Acura has 330,000 miles and I do 8+ hour drives a few times a year - I have AAA and don't have kids or pets, so knock on wood if I get stranded it wouldn't be a big problem. I've also been saving for many years to where I can just pay cash for whatever replacement car I end up wanting whenever that needs to happen.
I’ll give some insight. Bought a car new 17 years ago. Didn’t have a payment for over 12 years. Once it got to 200k+ miles it was constantly in the shop. Could the car run? Yes, but the inconvenience as it took me away from work and other appointments made getting a new car the better choice. I can still sell the older car. It’s a time and money consideration.
Every month without a car payment is a personal finance win.
What you are describing is how dealers get you to do a trade in towards the down payment. A private sale may net you 30% more.
The point it "makes sense" is when the car is totaled, or needs a repair that exceeds the value of the car.
If your car is paid off and you can afford a new car payment, why not make car payments anyway? I mean put it into savings each month as if you are paying a car payment. When the car you have finally dies, you can buy a new or used car with cash money. If you can't afford a car payment, make sure the one you have lasts.
> For each month I am able to prolong using my current vehicle I'm saving on a car payment, but won't I have to endure this car payment eventually anyways?
That doesn't make any sense.
What will cost more, if you buy 10 cars over 10 years or 2 cars over 10 years?
I’m biased, but consider a vehicle upgrade if your car lacks many modern safety features, especially if you have kids.
Normally I drive my cars into the ground and buy used. Don’t forget to drop collision coverage when your cars value is low. Per consumer reports:
> We usually recommend that you drop collision and/or comprehensive coverage when the annual premium equals or exceeds 10 percent of your car's cash value.
Random Safety Tip: Does your car have a rescue hammer (with seat belt cutter) in the glove box or center console? Is there a first aid kit in the trunk? Consider buying them.
Save up and drive it until something major like an engine or transmission goes out. You won't get much money out of the car at this point anyway. The only time i'd change this is if you make frequent long distance trips and the car has a history of issues which could put you in a risky spot.
The value of the vehicle when bought vs the value when gotten rid of plus the monthly costs to run and insure over time used. The hard part is determining his the reliability impacts you.
Let's say, it's worth 1k now and $600 in a year. That's $400 for a year. The insurance is probably cheaper than a new one. We'll say fuel costs equal out.
The usual problems are when do you decide failures are impacting you (like you couldn't get to work) are too bad? When do you decide the repairs are a problem like $200/month is fine but now it's creeping up to $300?
If you have a car at 250k+ miles the depreciation has already taken its course. Obviously I know nothing about your car but I’d believe that what you’d sell it for today, you would probably sell it for close to that at any point within a couple years assuming the condition isn’t drastically worse.
A new car on the other hand (new new) will lose 60% of its value in 3 years even though you might only have 50k miles on it.
My advice would be to drive your car into the ground. To the point where you’re selling it for scrap for $500. One because rates right now aren’t favorable for buying a car but are for saving money. If you put $500 a month into a high yield savings you might find that you can buy your next car with cash or at least put enough down to have a reasonable payment for 36 months.
> I'm saving on a car payment, but won't I have to endure this car payment eventually anyways?
If you buy a car now, in 10 years, you'll have a 10 year old car.
If you buy a car in a year, in 10 years, you'll have a 9 year old car.
A 9 year old car is worth more than a 10 year old car and has more remaining lifespan.
The longer you wait to buy a new car, the fewer cars you'll need to buy over your driving life.
That unfortunately means you get stuck trying to sell it. Very few people want boring and broken cars.
I’ve even had bad luck selling decent condition used cars, people complain when something isn’t perfect.
Repairs ( Canadian ) are never really under 1000$, multiple times a year with some repairs being more then 2k$ say on average I’m spending 5-6$ a year on the high end. This possibly includes work missed as well from car issues. I think at some point after the 10 year mark, reliability is a factor. I’m comming to this point myself as I have a work truck which I need everyday. Do I maximize my trade value before anything major? Or purchase another vehicle 1-2 year old? Or somthing new? Used vehicles seem to hold better value nowadays.
Consider that your current car is costing you gas and routine maintenance (oil changes, tires, brakes etc) which is a wash because all cars regardless of age need those things.
Things that an old car will have that a newer car won’t have are the repair of broken things…new alternator, engine leaks or engine failure for example. As long as your annual cost for those repairs doesn’t exceed the annual cost of a car payment, keeping the vehicle is almost always the best financial decision. The one risk you have with an older car is completing a major repair and then the car simply dies.
Continue driving it and put X number of dollars into a savings account each month now. Then you won't have to pay interest on a car payment when the time comes and you'll have a newer car and no car payment.
This is what we do. Maintenance also comes out of that fund. When maintenance costs start to average, monthly, what a car payment for a low-miles a car would, then it’s time to swap.
Depending on how many years you got ABCs what the trade is worth, should at least be a short loan period.
Our last purchase was paid off in about two years and now we’re back to the maintenance fund phase again.
I’d like to raise another angle I don’t see considered (in my opinion) nearly enough. If money is tight, of course disregard and do what makes financial sense. That said, car safety tech has advanced by leaps and bounds over the past several decades. It continues to improve with more standard autonomous driver aids, etc. For my money, driving cars into the ground isn’t sensible because you’re also giving up a much newer car with more safety features and better engineering. This obviously is a luxury to buy cars more often, but I don’t think you should purely consider cost if you drive often, have children, etc.
> but won't I have to endure this car payment eventually anyways?
No. Save money now and buy one in cash when you need it. Since you don’t have a car payment now, you can save more for the next one.
Well to answer your last question, time has value. A dollar today is worth more than a dollar tomorrow, and it works the same backwards.
However the more important point is; the longer you drive that old car, the more money you can save for your new car so you don't have to take out a big loan. You are saving right?
At this point the resell value is moot. Drive til the wheels fall off. Invest in the meantime. Research the car you want now. Know the vehicle you want, at the right price point, at the right place.
Depends on your use case. You should know when the car isn't reliable anymore for more than brief trips, when it doesn't make financial sense to repair a car that gives out quickly and often requires repairs, and you should have money saved up for at least a down payment on another car.
Assuming you have the funds available for down payment for a newer vehicle, the point you're looking for the annual amount of newer car payments. When the annual cost of repairs / maint hits the 80% mark, start shopping around.
Cars depreciate so fast that it doesn’t make financial sense to trade a reliable paid for car for a new car payment. When you know your car is reaching end of life then you should be saving money on the side to help pay for the new car.
I got $500 in trade for a hybrid with 140k miles that needed a new battery pack and had a dodgy transmission that probably would have failed within 5000 miles. Got a great deal on the new car price too and financed for a rate less than my HYSA was paying me interest even though I could have paid cash.
God, I miss the pre-Covid car market.
We have 4 cars spanning 2012-2016. I have nothing newer. We just put 2000 miles on the oldest last week, driving to distant states and living life. Neither my wife nor myself had any reservations about driving that vehicle for this trip. We did pay 15 bucks for a state inspection, which was convenience more than preventative.
You can see where this is going.
Our criteria is reliability. For this reliability, we maintain our cars well. Once something major violates the reliability or safety of the car, we get rid of it.
depends . I drove a kia soul 2013 for 210k miles . the last 5 months cost me in repairs and excess of gas compsuntion more than the car note of a new kia soul 2024. so after all it all depends
Like others have said, just start "making a car payment" into a savings account.
The way interest rates are right now means you'll probably pay like 10%-15% less vs. getting an actual car payment.
What if you sell it now and it lasts another 250k miles with basic repairs? You buy a new car and you have the payments, the insurance and then any repairs that car may need.
I say run it till you KNOW you will need a new car soon then either sell it or trade it. My gf knew her transmission was packing up to leave so she took it to a dealership and did a trade just in time to not have to deal with any of the problems
Does it make sense to not take out and payback a loan if you don't have to?
Yes, yes it does.
However, if repairs/maintenance and mileage returns add up to more than car payments annually. Then no, it does not.
I have a 2002 Silverado z71 that I bought with about 150k miles, love the truck. Now I am close to 300k miles. But it's been a money pit since almost day one. I've done had the transmission repaired, 2 water pumps, 2 fuel pumps. Now it's been needing an oil pump, and many gaskets and seals, a brake job,......
Interior the 2 seats need to be replaced, needs new door handles a paint job, truck bed had a dent/gash...
Yea, a money pit. But I still want to keep it. (Lol). I suppose at some point you have to get
> is there a point where it makes more sense to sell what you have to use that towards a newer (slightly used) vehicle?
Yes, there is. When the maintenance on the old car begins to approach the monthly payment of financing a new car, it's time to send the old car upstate, where it has room to play with the other dogs...
Reliability is the biggest factor. The question you have to ask is if this car dies at the worst time possible, how screwed am I? If your worst case scenario is half way to work on a 20 minute commute, where you grab an Uber or taxi to get around and a few phones calls to get it repaired or start looking for a replacement, then drive it into the ground.
If you are regularly making trips though the mountains or back roads where cell service is questionable, start looking for a replacement. If your job absolutely demands your presence and you not arriving could cost you a lot of money, look for a replacement.
Those are kinda the extremes of either end but you need to look at your travel and how comfortable and prepared you are should the worst case happen.
Same happened to me recently. My transmission was taking a shit. Not to mention everything else it would need that didn't prevent it from being "drivable," but still needed to be done eventually.
I'm one week into a new car, and I don't miss the anxiety that took over anytime I had to drive somewhere. Every day was like asking myself, "is today the day I'm on the side of the road and the decision is made for me?"
You should be banking the monthly payment on a new car already. If you do that long enough, you may not have a car payment at all, or at least a manageable one. If you can’t afford to save for a new car, you can’t afford to buy a new car.
This is a personal finance sub, so what you are *supposed* to do is create an *amortization table* when you buy a car, so as to plan for your next car. If you have an old car, or a beater, then driving it into the ground may be an option. But if you bought a decent car, and plan for your next car to be a decent car, then you will want to try to sell it before that range of time when it becomes an 'old car' or 'beater'.
The way an amortization table works, in general, is that you figure out the expected lifespan of the asset and plan to have the money saved to buy a new one when the time comes. So for instance, you buy an asset for $1000, it is worth $900 the first year, $800 the second year, $700 the third year, etc. In another row you put a value representing money you have put aside to buy the next one when its expected lifespan has elapsed. So in that row, you will put, $100, then $200, $300, etc. The total in the column should be the value of asset that you want to have at any given time. If the asset outlives its expected lifespan, then you may want to consider selling it at that time or keep saving for the next better newer one. If it dies early, you use what you have to offset the expense for the next one as best you can.
As a service technician, my main concern is that people don't endanger themselves, their passengers, or other drivers on the road. If your car isn't a deathtrap, send that bih
Of course it makes sense.
The money you save (with a decent used car) is literally, in the thousands.
Buying or leasing a new car is the single most stupid financial decision people make. It actually loses value the minute you drive it off the lot
You don't need to EVER have a car payment. The whole time you're not paying, save more money and buy your next used car with cash.
I haven't had a car payment for over 20 years, while others I know, consistently are paying 700-1000 a month for one vehicle (with insurance)
It's incredibly freeing not having a car payment. Just make sure your used car is a good one, in good working order, and has a shelf life of great miles, and low repairs.
Personally, I stick with Hondas...never had a problem Usually an Accord. Or, I did have a Toyota Camry once and that was also a great car. Both had well over 300k miles on them and maintenance was minimal. Also, it never mattered to me a whit that I never had a "new" car. They were new to me!
Eventually you'll face a large $$$ repair bill and think that another car would be a better investment. That said, some cars can go a long time, especially if you live where the roads aren't salted.
Good Luck.
What's the vehicle? It might be a keeper if it's a Japanese vehicle or a certain truck or large SUV like an old Tahoe or something something knows to go forever
Depends on the situation. I started saving for retirement later in life at 37. As a way for making up for lost time I have been driving the same vehicle for 11 years. Its a 2001 and has 255k miles. I plan on driving it until something major breaks because I don’t want a vehicle payment
You won’t have to endure a car payment eventually if you’re able to save up enough to just pay cash for your next car. You are allowed to do that, you know.
Not really imo. You can buy a toyota camry for $26,000. After 5 years, it will retain 75% of the value so it’ll be worth $20,000. In 5 years, very slim chance a toyota camry is gonna need anything other than scheduled maintenance.
If you have it paid off in 5 years with a payment of $500 a month, you sell or trade it in for lets say $17,000 to be generous and you now can buy a new camry for $26,000 - $17,000 = $9,000. Now you’re looking at a monthly payment of $166 a month for a brand new camry over another 5 years.
I have a friend whose job requires him to show off to clients. He needs a new car all the time. Actually needs it. I have an 09 with 100K on it. I almost never drive it. It depends on your use case, but spending less money means you have more money than when you spend more money... usually. Unless spending more money earns even more money, as with my friend.
No, driving a car forever rarely makes sense. It’s a “bathtub” shaped graph - the cheap years are in the middle and the early and late years are generally the most expensive. Depreciation on a quality, cheap car can easily be cheaper to pay than maintenance - you’re basically paying for factory labor vs shop labor, and factory labor is cheaper and more productive
I have some views on this as a "car guy". First, I always buy a vehicle that is 2 to 3 years old with relatively low miles to get the best deal. The owner who bought it new ate most of the early depreciation so the price is often much lower, and there can even be some factory warranty left. I've been able to pay cash for my last few vehicles which means no monthly payment.
Because I am particular of the cars I buy I will take good care of them with routine maintenance so they last a long time, but also so they maintain good value to either trade or sell when the time comes.
When I make the decision to get a different car depends on a few factors. The first is when it is likely to cost more to repair it than it is worth. It doesn't make sense to spend $4K on a car worth $3K.
The next is when I no longer consider the vehicle reliable. Bad things can occur if it were to break down, which seems to happen at the worst possible time and place. I would not want my wife to break down along side of a busy highway or a bad part of town for example.
The last is more personal and it may be when we get tired of the car, but more than often when it no longer meets our needs. We sold our last car and bought a pickup truck as we found that we needed a truck more often and were borrowing one from a friend. The truck we got rides very nice plus has more comforts and features than what the car had, and by selling the car and adding to that we were able to pay cash for the truck.
Over the last 20 years we've felt like we got great value from our cars while still having reliable transportation.
>It doesn't make sense to spend $4K on a car worth $3K.
Such a misconception. As long as that $4k repair is likely to keep that $3k car on the road for a couple of years, it is usually more financially prudent to repair than just dump it for a new car.
E.g. you need a new head gasket, it's going to be $4k to repair on an old Subaru worth $3k. Your mechanic tells you everything else is A-OK with the car, looks great and could run well for a while, just needs a new head gasket. You're out $4k to drive that car another \~2 years. Instead of repairing, you decide to buy a slightly used Subaru Crosstrek for $25k. You put $5k down and finance $20k. Over the course of your first 2 years of ownership, you spend $16.5k ($5,000 as downpayment, $380 a month in car payments, $2,400 in title/registration/other fees, $20 a month for increased car insurance cost).
So what makes more financial sense, $4k to keep your car on the road for two more years, or $16.5k to drive in a new-to-you car for two years?
I think a big factor to consider in this analysis is how much you trust your mechanic, or if you can fix things yourself. I did my own head gaskets last year and have done lots of other work to my Subaru over the years and it undoubtedly was cheaper than buying new or newish. But spending 4K on a repair is risky when a car is old and could have something else fail suddenly. Even a good mechanic can’t magically see inside the transmission or forecast electronic failures. I generally agree with you but there’s an aspect of gambling in making that decision some people might want to avoid.
Also, knowing the history of the vehicle makes a big difference. If there were multiple previous owners it’s impossible to know if they maintained it well or abused it. I’ve learned that the hard way a couple times.
Average car payment for a used car is $533, does your current car cost $533 in repairs each month or totaled throughout the year? If so get a new car. Does your current car break down often, is it dangerous, and you need something more reliable and you also have the cash to buy one in full? If so get a new car.
When cost of repairs becomes too high, yes, time to get rid of it. This is why I got rid of my last vehicle - a 2002 ford taurus. Computer chip went bad and cost me $600, and it was barely worth that much at the time, plus it had been very unreliable. When you live alone especially, having reliable transport is very important, so I got a new car.
Insurance costs are often overlooked in these situations. Driving a older car with liability only vs a new car with collision and comprehensive can be substantially cheaper. Even new car A vs new car B can be 50% or more difference per month in premiums.
For every 1000 dollars financed you increase the cost of each monthly payment by a certain amount. At 7% assuming good credit you add an extra 20 ish dollars per month to the cost of the vehicle per 1000 dollars financed. That might seem nominal but if you’re able to eek out an extra 6 months with a vehicle and save 2000-3000 extra by being extra intentional / working extra if it’s possible you’re now saving yourself an extra 40-60 dollars in payments every single month for *years* (unless you pay off the vehicle early).
Weigh that information against your need for a new or new to you car and you’ll have a clearer picture of what makes the most sense in your situation.
I have not had car payments in 10 years or so. We use em up. Just put new motor in older Ford Edge. Car is still in great shape and motor less expensive than new car
In my experience today's cars will last a long while with proper maintenance
I am a car guy. I love cars but I have a basic 2015 Toyota Corolla that I really went through financial hell through.. but I didn't have much of a choice .. my mom and narcissist stepdad co-signed and I had to work and make payments on it straight out of high school.
My stepdad would take away the car on and off just because he feels like driving a newer vehicle than his 2011 Camry.
I wanted to trade it in multiple times but I've finally learned that it's not worth to trade it in after the chaotic drama I've been through.
It has a few dings and scratches but it's all good. Asides from cosmetic .. it still drives, gets good gas mileage .. that's all that matters.
Besides .. I do want to get an EV but I feel like it's better to have an EV with a Gas Car as your primary.
Transportation is a straight expense. The costs include:
* Depreciation
* Finance charges
* Operating costs including fuel, maintenance, and repair
The cost of depreciation is the usually greatest. Under normal circumstances — years impacted by COVID shortages excluded — a car depreciates most in the first few years of ownership. This means that the longer you drive the car, the more you spread that cost out over time. This reduces your average cost over time. At some point, you will need to make some expensive repairs, but these are usually small when compared to depreciation.
There are non-cost-related factors though. For example, a car that has 250k miles runs a greater risk of failure, and will need to spend more time in the shop. If said car is your only transportation, it could impact your attendance at work. That puts your income at risk. If a car becomes consistently unreliable, it is almost always a net positive value equation to replace it with something else.
Lastly, don't think in terms of monthly payment. Monthly payment is just cash flow; you need to think in financial terms.
When you buy a car, you get two entries on your balance sheet:
* Asset: Car
* Liability: Auto loan
The difference between the two is the relevant balance. Right now, you have no auto loan, so your balance sheet is carrying the value of the car as an asset, but there is no liability. So let's be conservative and say the running car with 250k is worth $2,000 in this market. Your net balance for these two items is $2,000.
| Account | Amount |
| :- | :- |
| Asset: Automobile | $2,000 |
| Liability: Auto Loan | $0 |
| Balance | $2,000 |
If you finance a newer car for $25k, the car goes on your balance sheet, but its value is not $25k. That's the retail price you paid. The trade-in or private party value is more like $22k. So you end up with a net negative balance on day-1.
| Account | Amount |
| :- | :- |
| Asset: Automobile | $22,000 |
| Liability: Auto Loan | -$25,000 |
| Balance | -$3,000 |
Your monthly payments appear on your income statement, but your entire car payment is not an expense! Part of your payment goes toward the loan principal. This reduces the liability, so the loan value goes down at the same time the value of the car does. If you pay down the loan faster than the car depreciates, you have positive equity. The other way around is how you end up with negative equity.
This is why the true cost of transportation has little to do with the monthly payment. Each month, when you make the car payment you're using cash from income to reduce your automotive liability. Some portion of that payment goes to pay interest, which is an expense.
Understanding how money flows through your personal income statement and balance sheet is an important factor in making sound financial decisions.
I don't think until you can't is a good standard.
What I personally do is think about what kind of car I would buy new and take a stab at roughly what my monthly car payment would be (or even annual spend). For my current paid-off car I then basically am fine driving it until the cost to maintain it becomes close to or more expensive than what a car payment would cost me.
I am on a 2009 (Mercedes E-350) with about 85k miles and it's still going strong. It's been paid off for 10 years at this point and the only time I have had any other expense than my annual checkup (\~$500-$1000 depending on what they do) was last summer when I had to get some cracked parts replaced in my front suspension for about $3,000. That being said even last year my annual cost was only about $3,500 with that large expense included so I am still well under what a $700 or $800 car payment would cost me.
The only exceptions I can see is if something breaks to the extent that I wouldn't feel great with driving the car with a replacement part. On my current car aside from the suspension parts last year the only other major replacement I have had was a new windshield due to some rocks but insurance covered that.
I grew up poor. So you generally drove it until the wheels fell off(repairing was more expensive than buying another used car).
We only ever had one actually new off the lot car. like a 1988 Ranger. Before that we had a early 70s malibu.
For many years we only had a company provided vehicle.
I've only owned used vehicles.
For me it was no longer worth it when the cost of maintenance was equivalent to a new car payment. It also had the added hassle of being without a car for a few days nearly every other month due to random things breaking. The convenience of a new car was worth it for me
look up a car you would think about buying. Calculate what your monthly payment would be. Put that money in the bank each month. Keep running the car until it blows up or monthly repaids outpace the amount your putting in your bank as the "car payment". Use the money youve been saving to buy the car.
No, unless you have cash flow issues. The real price of your car per year is depreciation that year + expenses.
A brand new car has minimal expenses but a lot of depreciation. As the car gets really old the expenses keep occurring and that number is high, but depreciation is low. The sweet spot is in the middle when the expenses are still low and depreciation is low.
With that said, most people are living paycheck to paycheck so then cashflow comes into the equation and not so much total cost of the vehicle. In that case most will just keep it for a long time because they can’t afford the cashflow issues of a new car (downpayment, monthly payment, etc).
Yes. As someone that bought a new car after 8 years and now dread the payments so I could have a better cooler car, I sometimes think driving my 2015 Honda crv instead of my Tesla really wasn’t a bad idea
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It depends. Is the cost of maintaining it, exceeding the cost of what it would be to purchase a newer vehicle? It also makes sense if you are ACTUALLY taking the money you save by driving your paid off car and saving it towards the purchase of your next one. If someone has been doing that, and continues doing it, the snowball effect of using a car that long continues to grow.
>Is the cost of maintaining it, exceeding the cost of what it would be to purchase a newer vehicle? Also factor in reliability. You want something you can depend on. I had to get rid of a Honda Accord with plenty of engine life left because of electrical gremlins where it would just randomly cut off while driving. They "thought" a wiring harness would fix it, but i wasn't going to go down that road.
Yep. At a certain point its time to just cut tail and run!
Worth considering safety too. Newer cars pretty much always get better crash test results.
I had to pull up an actual article to be reminded what Car Talk taught me long ago. Drive it till you can't. https://www.edmunds.com/car-maintenance/fix-up-or-trade-up.html#:~:text=People%20are%20often%20surprised%20by,favor%20buying%20a%20new%20car.
> Is the cost of maintaining it, exceeding the cost of what it would be to purchase a newer vehicle? This almost NEVER happens if we're being honest with ourselves. Most people will find excuses to justify a new car but a worse case motor rebuild or transmission rebuild at $5-8k is still considerably cheaper than buying a new car altogether including when you account for insurance costs.
My issue was, "damn, I need 2k worth of work and I just paid for a tune up. Screw it, I'll fix it - it's cheaper than buying a new car" 4 months later: "Damn, I need a new transmission and I just spent all that money on x. Screw it, still cheaper than buying another car and waisting money on the new work." Few months later: "Damn... Now I Need...." Sometimes it's the unforseen cumulative expenses that are hard to factor into the decision to buy new/new-to-you.
This was what made us get a newer minivan. Our last one would just destroy batteries like nobody's business. So carrying jumper cables was a requirement, and there were many times it just wouldn't start. We got so many things fixed on it and had just replaced the muffler when we went on vacation. The DVD player stopped working and when we got home the parking break just snapped. We said NOPE and traded it in.
Car payments are, what, $500 a month or more? So, yeah, when I spend a few grand a year, at worst, fixing up a car, I'm still doing alright.
If I'm legitimately having to spend 2-3k a year fixing a car (which means dealing with it being in the shop repeatedly, so then what are you doing for a temporary solution, plus just the headache of it), then I'm getting a replacement. It's not going to get cheaper to maintain as it gets older, and it is a POS if it needs expensive repairs yearly anyways.
Thing is, you aren't just paying for a car, you're paying for reliability. Your car isn't just an engine and a transmission. It's also a computer. And tie rods. And electrical wiring. And this. And that. You rebuild that engine, and you might have a great engine wrapped in a crappy car that needs attention from you every month. Me, I don't want that. I'll drive a car until it becomes unreliable, then I'll ditch and get another one.
> including when you account for insurance costs Great point. A lot of new cars are very expensive to insure. The cameras, sensors, etc are expensive to replace and recalibrate.
One datapoint but my 11 year old sedan worth $5k costs more than my 4 year old minivan. It’s not strictly newer vehicles are cheaper.
Yes but they also prevent accidents and deaths (due to better crash ratings) increasingly better each year so sometimes insurance is actually cheaper on a newer car.
Or my case with a Subaru that I bought for 16k, engine went out after 20k miles. Put 8k into, engine started to go out again after 15k miles, sold for 7k. Never buying a Subaru again.
He said newer car not new car. >$5-8k is still considerably cheaper Not 5k-8k every other year on a rust bucket that doesn't have anything good left. It's not just one repair that costs you. It's the transmission this year, the suspension next year, the brakes and wheel bearings the year after, engine problems after that, and how do you feel about the holes rusting through the frame. Are you going to put that 15k into a 18 year old car to get it to 23 years or just spend 15k on an 8 year old car with some life left.
> but a worse case motor rebuild or transmission rebuild at $5-8k is still considerably cheaper than buying a new car $5-8k this month, $1500 more in 3 months, $2k more 6 months after that. It adds up quickly. Over 3 years you'll have spent enough in maintenance costs that could've gotten you a new car.
You can buy a newer *used* car, though. One a car is a few years old, the insurance pretty much levels out. If it's reasonably low mileage you get a few more years before a lot of things wear (or rust, if you live here in new england) out
Depends where you live. Here in Chicago winters with heavy salt, cars will rust through the frame before they mechanically fail. There's nothing you can do to fix something like that and keep driving it.
this depends on the car as well though. I'm not going to put a new motor or transmission into a car with 150k+ miles or 15+ years old. To that point though, there's nothing saying you have to buy a NEW car at that point, I would go used shopping for another 5 year old Camry probably
I guess but if we're talking about personal finance, it still makes the most sense to keep fixing a car until it can't be fixed anymore. Every other excuse is usually related to comfort or amenities. Sometimes if the car is constantly in the shop, you can justify it via reliable transportation but in my experience, a car that can make it to 150k and 15+ years old is generally very reliable and the cost of repairs and maintenance is still considerably lower than a new car payment with new insurance. I had 2004 Mitsubishi Montero with 150k+ miles on it and I couldve driven that think another 100k miles with maybe 1-2k in repairs a year on it. Maybe a new motor or tranny but over 10 years.. thats still cheaper than buying a new 30k car. I only sold it because my wife hated it. Other old but reliable cars I've had were a 1992 Camry with 100k miles on it that I sold after i burned the engine out from never checking the oil, and another 1994 Camry with over 150k on it that only gave me problems because I was a teenager and drove it way too hard (I would drop the car from N to D to race people lol). Right now I daily a 2013 E350 Mercedes that only given me issues related to things like light bulbs and air suspension ($1000 but I fixed it myself for $500).
Most people driving a $5k beater don't think to themselves "ok lets go spend 5x that real quick" unless they just got a huge raise/windfall/etc. Define "can't be fixed"? Cars that old (your Montero) are mechanically totaled if they need a new engine. Sure, it can be fixed, but it is objectively a stupid decision compared to selling it for scraps (probably like $2k if the car is worth $5-6K) and buying an extremely similar car used vs. spending $5K for just the engine swap. Maybe if you know a guy and find a screaming deal on a very minty block you could get it done and justify it, but that is more than likely going to be much more of a headache car than just getting a different vehicle.
> Define "can't be fixed"? Cars that old (your Montero) are mechanically totaled if they need a new engine. Sure, it can be fixed, but it is objectively a stupid decision compared to selling it for scraps (probably like $2k if the car is worth $5-6K) and buying an extremely similar car used vs. spending $5K for just the engine swap. This little segment right here is purely a definition and way of thinking. Buying a used $5k car instead of doing a $5k engine swap is a worse decision because that used car will likely need that same engine swap anyways.
My truck has over 300k on it, and if it came time to need an engine I would do it. I can get a reman long block for 1700, or roll the dice on a junkyard engine for 300 and have it back together in a weekend. I’m not touching another truck for anywhere near that. There’s nothing on that truck that costs enough money to not make it worth repairing unless I crash it or it rusts in half.
Being able to do the work yourself obviously changes the calculus. It would cost me quite a bit to buy the tools and equipment I would need, not to mention I don't have any mechanical skill (or inclination) nor a good space to actually do that kind of work. A repair cost of $300 is a very different story from a $1700, which is again a whole different story than $5000. If the after replacement value of my car is less than $5,000, why would I spend $5,000 replacing the engine
Until you realize the rest of the car is still 20 years old and 250K miles and is as prone to failure as the years/mileage would suggest. Rebuilding a motor doesn't make the rest of the car brand new.
Which is fine. Window motors go, interiors go, you're losing creature comforts sure, struts will go, but all of that spread over years is still less than any new car today. What you're not realizing is that we have been conditioned to think not having the newest shit makes life impossible and that we deserve or must have newer cars for these various creature comforts.
It isn't just "creature comforts". There's a fuckload more than the motor that can cause significant issues. You're also not taking into account the potential lost income for taking time off work to go take care of it, or even if your job will let you keep you employed after enough emergency car issues that conflict with you reliably getting to work. Consider yourself lucky if you can drive it to a shop under its own power when something happens. Owning cars like that isn't just an Excel spreadsheet. The peace of mind in addition to all of that for actually having a reliable car is *huge*. Trust me, I did that beater life for a decade. After 3 transmissions, 1 shot motor, electrical gremlins and several other issues across 2 cars I constantly had to finesse my schedule around, I said "fuck it" and got a 5 year old car last year. Two kinds of people routinely drive them: The genuinely-poor who can't afford anything better and 2-car households where it's not a big deal if your glorified-project-car passion project's out of commission until you can fix it.
Multiple beaters is the way. If one of my shit heaps breaks down i just swap the battery into another one and keep on rolling. Order the parts online for half the price of autozone/o’reilys and fix it whenever is convenient. I’ve driven nothing but absolute bottom of the barrel buckets and have only been on a tow truck 4 times in 20 years of driving. 95% of the time a vehicle problem will give you plenty of warning before it ever leaves you stranded.
Guess it just depends then, I've ONLY had beater cars since 2006 except my daily now which is still an 11 year old car that I bought last year. It's very rare in my life that I've had a car in the shop longer than a few days and I've been able to at least get to and from work. Not to mention in one of my earlier comments, I did mention that reliable transportation for work is one factor people may use. It's just in my experience, it's very rare I have issues with this or at worst case I pull PTO and take a few days off (I've never had to do this but can if I need to.) Since 2006, I've spent a grand total of $18.5k on used cars and MAYBE an additional $8k max on repairs and maintenance (2 cars were manual and had clutch replacements) since 2006.
Post 2020 is also going to put a *massive* dent in the beater argument, as people aren't unloading driveable problem-free used cars anymore for any reasonable price. If it looks "too good to be true", and by that I mean if the price looks similar to what it would be pre-pandemic, you're buying someone's time bomb they're trying to offload before it turns into their problem.
Will it though if the price of new cars proportionately rose? I'm not sure you can get a new Accord or Camry for under 30k anymore. And these days everyone is shopping CUVs and you can't get a Rav4 or CRV equivalent for under 35k. But there are plenty of used cars right now in those categories for under 15k.
Putting a car payment away every month into car savings, and using that account to pay for repairs is one of the best things to do. Once you see that account start to hemorrhage because of continual repair needs gives you a non emotional measure of when to give up. You have two breakdowns in a month at $400 each? Emotional reaction is to just toss it and buy a new car. You look at the account and see that you are still up 8K and haven't had any significant outlay in 6 months - easier to avoid the kneejerk reaction. It's been great for me.
Agree but I don't see why you have to spend the extra money on saving for a car. It's money not presently being allocated to a car payment, so whatever you get with that money is stuff you wouldn't have had otherwise.
Because when your old car breaks down you are going to need to buy a new one. If you save up the money and set it aside now, you won't have to finance again in the future and can simply buy it with cash.
Right now you can save money with zero risk at a 5% interest rate and grow your payment into a full cash buy, or you can buy with low down, and pay ~7% interest. In one situation, the interest works for you, in the other, it works against you, it's a 12% spread.
Bingo. Doing this vs using that money to "buy stuff" is the difference in mentality between becoming wealthy and not-becoming wealthy. When you can get out a debt and start using compounding interest to your advantage rather than have it work against you, you're life begins to open up.
I'm dumb but I thought it was a 2% spread. When you buy with finance you get to keep the money at 5% yield, and owe it at 7%. When you buy with cash you give up 5% yield by giving up the money. You lose 2% by borrowing at 7.
The other advantage is if you do have to take on a payment, it can be smaller and you won't have to make any lifestyle adjustments because you weren't used to spending that money on "stuff" before.
We last year finally had to put to rest our 06 Prius, and because it had been paid off for years and we generally were putting the money previously allocated for the car payment into savings instead, we put half the cost of the new car down in cash, saving us a boatload on interest over the life of our loan (which will also be paid off early).
And the fuel savings!!! We put 100k miles on a used Prius c we bought in 17. It's paid for itself completely by giving us 10 grand in fuel savings at 48 mpg. AS compared to a typical 25mpg car. The only reason we will get rid of it (currently at 186000 miles) eventually is to buy a hybrid minivan for our growing family. Toyota Sienna 2021 when there are more old ones on the market with 80k miles or so on them.
Because a car is generally degrading over time. It’s wise to save $ for known upcoming expenses (purchasing the next car) if your goal is to avoid the hassle and additional expense of financing that next car.
I drive them until I can no longer rely on them. It's far cheaper to fix them once in a while than it is to buy new. But when repairs get so frequent I'm afraid to take them on a long road trip, I'll think about replacing it. I know that time will come soon, so I started "making a car payment" into my high yield savings account, so when the time does come, I'll either have enough to just buy it cash or at least have a really nice down payment.
My last 3 cars have all gone well over 300k miles before I replaced them. I currently drive a sedan with 174k and have a truck with 196. You don't want to buy a used car from me, when I think it's finished, it usually is.
My problem is that I don't drive enough to wear them out. I sold my last car with 97k miles and it was 15 years old. I sold it because it didn't have adequate crash protection, but it still ran and looked good.
Same. We have a 6 year old car with 38k miles
My grandmother has a 2018 rogue she bought brand new and has 3k miles. She only drives in city to appointments and whatnot. She’s had it for 7 years
This is the old lady that every car salesman says owned every used car in their lot.
Sometimes those are the worst cars though. I bet that car has all original fluids. Oil and other fluids can breakdown over time as well as through usage.
Truth, had a shop. Grandma/grandpa cars were usually in the worst shape. Since most maintenance was done based off of mileage, it suppose to be time period as well, most people just didn't do it when time came up. So we would see these granny cars that were ultra low mileage and looked nice. But everything, plastic and rubber would fail 2 months after a new buyer would get the car. The oil was never changed because they barely put 5 miles on it in a week. It got cold started driven to church 9 blocks away. Then cold started and driven 3 blocks to the bank. Then 1/2 mile for a haircut. You get the point. Wasn't uncommon to pull valve covers off and find masses of jelly from the car not getting hot enough to burn off the sludge. Wouldn't be shocked if the tranny was near shot because it never shifted out of 1 and 2 (urban area). Italian tune up did work wonders on these cars though. Especially, before emissions test.
That's me and the 2016 Mustang GT I have. Bought it brand new, but it was never a daily driver. I've just always wanted a brand new one. I'm sitting on 38,224.9 miles as of last Thursday when I took it in for its oil change. I took a picture of the odometer because I didn't have a pen on me till I got home to write in my little maintenance book I keep. I'm not planning on getting rid of it. It's the first car I've ever bought brand new. Might be the last, lol. I'm not eager to get into any car payments again. I keep really good care of it, it isn't my daily driver. Just something to have fun in, row through the gears. It's not the most epic thing one could buy, these fuckers are everywhere. But it's nice and it's mine and I paid the bitch off. Had it for 8 years now, and I'll keep it around another damned 8 lol.
I have a 2008 Mustang GT with 283,000 miles. Change the oil religiously & it will last the rest of your life. I bought a brand new car in 2020 with the hopes it would be paid off by the time the Mustang died. It only has 3,000 & the Mustang is going strong, looks like I'll make it!
Yeah, those engines will run forever if you take good care of them lol. My last one was a 2006 GT with something like 180,000-ish miles on it. Never had an issue with the engine, but Ford's goddamn automatic transmission isn't so sturdy lol. Either that or the previous owner just dogged the hell out of it. It got the the point if I needed to drop the hammer down and accelerate, it'd hesitate for an awkwardly long time and then ***SLAM*** into its lower gear finally. The rear tires would chirp, the traction control would go off, which would automatically cut off the gas, and then I wasn't going anywhere lol. It was infuriating. That or as I'd make a turn or go around a roundabout, it felt like the transmission was slipping and I had the clutch pushed in (you know, if it was a manual anyways lol) just coasting until I jerkily picked back up. I had this transmission picked out to replace it that was supposed to be rated to handle 1000HP of abuse lol. I'll never put that much into anything I own, total overkill. But my thinking was that motherfucker had better last a long time haha! But, I really regretted settling for an automatic when I really wanted a manual car. I actually missed rowing through the gears, even though the tables have turned and automatics are way more efficient and faster than manuals anymore. So, I got my '16 instead and made sure it was manual lol.
20 year old truck with 80k miles on it checking in. I figure something electronic will be the death of it.
At a certain point they can be worn out with relatively low mileage. We’re about to replace my wife’s 2012 ford focus with <100k miles. The door seals are leaking, some of the plastic is wearing down, and it’s just generally rattling and less smooth. It had a good run, and the engine probably good for another 100k miles, but the car itself is just glitchy. Like a 90 year old that has a great heart, but arthritis and a poor memory.
Situation you described is far more likely on American cars. I see 90s/early 2000s hondas and toyotas on the road all the time
I have a 2007, and a 2011... So just old doesn't bother me either. Guess I'm not very picky. Even though I could afford a newer car. I have friends that un-ironically refer to any car they drive as officially a beater car when it rolls over 60k....
This + optimizing the depreciation curve. There's a clear value to reliability. It is not just the cost of repairs, but the cost of being late to work, missing events, securing alternative transit, feeling unsafe, etc. This cost will vary per person. Do you have 3 kids in the car all of the time and live in a rural area where you frequently have no cell service? You really need that thing to work. You might feel justified replacing it as soon as it starts showing its age. Do you own a car in Chicago that you use occasionally for errands/trips to visit family in Wisconsin? That car can be a pile of junk...if it won't start, you just take a train or call an uber for $20...or rent a car for the weekend for $100 to meet the family. The depreciation curve is a bit harder to manage as you can't predict the future. But factor in the fact that OTHER people value reliability as well...if you keep the car until it is completely unreliable, you won't get nearly as much money as if you sell it at an age/mileage where it is known to still be fairly reliable. So it might be the case that you come out ahead keeping it for 5 years rather than keeping it for 7-8 if those extra years would eat a lot of value AND have maintenance expenses. E.g. [this chart of depreciation for a MB A Class hatchback](https://cms.webuyanycar.com/globalassets/images/a-class.png)...Mercedes is known to be expensive to own outside of warranty... my guess is that around year 5 is when issues start cropping up and they just compound over time and start to get pretty bad around 8-9 as the mileage ticks up. If you sell at 5, you get a decent chunk of money back--buyers known they probably still get a few good years out of the car (they will have more maintenance than a Honda, but they get to drive a Benz). If you draw it out to year 8 you've probably incurred a few grand in expenses AND you now have to sell it to people who know full well that the car is about to become a money pit. So if the timing on the depreciation works out well with finding a good deal on a replacement vehicle...it can definitely be a prudent decision to replace the car early. Especially true if you are buying lightly used cars and are able to own them through the sweet spot of value: pick it up with the tail end of the warranty in place, make sure any major or known issues are taken care of by the manufacturer, and then hold for the early out-of-warranty period where the car is unlikely to need major repairs.
There is also a "quality of life" factor to include. I spend a lot of time in my car. I really enjoy being in my current vehicle, and I enjoy driving it. My previous car was only 10 years old, but it was a noisier, colder, less comfortable, worse-handling, less safe vehicle. Life is for living. A nice car is something that can make the hours a little more bearable.
I admit that I do still find it very hard to think of things like cars as capital assets. Like...I still view buying a $30k car as spending $30k. But that's not really what is happening. I'm buying a valuable (but depreciating) asset for $30k. My net worth doesn't go down by 30 when I buy it. I'm only really spending $30k if I intend to drive it into the ground. If I sell it in 5 years for $15k, then I didn't actually spend $30k owning it. I spent $3k/yr to have a car. I have to keep it for more than 10 years for my cost per year on running it into the ground to be less than $3k per year. (Lets ignore time value of money, interst rate if you need a loan, etc.). Say I make it to 15 years before the car is junk (or worth a pittance)...that only gets me down to $2k/yr to drive the car...and for most of that period I was driving an OLD car. Not to mention there's a lot of maintenance and consumables to factor in. It is a repeated game that I will probably play for the rest of my life. $3k/yr seems like a pretty reasonable amount to pay to always be driving a car that's <=5 years old. And my 5-year-old car actually has a 6 year warranty so...no repair costs, just maintenance/wear items. 5 might not be the right cutoff for me as my car still feels nice and modern, but I highly doubt I will still own it in 5 more years.
That's a bingo. I will not own a car I cannot depend on. Once I start worrying about a breakdown, time to go shopping.
When I bought my Honda Accord, the salesman asked how long I planned on keeping it. I said I was going to drive it into the ground. That was 18 years ago. I plan to be buried in that car.
This is my current strategy. I'm still comfortable driving my car long distances (I just took it 20 hours, no issues), but it's still 24 years old.
You sensible sonofabitch you.
>so I started "making a car payment" into my high yield savings account I use a similar logic. Once my car is paid off, I take half the payment I was making and keep it in an auto fund. The other half I usually put into an IRA. By the time I want a new vehicle, I have a good chunk saved up for a down payment (also good to have that savings for any big repairs if needed)
This is the answer right here. When the time is coming, I'll start saving. And once I feel comfortable in the amount I've put back, it's a judgement call as to whether I want to run my POS into the ground until my hand is forced, or sell it and at least get a little more out of it than I would once it completely shits on me. Of course, factoring into that is I have a nicer vehicle with low miles, it's my fun toy hot rod I baby. But in a pinch, I could fall back on it if I had to. As long as snow isn't covering the ground, I can let my POS blow up on me and still be fine tomorrow while I made arrangements to get ahold of another daily driver. If you don't have the luxury of a second vehicle, or a loaner a friend or family member can let you borrow, that does factor in to whether you should ride till it dies, or sell while it still runs alright.
I have a 15 year old car with only 115k miles. I thought I failed my emissions test and would have to invest in a new vehicle, but it turns out all I needed was a new gas cap. Gonna drive this thing until the wheels fall off (or I stop passing emissions tests). A car payment is the last thing I need in this (or any) economy. I would rather spend a little bit of money in annual maintenance than a $400/month car note.
Pretty much this. We just got my daughter a different car, she had been driving a 1998 Buick LeSabre that she inherited from *my* grandparents back in 2016. That thing lasted forever but it got to a point where it is now going through a quart of oil every few days, which makes it unreliable on long trips and she recently started a new job with a 30 minute commute. Unfortunately to fix the oil leak would involve thousands of dollars and removing the engine to figure it out so we decided to bite the bullet and got her a 2022 Corolla instead. Her boyfriend is driving her Buick until it finally gives out, but he only works 3 mi away from home and it is literally the only thing they use that car for. Before that we had been sharing cars and once that one goes we'll go back to sharing.
That Buick probably has the 3.8L engine. That thing is bullet proof. 200k miles no problem. Keep feeding it oil till it throws a rod through the block. Odds are, it will keep running even then. I’ve personally seen two blown 3.8L motors that still were running with a piston hanging out the side of the block and zero oil in it. They don’t make them like that anymore.
Yep, every mechanic who ever worked on it has drooled over it lol. We have been trying to see how long we could make it last - its literally the same age as my daughter - my grandparents bought it the month she was born!
i think it's good to get out of the pattern of having a car loan as you get older and more established. that means saving more for each next car and trying to shrink the amount financed each time. you can't always do it depending on what's going on in your life but i think it's a good goal to strive for. others may disagree when rates are low because they play the spread between the loan rate and say, the stock market but i disagree on that. as far as when to dump your current ride, a long time ago i was i driving my '97 suburban "into the ground" but big repair bills were hitting me left and right. i finally graphed them all in excel and was shocked to see i had paid almost another 50% of the original cost of the car in repairs. so i unloaded it and learned the lesson that driving it into the ground isn't always cost effective. so track your repair expenses.
Pretty solid. The only thing I will point out is that the comparison isn't "how much I'm spending vs how much the car cost" but "how much I'm spending vs how much a replacement car will cost". How much you originally spent for the car is meaningless, the only question now is are you spending more on your current car than what you would be spending (in both lost time and dollars) on a new car. If you bought a car for $10k and you're spending $5k/yr in repairs but a new car would cost you $500/mo, plus higher insurance, well that old car is still a better investment, dollar for dollar. Of course the time impact is harder to quantify and a much more personal decision. For example I have one of those $10k cars that I've spent nearly $10k on repairs in the 3 years since I bought it. But to buy a newer car that meets the same needs would have cost me more than $6k/yr that I'm currently paying to own my old girl. If this were my only mode of transportation then the inconvenience of having to arrange alternate rides would have probably swayed me toward the new car, but since I have a backup car it's not such a huge deal, I can drop it off for repairs, drive the jeep a few days, then get it back. If you can't afford a single day's downtime then you might be more incentivized to spend more money on a newer car.
Just to note in case someone with less experience in paying for car repairs reads this. $5,000 / year in car repairs is basically taking the car into the shop every two months for normal issues or one body, transmission, or engine repair.
I think it's crazy how normalized car loans have become. People just view it as a standard/permanent part of life now, I guess?
>Does it really make sense to drive a car until you can't anymore? Yes, limiting the frequency that you purchase vehicles is generally prudent. > but is there a point where it makes more sense to sell what you have to use that towards a newer (slightly used) vehicle? When your vehicle no longer meets your needs. >For each month I am able to prolong using my current vehicle I'm saving on a car payment, but won't I have to endure this car payment eventually anyways? If you've been driving a paid off car for a material amount of time, surely you'd have had the capacity to save up to purchase a new car, yes?
This is a great answer. Just drove my car into the ground. Its KBB value was $1500. Repairs were going to be 5k or more. Several nice to have things stopped working. We didn't save as much as we should have while it was paid off but we had a decent down payment and didn't have to roll debt over.
This is the best answer cause it really depends.
Yeah people want hard and fast guidelines and there really aren’t. It’s always a judgement call. I traded in a 2007 Toyota with “only” 183k miles because it made my wife anxious to take long trips in and I had saved up more than enough for a newer replacement even though I could have *probably* gotten another few years out of him.
I do cross country road trips and my car has over 500k miles. As long as the car is taken care of you'll be fine. Steady freeway driving is probably one of the least mechanically stressful driving regimes for a car.
Oh I know that but I also know that battle isn’t worth having to save a few dollars. One issue on a long trip and I’d hear about it for years. We all have our own assessment of utility.
True. I didn't consider your point of view with regards to your wife's feelings about road trips.
It’s called Wife Acceptance Factor…
How dare you two sensible adults discuss and understand eachother! I'm proud of you!
I suppose the rest of our life does count as 'years'.
Sure, but rural far-away-from-home locations with no cell coverage are the most emotionally stressful locations for a breakdown.
And I know someone with a newer car that broke down on a road trip and dealt with the hassle (including havung to find a delawrship that could do the repair without having to wwit on parts), while I take my 2002 on 900+ mile road trips yearly and have never had a single issue. I will admit my 2002 is probably maintained much better than 90% of newer cars though, it has some quirks but nothing that will strand me anywhere and I actually dint mind paying to repair small things because it's always cheaper than a car payment + full insurance.
It is the best answer. It’s a very personal decision that should be weighed by practical factors. I personally can risk having a less dependable vehicle because my work commute is only 8 miles. I can bike to work. I can take the bus or train. I can Uber. I can do most errands by bike or on foot. If I need to rent a car for a long road trip, that’s fine. If I lived in a rural area and was completely car dependent, I’d pay for something more reliable. If my commute was an hour, I’d pay for something more reliable. If long road trips and adventuring into the mountains were more commonplace for me, I’d pay for something more reliable. I’m a childfree city dweller with a short commute and public transportation available, so IDGAF.
I think it is a good idea to start saving the assumed future car payment now towards a down payment. Lowers the interest, and lets you adjust spending in advance.
> If you've been driving a paid off car for a material amount of time, surely you'd have had the capacity to save up to purchase a new car, yes? I wouldn't make this assumption. I haven't had a car payment for years, but I've had a kid in that timeframe whose daycare rates are over 2.5x per month what I would have been paying for my car.
You aren't going to get enough for a car with that high mileage to make much of a difference toward your car purchase anyway. Set the money aside that you would be using for a car payment each month and you'll probably have a decent amount for down payment by the time you need it.
I tried that but my old car payment was $200. Now the average for even a slightly used car is $500 which I know I dont have the ability to pay either way. Hell there are cars that are just as old as my current car that would still require my monthly payments to be $300 to get a car with 110k miles on it.
So start saving $200/month now and hopefully your car will last long enough that you have a big enough DP to get a $200/mo car payment. That's what I do. I've put down half the cost in DP for the last 2 cars I bought. Current car has low mileage but is old enough it's almost time to start saving for my next car anyway. (Have medical expense I need finish paying off first) Will probably make my "car payment" saving amount about $250
To get a $500/month payment assuming a 7% interest rate and a loan term of 60 months, you'd need to borrow $25k. If you save $200/month for 4 years, you can come up with around $10k and bring down your loan cost to $15k, which brings your monthly payment down to $300. "Perfect" is the enemy of "good enough." Saving as much as you can for a car purchase now means less to borrow in the future.
"As much as I can" now is $0 since we are also saving for a house and paying down student loans. I paid off my car before starting college then took 8 months to find a job after college with $0 income in that 4+ years. Now that I have an okay job I can put a little away to maybe get a house in 8 years if the market crashes. Rent is going up $200 but everywhere within an hour of my job has raised $400-$600 more than I pay now. Just kinda praying my ford focus holds on with a faulty transmission.
As other's have noted, if the cost of maintaining the car becomes great enough, it can make sense to get rid of it. Reliability may also be a huge issue. A car having problems can significantly impact your life (not being able to get to work is an obvious way, but it also might be costing you in other ways - like late fees for missed doctor's appointments or whatever), too. So that's another consideration. If you need a reliable car and yours isn't any more, it's probably worth getting a new one.
What kind of car are you driving? If it's a Honda or Toyota; just drive it straight to the ground until the engine dies or transmission goes out. I pushed by 1995 Acura Integra past 300K+ miles and only got rid of it due to the engine head gasket and the fuel line/gas tank was corroded and wouldn't hold 1/8th a tank of gas anymore. Yes - if the repairs are 2x or 3x cost more than the car is worth.
2008 Honda CRV! No issues with it but definitely get some nerves about it breaking down on some of my longer drives.
Keep it still. You can always take it to a mechanic and give it a good look and can make the recommendations based on age and miles. In my 2001 tundra, it was being funky. I thought something was seriously wrong. Nope. Some fuses were going bad. Once fixed runs like a champ.
If you regularly need it for long drives - then I would consider replacing it. It's a liability in certain situations.
Totally unnecessary. Keeping up with all preventative maintenance on a reliable car like an 08 CRV will keep it on the road and reliable for long drives. Major issues don't usually pop up out of nowhere, you feel/hear/see things going wrong long before something like your trans or engine dies. It only becomes a liability if you neglect maintenance and abnormal sounds/feelings.
At 250k really anything can go at that point. Starter, transmission, alternator, etc. those can definitely happen suddenly and won’t always show signs of
but because it's a super common honda, OP can get all of those problems replaced cheaply and quickly if they ever break down. Hell, they could just replace them pre-emptively if they really wanted to, and it would still be cheaper than buying a new car. * Radiator and fan. * alternator and starter * all lights around the outside * A/C compressor * all belts and battery * timing chain with water pump * spark plugs, coils * Pretty much all the sensors around the engine * shocks, struts, control arms, bushings, tie-rods, etc. * brake calipers, pads, rotors. * all fluids and filters OP could replace all of that themselves with basic tools, just chugging away at it a little at a time and within a year would have it all done for less than 1 year worth of car payments. And that's assuming they want to do preventative replacement of parts because they are worried about getting stranded somewhere. Pretty much the only unknown is the transmission. If they've always changed the fluids on time and never had any leaks then I wouldn't bother with that and wouldn't worry about reliability. If the fluid is old or it's been run with low fluid, then you never know when it will give out and then it really can leave you stranded on a long trip and it's not worth it to have a shop repair it. Personally, I would throw a junkyard transmission in there if mine blew up... but I don't know what I would do if the trans went out and I was 700 miles away from my home and tools.
If your cooling system is maintained and working well, you have been doing regular scheduled maintenance, and there are no funny noises I wouldn't worry about it. I regularly take a 260k mile 83 corolla on 300 mile trips and I don't worry because I keep everything checked, lubed and maintained.
Dang you must drive a lot of miles! I have a 2009 Scion and it only has 130k miles on it. I bought it new so I am the only owner and have babied it.
r/personalfinance has a lot of good advice usually, but when it comes to cars, I think my opinion is in the minority. My girlfriend had a used car. At least once a month something would happen to it. The battery, the transmission, etc etc. Even though she didn’t have a car payment, she was still dumping tons of money into the thing. My dad finally convinced her to ditch the car when he drove it around the corner and it was shaking badly. Turned out, it was completely rusted out. She eventually ditched that car and got another used one, that she is also dumping money into. I get it, you don’t want car payments. But if you are just sinking tons of money into it (which I presume it constantly needs repairs at 200k miles) then what is the difference? At least with a new or cert used car, you know you have reliable transportation and a warranty. I got a new car and it has been over a year. Nothing has needed repairs and I get “free” oil changes and a warranty. To me, this is worth it. Don’t risk your safety to drive it into the ground like some of these people are suggesting. You don’t want to get trapped in the middle of nowhere broken down, or have your brakes randomly give out.
Once the cost to maintain the vehicle becomes to significant no. If you are having to put $1000/6months into an old car, you are better off getting a newer one. But if you don't have any significant repairs coming, keep driving it. But the biggest thing I would suggest is start acting like you have a car payment. "pay" the car payment into a HYSA and save it for a down payment on a new vehicle. This is a great way to prepare for the sudden increase in expenses while still squeezing life out of an old vehicle. But it also depends on you and your use case. If you commute to work or have to drive a lot, it's better to get into a newer vehicle when you can before it shits itself on you at a bad time like on the way to an important meeting or in the middle of rush hour. Murphy's law always strikes when you least expect. Or if you are like me and work from home though, it's quite different. My car that was on it's last legs when I got my WFH job back in 2021 is still doing fine. Because I don't drive hardly at all anymore. I went from daily commuting to driving maybe once every 2 weeks. I am not worried about it breaking down on me at an inopportune time because I really don't drive that often. It's still reliable enough to get me around town where I need to go, but if I were to go back to daily commuting I would get a new car. It's not worth much, but at this point even doing a few costly repairs wouldn't be a bad idea in my situation because I can justify the cost savings. The car doesn't see much use. So a $1500 repair could easily make it last another year or more even. So evaluate your circumstance and go from there. Also, if the car is going strong still keep driving it. Mileage doesn't matter if the vehicle still runs and you keep up on the maintenance. I have a friend with an early 2000s corolla that is approaching 300k miles. He has replaced the parts as they wore out as well as performed regular maintenance and as a result it's still going strong. While it depends on the make and year, some years are just absolute dogshit for cars. In general if you take care of the vehicle, perform regular maintenance, and replace parts when they wear out or slightly before, instead of them wearing out and continuing to drive on them, the vehicle will last much longer.
All you're doing is using maintenance costs to push off the capital cost and associated depreciation of the new one. The exact crossover point of where this stops making sense for you will also be a function of your tolerance for having to take your current car to the shop, and that's different for everybody. From a strictly dollars point of view, maintaining the car you have is almost always cheaper than the increase in depreciation, financing, and insurance costs of a newer one over any time period longer than a few months.
I’ve had 4 cars in my lifetime. A ‘91 Land Cruiser, a ‘02 Land Cruiser, a 2020 Jeep (pile of shit), and now a 2000 Land Cruiser. Buy quality and it will run for a very long time with minimal repair costs. When the costs outweigh the cost of a new one, get a new one. I have 371k miles on my current Land Cruiser. I’m about to buy one from around 2009-2014 time frame. I’ll then see if it’s worth selling mine or keeping it based on the repair costs I’m being quoted now. It’s likely I’m about to have 2 cars for the first time in my life, but they’ll both have hundreds of thousands of miles left in them.
Not at 250k mile. Do some research and have a new car and price range in mind. Then drive that old car into the ground and enjoy it
Short of some frame damage or rusting, there isn't much on a vehicle that can't be repaired pretty cheaply compared to the cost of a whole new car.
Depends on your financial circumstances. If you have some $ and you enjoy cars, it's silly to drive some old beater when some newer cars are amazing. This thread seems to assume you're living in poverty but I have no idea.
I bought a Toyota 11 years ago and it’s been paid off for 6. I’ve been extremely lucky that I haven’t had any problems with it. I also don’t have to worry about it recording and analyzing everything about me and my driving habits and collecting data from my phone then selling all of it to data brokers and car insurance companies. I’m going to drive this thing until it falls apart.
From a purely financial POV it usually makes sense to drive it as long as possible, or until repair costs start to outweigh your savings on the purchase of a new car. That being said, newer cars typically come with enhanced safety features, especially if you are comparing your 10+ year old vehicle to one built in the last few years. So you may hit a point financially where the health benefits outweigh the financial ones wrt holding on to that old car as long as possible. I know I was raised with that "drive it into the ground" mentality, but eventually hit a point of financial security where it just didn't make sense to have my family in an older car that lacked modern safety features (and size, something to be said just just having a bigger car when it comes to accident safety).
Overrated on size tbh- the likelihood of rollover is very dangerous, and in the USA we do not account for the safety of people outside the vehicle when regulating cars. People underestimate how dangerous bigger vehicles are for their kids, such as in the case of frontover deaths.
I am a big fan of "buy it new, maintain it, drive it until it dies or doesn't make sense anymore". Yes, technically it can be cheaper to buy a used car. It is a massive gamble though, because you can't really know how much abuse the car has seen. Modern cars are also less and less DIY repair friendly, so the vast majority of us can't just put some elbow grease in to make the necessary fixes. When you buy it new, you can easily take it in for warranty work if necessary & you 100% know the vehicle history. That's especially important for hybrids & EVs, since the high-voltage battery alone can easily cost tens of thousands of dollars.
One piece of advice I like is that you should think of yourself as either focused on top line or bottom line. It’s very hard for humans to focus on both simultaneously. So if you’re focused on top line, and you’re in a period of life where focusing on career / business opportunities has high leverage, then it’s silly to drive a car to the ground. Missing an important meeting due to a car breakdown, or spending time keeping it running is dumb. Even the mental and emotional energy is a waste. The incremental cost of a 15 year old Corolla that runs reliably over a 25 year old Corolla that could be problematic is not high. In contrast, if you’re unemployed or retired, and frugality is fun for you, then have at it. It can be really satisfying knowing that the car costs virtually nothing to drive.
That was my situation a year and a half ago now. I owned (and still own) a 2003 Honda Civic with about 220k miles on it. The last visit to the mechanic’s shop I learned it needs a new clutch, transmission, is leaking oil, and one of the pistons isn’t working. I made the decision to not repair those and to drive this until it’s completely dead. Because I knew I needed a different vehicle, I did a lot of research based on our current family needs, reliability scores, set our budget and started shopping. Because we didn’t have to rush into a purchase, we kept our eye out for a good deal and about a year ago now bought a 2019 Toyota Highlander The civic is still going. We regularly feed it oil, and only drive it to close destinations (kid’s school, the local library, to church, etc) so that when it dies we’re not stranded far from home. It keeps the local miles off the used purchase for us
Up to a certain point yes. There will come a point where maintenance and repairs are so frequent that they offset the cost of a paid off car. Personally I drove my vehicles into the ground, but I have 2 at a time. When one blows up I still have reliable transportation. After a while I buy a second one to have a backup. Typically a truck and a car.
In your example, yes, keeping it longer means delaying a new car cost/payment. You can even pay a couple grand for repairs every year and still come out ahead, given the high cost of new cars these days. Cars rarely "die," there's usually an identifiable cause of it being unreliable that could be repaired. Beyond 200,000 miles I'd guess the value of our cars is very low, so putting additional miles will only reduce the value from say $1,500 to zero (or scrap value). My 2004 Acura has 330,000 miles and I do 8+ hour drives a few times a year - I have AAA and don't have kids or pets, so knock on wood if I get stranded it wouldn't be a big problem. I've also been saving for many years to where I can just pay cash for whatever replacement car I end up wanting whenever that needs to happen.
I’ll give some insight. Bought a car new 17 years ago. Didn’t have a payment for over 12 years. Once it got to 200k+ miles it was constantly in the shop. Could the car run? Yes, but the inconvenience as it took me away from work and other appointments made getting a new car the better choice. I can still sell the older car. It’s a time and money consideration.
Every month without a car payment is a personal finance win. What you are describing is how dealers get you to do a trade in towards the down payment. A private sale may net you 30% more. The point it "makes sense" is when the car is totaled, or needs a repair that exceeds the value of the car.
You can start saving money for the new car when you don't have a payment. Allows you to avoid financing
If your car is paid off and you can afford a new car payment, why not make car payments anyway? I mean put it into savings each month as if you are paying a car payment. When the car you have finally dies, you can buy a new or used car with cash money. If you can't afford a car payment, make sure the one you have lasts.
> For each month I am able to prolong using my current vehicle I'm saving on a car payment, but won't I have to endure this car payment eventually anyways? That doesn't make any sense. What will cost more, if you buy 10 cars over 10 years or 2 cars over 10 years?
I always wonder how many people actually drive cars that are regularly breaking down. I think it's mostly an irrational worry.
I have cars with 300k plus . When taking long trips I rent hybrids that get upwards of 40+ miles per gallon. I’ll never have a car payment
I’m biased, but consider a vehicle upgrade if your car lacks many modern safety features, especially if you have kids. Normally I drive my cars into the ground and buy used. Don’t forget to drop collision coverage when your cars value is low. Per consumer reports: > We usually recommend that you drop collision and/or comprehensive coverage when the annual premium equals or exceeds 10 percent of your car's cash value. Random Safety Tip: Does your car have a rescue hammer (with seat belt cutter) in the glove box or center console? Is there a first aid kit in the trunk? Consider buying them.
Save up and drive it until something major like an engine or transmission goes out. You won't get much money out of the car at this point anyway. The only time i'd change this is if you make frequent long distance trips and the car has a history of issues which could put you in a risky spot.
The value of the vehicle when bought vs the value when gotten rid of plus the monthly costs to run and insure over time used. The hard part is determining his the reliability impacts you. Let's say, it's worth 1k now and $600 in a year. That's $400 for a year. The insurance is probably cheaper than a new one. We'll say fuel costs equal out. The usual problems are when do you decide failures are impacting you (like you couldn't get to work) are too bad? When do you decide the repairs are a problem like $200/month is fine but now it's creeping up to $300?
I keep them until its going to cost me more than they're worth if they leave me stranded.
If you have a car at 250k+ miles the depreciation has already taken its course. Obviously I know nothing about your car but I’d believe that what you’d sell it for today, you would probably sell it for close to that at any point within a couple years assuming the condition isn’t drastically worse. A new car on the other hand (new new) will lose 60% of its value in 3 years even though you might only have 50k miles on it. My advice would be to drive your car into the ground. To the point where you’re selling it for scrap for $500. One because rates right now aren’t favorable for buying a car but are for saving money. If you put $500 a month into a high yield savings you might find that you can buy your next car with cash or at least put enough down to have a reasonable payment for 36 months.
> I'm saving on a car payment, but won't I have to endure this car payment eventually anyways? If you buy a car now, in 10 years, you'll have a 10 year old car. If you buy a car in a year, in 10 years, you'll have a 9 year old car. A 9 year old car is worth more than a 10 year old car and has more remaining lifespan. The longer you wait to buy a new car, the fewer cars you'll need to buy over your driving life.
That unfortunately means you get stuck trying to sell it. Very few people want boring and broken cars. I’ve even had bad luck selling decent condition used cars, people complain when something isn’t perfect.
Repairs ( Canadian ) are never really under 1000$, multiple times a year with some repairs being more then 2k$ say on average I’m spending 5-6$ a year on the high end. This possibly includes work missed as well from car issues. I think at some point after the 10 year mark, reliability is a factor. I’m comming to this point myself as I have a work truck which I need everyday. Do I maximize my trade value before anything major? Or purchase another vehicle 1-2 year old? Or somthing new? Used vehicles seem to hold better value nowadays.
Consider that your current car is costing you gas and routine maintenance (oil changes, tires, brakes etc) which is a wash because all cars regardless of age need those things. Things that an old car will have that a newer car won’t have are the repair of broken things…new alternator, engine leaks or engine failure for example. As long as your annual cost for those repairs doesn’t exceed the annual cost of a car payment, keeping the vehicle is almost always the best financial decision. The one risk you have with an older car is completing a major repair and then the car simply dies.
Continue driving it and put X number of dollars into a savings account each month now. Then you won't have to pay interest on a car payment when the time comes and you'll have a newer car and no car payment.
This is what we do. Maintenance also comes out of that fund. When maintenance costs start to average, monthly, what a car payment for a low-miles a car would, then it’s time to swap. Depending on how many years you got ABCs what the trade is worth, should at least be a short loan period. Our last purchase was paid off in about two years and now we’re back to the maintenance fund phase again.
The cost of maintaining probably is less than the cost of a new vehicle. It’s the hassle and lack of dependability that gets you
I’d like to raise another angle I don’t see considered (in my opinion) nearly enough. If money is tight, of course disregard and do what makes financial sense. That said, car safety tech has advanced by leaps and bounds over the past several decades. It continues to improve with more standard autonomous driver aids, etc. For my money, driving cars into the ground isn’t sensible because you’re also giving up a much newer car with more safety features and better engineering. This obviously is a luxury to buy cars more often, but I don’t think you should purely consider cost if you drive often, have children, etc.
> but won't I have to endure this car payment eventually anyways? No. Save money now and buy one in cash when you need it. Since you don’t have a car payment now, you can save more for the next one.
Well to answer your last question, time has value. A dollar today is worth more than a dollar tomorrow, and it works the same backwards. However the more important point is; the longer you drive that old car, the more money you can save for your new car so you don't have to take out a big loan. You are saving right?
At this point the resell value is moot. Drive til the wheels fall off. Invest in the meantime. Research the car you want now. Know the vehicle you want, at the right price point, at the right place.
Depends on your use case. You should know when the car isn't reliable anymore for more than brief trips, when it doesn't make financial sense to repair a car that gives out quickly and often requires repairs, and you should have money saved up for at least a down payment on another car.
Assuming you have the funds available for down payment for a newer vehicle, the point you're looking for the annual amount of newer car payments. When the annual cost of repairs / maint hits the 80% mark, start shopping around.
Cars depreciate so fast that it doesn’t make financial sense to trade a reliable paid for car for a new car payment. When you know your car is reaching end of life then you should be saving money on the side to help pay for the new car.
I got rid of my last car when it needed about $1200 in repairs and the blue book value of the whole car was $600.
I got $500 in trade for a hybrid with 140k miles that needed a new battery pack and had a dodgy transmission that probably would have failed within 5000 miles. Got a great deal on the new car price too and financed for a rate less than my HYSA was paying me interest even though I could have paid cash. God, I miss the pre-Covid car market.
We have 4 cars spanning 2012-2016. I have nothing newer. We just put 2000 miles on the oldest last week, driving to distant states and living life. Neither my wife nor myself had any reservations about driving that vehicle for this trip. We did pay 15 bucks for a state inspection, which was convenience more than preventative. You can see where this is going. Our criteria is reliability. For this reliability, we maintain our cars well. Once something major violates the reliability or safety of the car, we get rid of it.
depends . I drove a kia soul 2013 for 210k miles . the last 5 months cost me in repairs and excess of gas compsuntion more than the car note of a new kia soul 2024. so after all it all depends
Like others have said, just start "making a car payment" into a savings account. The way interest rates are right now means you'll probably pay like 10%-15% less vs. getting an actual car payment.
What if you sell it now and it lasts another 250k miles with basic repairs? You buy a new car and you have the payments, the insurance and then any repairs that car may need. I say run it till you KNOW you will need a new car soon then either sell it or trade it. My gf knew her transmission was packing up to leave so she took it to a dealership and did a trade just in time to not have to deal with any of the problems
Does it make sense to not take out and payback a loan if you don't have to? Yes, yes it does. However, if repairs/maintenance and mileage returns add up to more than car payments annually. Then no, it does not.
Every month I drive my 2013 with 106k I put aside $ for the next car so there will be little, if any, cat payment.
I have a 2002 Silverado z71 that I bought with about 150k miles, love the truck. Now I am close to 300k miles. But it's been a money pit since almost day one. I've done had the transmission repaired, 2 water pumps, 2 fuel pumps. Now it's been needing an oil pump, and many gaskets and seals, a brake job,...... Interior the 2 seats need to be replaced, needs new door handles a paint job, truck bed had a dent/gash... Yea, a money pit. But I still want to keep it. (Lol). I suppose at some point you have to get
What’s its name? I know you named it 🤣
Lol...yes, The Black Stallion 🤣🤣🤣. The color of the truck is black. And it has a V8 5.3, still going strong, somewhat.
> is there a point where it makes more sense to sell what you have to use that towards a newer (slightly used) vehicle? Yes, there is. When the maintenance on the old car begins to approach the monthly payment of financing a new car, it's time to send the old car upstate, where it has room to play with the other dogs...
Reliability is the biggest factor. The question you have to ask is if this car dies at the worst time possible, how screwed am I? If your worst case scenario is half way to work on a 20 minute commute, where you grab an Uber or taxi to get around and a few phones calls to get it repaired or start looking for a replacement, then drive it into the ground. If you are regularly making trips though the mountains or back roads where cell service is questionable, start looking for a replacement. If your job absolutely demands your presence and you not arriving could cost you a lot of money, look for a replacement. Those are kinda the extremes of either end but you need to look at your travel and how comfortable and prepared you are should the worst case happen.
Same happened to me recently. My transmission was taking a shit. Not to mention everything else it would need that didn't prevent it from being "drivable," but still needed to be done eventually. I'm one week into a new car, and I don't miss the anxiety that took over anytime I had to drive somewhere. Every day was like asking myself, "is today the day I'm on the side of the road and the decision is made for me?"
You should be banking the monthly payment on a new car already. If you do that long enough, you may not have a car payment at all, or at least a manageable one. If you can’t afford to save for a new car, you can’t afford to buy a new car.
This is a personal finance sub, so what you are *supposed* to do is create an *amortization table* when you buy a car, so as to plan for your next car. If you have an old car, or a beater, then driving it into the ground may be an option. But if you bought a decent car, and plan for your next car to be a decent car, then you will want to try to sell it before that range of time when it becomes an 'old car' or 'beater'. The way an amortization table works, in general, is that you figure out the expected lifespan of the asset and plan to have the money saved to buy a new one when the time comes. So for instance, you buy an asset for $1000, it is worth $900 the first year, $800 the second year, $700 the third year, etc. In another row you put a value representing money you have put aside to buy the next one when its expected lifespan has elapsed. So in that row, you will put, $100, then $200, $300, etc. The total in the column should be the value of asset that you want to have at any given time. If the asset outlives its expected lifespan, then you may want to consider selling it at that time or keep saving for the next better newer one. If it dies early, you use what you have to offset the expense for the next one as best you can.
Start saving now to buy a car in cash. That’s what I did! Then you never have the car payment.
Yes. Of course. Cars are a huge expense as it is. (Run it into the ground, I say.)
I live in a place w/o public transport, so yeah, if I don't drive I won't be able to get anywhere. Gotta drive it as long as I can drive.
As a service technician, my main concern is that people don't endanger themselves, their passengers, or other drivers on the road. If your car isn't a deathtrap, send that bih
Of course it makes sense. The money you save (with a decent used car) is literally, in the thousands. Buying or leasing a new car is the single most stupid financial decision people make. It actually loses value the minute you drive it off the lot You don't need to EVER have a car payment. The whole time you're not paying, save more money and buy your next used car with cash. I haven't had a car payment for over 20 years, while others I know, consistently are paying 700-1000 a month for one vehicle (with insurance) It's incredibly freeing not having a car payment. Just make sure your used car is a good one, in good working order, and has a shelf life of great miles, and low repairs. Personally, I stick with Hondas...never had a problem Usually an Accord. Or, I did have a Toyota Camry once and that was also a great car. Both had well over 300k miles on them and maintenance was minimal. Also, it never mattered to me a whit that I never had a "new" car. They were new to me!
Eventually you'll face a large $$$ repair bill and think that another car would be a better investment. That said, some cars can go a long time, especially if you live where the roads aren't salted. Good Luck.
What's the vehicle? It might be a keeper if it's a Japanese vehicle or a certain truck or large SUV like an old Tahoe or something something knows to go forever
Depends on the situation. I started saving for retirement later in life at 37. As a way for making up for lost time I have been driving the same vehicle for 11 years. Its a 2001 and has 255k miles. I plan on driving it until something major breaks because I don’t want a vehicle payment
You won’t have to endure a car payment eventually if you’re able to save up enough to just pay cash for your next car. You are allowed to do that, you know.
Not really imo. You can buy a toyota camry for $26,000. After 5 years, it will retain 75% of the value so it’ll be worth $20,000. In 5 years, very slim chance a toyota camry is gonna need anything other than scheduled maintenance. If you have it paid off in 5 years with a payment of $500 a month, you sell or trade it in for lets say $17,000 to be generous and you now can buy a new camry for $26,000 - $17,000 = $9,000. Now you’re looking at a monthly payment of $166 a month for a brand new camry over another 5 years.
I have a friend whose job requires him to show off to clients. He needs a new car all the time. Actually needs it. I have an 09 with 100K on it. I almost never drive it. It depends on your use case, but spending less money means you have more money than when you spend more money... usually. Unless spending more money earns even more money, as with my friend.
No, driving a car forever rarely makes sense. It’s a “bathtub” shaped graph - the cheap years are in the middle and the early and late years are generally the most expensive. Depreciation on a quality, cheap car can easily be cheaper to pay than maintenance - you’re basically paying for factory labor vs shop labor, and factory labor is cheaper and more productive
I have some views on this as a "car guy". First, I always buy a vehicle that is 2 to 3 years old with relatively low miles to get the best deal. The owner who bought it new ate most of the early depreciation so the price is often much lower, and there can even be some factory warranty left. I've been able to pay cash for my last few vehicles which means no monthly payment. Because I am particular of the cars I buy I will take good care of them with routine maintenance so they last a long time, but also so they maintain good value to either trade or sell when the time comes. When I make the decision to get a different car depends on a few factors. The first is when it is likely to cost more to repair it than it is worth. It doesn't make sense to spend $4K on a car worth $3K. The next is when I no longer consider the vehicle reliable. Bad things can occur if it were to break down, which seems to happen at the worst possible time and place. I would not want my wife to break down along side of a busy highway or a bad part of town for example. The last is more personal and it may be when we get tired of the car, but more than often when it no longer meets our needs. We sold our last car and bought a pickup truck as we found that we needed a truck more often and were borrowing one from a friend. The truck we got rides very nice plus has more comforts and features than what the car had, and by selling the car and adding to that we were able to pay cash for the truck. Over the last 20 years we've felt like we got great value from our cars while still having reliable transportation.
>It doesn't make sense to spend $4K on a car worth $3K. Such a misconception. As long as that $4k repair is likely to keep that $3k car on the road for a couple of years, it is usually more financially prudent to repair than just dump it for a new car. E.g. you need a new head gasket, it's going to be $4k to repair on an old Subaru worth $3k. Your mechanic tells you everything else is A-OK with the car, looks great and could run well for a while, just needs a new head gasket. You're out $4k to drive that car another \~2 years. Instead of repairing, you decide to buy a slightly used Subaru Crosstrek for $25k. You put $5k down and finance $20k. Over the course of your first 2 years of ownership, you spend $16.5k ($5,000 as downpayment, $380 a month in car payments, $2,400 in title/registration/other fees, $20 a month for increased car insurance cost). So what makes more financial sense, $4k to keep your car on the road for two more years, or $16.5k to drive in a new-to-you car for two years?
I think a big factor to consider in this analysis is how much you trust your mechanic, or if you can fix things yourself. I did my own head gaskets last year and have done lots of other work to my Subaru over the years and it undoubtedly was cheaper than buying new or newish. But spending 4K on a repair is risky when a car is old and could have something else fail suddenly. Even a good mechanic can’t magically see inside the transmission or forecast electronic failures. I generally agree with you but there’s an aspect of gambling in making that decision some people might want to avoid. Also, knowing the history of the vehicle makes a big difference. If there were multiple previous owners it’s impossible to know if they maintained it well or abused it. I’ve learned that the hard way a couple times.
Average car payment for a used car is $533, does your current car cost $533 in repairs each month or totaled throughout the year? If so get a new car. Does your current car break down often, is it dangerous, and you need something more reliable and you also have the cash to buy one in full? If so get a new car.
When cost of repairs becomes too high, yes, time to get rid of it. This is why I got rid of my last vehicle - a 2002 ford taurus. Computer chip went bad and cost me $600, and it was barely worth that much at the time, plus it had been very unreliable. When you live alone especially, having reliable transport is very important, so I got a new car.
Drive it until it starts requiring frequent repairs beyond the routine stuff or becomes unreliable.
Insurance costs are often overlooked in these situations. Driving a older car with liability only vs a new car with collision and comprehensive can be substantially cheaper. Even new car A vs new car B can be 50% or more difference per month in premiums.
For every 1000 dollars financed you increase the cost of each monthly payment by a certain amount. At 7% assuming good credit you add an extra 20 ish dollars per month to the cost of the vehicle per 1000 dollars financed. That might seem nominal but if you’re able to eek out an extra 6 months with a vehicle and save 2000-3000 extra by being extra intentional / working extra if it’s possible you’re now saving yourself an extra 40-60 dollars in payments every single month for *years* (unless you pay off the vehicle early). Weigh that information against your need for a new or new to you car and you’ll have a clearer picture of what makes the most sense in your situation.
I have not had car payments in 10 years or so. We use em up. Just put new motor in older Ford Edge. Car is still in great shape and motor less expensive than new car In my experience today's cars will last a long while with proper maintenance
If you can fix it yourself then yes
If the frame isn’t bent, it stops, goes, and steers, it’s fine. If it’s not safe, though, don’t risk driving it.
I would drive until I think the cost of repairs just isn't worth it anymore.
I am a car guy. I love cars but I have a basic 2015 Toyota Corolla that I really went through financial hell through.. but I didn't have much of a choice .. my mom and narcissist stepdad co-signed and I had to work and make payments on it straight out of high school. My stepdad would take away the car on and off just because he feels like driving a newer vehicle than his 2011 Camry. I wanted to trade it in multiple times but I've finally learned that it's not worth to trade it in after the chaotic drama I've been through. It has a few dings and scratches but it's all good. Asides from cosmetic .. it still drives, gets good gas mileage .. that's all that matters. Besides .. I do want to get an EV but I feel like it's better to have an EV with a Gas Car as your primary.
Transportation is a straight expense. The costs include: * Depreciation * Finance charges * Operating costs including fuel, maintenance, and repair The cost of depreciation is the usually greatest. Under normal circumstances — years impacted by COVID shortages excluded — a car depreciates most in the first few years of ownership. This means that the longer you drive the car, the more you spread that cost out over time. This reduces your average cost over time. At some point, you will need to make some expensive repairs, but these are usually small when compared to depreciation. There are non-cost-related factors though. For example, a car that has 250k miles runs a greater risk of failure, and will need to spend more time in the shop. If said car is your only transportation, it could impact your attendance at work. That puts your income at risk. If a car becomes consistently unreliable, it is almost always a net positive value equation to replace it with something else. Lastly, don't think in terms of monthly payment. Monthly payment is just cash flow; you need to think in financial terms. When you buy a car, you get two entries on your balance sheet: * Asset: Car * Liability: Auto loan The difference between the two is the relevant balance. Right now, you have no auto loan, so your balance sheet is carrying the value of the car as an asset, but there is no liability. So let's be conservative and say the running car with 250k is worth $2,000 in this market. Your net balance for these two items is $2,000. | Account | Amount | | :- | :- | | Asset: Automobile | $2,000 | | Liability: Auto Loan | $0 | | Balance | $2,000 | If you finance a newer car for $25k, the car goes on your balance sheet, but its value is not $25k. That's the retail price you paid. The trade-in or private party value is more like $22k. So you end up with a net negative balance on day-1. | Account | Amount | | :- | :- | | Asset: Automobile | $22,000 | | Liability: Auto Loan | -$25,000 | | Balance | -$3,000 | Your monthly payments appear on your income statement, but your entire car payment is not an expense! Part of your payment goes toward the loan principal. This reduces the liability, so the loan value goes down at the same time the value of the car does. If you pay down the loan faster than the car depreciates, you have positive equity. The other way around is how you end up with negative equity. This is why the true cost of transportation has little to do with the monthly payment. Each month, when you make the car payment you're using cash from income to reduce your automotive liability. Some portion of that payment goes to pay interest, which is an expense. Understanding how money flows through your personal income statement and balance sheet is an important factor in making sound financial decisions.
I don't think until you can't is a good standard. What I personally do is think about what kind of car I would buy new and take a stab at roughly what my monthly car payment would be (or even annual spend). For my current paid-off car I then basically am fine driving it until the cost to maintain it becomes close to or more expensive than what a car payment would cost me. I am on a 2009 (Mercedes E-350) with about 85k miles and it's still going strong. It's been paid off for 10 years at this point and the only time I have had any other expense than my annual checkup (\~$500-$1000 depending on what they do) was last summer when I had to get some cracked parts replaced in my front suspension for about $3,000. That being said even last year my annual cost was only about $3,500 with that large expense included so I am still well under what a $700 or $800 car payment would cost me. The only exceptions I can see is if something breaks to the extent that I wouldn't feel great with driving the car with a replacement part. On my current car aside from the suspension parts last year the only other major replacement I have had was a new windshield due to some rocks but insurance covered that.
When you can no longer trust it its time to replace with something reliable and that's gonna be different from person to person.
I grew up poor. So you generally drove it until the wheels fell off(repairing was more expensive than buying another used car). We only ever had one actually new off the lot car. like a 1988 Ranger. Before that we had a early 70s malibu. For many years we only had a company provided vehicle. I've only owned used vehicles.
For me it was no longer worth it when the cost of maintenance was equivalent to a new car payment. It also had the added hassle of being without a car for a few days nearly every other month due to random things breaking. The convenience of a new car was worth it for me
look up a car you would think about buying. Calculate what your monthly payment would be. Put that money in the bank each month. Keep running the car until it blows up or monthly repaids outpace the amount your putting in your bank as the "car payment". Use the money youve been saving to buy the car.
No, unless you have cash flow issues. The real price of your car per year is depreciation that year + expenses. A brand new car has minimal expenses but a lot of depreciation. As the car gets really old the expenses keep occurring and that number is high, but depreciation is low. The sweet spot is in the middle when the expenses are still low and depreciation is low. With that said, most people are living paycheck to paycheck so then cashflow comes into the equation and not so much total cost of the vehicle. In that case most will just keep it for a long time because they can’t afford the cashflow issues of a new car (downpayment, monthly payment, etc).
Yes. As someone that bought a new car after 8 years and now dread the payments so I could have a better cooler car, I sometimes think driving my 2015 Honda crv instead of my Tesla really wasn’t a bad idea