when to replace the jalopy

[GrayHare]

I've been driving my multi-decade old car into the ground, and it's finally signalling weariness. Anyone have tips about at what point car replacement rather than repair makes sense for FIRE-minded folks like us? I'm curious what people here choose for X in the following, "When repair costs more than X% of the car's value it's time for a replacement instead."

 

[Tyro]

Are we talking hoopty or a classic? Generally, I dump a vehicle when repair cost is more than book value unless there are extenuating circumstances (low mileage, high potential to last considrably longer). In some cases, a collector may pay more than junkyard value.

 

[Finance Dave]

Well, the ceiling is that if the repair costs more than the wholesale value, you shouldn't bother...but I know that's not what you were looking for. LOL

Here's how I think of it. Let's say a typical new car lasts you 10 years. That's 120 months. Let's say you pay $24,000 cash for that new car (I don't buy cars on credit...if I needed to borrow, I'd buy a used car)...that would mean you're effectively paying $200/month in value to use the car. So let's say a repair comes up that costs $2,000. $2,000 represents 10 months of "use". Do you think doing that repair would make the car last another 10 months? If so, do it.

 

[Cessna5354]

1+ what Dave said,

I keep a car as long as I can. Doing all repairs myself, I keep maint costs low. My current ride is a 1999 diesel w/ 280K on the clock. I look to make 350K at retirement time.

PS, I have not heard the trm Jalopy in a long time...

 

[JOHNNIE36]

Well, the ceiling is that if the repair costs more than the wholesale value, you shouldn't bother...but I know that's not what you were looking for. LOL

Here's how I think of it. Let's say a typical new car lasts you 10 years. That's 120 months. Let's say you pay $24,000 cash for that new car (I don't buy cars on credit...if I needed to borrow, I'd buy a used car)...that would mean you're effectively paying $200/month in value to use the car. So let's say a repair comes up that costs $2,000. $2,000 represents 10 months of "use". Do you think doing that repair would make the car last another 10 months? If so, do it.

That's a good way to look at it. However, one has to consider what other repairs are coming up. Is it going to need brakes, tires, is the A/C on the fritz, etc, etc? In the situation you used as an example, I think you have to look down the road to anticipate what else you might be facing.

 

[accountingsucks]

Well, the ceiling is that if the repair costs more than the wholesale value, you shouldn't bother...but I know that's not what you were looking for. LOL

Here's how I think of it. Let's say a typical new car lasts you 10 years. That's 120 months. Let's say you pay $24,000 cash for that new car (I don't buy cars on credit...if I needed to borrow, I'd buy a used car)...that would mean you're effectively paying $200/month in value to use the car. So let's say a repair comes up that costs $2,000. $2,000 represents 10 months of "use". Do you think doing that repair would make the car last another 10 months? If so, do it.

I like this approach and this is what i did last Fall when I had a $1700 bill to my 11 year old car (mind you, $700 were for good All Weather tires, a necessity up here with our winters). I also worked out that a new car is about $200 per month on average. As long as I went about one full year without putting any more money in, I'd be better off ahead. So far nothing else has gone wrong. I'm thinking 3 more years tops for my car at this point.

 

[Andre1969]

The way I justify a repair on an old car is looking at how many months of payments on a newer car that would be. I don't buy extravagant vehicles, but I'd guess even a fairly modest new car or truck could run $350-400 per month. Plus the down payment. And then, figure what insurance would cost on top of that.

I'm sort of going through this same decision right now. I have a 1985 Chevy pickup that's getting rattier by the day, but it still runs fairly well. I had to put about $1,000 into it about a year ago, but not a dime since then. Well, I recently found a leftover 2012 Ram pickup, equipped the way I'd want it, for about $19,600+TTL at a local Dodge dealer.

I have to admit, I'm VERY tempted. But then, I look at the repair spreadsheet for my truck. At the end of September, it will have been 10 years since I got it from my Mom. And in that time, it's been averaging about $76 per month, which includes the $1200 I paid Mom for it, registration renewals, maintenance, etc. Everything but gasoline (9-10 mpg local, 15-16 on the highway if I'm lucky) and insurance (about $300 per year)

I'm about to put it in the shop and have a few things fixed on it. The parking brake broke, the driver's side power window came loose, and the radio has a short in it. Oh, and it has a huge crack in the windshield. Dunno how much all that's going to cost, but I figure if it comes in under $1,000, and I don't have to put any more money into it for the next 3 months, I'm even.

In contrast, just the sales tax on that 2012 Ram would cost almost $1200.

With this truck, it's a second vehicle, which means that replacing it with a brand-new truck would be, well, a bit extravagant! I'd probably make the decision to dump the truck if something really major failed on it. But, I don't think there's really anything all THAT expensive to replace on an '85 Chevy pickup. The transmission, if it failed, would be around $650-700. I guess if the engine blew, that might be the time to just dump it. Chevy smallblock V-8's are pretty cheap, but at that point I think I'd just bite the bullet and get a new (or newer used) truck.

 

[Animorph]

Here's how I think of it. Let's say a typical new car lasts you 10 years. That's 120 months. Let's say you pay $24,000 cash for that new car (I don't buy cars on credit...if I needed to borrow, I'd buy a used car)...that would mean you're effectively paying $200/month in value to use the car. So let's say a repair comes up that costs $2,000. $2,000 represents 10 months of "use". Do you think doing that repair would make the car last another 10 months? If so, do it.

+1.

That's pretty much my thinking. When the old car starts costing more than a new (or new to you) car it is past time to replace it. The value of the old car is not really relevant.

For us, there is also the reliability factor. We both hate to be left stranded, or even have to go in for a long service. So if we start losing 4 days a year servicing the car, it's probably time for us to look at replacements. My rule of thumb for DW was to replace the car at eight years old (over 100k miles), before rising repair costs and more service days became a bigger factor. But our newer cars have survived better, so we may hit 10 years or better now.

There are usually significant advances in safety after 8-10 years as well. My favorite boss really regretted giving his kid his ancient Karmann Ghia as a first car when the kid had an accident and the driver's seat didn't even stay bolted in place.

 

[Finance Dave]

1+ what Dave said,

I keep a car as long as I can. Doing all repairs myself, I keep maint costs low. My current ride is a 1999 diesel w/ 280K on the clock. I look to make 350K at retirement time.

PS, I have not heard the trm Jalopy in a long time...

LOL @ Jalopy.

I used to be an auto mechanic, so I also do all my own work. As a matter of fact, I'm a car hobbyist...so I spend way more on cars than the typical budget recommends...but I can afford it. I currently have a fully restored 1969 unoriginal Camaro Z28 and a 700 horsepower 2007 Mustang GT500.

But, I drive a 2002 Honda CRV as my "everyday" car...whereas most of my colleagues at work drive BMW 5-series or Lexus SUVs.

 

[Mulligan]

My car is approaching 180,000 miles on it and it is 12 years old. I thought I would have got a newer one by now but it has been so reliable, I wont look yet. If the tranny goes, I will fix it and continue driving it as long as it doesn't start having more problems. If engine goes, Im probably done. For people who are cheap like me, it is not just the equivalent replacement payment of a new car but also, the sales tax, full coverage insurance, and property taxes that add into the equation. Getting a newer vehicle will add those costs, too. At some point however, you will have to wave the white flag and surrender, though.

 

[Texas Proud]

I look at it from a reliability point of view.... if it leaves me stranded it has a mark against it... if I have to take time out to get it repaired, it has a mark against it....

At some point in time there are too many marks against the car and I get rid of it... so far, that has been in the range of 90K to 125K.... but most of my previous cars have been domestic... I think my foreign cars will last longer...

As a note, I have an 04 that will be 10 years old at the end of next year and only have 44K on it... this one might go 20 years the way I am going... my wife's car has 35K and is only 3 years old....

 

[MasterBlaster]

Like others, I am of the "cost to operate" mindset. So if the repairs start costing more than a better car then perhaps it's time. perhaps a late model used car would be a better substitution and cost less over the long term.

But that's just the money aspect. You also have the hastle-factor of repairing older cars. Also the newer cars have better safety equipment to consider.

 

[Andre1969]

Actually, I had forgotten about the breakdown/hassle aspect of it. I've been fairly lucky, that my truck hasn't broken down and left me stranded since the summer of 2004. Back then it was an intermittent problem with the ignition coil in the distributor getting hot and shorting out, which would kill the truck. It would always re-start...eventually.

I don't get *too* annoyed with having to take a vehicle to the shop every once in awhile. But when it starts breaking down and leaving me stranded too often, that's when I'll start losing patience with it.

 

[ejman]

This is an interesting question to me because although my car is not a "Jalopy" (2009 Dodge) with only 40,000 miles on it and has been wonderful so far, at the time I purchased it it looked like the end of the world for Chrysler so they were offering a lifetime power train warranty (engine, transmission, driveaxle). So I'm wondering if the car starts doing normal wear out things (such as starter, alternator, windows,brakes etc etc) at what point is that lifetime power train warranty not worth it anymore?

 

[LOL!]

I would just stop repairing the jalopy and keep driving it. That way the repair costs go to zero. Then one day, someone will hit it and it will be totaled. That will be the signal to get new car. At least that's how it worked out in 2001 when I bought my last car.

 

[easysurfer]

The last few years put in plenty of money in fixing up my old car (repaired trans -- twice, A/C, brakes new tires, new headlights, struts). Yet, in a few years, regardless of how well it's running, I may spring for a new vechile.

I figure hanging on one for 20 years (4 years from now) is long enough.

 

[GrayHare]

Thanks for the feedback. I decided to throw $1000 at the jalopy to get it operational again. Back when I was younger and did the work myself it was a bunch less from the wallet. The car is something of a classic, low miles, and in very good condition otherwise. Ever operational I've read it's worth more for the parts than for the whole, but I've never parted out a car. Probably more fuss than I want to deal with.

 

[kumquat]

at what point is that lifetime power train warranty not worth it anymore?

Possibly when they declared bankruptcy?

 

[Meadbh]

I agree with Dave.
One other cost to consider is insurance. I stopped paying for collision insurance when my old car was 12 years old. Now that I have a new car of course I have collision insurance on it.

 

[freebird5825]

Normal maintenance and wear-n-tear items discounted, I will drive a car until it has a major component failure.
I'm facing this situation right now. My 2002 Jeep Grand Cherokee (96000 miles) has a cylinder misfire and sometimes will not start. It runs like hell when it does start.
I've owned the Jeep since 2004. I recently had to spend $500 on sensors to get the check engine light off to get it inspected. The check engine light is back on again.
The antifreeze reservoir is emptying at a faster rate than normal, even though the radiator, themostat and hoses are intact.
The mechanic (a trusted friend) thinks it might be more than just a tuneup problem after checking a few key things. The tuneup parts would cost $100 alone.
He estimated it would cost a minimum of $1500, mostly in labor hours, if it needs a head gasket repair, and possibly a water pump on top of that. There is no way of knowing until he opens the patient.
So I am contemplating putting it on Craigslist as a parts car or a real deal for a home mechanic, as is, and getting a used Ford Escape as a replacement. We definitely need a 4WD for the wintertime.
No decisions have been made yet. We still have 2 vehicles to use, so there is no immediate requirement to buy.
My thinking is I would rather use the cost (the total of which is unknown) of fixing the Jeep as a down payment on a newer used vehicle.
Mr B is looking online at used vehicles. He and I will split the cost 50-50.

 

[Walt34]

We're pretty much on the same page as the other posters. We'll buy new vehicles and keep them until reliability or parts availability become issues.

Both of ours are now ten years old. DW's car has 140k miles and I'm hoping to get 200-250k miles out of it. Anything more than that is gravy. My truck has 81k miles so it's just broken in.

 

[LakeTravis]

We're pretty much on the same page as the other posters. We'll buy new vehicles and keep them until reliability or parts availability become issues.

Both of ours are now ten years old. DW's car has 140k miles and I'm hoping to get 200-250k miles out of it. Anything more than that is gravy. My truck has 81k miles so it's just broken in.

Bought a new Suburban in 1996. Paid it off in 1999. In addition to it being my daily driver, I used it to occasionally tow an 8,000lb boat to the dealer for service. Had 225K miles on it in 2007 when I replaced the engine with a brand new Chevy crate engine ($5200).

Drove it another two years and 40K miles when the transmission and transfer case went out. Facing another $4500 in repairs, I decided that was it. Repairs alone might have been worth it but with gas prices becoming a considerable factor as well, I had to factor in the average 12mpg.

Traded it in on a Kia Spectra. $4500 trade in credit, net outlay for the Kia was a little over $11K. Averaged almost 30mpg.

Kia was totalled two years later when a pickup rear-ended me. Insurance paid over $14K. Bought a Kia Sportage for $22K and I figure I'll get at least 10 years/100K miles out of it - the length of it's powertrain warranty.

 

[ERhoosier]

Lots of good thoughts on $$ aspects, but another thing to consider is tech advances in safety of newer car. There is independent evidence showing that things like air bags, anti-lock brakes, stability control, etc. improve safety. When I traded in my '01 Chrysler for '10 Nissan Altima my insurance premiums (same ins co, coverage, & limits) actually dropped a bit due to much lower bodily injury coverage cost. In many areas insurance can be a relatively larger overall cost of operating a vehicle.

 

[meierlde]

Another issue is where the vehicle is driven in West Texas for example a reliable car is more important since there are spots where cell phones don't work. It is also a long ways to anywhere. Back East if the car for example stays east of the Missouri River Line, then this is not as much of an issue.

 

[JPatrick]

This is an interesting question to me because although my car is not a "Jalopy" (2009 Dodge) with only 40,000 miles on it and has been wonderful so far, at the time I purchased it it looked like the end of the world for Chrysler so they were offering a lifetime power train warranty (engine, transmission, driveaxle). So I'm wondering if the car starts doing normal wear out things (such as starter, alternator, windows,brakes etc etc) at what point is that lifetime power train warranty not worth it anymore?

I've got a 2008 Dakota with one of those lifetime warranty's also.
Sure hope they mean it, I sense a transmission job in my future.