Help me figure this out. $1,000 is maybe 3-4 months of car payments. A new car will obligate me for 4-6 years. It seems to me that if I average $100 a month or so in repairs I am ahead of the game, for me at least. The down payment and monthly hit of a new car would be a tremendous strain on my finances.
One important variable that has not yet been mentioned is the amount of time that you tend to own your cars, or that you would intend to own a new car. If you’re the type that buys a car, then spends occasionally to keep it in decent running condition, and keeps it for ten or more years, then even a $1000 expense at the nine year mark is not out of the question if everything else is in good shape. Amortize that over a lot of years and it disappears. If you like to get a new car every two or three years, then that same expense will make car owning - over a period of a few years - a lot more expensive. It’s not an unimportant factor. This is essentially the reasoning behind Click and Clack’s theory of automotive ownership, i.e. fix it, don’t buy a new one. It’s cheaper.
That’s sort of where I am coming from. I have 130,000 miles on a 10 year old Pathfinder and would like to get another 130,000. My last major expense was $1,400 6 months ago. Not cheap, but much less than 6 months of car payments.
On that same note, it astounds me that people that routinely trade their cars every 3/4/5 years always come here to ask about proper oil change intervals and the best way to prolong the longevity of their cars. If were planning to ditch my brand new car in three years, what the hell do I care about changing the oil every 5,000 miles? Just throw another quart in every time you’re low. Break in procedures? Who the hell cares; rag on it; it’ll last the 60,000 miles you’ll have it for.
snort
This is a good joke… you ARE joking right?
200 mpg carburetor? You are aware we have these things called fuel injectors now that blow normal carburetors out of the water in precision and performance, and that there is no way a carburetor is going to outperform it. We don’t have 200 mpg Fuel Injectors, and there isn’t and never was a 200 mpg carburetor.
Oh yeah, “Big Oil” is doing so much to “bury the patent” (only one?), but doing nothing to end Hydrogen, Ethanol, and other alternative fuels. Seems all the others are much bigger threats.
But hold on to your pet theory if it makes you feel better or smarter than those around you.
Pretty clearly a whoosh, dear.
If so, I think an apology is in order. Likely even if not, cause my reaction was a bit rude, and for that I am sorry. I was cranky, at work, and the 200 mpg conspiracy theory is one of my rather illogical pet peeves.
So, I am sorry, sincerely and from the bottom of my heart. If you were being funny, I am a clod. If you truly believe it, you don’t deserve my rancor, but I think you are wrong. 
And I’ll throw an apology right back at you – I certainly didn’t mean to make anyone think I was serious, not even as a whoosh. The 200 mpg carburetor has reached cliche status, now, hasn’t it???
But, if those are sudden repairs, they could be dangerous (brake failure is bad.)
And even if not dangerous, they could be bad in other ways such as the time my clutch wore out at the top of the Grapevine, sticking me up there in a cheap but expensive motel* for 3 days and a repair and towing bill that was twice what it would cost at my regular garage, not to mention two days off from work. And that was just a clutch, something that wears out.
- Now there’s an oxymoron.
**
Balthisar**: we have gotten a litttle touchy about “whooshes” around here recently. I have to say I saw yours as a joke, but you do know there are conspiracy nuts here on the Board that actually beleive that sort of crap, right?
I guess I tend to forget that there really are people that still believe such things. FWIW I didn’t pick the 200 mpg carburetor out of thin air – it’s a common belief. Here’s a Snopes article describing one of them.
Epimetheus, I’m an engineer, and I actually produce car bodies, and we’re pretty smart people (well, for the most part). As for for carburetors, I’m actually getting ready to install a mass air flow fuel injection system into an old Pontiac 455 (that’s 7.8 liters for you young 'uns). Once the manifold’s been reworked, I’ll have better power and vastly improved fuel economy than with the four barrel, but nowhere close to 200 mpg. I do plan to feed it a steady diet of gasoline.
OK, you have a car worth $1500. Today you need a transmission $1000. Next month you need brake pads and rotors all the way around for $800. Two months from then, the CV joints on your drive axles are shot for $1200.
At this point you have invested $3000 and have a car worth $1500. You also have no guarantee about future reliability of the many other systems in the car.
When I was a line tech I often told people that it was not a good idea to fix a particular car (which by the way meant I did not earn any money from them). Sometimes they took my advice, sometimes they didn’t. None of the people that took my advice and got a newer (or new) car ever complained that I steered them wrong.
Let’s think more about Click and Clack’s theory.
Why would it ever be a good idea to buy a new car? There has to be a reason, otherwise a much higher percentage of people would be content to buy a beater and keep it running, or just keep their current beater running. Many people buy a new car for prestige value. That and similar factors aside, my guess is that it’s better and cheaper to buy a new, inexpensive car than keep your average beater running.
Let’s say you buy a Chevy Aveo with extended warranty for about $12k and plan to drive it for five years, sell/trade in and get another car. At 7% interest your payment is $238.00. With insurance it will be a bit more, but let’s say you are paying a total of $300 a month. After 5 years when you pay off the car, it will still be worth something so you will have an even lower payment the next time around.
The sole advantage of the beater is money: no monthly payment and insurance is cheaper. You have, however, the cost of repairs, which is unknown. Is it fair to assume $50 a month in repairs? I should think so. That makes the relative cost of owning the Aveo $250 a month, or $3,000 a year (let’s assume that regular maintenance costs the same and is a wash). Let’s consider whether the following advantages are worth that amount.
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Newness. It’s neat and clean inside. The Aveo may not be a prestigious auto, but having a new car still means something. Obviously, this advantage will disappear over the five years.
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Reliability. As mentioned in the thread, the beater can go kerplunk at any time; the cost of those repairs could be extremely high and not immediately affordable. Plus, the nature of the breakdown could be extremely inconvenient. The Chevy, however, is under warranty. You drive with peace of mind.
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Better gas mileage. The Aveo gets 27/37; the beater probably doesn’t. You are saving money on gas.
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Safety. The Aveo is a new car and therefore probably safer than the hypothetical beater; if the beater is more than 10 years old, then it’s definitely lacking in some modern safety features. The Aveo’s newness and reliability also equate to greater relative safety (it has new tires, etc.).
Are all the above worth $250 extra a month? I certainly think they are, even for someone who must watch his/her budget. And there are also cheaper new cars out there or near-new used cars that could reduce the monthly “extra” to $150 or lower. For all these reasons, I don’t think the beater is the better option.
Aeschines, you’ve convinced me. I’m going to trade in my paid for 2001 Continental for an Aveo, because looking at purely the numbers, this makes the most sense. Forget comfort, handling, acceleration, the ability to have passengers, the ability to carry luggage, and so on.
Really, you made a better effort than most of the people here and I’m not trying to be snotty, but shouldn’t the comparison be for like cars? If you’re going to budget $50 per month for repairing your King Ranch F-150, or spend $890/month in payments (or, as you say, $840 in relative terms), then there’s a bit of a difference.
Start a direct deposit for the amount you think you can afford for car payments. Deposit it in a savings account. Look over the type of used car you want, online, and in local dealers. When you find the one that is a significant good deal, use the savings so far, and buy a newer used car, with some sort of dealer warranty.
The longer your car lasts, the more money you will have saved, and the better you will know your ability to pay. Sell your car yourself, after the fact. It usually ends up being a better deal.
Tris
It surprises me sometimes how little people expect from cars.
My first car was over twenty years old when I sold it, and I treated it like shit. My second and current car is pushing 14 now and doesn’t consume or leak a detectable amount of *any *fluid. I paid something like $3000 for it five years ago and have maybe spent a couple hundred on regular maintainence costs. The only work I’ve ever had to do to it is to replace a CV joint that died because I was too lazy to replace a boot that was damaged in a hurricane (just don’t even ask :))
Maybe my opinions are shaded by good luck, but it seems to me that with a few unfortunate exceptions, a ten or fifteen year old car is not a “beater” unless the owner made it that way.
Wow, there is no way that was five minutes. Anyhow, posted too soon.
My point is that the dividing line for me would be when maintenance costs on my old car are costing me more than a new car payment. It would probaby get pretty unpleasant to drive before the car got that mechanically unsound, so I’d be looking forward to replacing it at that point.
I’m hoping to get another five years out of this one before I’ll feel like I got my three grand’s worth.
And here is an even better idea. Drive the new car for **10 **years. Bank 5 years of payments, then pay cash for the next car. Nowadays you can get 10 years out of a new car before any major crap starts happening.
There is where the Click and Clack theory breaks down. They assume you will buy a new car, drive it for a few years then trade it in. I say, buy a new car, drive it for 10 years bank 5 years of payments *then *give it to the kids/trade it in for a pittance/ donate it to charity.
Aeschines you also forget that today, with good credit you can buy a new car for 0% Manufacturor financing. Thus the payments on a new $20,000 car (several nice family sedans with a 6 cyl engine can be bought for that,) would be around $300 for 5 years but if we use my figure of 10 years we get $150/mo. So you get to buy a new Impala/Hyundai/Saturn Aura for an amortized cost of $150/mo. Not an Aveo.
Yes, but I was thinking that the OP meant a care that was merely transportation; hence, I compared it to an Aveo, which someone is likely to buy as economical form of transportation.
I’m simply not going to buy a new car while my '97 Camry runs fine and still gets 30 mpg on the highway. I’ll drop a few hundred occasionally if something really needs a fix - cv boots, timing chain - but all I really need to do is change the oil and brake pads from time to time. Considering purchase costs and insurance costs of a new car, the car at this point costs me way less to own than a new car would, so I’ll stay with it. And, to save more money when the inevitable occurs, I will not buy a NEW car, but one that’s new to me, i.e. a one-year old car with its warantee intact. At this point, there’s no reason for me to be spending more money on a car. And when I do get that “new” car, I’ll do the same thing and drive it with love and care for another 10-15 years (presuming god remains neutral). It’s cheaper.
So far, comments seem to have ignored the depreciation of new cars, which is often ferocious. Take a hypothetical car that sells for US$20,000 and trades in for US$5,000 after 5 years. It’s dropped US$15,000 in value or US$3,000 a year. That’s costing you US$3,000 per year just to have it sitting there. So if your rental cost is less than US$3000 (plus insurance etc) per year, you’re actually saving money. And because the car’s rented, if the car gets damaged, the rental company sorts it all out for you. Obviously, you need to check the small print here!