Does it pay to keep older cars?

[fdcg27]

Depends mainly upon the owner/driver.
Most of what breaks over the life of any vehicle is fairly cheap and easy to fix for those who DIY and therefore supply the hundred buck an hour labor and shop their own parts.
Those who rely upon sometimes iffy third parties for repairs and maintenance are in a different situation.
It also depends upon the owner/driver's willingness to be seen in something old versus the ego boost some get from being seen in something new.
There is little question as to which makes more economic sense.
Many also take pride in keeping something old running and fully functional.
All a matter of what one is capable of and what one wants to spend one's money on.
Finally, the best way to get a good old beater is to have bought the car new and maintained it personally throughout its life.
I'll add that most of those we know who have real money drive older vehicles.
They may be nice vehicles, but they aren't new and aren't leased.

 

[antonmnster]

I'm doing the unthinkable and will pay a shop on Tuesday $1200 to replace my oil pan gasket on my 07 335 BMW.

It's not my first choice, but I did the gasket myself a year and a half ago and obviously missed something. My garage is a lot worse now (but the house better!), and I'm not eager to have to take a couple days off of work and not have a backup car in case something goes awry.

The connection to this thread is that even at $1200 on a 180,000 mile, 10-year old car, it's still a better value proposition than scrapping the car and replacing it. It's paid for, and the average monthly maintenance costs are a lot lower than even payments on a $7500 car.

 

[Bronco1]

I was doing a search on this topic the other day and one point I read indicated if the cost of the repair exceeds the value of the vehicle, it might be time to consider a replacement. I think sometimes it comes down to the utility you get from your auto purchases. I'm using utility here by the economic term:

"Utility is a term used by economists to describe the measurement of "useful-ness" that a consumer obtains from any good. Utility may measure how much one enjoys a movie, or the sense of security one gets from buying a deadbolt. The utility of any object or circumstance can be considered."

That differs from the purely financial view. I thought fdcg27 made some great points but in the end, I guess the bottom line is it's your money and being happy with your choices. The wife and I will be getting a new vehicle in the Fall, replacing the Honda Fit. We'll do it because we're retired now and want to travel around the country and we want something that is safer, more economical and more comfortable. The Fit is a great car but it doesn't meet that criteria and the wife doesn't like to drive the F150 or Bronco. We'll keep the F150 and Bronco, maintain and use them for camping, towing, fishing and hiking. That may not best the best financial choice but, it will give us the best utility.

 

[fdcg27]

In economic terms, we're all utility maximizers and utility can be defined as that expenditure providing the highest level of personal satisfaction for funds.
Our personal utility maximizing choices must therefore differ.
One guy might want a fat cheeseburger for lunch while another might spend the same money on a salad.
Both are maximizing their utility.
In your case, none of your current fleet is really suitable for lots of traveling, so if travel is your aim, then a new and more suitable road trip vehicle makes great sense.
In my case, I can drive and enjoy almost anything on my pretty stress-free fifty miles a day commute, so something older and more Spartan might make sense to me.
We would both be utility maximizers by definition.

 

[B320i]

I was thinking about it just yesterday... The whole idea of replacing a vehicle because "repair exceeds the vehicle's value" is close to bogus. Think about it, first you have to flip the car that needs said expensive repair.

Now you have to buy another with a potentially unknown history and repairs (potentially) not too far down the road... Spend more $ only to land yourself back to Square 1 - a car that is depreciating, which requires routine repairs and maintenance. In all likelihood, you could be no better off.

 

[RooflessVW]

Originally Posted By: B320i
I was thinking about it just yesterday... The whole idea of replacing a vehicle because "repair exceeds the vehicle's value" is close to bogus. Think about it, first you have to flip the car that needs said expensive repair.

Now you have to buy another with a potentially unknown history and repairs (potentially) not too far down the road... Spend more $ only to land yourself back to Square 1 - a car that is depreciating, which requires routine repairs and maintenance. In all likelihood, you could be no better off.

It's only bogus if you keep buying clunkers.

For most people, 10 months of $300 payments is easier to stomach than a $3k repair.

 

[Ducked]

Originally Posted By: B320i
I was thinking about it just yesterday... The whole idea of replacing a vehicle because "repair exceeds the vehicle's value" is close to bogus.


Yeh, never made much sense to me. Seems a fairly arbitrary data point.

In a banger (=clunker=beater in American, I think) context it'd mean you scrap for just about any repair, which seems like an unnecessary waste. It also ignores the generally lower maintainability of newer vehicles, so it pushes you into an escalating cost/shorter life spiral.

 

[Andrew1972]

My wife loves her old Legacy turbo manual transmission wagon. At 10yrs/169k it burned a valve. We rolled the dice and spent $2200 to fix that and also another $600 in parts for maintenance with no labor really(timing belt, seals, plugs, oil pump....)

3 years latter the $1000/year has paid off as we only have changed oil on car and now sitting at 230k with her commuter car.

Interestingly it still has factory turbo which is strong but car does flutter in boost when cold.

 

[The_Jeff]

Originally Posted By: B320i
I was thinking about it just yesterday... The whole idea of replacing a vehicle because "repair exceeds the vehicle's value" is close to bogus. Think about it, first you have to flip the car that needs said expensive repair.

Now you have to buy another with a potentially unknown history and repairs (potentially) not too far down the road... Spend more $ only to land yourself back to Square 1 - a car that is depreciating, which requires routine repairs and maintenance. In all likelihood, you could be no better off.


Yeah this. If you like, say, early PT cruisers, they're worth $500 because the market has decided that head gasket could blow any day now.

If you buy one to fix and flip, and even advertise the new head gasket, the market will shun it because "obviously it has unreliable head gaskets, this un-loyal car needed major repairs and will likely need more."

If you buy a PT and pray, and the gasket goes, you could either fix it and reset the clock or buy another and drive in fear.

But if you're a tolerable mechanic and have done dozens of PTs, you could do them "right" and have a never ending input stream of nearly free cars. That gives a lot of confidence.

 

[Vikas]

Quote:
For most people, 10 months of $300 payments is easier to stomach than a $3k repair.
And where does one find a good reliable car needing no further repair or maintenance for $3000 ?

You don't get what you want for 10 months of $300 per month payments. Try 60 months at $500 instead.

 

[Dave Hess]

Originally Posted By: madRiver
My wife loves her old Legacy turbo manual transmission wagon. At 10yrs/169k it burned a valve. We rolled the dice and spent $2200 to fix that and also another $600 in parts for maintenance with no labor really(timing belt, seals, plugs, oil pump....)

3 years latter the $1000/year has paid off as we only have changed oil on car and now sitting at 230k with her commuter car.

Interestingly it still has factory turbo which is strong but car does flutter in boost when cold.


Why is your wife so attached to the car?

Maybe subconsciously she feels bad to get rid of car that was good to her....?

 

[Dave Hess]

Originally Posted By: Vikas
Quote:
For most people, 10 months of $300 payments is easier to stomach than a $3k repair.
And where does one find a good reliable car needing no further repair or maintenance for $3000 ?

You don't get what you want for 10 months of $300 per month payments. Try 60 months at $500 instead.


Most Americans are cash poor and financing vehicles for 7 years.

 

[RooflessVW]

Originally Posted By: Vikas
Quote:
For most people, 10 months of $300 payments is easier to stomach than a $3k repair.
And where does one find a good reliable car needing no further repair or maintenance for $3000 ?

You don't get what you want for 10 months of $300 per month payments. Try 60 months at $500 instead.

You missed my point, but ok.

The point is that people would rather take the smaller money (payments) over the larger money (repair) 9 times out of ten. Whether or not it is rational is irrelevant.

 

[Vikas]

But the point was the alternative is NOT 300 for 10 months. If you change your argument to say instead of spending $3000 now, people would much rather spend $500 per month, then I agree with you wholeheartedly. It may be little irrational but that is how people behave and I would be hard pressed to blame them. For many people, circumstances make it impossible to get out of the perpetual car payments BUT if they can get the stability and not having unexpected repair costs along the way, I can understand their predicament.

 

[pandus13]

Originally Posted By: eljefino
Yeah this. If you like, say, early PT cruisers, they're worth $500 because the market has decided that head gasket could blow any day now.

If you buy one to fix and flip, and even advertise the new head gasket, the market will shun it because "obviously it has unreliable head gaskets, this un-loyal car needed major repairs and will likely need more."

If you buy a PT and pray, and the gasket goes, you could either fix it and reset the clock or buy another and drive in fear.

But if you're a tolerable mechanic and have done dozens of PTs, you could do them "right" and have a never ending input stream of nearly free cars. That gives a lot of confidence.

El Jefe,
would the HHR's be the same?

 

[supton]

I go back and forth on if my '99 Camry was a good buy or not. So far it seems to need something every month. So far I've done all the work on it, so my labor has been free. I suspect the last owner was smart to ditch when she did: I had to do tires when I got it, and wound up doing struts, timing belt, oil pump reseal. And now it appears it needs wheel bearings. Would guess she would have paid at least $2k to have that work done? That plus the $1500 I gave her probably put a decent dent in her new car payment (plus she had been driving this '99 for 10 years so who knows if she saved up or not).

But it always seems to need something messed with... I'm at $2700 into this car, and I've only put 9kmiles onto it. Only cracks 30mpg if I set cruise to 65mph. But insurance and registration is cheap.

Will say, only reason I was willing to get a beater was because I'm at N+1 vehicles. If the beater breaks, I can still drive around. I have to wonder if the general public has such redundancy. Or only has enough money for one. In which case it needs to be a good one.

 

[dwcopple]

Originally Posted By: Vikas

You don't get what you want for 10 months of $300 per month payments. Try 60 months at $500 instead.
I am driving a loaded 2017 RAM for $295 month for 23 months

 

[supton]

Originally Posted By: dwcopple

Quote:


You don't get what you want for 10 months of $300 per month payments. Try 60 months at $500 instead.
I am driving a loaded 2017 RAM for $295 month for 23 months


How much did you have to put down? Although to be fair, most people put something down on car purchases.

My Tundra was my biggest monthly payment at $333, but I guess it was used, still a 5 year loan, and at a lousy APR (3.5% I think?). Rest were less, even my Saturn at whatever APR it was (probably double digit). I suspect it isn't that hard to get $300 or less monthly, just depends upon cash down and amount financed.

 

[KrisZ]

Originally Posted By: dwcopple

Quote:


You don't get what you want for 10 months of $300 per month payments. Try 60 months at $500 instead.
I am driving a loaded 2017 RAM for $295 month for 23 months


I'm pretty sure Vikas is talking about car financing, not lease.

And a perpetual car payment, no matter how low, is not a way to "afford" a vehicle for poor people. It's another way to ensure the financially illiterate never reach financial independence.

 

[Kurtatron]

I think the answer to this question is a luck of the draw. I am not convinced keeping an old car is always financially sound. The cost of replacing parts, even when DIY, can be the deciding factor if the car is worth it or not. I have 2 examples.

I bought a 1992 Miata for $2400. I kept it fo 6 years, put on 50k miles on it, and the only thing I ever needed to replace other than standard maintenance was the airbag computer. That was $40 at a junkyard.

I bought a 1999 Toyota Solar for $1750. This car has needed the end links replaced, axle, and engine timing belt. The transmission is in bad shape, and the suspension needs some major overhaul. This car has costed me $2000 beyond the purchase price. I could probably get a much lower cost to own car for $3750.

I'd say if you bought the car new and treated it well, I think it pays to keep it a 10+ years. But when you are buying a old, used car, it might actually be worse to keep the old clunker, than get a replacement used car.