Car Situations

[Toad_Passenger]

DW and I both have vehicles that are at/over 140K miles, and 10 years old. Both are 100% paid in full. They both run well, but do have the occasional pricey fix. Our friends think we're crazy not to get new cars, but I keep thinking of it this way:

Over the next 5 years, let's say we have to put $1000 of repairs into each vehicle per year.

We'd be spending $10,000 to keep them running.
If we bought one new car, we'd probably be paying $300/month = $18,000 for the same 5 years, plus maintenance on the car we keep.

Are we crazy for just wanting to keep doing the repairs on these cars? It just seems cheaper in the long run when you really look at financing, etc.

I guess we could go the "used" route and pay in full, but it still seems like the used car will start to need maintenance anyway, and we're saving to move into a new home.

 

[Brancaneve]

If you decide to buy a new car, this is a great time to get a great deal on a new car. You have 2009 inventories that need to be off the lot, and even Saturn is taking 50% off the price of their cars since they are phasing out the brand. Could you possibly keep the better of the 2 cards and just buy one car?

My husband has used the website edminds.com to find dealers in our area. Once you've narrowed down on a type of car, you can email all the dealers using the website. Let them know exactly what you want and what you want to pay. The dealer that gives you the best deal is who you work with. All you do is show up and sign papers because the deal has already been negotiated! Best of luck!

It's always so fun to get a new car!

 

[Darcy03231]

It depends on how you buy your new car. I deposit the amount of a car payment into "car" savings every month. I bought a new car under the Cash for Clunkers program last summer. I got the $4500 from the government for a car that was worth about $2,000 and paid cash for the rest. I'm now driving a brand new car with no payment. By the time I need a new one I'll have cash to pay for it. I also don't buy really expensive cars with lots of gadgets which helps keep the inital price down. The cost of my new car, before my rebate was under $15,000.

At some point in time its going to be more expensive to fix your cars than it will be to replace them. The car I got rid of was old, with high mileage, and it needed close to $4000 in repairs (transmission was slipping and it had some other things wrong with it). I'm all for keeping older cars and repairing them as long as its cost effective to do so.

 

[Toad_Passenger]

It depends on how you buy your new car. I deposit the amount of a car payment into "car" savings every month. I bought a new car under the Cash for Clunkers program last summer. I got the $4500 from the government for a car that was worth about $2,000 and paid cash for the rest. I'm now driving a brand new car with no payment. By the time I need a new one I'll have cash to pay for it. I also don't buy really expensive cars with lots of gadgets which helps keep the inital price down. The cost of my new car, before my rebate was under $15,000.

At some point in time its going to be more expensive to fix your cars than it will be to replace them. The car I got rid of was old, with high mileage, and it needed close to $4000 in repairs (transmission was slipping and it had some other things wrong with it). I'm all for keeping older cars and repairing them as long as its cost effective to do so.

I guess I've just become overly frugal, because I look at that and think that even when adding in a $4000 repair, it's still cheaper over the 5-year period, plus I'm getting new parts that will last another so many years, and a new warranty on the repaired transmission!

Maybe I am crazy.

 

[Chicago526]

My car is 12 years old with 160k on it, so I know exactly what you mean! I'm luck that my DH can fix it for just the cost of parts, a $1k fix at a garage would only cost us $100 for the part(s). I plan on keeping the car at least another 2 years.

That said, there is something to be said for new(er) cars. Updated safety features for one, my car is a '98 so it doesn't have things like side curtain air bags or ABS brakes. Also reliability. Cars never break down where and when it's convienant, they always break down in the worst possible places at the worst possible times, it seems. I like my car and it runs well, but I never leave home with out my cell phone and I make sure to pay for AAA, and not just the standard AAA coverage but the one that includes extra towing milage.

So, with safetly and reliability in mind, at some point it DOES make sense to replace a vehical, even if it's still running well. It's hard to put a price tag on safety and reliability, and that's what getting a new (or new-ish) car can give you. Only you can decide where that scale tips.

 

[dfchelbay]

I guess I've just become overly frugal, because I look at that and think that even when adding in a $4000 repair, it's still cheaper over the 5-year period, plus I'm getting new parts that will last another so many years, and a new warranty on the repaired transmission!

Maybe I am crazy.

Don't forget your insurance will probably go up ALOT with a new car. Keep what you have. It's paid for. Do research for a new car and find one you would likely buy. Set aside the monthly payment amount for that new car in an account, as your pretend car payments. As well, call your insurance carrier and ask them how much to insure that vehicle. Put the cash difference between new car/used car insurance in your car account. Look how much money you're saving each month. When the time comes that it is no longer cost effective to fix a costly repair to your current car, you'll have all that money already saved up in your pretend car purchase account.

 

[amamax2]

I don't think you are crazy at all! Our rule is to drive it till it makes no sense to repair any more. As others have said, as SOME point it doesn't serve you well to keep repairing it, but as long as you don't constantly have it in the shop, I think your math and reasoning is right on.

I bought my current car in 1994 and it is still going strong. It is only the second car I have ever owned and I'm in my mid-40s! Guess I'm frugal, too!

 

[Darcy03231]

I guess I've just become overly frugal, because I look at that and think that even when adding in a $4000 repair, it's still cheaper over the 5-year period, plus I'm getting new parts that will last another so many years, and a new warranty on the repaired transmission!

Maybe I am crazy.

Your reasoning would be right if I were guaranteed to only have the $4000 repair in 5 years. The odds of that happening on an older vehicle with high mileage are slim. Before I traded it in, the last several years I was averaging $1000-$1500 a year in repairs/maintenance so it was definitely cheaper to keep the older car on the road, even though it only got 14 mpg.
My fear was that I'd spend the $4,000 and then something else would go wrong, etc. etc. I work with a woman who's averaging $300-$500 a month to keep a 14 y.o. car on the road. I don't want to be her.

 

[Irin997]

I'm in the same boat. I've got a 97 Accord which runs great but in a year will have 200,000 miles on it. That has started me worrying quite a bit...even though I hear that Hondas will go for 250k. I paid cash for it but have also put a decent amount into it to keep it running smoothly. Nothing major has happened but I have had to do a few repairs. Over the past 5 years I've probably put in about $6,000....still better than a car payment, but still pricey nonetheless.

What I've started thinking is that I would be happy to get another 2 years out of my car. So now that I am in a position to be able to afford a car payment, I will begin putting away the amount I need for a monthly car payment into savings and use it towards my down payment 2 years from now. It's a pretty solid plan. Not to mention that I plan to go used all the way. Used, but newer.

For example I was checking out cars online and priced a new 2010 Camry with all the bells and whistles and it came to $30-32k. Then I checked the used prices and found a 2008 Camryn with all the major features I want (sunroof, leather, alloy wheels, and finally, finally, heated seats) for $18k. Going used is a no-brainer for me.

 

[Irin997]

Your reasoning would be right if I were guaranteed to only have the $4000 repair in 5 years. The odds of that happening on an older vehicle with high mileage are slim. Before I traded it in, the last several years I was averaging $1000-$1500 a year in repairs/maintenance so it was definitely cheaper to keep the older car on the road, even though it only got 14 mpg.
My fear was that I'd spend the $4,000 and then something else would go wrong, etc. etc. I work with a woman who's averaging $300-$500 a month to keep a 14 y.o. car on the road. I don't want to be her.

See I don't want to get to that point either. I'm averaging about $1000-1500 per year now and I figure I don't want to shell out another $1000-2500 if something happens. My car is only worth $2500! I'd rather use that money towards a down payment. It's tough though cause I haven't had a car payment in years and years and years.

 

[Judy in Texas]

Take the $$ that you would be paying for a car payment and put it aside NOW while you still have a car that is paid off. That will give you a tidy sum to put down on a car when you decide to get a new one.

I have a 2002 Honda CRV that just went over 200,000. I go to an independent mechanic that specializes in Hondas. He says my car is just getting broken in. The only reason I might sell it at some point is to get something that will tow a travel trailer.

 

[jstbcuz]

My car is a 99 Cirrus and probably the best car we've owned. However, it just turned 201K.........and needs new tires, brakes, rotors, .........I dont know if I want to put money into it or not.....

 

[FamilyGuy]

The vast majority of Americans buy things they can't afford; new cars is one of the best examples I can think of... Going to Disney annually is another. I am (or at least have been) guilty of both!

From a financial and family standpoint, I would probably suggest upgrading one of your cars (the one closest to it's death bed) to a 3-6 yr old model with 40-70,000 miles on it - whatever you can afford to pay cash for (or even perhaps do a short term 18 - 36 month loan on).

 

[Kika]

I don't think you are crazy at all! Our rule is to drive it till it makes no sense to repair any more. As others have said, as SOME point it doesn't serve you well to keep repairing it, but as long as you don't constantly have it in the shop, I think your math and reasoning is right on.

I totally agree with this and do the same thing.

What kind of cars do you have? If you have a Honda, Toyota, or Nissan, you can probably run them to 200,000 miles.

I also agree with socking away money each month now for when you are ready to buy. This way, when you are ready to buy, you'll have enough to buy a more recent used (or new) car in cash, or at least have a nice down payment.

Sounds like you are doing the right thing to me...from one frugal person to another.

 

[BridgetBordeaux]

It's a balancing act. We are also driving 2 older and paid for cars. A 98 and an 02..

Once you look up the tax/titling fee/insurance rate numbers, the argument to avoid fixing an older car looks less impressive.

Cheapskate guru Clark Howard would tell you to drive it untill the wheels fall off and then buy new wheels!

Yes, sooner or later you will choose to replace it. Just set aside money now and drive your present car until you are uncomfortable with its overall reliability.

Regarding the 99 car needing tires, brakes and rotors.............there are many cars with 60K on them that need that stuff. Although you may not be pleased with the bill, the tire/brake/rotor situation should be stable and reliable for between 30 and 50 thousand miles after you pay the bill.

Our car had a defect so we are on our second motor and have a total of 150k on the car.

We are on our third set of front rotors and our third set of brake pads. I think it is our 3rd or 4th set of tires. We are on our third battery (the second one was defective at about 20 months old so it was replaced under warranty).

One more thought.............does your state have a personal property tax on vehicles? Ours does and we are enjoying low bills on what we have.

 

[singnring]

Regarding the 99 car needing tires, brakes and rotors.............there are many cars with 60K on them that need that stuff. Although you may not be pleased with the bill, the tire/brake/rotor situation should be stable and reliable for between 30 and 50 thousand miles after you pay the bill.

Agreed!! Don't figure wear maintenance like brakes and such. ANY car has to have those taken care of periodically.

Look at major repairs that you have put into the vehicles and compare those costs to the payments for a new car.

We own a 98 van about to roll 170K and a 00Tundra around 190K. We keep up on the regular maintenance and they both run great. Both drove us from OH to FL and back during the past year with no issues.

I say put aside money for a new car now while you can and run the old ones till they croak!!

 

[hanutedmansionmomma]

Cheapskate guru Clark Howard would tell you to drive it untill the wheels fall off and then buy new wheels!

totally agree

why have a payment if you don't need to?

both of our cars were born in the 90s, and doing ok with minor repairs.

knock on wood!

 

[mrodgers]

For the past 15 years (except for my wife's latest car), I have bought only 100,000+ mileage Japanese vehicles. My latest I went backwards and sold my 96 Altima 160k miles for $50 to buy a 94 civic with 180k miles for $69 (only paid title and registration ) It was better maintained than my Altima was. My wife has a brand new Ford which is a new experience in owning something new and something American.

There are 2 issues here.

First issue is obviously the reliability problem with an older car. You have 2 older cars. Something is more likely to happen to an older car to get you stranded somewhere or just stranded at home unless you have a backup. In your case, both of yours are older and the potential of both being disabled is higher than if one of them was new.

The 2nd issue is the one that hurts me. I wanted a new "reliable" car for my wife and kids to be in. I don't want her by herself with the kids in a 150-200k mile car. But with having a car payment on a new car, the funds aren't easily there to keep the older car running in top condition. That was the issue I had with the Altima. I'm not a mechanic and hate working on the cars, but I couldn't afford the car payment and pay for any work needed on the Altima. $100 for me to weld a new front radiator support on opposed to $1000 for someone else to do or $0 for me to diagnose the engine light and try to get at the sensors crawling around in the gravel driveway opposed to $500 for the shop to do it. Both of those put my car down for a good while, but I did have the backup of a "new" car to get me to work.

All that said, it also needs mentioned about what kind of car you have / are looking to buy. As I said, for the past 15 years, I've only bought Japanese vehicles until my Ford. My Ford failed state inspection with the brake rotors being completely shot at 35,000 miles, all 4 corners. At the same time, the Altima was also needing front brake rotors. The difference was, the Ford rotors were completely shot at 35,000 miles and needed replaced while the Altima rotors that needed replaced were also the original rotors with 160,000 miles on them. Big quality difference.

So far, my "new" Ford with 35,000 miles on it has cost me more money in maintenance than any other car I have ever owned the last 15 years. Here's the list of my last 15 years of vehicles and maintenance besides tires and brake PADS...

89 Toyota pickup - 139,000 miles (new shocks)
94 Toyota 4Runner - 100,000 miles (nothing)
88 4Runner - 189,000 miles (new clutch, $100 installed myself and new shocks)
99 Tacoma - actually did have less than 100k on this one at 92,000 miles (nothing, but it did have the rusty frame problem that Toyota fixed for more than I paid for the vehicle)
96 Altima - 160,000 miles (needed shocks, but I never replace them)

The Altima and my "new" Ford are the only vehicles I've had to replace rotors on. I was appalled at having to replace the Ford rotors at 35,000 miles. The 88 4Runner I did have them cut down once, but the Ford was even beyond being cut down.

Moral of the story is, just because a car is new, doesn't mean that it will be cheaper with regards to maintenance. You also have to consider what the new car is going to be. Replacing "normal wear items" at an increased rate of 5X is going to be considerably more expensive.

 

[Cindy B]

It depends on how you buy your new car. I deposit the amount of a car payment into "car" savings every month. I bought a new car under the Cash for Clunkers program last summer. I got the $4500 from the government for a car that was worth about $2,000 and paid cash for the rest. I'm now driving a brand new car with no payment. By the time I need a new one I'll have cash to pay for it. I also don't buy really expensive cars with lots of gadgets which helps keep the inital price down. The cost of my new car, before my rebate was under $15,000.

At some point in time its going to be more expensive to fix your cars than it will be to replace them. The car I got rid of was old, with high mileage, and it needed close to $4000 in repairs (transmission was slipping and it had some other things wrong with it). I'm all for keeping older cars and repairing them as long as its cost effective to do so.

I did a similar thing. I did trade in my old Jeep for $4500. The head gasket was leaking so I was looking at a $2k repair. The cost of my new car- a 2010 Camry- was 21K. On top of the Cash for Clunkers, there was a new college graduate rebate - $1000, and another Toyota Friends and Family discount of about $2K -- (BIL works for the dealer!)

We did have money in savings to cover 7/8 of the car cost so I financed a minimal amount and am paying it down agressively every month. (It is now $60 month). I could have used the emergency fund to pay the car in cash-- but I did plan out that purchase and it will be paid off probably in March. If the cost of the car was 15K, I would have been able to pay full out cash.

 

[DISdreamin']

DH and I share an 03 Honda with about 120K on it. We're currently saving for another car - will likely be nearly new with low mileage if possible (dealer demo or similar with original warranty would be ideal). Our vehicle has been - knock on wood - incredibly reliable, but it's getting far enough up in miles that a second car would be a nice fallback.

All that said, I've run the numbers on what the Honda has cost over the years, and it averages out to WAAAAY more than $1500K a year in repairs. Thus, every mile we drive it, every day we get out of it, lowers our cost of ownership. As long as it drives, we'll drive it! If the repairs get over $2K a year, or when it becomes unreliable as transportation, that's when it will get replaced. Until then, just keep driving, just keep driving (think Dory from Nemo)...