Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Car Purchase -- Deciding When
Old 07-15-2007, 04:28 AM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
Car Purchase -- Deciding When

Our car is getting older. I drive a car for as long as practical. I say practical because eventually maintenance costs begin to increase. (I no longer do maintenance myself.)

How do you make a decision about when to purchase a new (or new used) vehicle? (assuming the car was not a lemon).

One very important factor for us is reliability. If a car is down and out very often... we would dump it.

Do you have an actually yearly maint cost threshold or just gut feel?

I was thinking that maybe if I used the Total Cost of Ownership from something like consumer reports (including fuel based on a projection since a new car may be more fuel efficient) that I could compare that yearly amort against my currently yearly maint cost.

It seems there should be some common sense rules for making that decision when one's goal is to optimize the overall expense.
__________________

__________________
chinaco is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-15-2007, 06:47 AM   #2
Thinks s/he gets paid by the post
Spanky's Avatar
 
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,046
I do not perform any number crunching to determine whether it's time to get a different car. When the car starts to require a major repair or frequent small repairs, that's time that I would consider getting another 2-3 years old used car made by Toyota or Honda. I might consider Hyundai since its quality has improved significantly over the years.
__________________

__________________
Spanky is offline   Reply With Quote
Old 07-15-2007, 07:14 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
Quote:
Originally Posted by Spanky View Post
I do not perform any number crunching to determine whether it's time to get a different car. When the car starts to require a major repair or frequent small repairs, that's time that I would consider getting another 2-3 years old used car made by Toyota or Honda. I might consider Hyundai since its quality has improved significantly over the years.
That is what I have done so far also... except we have usually purchased a new car.

You are using the gut feel approach... a couple of expensive maint fixes and it feels like it is time.

I typically use a 10-13 year sell approach... provided the car is reliable. I might sell sooner if I encounter an expensive repair that is a high % cost compared to the worth of the car.
__________________
chinaco is offline   Reply With Quote
Old 07-15-2007, 07:36 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,288
Quote:
Originally Posted by chinaco View Post
That is what I have done so far also... except we have usually purchased a new car.

You are using the gut feel approach... a couple of expensive maint fixes and it feels like it is time.

I typically use a 10-13 year sell approach... provided the car is reliable. I might sell sooner if I encounter an expensive repair that is a high % cost compared to the worth of the car.

I used to use the 10 year and/or 100,000 miles.... but I was on assignment for 3 plus years and I have a 95 Chevy with only 82K miles... and it has not needed any major repair in years... but... and a big but.... it is in the shop right now as I started to smell anti-freeze... if it is a cheap fix... I will continue to go for the 100K....


As for TRUE costs... I don't think any car actually costs more to maintain than buying a new one unless you factor in a huge opportunity costs of taking into the shop...


OH... I forgot my other one... the three tire rule... I have never bought more than three sets of tires for a car... that is how I got rid of my Firebird... it was about to need its fourth set... (5 when you count the originals....)
__________________
Texas Proud is offline   Reply With Quote
Old 07-15-2007, 08:21 AM   #5
Recycles dryer sheets
 
Join Date: Dec 2006
Posts: 162
I want repairs to stay below $1,000 per year, which I have never come close to, which is why I still have the old clunker. I figure this is my annual cost of buying a new car:

$20,000 @3.5% = $700 (lost interest on the purchase funds withdrawn from my tax free money market fund that I keep for things like this)

$300 give or take for higher insurance for collision and comprehensive that I dropped years ago but would keep for awhile on a new car

If you only are spending a few hundred dollars per year on repairs and the aggravation is not too much, you are still probably ahead of the game

Of course if you keep the older car until it needs a major repair, that might kill its resale value versus if you had sold it sooner before the problem. So keeping it an extra 6 months could mean sharply reduced resale value or big repair bill. Of course if you car is old enough, that is likely not an issue, as the resale value is almost nil and there is no depreciation left, so you can drive it without losing anything.
__________________
firewhen is offline   Reply With Quote
Old 07-15-2007, 09:18 AM   #6
Full time employment: Posting here.
Darryl's Avatar
 
Join Date: Mar 2007
Posts: 577
Gut feel.

94 Nissan with about 170,000 on it. Maybe next spring for a newer car. Of course this one should be good for another 100,000.
__________________
I highjacked a rainbow and crashed into a pot of gold - Bon Jovi
Darryl is offline   Reply With Quote
safety
Old 07-15-2007, 10:03 AM   #7
Recycles dryer sheets
Charlotte's Avatar
 
Join Date: Feb 2007
Posts: 176
safety

We tend to drive our cars for 10-12 years before trading in. One of the major factors is how safe I feel about if the car were to break down. For example, where do I drive the car - along safe roads or in not-so-safe areas? highways or city? Am I toting kids with me?

For our primary family-driving car (for toting kids around), I'd never drive anything that I think that I'd break down in. If I don't trust the car, then it's time for an upgrade. (I guess that means guts/instinct...)

Charlotte
__________________
Charlotte is offline   Reply With Quote
Old 07-15-2007, 10:27 AM   #8
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,934
I tend to follow Chinaco's approach, and drive it until it starts needing repairs or seems old at which point I buy another brand new car.

My present Camry Solara is 7 years old with 33,000 miles on it, and up to now it has needed no repairs. Just this week, one of the power windows doesn't seem to work any more. I probably won't bother to have that checked out, but it does tell me that this car won't last forever.

My plan has been to drive it until ER in 2009-2010, drive it to my new ER location in another state, and then immediately trade it in on a new car (that week) so that I can start ER without car worries. I probably won't NEED a new car, but ten years is long enough even if there are no significant repairs by that time.

If it should need repairs costing over $500 or so between now and then, I would very likely trade it in earlier than I had planned.

An unknown factor in my case is how the Katrina disaster will affect my Solara's trade-in value. It was parked in my driveway during Katrina, but was not flooded or damaged at all. Still, just the fact that it was here might affect its value to some. That's another good reason to drive it until it is at least ten years old.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 07-15-2007, 10:58 AM   #9
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,620
I guess we don't really have a plan for car replacement because it only happens once or twice a decade. We only drive a few thousand miles/year (mostly to the beach) and on Oahu it's hard to get so far away from civilization that you'd worry about your car's reliability. After the kid gets her license and we add a third car we'll probably ditch one of the older ones.

Our current cars are 10 & 13 years old and our last two went into double digits too. Since we don't put a lot of miles on them, at the end of life it never seems to be the engine block or the pistons or the transmission but rather a cascade of expensive auxiliary equipment-- A/C, power steering/brakes, coolant, alternator, starter motor... stuff that even bottom-fishing buyers sorta expect to be working.

We've used $150/month as a repair criteria for a long time but we haven't adjusted that for mechanic/equipment inflation. But if we went through a spate of nuisance repairs we'd take that as a hint to start shopping.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 07-15-2007, 12:58 PM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Moemg's Avatar
 
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 10,037
[quote=Want2retire;536254t Camry Solara is 7 years old with 33,000 miles on it, and up to now it has needed no repairs. Just this week, one of the power windows doesn't seem to work any more. quote]

The same thing happened to my Camry Solara so I had the dealer check it when I was in for an oil change .They told me it needed a new motor and they would have to order one for $453. I said I'd think about it but guess what ,the window worked fine after they took off the door panel to look at it .It did not need a motor some wire was probably loose . Another dealer rip off story !
__________________
Moemg is offline   Reply With Quote
Old 07-15-2007, 01:18 PM   #11
Full time employment: Posting here.
 
Join Date: Jun 2007
Posts: 567
Shoot... I'd better cut down. Our Accord is 2 years old with 45,000 miles on it.

We bought it when the Olds needed 2k in repairs. We donated the car to the local vocational school and bought the Accord new (never buying new again)
__________________
Webzter is offline   Reply With Quote
Old 07-15-2007, 01:32 PM   #12
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,620
Quote:
Originally Posted by Webzter View Post
We donated the car to the local vocational school...
Hey, great idea-- we've been wondering what to do with a car that's been in an accident and runs fine but will scare away most buyers.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 07-15-2007, 01:33 PM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,626
We replace a car after it has gone 200,000 miles or 13 years ... whichever comes first. We have two cars that were purchased "out of phase", so when a car is to be replaced, the other car is about 6-7 years ago. In other words, we always have a car that is less than 6 years old around.

The cars have been Honda, Nissan, Toyota, Lexus so no problem with lasting that long. The most recent purchase was a Ford, so we may have to change our tune in 7 years. So far we have had 5 cars in 50-person years of marriage.
__________________
LOL! is offline   Reply With Quote
Old 07-15-2007, 01:49 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2006
Posts: 11,019
I've only had three cars in my life, all of which I purchased new. The first was a Ford; I sold it prior to a transatlantic move, but if I hadn't been moving, I probably would have sold it anyhow, because it was a real lemon.

The second was a GM, also a bit of a lemon, but I was LBYM and kept it for nine years. I traded it in when I was told that replacing the CFC A/C would cost me more than the car was worth.

Car #3 is a 12 year old Honda. It's given me stellar service until 6 months ago when I had to replace an axle for $900. That was a reminder of the car's age and got me thinking about plans for replacement. Everything else is working perfectly and the doors still click shut like the day I drove it off the lot, so I would really miss this car!

Currently I plan to keep it till it is requiring other significant repairs on a regular basis. When I see that happening I will do a spreadsheet with discounted cash flows to try to justify the cost of investing in a new Honda or Toyota (which may well be a hybrid). I am hoping I can make my Honda last till just before ER, say 2012. Since I am required to have a car to do my job, I can make a proportion of auto expenses tax deductible.
__________________
Meadbh is offline   Reply With Quote
Old 07-15-2007, 02:49 PM   #15
Moderator Emeritus
Khan's Avatar
 
Join Date: Aug 2006
Location: Pine Island, Florida
Posts: 6,868
Send a message via AIM to Khan
Quote:
Originally Posted by Nords View Post
Hey, great idea-- we've been wondering what to do with a car that's been in an accident and runs fine but will scare away most buyers.
Some fire departments will take cars to practice on.
__________________
"Knowin' no one nowhere's gonna miss us when we're gone..."
Khan is offline   Reply With Quote
Old 07-15-2007, 02:57 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
They take houses too...great way to have a POS house demolished and removed from a property for free...
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Old 07-15-2007, 03:01 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Given that the expenses of a new car are so high, I don't think the decision can usually be justified on the basis of money. Instead, its more about when you are ready for an upgrade or when the car's reliability is less than you need. So if you are getting dumped on the side of the road regularly, its probably time. Otherwise, unless you are dumping $500 a month into a car for repairs, you can keep it running and do OK money wise.

But its not always about the money.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 07-15-2007, 03:23 PM   #18
Full time employment: Posting here.
 
Join Date: Feb 2004
Location: Okanagan Valley
Posts: 805
I don't think it is ever about the money. $30k amortized over 10 years buys $2-3k of repairs a year without even thinking about the lost opportunity cost with that money.

I believe it is time to do it when you begin to wonder if it is going to get you where you are going today, or when the inconvenience factor of it being in the repair shop gets high enough. That, in my experience, is about 10-15 years.
__________________
AltaRed is offline   Reply With Quote
Old 07-16-2007, 04:47 PM   #19
Full time employment: Posting here.
 
Join Date: Jun 2007
Posts: 567
Quote:
Originally Posted by cute fuzzy bunny View Post
They take houses too...great way to have a POS house demolished and removed from a property for free...
They burn well too. For the record, I wasn't there when it started but I heard from one of the guys that they started the burn with a bag of poo on the front porch.

CRW_1504.jpg CRW_1527-psig.jpg
__________________
Webzter is offline   Reply With Quote
Old 07-16-2007, 05:31 PM   #20
Thinks s/he gets paid by the post
MasterBlaster's Avatar
 
Join Date: Jun 2005
Posts: 4,359
Quote:
Originally Posted by brewer12345 View Post
Given that the expenses of a new car are so high, I don't think the decision can usually be justified on the basis of money. Instead, its more about when you are ready for an upgrade or when the car's reliability is less than you need. So if you are getting dumped on the side of the road regularly, its probably time. Otherwise, unless you are dumping $500 a month into a car for repairs, you can keep it running and do OK money wise.

But its not always about the money.
Bingo !

It's almost always not not about saving money. Even if your used car need a new transmission and a new engine, you will probably spend less on that than monthly payments on a new car.

So, it all boils down to how new and or reliable a car you decide you must have.
__________________

__________________
MasterBlaster is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Attn savy car buyers, help me out wildcat Other topics 64 06-06-2007 01:40 PM
the compromise car - pictures added lazygood4nothinbum Other topics 23 04-09-2007 11:47 AM
$300/mo car loan to save $100/mo gas? green1 Young Dreamers 16 06-20-2006 11:48 AM
Helping a friend with car purchase fiasco WanderALot FIRE and Money 32 08-02-2005 03:33 PM
Used Car Purchase ferco FIRE and Money 5 02-25-2005 03:27 AM

 

 
All times are GMT -6. The time now is 09:52 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.