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Retirement Budget: Car Expense
Old 03-01-2008, 12:14 PM   #1
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Retirement Budget: Car Expense

I am constantly tweaking what will be my retirement budget and am trying to get closer to a number I feel is realistic. One line I am unsure of is the Automobile Repair and Depreciation.

So, I buy used cars and keep them 3-5 years. Cars are usually 15k-25k purchases. I don't have enough history to see what my real depreciation rate is, so wondered what people here use.

My numbers tell me $250 a month is safe and provides a nice car and repairs as needed. Thoughts?
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Old 03-01-2008, 12:21 PM   #2
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Just straight line the depreciation over how long you think you will keep the car. Let the repairs take care of themselves.

But I am surprised you even keep track of this 'expense'. Maybe if you said you were putting aside money to buy a new one it would make more sense, but trying to do a true income stmt with depreciation on fixed assets does not make sense to me.
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Old 03-02-2008, 03:10 AM   #3
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At first I thought your 250 per month was low. I am close to 290 per month (30k vehicle + 5k repairs / maint) over last 10 years. But my numbers are based on a new vehicle putting in a lot of miles while working. I'd say 250 is about right with a slightly used vehicle putting in less mileage in ER
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Old 03-02-2008, 04:08 AM   #4
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Try Yahoo Autos

Shabber, go to Yahoo Autos (click "Autos" on the left hand link bar), choose the make and model you are considering, and it will bring back a price AND a total cost of ownership for 5 years. Click on the "details" link, and it will come back with average depreciation, fuel cost, financing costs, maintenance costs, etc. You can customize this to an extent, depending on your locality and miles you drive per year.

Hope this helps.

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Old 03-02-2008, 11:41 AM   #5
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Thanks, I will check out Yahoo. So what number are you guys using in your budgets?

I am finally getting my total pretty close. Just need to work on Healthcare Costs and Vacations to finish up. I am looking at needing about $67k a year requirement to ER how I want. Later I will put up the whole budget for people to comment on.
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Old 03-02-2008, 12:08 PM   #6
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Thanks, I will check out Yahoo. So what number are you guys using in your budgets?
I calculated my retirement budget based on my present budget. I beefed it up a little, since I want to have more to spend than I spend now. I like buying new cars (not that it's cheaper, but that is what I like to do).

In general my plans usually include driving a car for five years and then assuming nothing on trade-in (that gives me a little slack in case prices go up too much on the new cars in the meantime). My present Toyota will be 8 years old in July, though, and I only have 34,800 miles on it and zero repairs. I might drive it for 10 years instead of 5 years.

I will probably only buy 2-3 more cars in my lifetime anyway. I am 59, and don't want to drive past age 75 if I can help it. I am already planning to retire in a location that is conducive to cutting back on (and eventually eliminating) driving.
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Old 03-02-2008, 07:21 PM   #7
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I will probably only buy 2-3 more cars in my lifetime anyway. I am 59, and don't want to drive past age 75 if I can help it. I am already planning to retire in a location that is conducive to cutting back on (and eventually eliminating) driving. __________________

I plan on driving all the way to 100
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Old 03-02-2008, 07:35 PM   #8
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I plan on driving all the way to 100
Thanks for warning us!
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Old 03-02-2008, 09:11 PM   #9
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Don't forget to budget the difference between your current vehicle of choice and the cost of a nice big sky blue Mercury Grand Marquis that is a requirement for being over 75.
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Old 03-02-2008, 09:51 PM   #10
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We keep our cars 10+ years, and we usually buy cars costing around $20K-25K. We save about $150 a month towards replacement costs for each car. Right now, we save another $200 a month for car repairs on our 2 cars because they are 7 and 10 years old and they've needed quite a bit of work done in the past 2 years. When we get new cars, we will lower that amount to about $100 a month.
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Old 03-02-2008, 10:11 PM   #11
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I will probably only buy 2-3 more cars in my lifetime anyway. I am 59, and don't want to drive past age 75 if I can help it. I am already planning to retire in a location that is conducive to cutting back on (and eventually eliminating) driving. __________________

I plan on driving all the way to 100
My Aunt is still driving at 78. She just bought a brand new car. So I think she plans on driving for a few more years. I haven't seen her drive, but my DW has ... and she does say that it's a scarey thing to eperience.

Personally I'm with you newguy... they will have to rip my drivers license from my cold dead hands ... or until I drive my vette (when I get one ) into the wall. 100 sounds like a good age to me. So there'll be 2 of us geezers on the road. Which side do you want? Left or right?
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Old 03-02-2008, 10:33 PM   #12
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Personally I'm with you newguy... they will have to rip my drivers license from my cold dead hands ... or until I drive my vette (when I get one ) into the wall. 100 sounds like a good age to me. So there'll be 2 of us geezers on the road. Which side do you want? Left or right?
Just don't drive up the sidewalk, where I'll be peacefully strolling. My feet won't need gas, oil, tires, registration, or insurance, and with good maintenance practices and some new running shoes now and then, they probably won't even need any repairs.
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Old 03-02-2008, 10:37 PM   #13
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My FIL is 85. Guy drives pretty darn good. He doesn't drive during high traffic times and avoids night time driving. I hope if I even make it to 85 I can drive like him.
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Old 03-03-2008, 08:19 AM   #14
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My mom is 88 and still driving... not great, but it has nothing to do with her age... she has never driven well...

She plans on driving until she if 'forced' not to drive... and right now that looks like a long time from now..
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Old 03-03-2008, 08:47 AM   #15
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I plan on driving all the way to 100
"When I die, I want to go sleeping peacefully like my grandfather. Not screaming like the passengers in his car."
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Old 03-03-2008, 10:42 AM   #16
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Originally Posted by Shabber2 View Post
I am constantly tweaking what will be my retirement budget and am trying to get closer to a number I feel is realistic. One line I am unsure of is the Automobile Repair and Depreciation.

So, I buy used cars and keep them 3-5 years. Cars are usually 15k-25k purchases. I don't have enough history to see what my real depreciation rate is, so wondered what people here use.

My numbers tell me $250 a month is safe and provides a nice car and repairs as needed. Thoughts?
Why every 3-5 years? Cars today last much longer than that........ But, it probably is a personal preference. The "average depreciation" on a new car is about 40% in the first 3 years, then it tapers off from there. After 5 years, most cars are about 60-75% depreciated.
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Old 03-03-2008, 11:30 AM   #17
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Why every 3-5 years? Cars today last much longer than that.
I thought so too. My wife and I bought a brand-new car in 1999, intending to drive it until it fell apart.

Instead, some 17-year old girl on her cell-phone rear-ended my wife and shoved the car under a school bus (with lights flashing!), totaling the car, with only 2 car payments left.

We took the insurance proceeds and bought a used car (thinking we were avoiding the depreciation hit), again planning to drive it for a decade. It cost us $4,000 in repairs in one year. We traded it in towards a new car which so far (knock on wood) has avoided accidents and major repairs.

So while we may hope to drive our cars until they fall apart, we plan as though we will always have a roughly $500/month item in our monthly budget labeled "Car payment."
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Old 03-03-2008, 01:04 PM   #18
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I thought so too. My wife and I bought a brand-new car in 1999, intending to drive it until it fell apart.

Instead, some 17-year old girl on her cell-phone rear-ended my wife and shoved the car under a school bus (with lights flashing!), totaling the car, with only 2 car payments left.
Well, that was unforeseen.........

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We took the insurance proceeds and bought a used car (thinking we were avoiding the depreciation hit), again planning to drive it for a decade. It cost us $4,000 in repairs in one year. We traded it in towards a new car which so far (knock on wood) has avoided accidents and major repairs.
What kind of car was it, and what do you drive now??
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Old 03-03-2008, 01:20 PM   #19
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Well, that was unforeseen.
Agreed. But the experience (and others since then) have taught me that there will always be something "unforseen." Our budget was getting consumed by one "one-time-event" after another, until we realized that we should be allocating a monthly amount to unforeseen "one-time-expenses" that have a way of cropping up on a surprisingly regular basis.

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What kind of car was it, and what do you drive now??
The first car was a '99 Volkswagen Jetta GLS VR6. We loved that car. It got shoved under the school bus and totaled in 2004 (pictures here). We replaced it with an '02 Passat that turned out to be a complete lemon. Traded it in for a Mazda 3 Sport (the hatchback), which has been utterly problem-free and an absolute joy to own. German cars were very nice and lots of fun, but the depreciation and unreliability was just too much for us. It's Japanese cars from here on out, for us.
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Old 03-03-2008, 01:37 PM   #20
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Wow, you weren't exaggerating about that accident! What gruesome photos.

I'm a fan of Japanese cars too, since buying my Camry Solara in 2000.
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