We just sold my wife’s car (11 years old, 152,000 miles). Now, I understand that modern cars can usually get 200,000 miles, but it seems to me that after 150,000 miles, you can be faced with endless repairs, as you enter the “wearout” phase of the car’s life. Take stuff like starters, alternators, u-joints, suspension components. Fixing these can run into quite a bit of money. On the other hand, you can usually buy high mileage cars for low $$. My question is: suppose you buy such a car…everything works, and the car shows no evidence of abuse. Should you:
-drive it until you face a major repair (e.g. transmission)…if it is >$1000, junk the car
-plan of keeping it for 50,000 more miles, and keep repairing it
I suspect that as cars become more complex, major repairs will be necessary-in which case you really have to think hard about keeping such a car.
Of course, if you have a simple vehicle, keeping it might be the best option.
I was just watching a Youtube clip about replacing a BMW heater core-easily a $2500 dealership job. That is scary.
For sure all else equal a car that was expensive when new will have more expensive repairs than a car that was cheap when new.
The only tradeoff is that at, say 150,000 miles a Volvo will still be in mid-life whereas a Chrysler will be well into its unreliable dotage.
So for max efficiency your goal is to choose from long-lived car makes/models and pick the cheapest such car you can find.
As a separate matter, the general rule of thumb on minimizing total cost of car ownership is to buy a mid- to late-life used car and keep driving it until the cost of necessary repairs plus your low insurance costs every month is greater than the monthly payment plus higher insurance cost of a new(er) car.
Since new cars typically cost ~300-500 / mo including insurance, this means you can make $1000 expenditures on your clunker and stay ahead dollar-wise as long as that happens less than once every 2-3 months.
That also presupposes you’re OK driving something that’s cosmetically falling apart around your ears and you’re only spending to keep it able to move under its own power and to pass your periodic safety and emissions checks, whatever they may be.
To be sure nobody needs to go 100% hard over that way. You (anyone) can take a less extreme approach. But it helps to understand where the region of max cheapo is.
Many working class folks spend about 3x more on cars than they need to because they mistakenly think spending $400/mo on a newer car is cheaper than buying a repair like a water pump every 9-12 months.
Don’t forget that reliability and lack of hassle is a factor too.
Hyper-expensive luxury cars like a BMW aren’t something you keep for 200,000 miles because the repairs are so astronomical. Something simple, reliable, and cheap to repair like a Toyota Camry or a Honda Accord are.
I paid $2500 for an upper engine rebuild in my Jeep Grand Cherokee at 150,000 miles. Even an expense like that is six months of new car payments + insurance.
Funny you should ask.
I just got off the phone with the shop that services my VW. It’s a 2000 Jetta GLX with 135,000 miles. I’m the original owner and only driver. I love that P.O.S.
I’m about to get a bill for $1,200 (parts & labour) that includes among various small issues:
- ABS sensor replacement (which is throwing brake system codes)
- Vac. hose replacement (which is throwing emissions codes)
- New plugs
- New exhaust clamp
- New belt
- Oil and filter change
- Engine and cabin air filters
- Under engine shield/air dam
- state & emissions inspection
The car is worth maybe $3,000 if I sell it myself. But everything on the car works, including air, electrics, etc… To me it’s worth much more than that. How much more? Well, at least $15,000 for a decent low mileage sport sedan or hatch, and perhaps as much as $35,000 for the 2016 VW SportWagen TDi with AWD.
So a $1,200 repair seems like a no-brainer. Especially since I still enjoy driving it as much as I did when I first bought it.
Now, if I had to do an engine rebuild or replace the transmission in addition to the above routine repairs and maintenance… that would give me pause as to whether it was worth repairing.
Yeah, I’m facing the one expensive regular service on my 2007 Odyssey, bought at a fair price in 2010. The timing belt/water pump/etc. service runs about $2200-2500 dealer, $16-1800 indy.
But in five years and 60k miles, the costs have been a few routine service/oil changes, one set of tires (about ready for replacement), front brakes, and one front axle. I’ll replace the second axle this summer, as it’s started clicking like its erstwhile mate. That’s pretty damned cheap when spread out over five years. Even factoring in the pending service, it’s around $1k a year - and only because I’m meticulous about repairs and upkeep.
Buying a high mileage luxury car is a good way to get a high-end car at a low price. In many cases, the prior owner has kept meticulous care of the vehicle and may be just looking for something different. However, you should be mechanically inclined and be willing to do some repairs yourself. An older car will typically have more problems. If you can’t identify the problems and make some of the repairs yourself, you’ll lose a lot of money paying the shop to do the fixes.
I’ve bought many high mileage BMW’s over the years. I like the way they drive, but I can’t afford the new ones. So I get one at 120000+ miles for under $10000 and fix all the little things that go wrong. Every now and then I’ll have a $1000+ repair, but I figure that’s the part of the price of ownership. I come out ahead over buying the car new, but a big part of that is the savings from working on the car myself.
And now, many cars have fantastic DIY communities which have extensive writeups and videos of how to do just about any repair on the vehicle-everything from changing an air filter to swapping the engine. That makes it much easier to make repairs yourself and keep costs down.
I have a 20-year old Olds with 157,000 miles on it. My husband bought it new and we’ve had it ever since. I no longer use it as my every day car, but it’s still running great and only had its 1st major repair last year ($625 for new fuel injectors), so I keep it for transporting my dogs to the dog park and as a back-up vehicle when my regular car is in the shop for those factory recommended maintenance checks. The outside still look pretty darn good, but the inside is beat up. I’ve put slip covers on the seats, which was inexpensive and took care of the bulk of the appearance issues. Unless the major repairs start mounting up, I have every intention of keeping the old klunker for years to come.
Excellent post, LSLGuy.
I’ve done both (new cars and high-mileage used cars) and I agree that all other things being equal, the used car is a better deal (provided, of course, that you have it thoroughly checked out by your mechanic before purchase).
Good point about “lack of hassle,” though; one of the things you’re paying for with a new car is the luxury of not having to worry about major repairs for a long, long time (maybe never, if you buy new every 5 years or so). That is definitely worth something, although it’s certainly a personal, YMMV thing.
I am a firm believer in periodic maintenance, so if I knew a high-mileage car had been serviced as recommended throughout its life, that would be a positive for me. I’m also lucky in that our cars have been serviced for years by a local shop that is just wonderful. If I wanted to buy a used vehicle, I’d take it to them for a complete going-over.
Both of our vehicles are paid off and neither has given us any problems so far. We’ll keep them till they pass the repair/new payment threshhold, which should be a long time, barring something weird coming up. Whether we replace one or both with new or used will depend upon our finances when the time comes. Retirement makes that much more of a factor than when we were working…
I think you guys are overestimating the cost of insuring a new car, or underestimating the cost of insuring an old one. I just traded in a 2008 Hyundai with 110,000 miles on it for a 2014 VW that was listed at $22,000. When I put the new vehicle information into Progressive’s website my premium came down $50 over 6 months. The Hyundai had ABS, front and side curtain airbags and a security system, mind; it wasn’t like I was trading in a deathtrap.
I’m very much in the high mileage camp.
Out of the three cars in the household, the newest one is 18 years old and has 189,000 miles on it. The oldest is 24 years old and has 279,000. All three run just fine, everything works (except the A/C isn’t working on one of them) and, aside from the odd scratch and ding here and there, look fine too.
All in, I spend maybe $200-$300 per year on repairs on each of them, and breakdowns occur maybe once a year - my SO and I both drive around 20k per year, so it’s not like they don’t get used.
I find it’s a great way to get something better specced than you might be able to afford when buying new, too: I had a hire car a few months ago and was quite shocked how basic (and slow!) it was - and this was a car that, had I bought it, would have had an annual cost of more than 10 times what I spend on my daily driver.
Ultimately, it’s a bit of a crapshoot - you could spend $5k on a car only to find in six months that it needs $6k in repairs. But then, you could spend $20k on a newish, low mileage, just out of warranty car and still face the same repair bills, so I don’t let that worry me too much.
I also find it useful to be able to do my own car repairs. The oldest car has just come off the road for some fairly major front end work - engine out, replace timing chain, fix oil leaks, sort out some rust in the engine bay, replacement of all suspension bushes and joints. Probably about a $2-$3k job done professionally. Total cost to me, other than my time? Maybe $400. I also bought my second oldest car for about $400 because the head gasket had failed. It cost me about $100 to replace it, and the thing has lasted me a further 8 years and about 100,000 miles. I bought it because it was cheap, intending to sell it on when it got too worn out to keep going. I’m still waiting…
Forgot to add: even at the dealer retail cost of the Hyundai, I could have written it off three times and the insurance company would still come out ahead relative to the VW.
My appetite for higher mileage cars has always been proportional to 1) my access to a good mechanic for harder to fix items and 2) the demands on my time. When I was younger (1) plus the low salary was a problem, though there was a sweet spot in there when I got out of graduate school and got my first good paying job. Now that I am older, I am doing great with item (1), but since getting married, having ailing in-laws, and a demanding job, (2) has been a headache for me. At some point, you have to factor in the cost of a random breakdown at the worst possible time, with no back up transportation, and ask yourself if the lose of reliability is worth the savings and risks.
When you’re young, it might just mean missing a crappy movie with a friend, but when you are getting older and you miss a doctor’s appointment, critical job interview, or something else you can’t live without, your priorities change fast.
I can’t speak for “you guys”, but speaking for just me I’m comparing the cost of full collision / comprehensive on a financed $15-20K freshly bought used car versus zero collision / comprehensive on a paid-for mostly run-out basic transportation car.
And at least here in FL, the safe and sane driving capital of South America, that’s almost two hundred dollars per month difference.
Fair enough. I kept substantial comprehensive coverage on the older car.
High mileage, on the right car, doesn’t scare me at all. In fact, that is my modus operandi. I buy an inexpensive, usually high mileage vehicle, drive it until it is not worth fixing (usually at least a couple of years), then sell it to a local junkyard for $300-400. My goal is total cost of ownership, including purchase price, repairs and maintenance, of 5 cents per mile.
I once bought a Cutlass Ciera with 250,000 miles. I drove it an additional 100,000+ miles before the timing chain snapped. My decision depends on 2 main factors - the car itself and how well it was maintained. I knew that particular engine was one of the best out there, and the vehicle looked and performed like new - it had been well cared for. OTOH, I have seen the same year and model car with 100,000 miles that I wouldn’t buy with your money.
With research and common sense one can do well with a high mileage vehicle.
For the average Joe this is a tough question. Unless you are mechanically inclined, a newer rig with mid to low mileage is a good compromise.
If you are a mechanic, as I am, then that opens up a lot more options.
For my family & myself, a high mileage older car is the way to go. None of the rigs (with the exception of a motorcycle or two), I drive have less then 200,000 miles on the clock. None of them cost me more that $1,000.00 to buy initially, including the motorcycles.
Heck, one of my trucks has over 500,000 miles. I have the maintenance records to prove that. It is a 1959 Ford pickup. It is not pretty, but it is not a rust bucket either. It is a good old farm truck. I bought it in 1984, with 252,525 miles on it, for the sum of $200.00. I then put another $650.00 into it. On average, it costs me around $500.00 annually to maintain, not counting my time.
Most folks would not drive this rig on a 200 mile trip for fear of breakdowns. I have used it to go from Western Colorado to Vancouver B.C. & back. A trip of around 2600 miles. I had to recover an aircraft that had been neglected for years. We put the airplane on a trailer & I towed it home with this truck. The trailer had more problems then did the truck. I had to replace one tail light bulb on the trailer.
As to the question of when to give up on a rig, I will usually maintain them until they are plumb wore out or are unsafe to drive. For example, I bought a 1992 Subaru Legacy Wagon with 300K + on the clock for $800.00. We ran it for two years. It is now needing new struts, rear axles, steering bushings, door hinges, window regulators, & a long list of other issues repaired. It is time for it to go.
So I bought another 1996 Legacy wagon with 225K on it for $300.00 but it needed a major cleaning, one front axle and brakes. So with a thorough cleaning, new brakes and one used axle from the '92, we now are using the '96.
The '92 is in the barn in the process of having all of its usable parts removed, repaired & tagged for use on the newer one. In a week its carcase will go to the scrap yard. I will get about $125.00 for it.
I figure that the '92 has cost me around $1500 total for two years of use that is $62.50 a month. Again, I am not counting my labor into that figure. If I sold all of the reusable parts, I might break even. The engine is worth around $750.00 alone.
So if you pop onto craigslist and find Hondas with 50k miles for about $8-9k cash, and you do have the cash, do you pretend that you loaned the 8k to yourself to come up with the monthly cost? I popped onto bankrate.com for a quick bit of figuring - over 3 years, it would be $237 a month. Call it $250 a month since insurance goes up slightly with a more expensive car.
So your yearly repair budget for keeping the clunker moving down the road is at least 250 * 12. Spend less than that, and you’re staying ahead. Except, you don’t keep a car with 50k miles moving for free either - it’s out of warranty and also costs something. How would you account for that?
What’s the mileage like? I know that for new vehicles, the cost of repairs and depreciation is usually less than the cost of fuel. An older truck like that might be almost free to purchase and maintain, but if it guzzles twice the fuel for the same load, it’s not saving you any money.
Example : you purchase a used truck for $25k with 80k miles. You drive it until 250k miles. It gets 18 mpg. At $3.40 a gallon you spend $32,000 on fuel.
Okay, but at 25 mpg you spend $23,120 on fuel. In the specific case of trucks, you’re not going to substantially improve fuel economy by buying newer unless you pick an almost-new one with cylinder deactivation (and even then you won’t do better than 22 combined MPG for a full-size truck.)