How to decide when to replace a car?

In My Humble Opinion
1

We took our 5-6 year old Toyota with 60K miles on it in for service the other day. It had been a little slow turning over lately, the check engine light was on, and there was an intermittent slight belt squeal. The mechanic - whom we’ve dealt with for years and respect, came back with a list of $1000 worth of repairs. Some airflow sensor dohicky, a timer thingamajig, the batterey was low, and something else. Said everything but the $300 airflow thing could wait.

Kinda set us back on our heels. If he had said $500, we wouldn’t have blinked. But $1000 out of ready cash caught our attention.

Neither of us know a darned thing about cars. Nor are we very interested in them. ALL we want is dependability and basic comfort. We want the car to start up when we turn the key, and not break down on our way someplace.

Our last 4 cars have been Toyotas, mainly because of the dependability, and also because we have good relations with a dealer very close to our house. Of the last 4 cars we had before our present 2, we traded them in around 5 years 50K - as soon as they developed any problems after the warranty expired.

We have a small wagon (Matrix) and a minivan (Sienna), which we had planned on hanging onto as our kids finish up HS and college. Figured we could decide on what we wanted to buy when we became “empty-nesters,” and had saw no urgency in letting our new drivers ding up a new car.

So now we find ourselves with 2 Toyotas about 5-7 years old, with around 60k on each. I had thought I’d keep them both and run them into the ground. Like I said, I have no desire to get a new car, and am fine in driving around a minivan that is paid for. Hell, I thought we might even give/sell the Matrix to my oldest in a year or 2. But I sure wouldn’t want to burden her with an undependable and costly car.

I’m just wondering, what do you take into consideration when deciding whether to keep and repair, or replace a car?

We talked the mechanic down 15%, and had the repairs done. I know there are no crystal balls, but I sure would rather not have another $1K surprise next season, and another after that. Most significantly, we want to do whatever we can to avoid being out somewhere and having our car crap out on us. That concern kinda removes it from a strictly financial equation in our minds.

2

I keep a spreadsheet on all of my cars showing the repair costs. Around 100k miles repair jobs were hitting us for 1,500 - 2,500 every couple of years. More accurately, the allocated monthly cost of ownership was $89.

That is significantly less than a monthly lease, or the purchase of a new car spread over 5 years.

We dumped both of those cars when they hit a repair bill of over $3k (and a Blue Book of less than $2k).

3

I look at frequency of repair and the blue book value of the car. If I’m bringing it in to the mechanic every other month, or the cost of the repairs starts exceeding the value of the car, then it’s time to move on to another one.

4

This is excellent advice.

I find that, over time, paying for the recommended maintenance visits is significantly less (monthly) than a new car note, and I (personally) would rather put maintenance money into an older car than take on a new car note.

You, however, might not like the aggravation of it. I think it boils down to personal preference - a person might prefer to be paying for a newer car, rather than scheduling these maintenance things and taking time out of their day to handle them.

5

In the long run, you get the most for your money by keeping and fixing what you have rather then replacing it, up to certain point. That point is usually when the car is over ten years old, has well over 100,000 miles (maybe twice that), and needs a particularly expensive repair (in the thousands). Neither of your cars is anywhere near that point.

$1000 repair bills are not common on Toyotas of the age and mileage you have, and there’s no reason to expect a rash of them.

The way I suggest to look at it is this: You can put $1000 into this car, and use it in its then-repaired state, or you can sell it for $X* and buy a replacement for $X+1000. Which car would you rather have - this one, fixed, or its replacement?

*It may be necessary to do some of the repairs in order to maximize the value of X. It can be hard to sell a car that has noticeable symptoms.

6

Are you giving the cars their scheduled maintenance? The 60K checkup on a car probably runs a few hundred dollars. Depending on the car, you’ll want to replace the timing belt at 60 or 100K.

But realistically, unless you have a lemon, a modern car should reach 150K or even 200K before the repair/replace equation becomes balanced. Even if you’re dropping $1000.00 a year for repairs, that’s nothing compared to payments on a new car (including increased taxes/insurance and so on.)

A Toyota with 60K is practically fresh off the lot.

7

Yeah, we’ve been doing all the scheduled maintenance, oil changes, etc. I believe last year both cars needed a major “tune-up” replacing filters and such as we hit some mileage point - 50 or 60K. And we bought new tires for this car last year. So that was a kinda pricey year.

I really like the idea of trying to spreadsheet all of the car’s costs. My wife does all of our books. I wonder if she’d see value in that approach?

Really simple top-of-my-head guesstimations are I might get $8K trade-in, applied to a new car that would cost $25k. So by that calculation, I could easily stand $1000 in repairs or more for the foreseeable future.

The big kicker, tho, is reliability. And I’m not sure how to quantify that. My wife really wants to do what it takes to minimize the chances of being stranded somewhere with a non-working car.

8

My last two cars (1980 Corolla, 1995 Volvo 850) add up to 28 years, and 280,000 miles, so far. If you’ve got a good car that you can keep running, I think you should do it.

But between us my wife and I have owned a Saab, a Datsun, and a VW that all were gone after about 40,000 miles. You just subjectively reach a level of disgust at which you say, “If that car’s still here when I get back from work, I want a divorce.”

9

At what price?

As you’ve seen, you can minimize those chances for $15,000+ out of pocket by getting a new car, where the chance of breakdown might be 0.1%. The chance with your current car might be 1%. Is that difference worth 15K?

Now, I guessed at the chance for breakdown figures, but the illustration stands. Modern cars, especially Toyotas, are quite reliable even at ten years old and over 100K miles. Doing preemptive maintenance, such as replacing the battery when it’s 4 or 5 years old instead of waiting for it to go out, enhances the reliability. Of course, any car becomes more likely to suffer a breakdown as it ages, but avoiding that to the greatest extent possible, by buying new every few years, is quite costly.

10

If you can afford it, I would just get a new car. The reason being that a new car is likely to have more and better safety features than an older car. Things like anti-lock brakes, all wheel drive, side airbags, and so forth are becoming more and more common. Also, I suspect that newer cars are better engineered to take hits from SUV’s.

11

Cost of repairs + cost of AAA membership is less than the cost of a new car, so I say fix it, buy a membership to AAA or see if your insurance company has an equivalent written into your policy. Reliability is important but is it worth the cost of new car payments + increased insurance?

12

We replaced our 10-year-old minivan in the fall of 2006 after it:

  • Died spectacularly while we were on vacation - in Canada (we’re Yanks. Thank heaven we had AAA and they have reciprocity with CAA; this was a Saturday night and we’d have had no clue whom to call for help. )
  • Wanted a new battery
  • Wanted a new alternator
  • Wanted a new starter.

The repairs totalled 1,000 in 2 months and I wasn’t comfortable that it was done wanting them. Payments would have been less than that.

I did pay for a few larger repair bills on the minivan over the years (including basically replacing the entire A/C system due to design flaws) but none of those repairs came close enough together to make me need to consider replacing the car.

With two 5-7 year old Toyotas, I’d say that you’re not all that likely to have such huge bills again really soon. Overall they’re reliable cars and every car gets big repair bills from time to time. I’d bet that, as another poster noted, your average monthly operating cost over the past year is still less than the payments would be on a newer car.

Washington Post columnist Michelle Singletary has said numerous times “Buy used, then keep the car until you’ve got your mechanic on speed-dial”. Well, we don’t buy used (haven’t so far anyhow) but the day my car tried to not-start, and I phoned the mechanic from memory as I was driving home, was the day we decided to replace it.

13

Just how bad is it realistically likely to be if your car breaks down?

Is it fairly easy and reasonably inexpensive to get towing or a jump start (or whatever you might need) in your area if your car did break down? Do you commute over a bridge like the Golden Gate where one towing company has a monopoly on breakdowns on the bridge (and, from what I’ve heard, are expensive)? Are you likely to have to wait for hours to get help?

Are you likely to be able to get back home or to work by cab, bus or other mass transit, or getting rides from someone? Or do you regularly go to remote locations or bad neighborhoods where that sort of thing wouldn’t be practical?

What sort of weather might you have to wait outside or walk in if your car did break down? I’ll probably be more aggressive in replacing an unreliable car here in Pittsburgh than I would have been when I lived in California, because the weather is worse here. I’d probably also be more aggressive this time of year than I would at a time when the weather isn’t likely to be as cold and icy.

If that car were in the shop for days or weeks, could you get by with one car for a while?

Sounds like your kids are older, so you wouldn’t be in the situation of having to deal with babies or small children if your car broke down. IANAParent, but I’d probably put more weight on reliability if I had small children I’d have to deal with while dealing with the car having broken down.

14

These are all great points. I asked this question a couple of years ago and concluded that repairs are almost always cheaper than buying a new car. Even if I have to spend $1000 a year, that’s less that car payments. Right now I have an '88 Cherokee with 170k on it and spend about $600 every other year. But my trade-off is a crappy looking, not that comfortable car with fewer safety items.

What makes it possible is that I live in Austin where the weather’s rarely bad, it’s under 5 miles to work and I can bike if I have to and there’s no where really dangerous I could get stranded. If I were still living in Atlanta, I’d definitely be incomfortable with the age of my car.

15

Ask your mechanic about this. Some problems can be fixed and are unlikely to recur. There are other car problems for which there are temporary fixes, but the problem is likely to recur, or there’s some underlying cause that is likely to cause other related problems to happen in the future.

But car dealers, at least the one I dealt with when I traded in my Pontiac Sunfire in 2004, might still be willing to take a trade-in that has noticeable symptoms. My Sunfire had one very noticeable one- one of the back windows was smashed and there was broken glass all over the back seat. The dealer still took it as a trade-in. In fact, the difference in the trade-in value wasn’t as much as it would have cost to fix the car (I’m not sure how the economics of that worked- it was very counter-intuitive to me). I knew going in that I didn’t want to deal with trying to sell my old car myself, so I didn’t care about anything other than the trade-in value.

16

The mechanic kinda pissed me off by saying “I don’t have a crystal ball.” When I pressed him, he said Toyotas are good cars, and he didn’t see any reason why this car should need anything pricey in the foreseeable future. Said the timing doohickey was something they identified as a potential problem, and the replacement was sturdier. Said maybe water pump might go at 80-90K.

I’m thinking my preference would be to keep both cars - at least for a couple more years. Of course, my wife drives the Matrix, so her peace of mind will weigh very heavily. We might want to re-assess our family’s car needs. Maybe trade in the van instead of the Matrix - tho the van is handy for driving kids to and from college. Or keep the Matrix for the kids and let my wife buy a 3d car.

Heck, maybe my wife just wants a new car! :wink: Toyota is coming out with a new Camry-based wagon/whatever in 09. Venza. Might be a possibility, tho it would be nice if they offered it as a hybrid.

Tho I would prefer to not spend thousands of $ I don’t need to, we would most likely buy any new car for cash out of savings, rather than financing it (unless we find someone offering 0% financing or something).

17

It seems odd to keep trading in cars with mileage that low especially Toyotas. You say you buy them for their reliability but almost any car should be reliable up to the 60K mark. Toyotas are well regarded because they can still be reliable well past the 100K mark and probably more. Some people trade in their 50K cars because the just really like new vehicles but it sounds like you don’t care that much about that yet you have a misguided view about what a high mileage car is these days.

18

Another thing to keep in mind is how much of a pain it is when your car does break down?

Are you burning all your vacation time sitting in an auto repair shop? Are you on your boss’ shit list for being late/calling in because of the car breaking down again?

Sure, a car payment costs more than the maintenance. But, the payment is regular. Out of the blue 1000 dollar expenses will come at the worst possible time.

19

As with most things, there is a little more relevant detail:

-Our first new car when we had no kids was a sweet little Grand Am. There were just the 2 of us, we only needed 1 car as we were young and broke, and I walked to the train for work.
-About 3 years later, when our 2d kid was born about 18 years ago, we traded the GrandAm in on a Taurus wagon to fit the every-multiplying kids’ seats and the dog.
-Never really liked that car and had a couple of problems with it, so after maybe 3 years we traded it for a Camry wagon. That was a really nice car. Wish they still made it.
-A couple of years later, we bought a 2d car, a Corolla.
-As the (now 3) kids were getting older, the Camry wagon started to feel a tad cramped, so we traded it in on a Sienna. The Camry was out of warranty, and we thought we were being nice to the kids, by giving them more leg room and such.
-For similar reasons, a couple of years later we traded the Corolla for a Matrix, because the rear seat has tremendously more head room.

So maybe we’ve been somewhat wasteful in our car purchases, but our Toyotas going out of warranty pretty much coincided with changes in our family that allowed us to rationalize changing cars.

Bottom line, in the past 20+ years - most of our adult lives - we have never hung onto a car as long as both of our current ones. For folks who are really REALLY ignorant about cars, and really don’t care about them as anything other than reliable transportation, this amounts to uncharted waters that cause some degree of uncertainty and unease. Also, as I’ve indicated, tho we don’t consider ourselves rich, we are sufficiently frugal in other aspects of our lives that we can afford to pay cash for a new car in the $20-30K range.

Thanks to all of you for your opinions and experiences.

20

Well the God’s honest truth is he does not have a crystal ball. While I am at least as good a mechanic as the guy who is working on your car is, I can’t tell the future either. I can often tell if some items are marginal, or getting near the end of their useful life (brake pads for instance) there are many things that I cannot predict, and I cannot control the conditions you drive in. For example it is often quite hard to tell just when a muffler will rust out, since they tend to rust from the inside out. I have no way of knowing if you are going to hit a giant chuckhole and tear your front suspension all to hell.
Also

I seriously doubt that your technician used words like dohicky, and thingamajig to describe to you the issues with your car. You might want to consider learning just a bit about your car. The more you know, the better you will understand, and the better the decision you can make about current repairs and how long you should keep the car.