Car Purchase -- Deciding When

[yakers]

Car Talk

On National Public Radio there is a show by two brothers from Boston called Car Talk. One brother points out that if you buy a new car and set aside $600 (this is some time back so I would go with $1K) a year for repairs you should be able to go forever. This means fixing things as they arise. Sometimes people defer some work until the car is not worth fixing. You need to build up the fund while the new(er) car is running well, when you need a repair, even a $1k transmission some years on you have the funds already. And this has worked pretty well for me. Older Honda Civic kept running 11 years, replaced engine & gearbox with rebuilts , gave it to older son who ran it for 4 more years and finally died when a tree fell on it. Another car (Ford Taurus SHO) I had from new for 11 years & 150K miles and it saved me in an accident, only needed clutches.
Now the other brother says a new car every 3 to 5 years for reliability & safety.
There you have it, the testimony of two experts.

 

[bow-tie]

I got rid of an 18 year old car because they stopped making parts for it 10 years ago.

C'mon... that's a defeatist attitude. This is precisely why we have junkyards.

 

[Texas Proud]

Very interesting.... to me that is...

I took my car in because I smelled coolant... and I had all the 'stuff' done at 60K, new hoses, water pump etc etc...

The verdict... it is leaking at the heater core.. about $800 of work...

THEN they said the heater sensor was fried and it would not tell me the temp of the water... another $350 (I declined)...

THEN there is a air sensor (some idle problems when cold)... another $350... (also declined)...

Plus shop supplies etc....

SO... verdict would have been over $1500 for a car with trade in value of $1600...

I have to do the leak.. but will keep driving for another year or so and then probably get a new one...

 

[FinanceDude]

I have a 2003 Accord and a 2006 Odyssey, and I will drive them until the wheels fall off, or 300,000 miles each, whichever is first.

I think they are up to date enough safety wise that I don't have to worry...........

 

[Dawg52]

One of my old work buddies drives a 1990 Pontiac Grand Prix. Believe it or not, the car has almost 500k miles on it. He put a refurbished engine in it 2 years ago for $1000 and has had plenty of other maintenance over the years but it still gets keeps on perking.

 

[FinanceDude]

One of my old work buddies drives a 1990 Pontiac Grand Prix. Believe it or not, the car has almost 500k miles on it. He put a refurbished engine in it 2 years ago for $1000 and has had plenty of other maintenance over the years but it still gets keeps on perking.

GM needs to buy the car from him, take it apart, and see how they made such a big mistake. I'm sure it was an error in Quality Control to have a GM car last that long..........

 

[Texas Proud]

GM needs to buy the car from him, take it apart, and see how they made such a big mistake. I'm sure it was an error in Quality Control to have a GM car last that long..........

Probably nothing original on the car except the body... and maybe not even that....

But I do have to admit, my 95 Monte Carlo has been very good to me until now.. but only has 82K miles as I was away for a few years and also have two cars...

 

[Dawg52]

Probably nothing original on the car except the body... and maybe not even that....

Oh it's the original body. Let's put it this way, his family won't be seen in it.
Wish I had a pic to post.

 

[cho oyu]

GM needs to buy the car from him, take it apart, and see how they made such a big mistake. I'm sure it was an error in Quality Control to have a GM car last that long..........

Some of the GM engines (and transmissions) had incredibly long lifetimes. In particular, look at the number of full-size Buicks, Oldsmobiles, Pontiacs with a 3.1, 3.3, or 3.8 liter engine that have more than 200k or even 300k miles.

I had 200k on a 3.3l - it still ran perfectly smooth and had never burned a drop of oil. The car is still puttering around with another owner and a lot more miles 5 years later (the clutch converter torque solenoid did go out at about 180k miles, though). Very similar situation with a 3.8 - close to 200k miles when I sold it with zero mechanical issues.

 

[chinaco]

Some of the GM engines (and transmissions) had incredibly long lifetimes. In particular, look at the number of full-size Buicks, Oldsmobiles, Pontiacs with a 3.1, 3.3, or 3.8 liter engine that have more than 200k or even 300k miles.

I had 200k on a 3.3l - it still ran perfectly smooth and had never burned a drop of oil. The car is still puttering around with another owner and a lot more miles 5 years later (the clutch converter torque solenoid did go out at about 180k miles, though). Very similar situation with a 3.8 - close to 200k miles when I sold it with zero mechanical issues.

I have a car with one of those engines. I think the transmission is reliable also.

I think someone else commented on this issue... I am not having major problems in terms of the basic engine or transmission... but every time I take the car in for some repairs, it seems like I am spending $500. Int the last 12 months, I have spent about $2k. I am not sure what I will spend in the next 12 months. On a simple cost comparison (my repair cost vs car payment) that excludes fuels and other considerations (which may make a difference), the 2k is less than a car payment would be less than if I were to get a loan and had a monthly payment.


I guess what I was looking for was a financial model (I wanted to cheat and not think to develop my own) that would give me a monthly expense plus depreciation of the car over say 10-12 years. I could compare the cost impact. There is some line or threshold where is makes sense money wise to buy a new car. Obviously, there are other considerations like reliability that need to be considered also. I am not concerned about absolute accuracy... just something to help me confirm the decision.

 

[MasterBlaster]

II guess what I was looking for was a financial model (I wanted to cheat and not think to develop my own) that would give me a monthly expense plus depreciation of the car over say 10-12 years. I could compare the cost impact. There is some line or threshold where is makes sense money wise to buy a new car.

Well someone could come up with an average cost to own a car. But that's not what matters... What matters is the cost to keep your car running. The variance around the average cost model is tremendous. If you are lucky you'll get a car that only needs regular maintenance plus the occasional repair. If you are unlucky you'll get a car with recurring problems or worse a problem that cannot be diagnosed properly. Those kinds of cars will cost you a bundle.

So you plunk your money down on something that seems reasonable, and you take your chances. That's kind of the way life goes.

 

[FinanceDude]

Some of the GM engines (and transmissions) had incredibly long lifetimes. In particular, look at the number of full-size Buicks, Oldsmobiles, Pontiacs with a 3.1, 3.3, or 3.8 liter engine that have more than 200k or even 300k miles.

I had 200k on a 3.3l - it still ran perfectly smooth and had never burned a drop of oil. The car is still puttering around with another owner and a lot more miles 5 years later (the clutch converter torque solenoid did go out at about 180k miles, though). Very similar situation with a 3.8 - close to 200k miles when I sold it with zero mechanical issues.

I'm with you on the 3.1 and the 3800. Actually, I had a 3100 motor in my 96 Grand Prix that is still being driven with 160K on it.........

3.3? Not so good.........and ANYONE with a 3.4 GM engine, your mechanic will be sending you gifts on the holidays...........

The 350 GM V-8 motors they put in Tahoes and Suburbans are pretty good too......too bad their base 4cyl engines are crap, with all the Japanese and Korean carmakers eating their lunch..........

 

[Webzter]

This is sort of off-topic, but I think it's handy to tie-in with the actual car purchase.

I read about this tip in one of the Motley Fool books and have since used it to help my FIL get a motorcycle and friends with their cars...

Basically, sit down and figure out what model and options you want. Come up color options that appeal to you. Then, fax every dealer for that car in your area and outline what year and model you're looking for, what options are necessary and which ones are desired, tell them something to the effect that you're accepting bids for your business and will decide on where to purchase within the week. Also, just tell them that you'll determine how you will pay to purchase the vehicle after you've chosen a dealer.

To make the comparison easy, ask for a quote that includes all costs such as tax, title, licensing and anything else. After you have that price, you can expand your search range (say you looked everywhere within 50 miles, maybe go 200 miles out). With those people, tell them the lowest price you've been quoted so far and then ask them if they can beat it.

Word the letter nicely, follow up and thank people you haven't chosen. Walk into the winning dealership with the faxed quote and buy your car. No emotions, no bartering, no haggling, and you'll save a ton.

When my FIL was here, they were thinking about a 2006 HD Sportster for his girlfriend... the 2007's were out so they thought they'd be able to get a decent deal. Prices in one place they looked were only down $500. We went to a dealership here and they had them marked down $1500 but they'd need to pay to get it railed to Arizona (FIL was in the middle of moving there).

I faxed every dealership in the area, every dealer around where they were going to be in Michigan to get his stuff, and where they were going to be in Arizona when he moved in with her. I told them I wanted a 2006 Sportser (I forget the exact model) and preferred color x or y, that we'd determine financing after we selected a dealer, and my current lowest price was $6000.

The feedback we got was awesome. Some dealers told us there was no way they could match that price and that it was a great deal. Some offered a similar price but would discount the rail shipping. some offered gear. I think we ended up with a dealership in Michigan that came down another $500 and threw in two helments.

all told, not bad for 10 minutes work.

 

[Texas Proud]

3.3? Not so good.........and ANYONE with a 3.4 GM engine, your mechanic will be sending you gifts on the holidays...........

That is what I have... the mechanic told me it was worse than the Yugo engine....

but truth be told... I have not had any problem with the basic engine at all.... this is the first time and it is an air sensor for cold idle... when warm it runs great.... and it is the cooling system that has gone crap on me..

 

[cute fuzzy bunny]

worse than the Yugo engine....

Worse than two three legged squirrels?

 

[Joss]

I manage an 800+ vehicle municiple fleet and have tried for years to build a slick math model to spit out the clear cut turnover point. Though I am totally convinced that it is economic foolishness (right up there with perpetual motion machines) to repair/rebuild indefinitely, I have never successfully completed the model. For me, it turns out to be like stacking sand.

The models I liked the best, though, tried to get there on the basis of ultimate "cost per mile". For instance, we get about 140,000 miles out of our Ford Crown Vic police units. They cost about $20,700 each and this is reduced to $18,000 by selling them at the end. Then the straight cost per mile is 12.9 cents. This increases when you begin to add lifetime repair costs - but not ALL repair costs matter here.

Leave off accidents and consumable "normal wear items". Accident repairs obviously aren't the car's fault. Wear items include scheduled services (oil changes, filters, etc), wiper blades, hoses, belts, tires, brakes rotors and pads. You have to have these whether you have an old car or a new car. Fuel doesn't matter either - IF the replacement has the same consumption rate. If the replacement has better mileage you should factor it in.

But.... the best application of this type of thing is to build it with data culled from a large sample of cars... and then apply it to a fleet on a rule of thumb basis. As someone above pointed out, this doesn't work well with just one vehicle.


A few things to keep in mind:

Technological economy improvements are important and coming closer together every day. 20 year old auto designs are WAY out of date now for economy, reliability, performance and safety.

The idea of perpetual repairs must, ultimately, compete with an auto assembly plant, where it looses badly. Once you imagine repairing your car to the point that there is nothing left of your original vehicle, this becomes clear. You can "rebuild" your 20+ year old car, over time, but an assembly line built the new one on the showroom floor. This is HUGELY different, cost-wise.

Every replacement part you put on requires the labor to first remove the old part. This would only double the labor if repair shops were as ergonomically designed as assembly lines. And if the mechanic you use repeated this specific task over and over and over. And if he had precisely the tools and parts he needs for that specific task. Since this almost never applies, I'd guess the labor to build a car via rebuild costs more like 3-5 times more than an assembly line.

Then there's the cost of your parts vrs the parts an assembly line uses. You go to NAPA or Pep Boys and pay retail. THEN you go back two or three more times because it was the WRONG part. The assembly lines purchase in quantities of hundreds of thousands of units in an entirely different pricing system. They also use "OEM" quality parts... by definition... and there are serously important quality differences in automotive parts.

Then there is the availability of parts for old vehicles. At some point, there just won't be any more NEW parts for that old keepsake. Then you get into the fun world of junkyards and used or remanufactured parts.

The bottom line is that all vehicles must ultimately be replaced, so the only question is when. The answer is before you put money in that you can't get back out. If that car's book value is $10K and you spend $5K replacing the engine, the value is still just $10K and you kept it.... $5K too long.

I just read back through this and it seems to be "all over the place". Sorry if it's confusing. Oddly enough, that's exactly how I have found this subject over the past 15 years.

 

[FinanceDude]

I manage an 800+ vehicle municiple fleet and have tried for years to build a slick math model to spit out the clear cut turnover point. Though I am totally convinced that it is economic foolishness (right up there with perpetual motion machines) to repair/rebuild indefinitely, I have never successfully completed the model. For me, it turns out to be like stacking sand.

The models I liked the best, though, tried to get there on the basis of ultimate "cost per mile". For instance, we get about 140,000 miles out of our Ford Crown Vic police units. They cost about $20,700 each and this is reduced to $18,000 by selling them at the end. Then the straight cost per mile is 12.9 cents. This increases when you begin to add lifetime repair costs - but not ALL repair costs matter here.

Leave off accidents and consumable "normal wear items". Accident repairs obviously aren't the car's fault. Wear items include scheduled services (oil changes, filters, etc), wiper blades, hoses, belts, tires, brakes rotors and pads. You have to have these whether you have an old car or a new car. Fuel doesn't matter either - IF the replacement has the same consumption rate. If the replacement has better mileage you should factor it in.

But.... the best application of this type of thing is to build it with data culled from a large sample of cars... and then apply it to a fleet on a rule of thumb basis. As someone above pointed out, this doesn't work well with just one vehicle.


A few things to keep in mind:

Technological economy improvements are important and coming closer together every day. 20 year old auto designs are WAY out of date now for economy, reliability, performance and safety.

The idea of perpetual repairs must, ultimately, compete with an auto assembly plant, where it looses badly. Once you imagine repairing your car to the point that there is nothing left of your original vehicle, this becomes clear. You can "rebuild" your 20+ year old car, over time, but an assembly line built the new one on the showroom floor. This is HUGELY different, cost-wise.

Every replacement part you put on requires the labor to first remove the old part. This would only double the labor if repair shops were as ergonomically designed as assembly lines. And if the mechanic you use repeated this specific task over and over and over. And if he had precisely the tools and parts he needs for that specific task. Since this almost never applies, I'd guess the labor to build a car via rebuild costs more like 3-5 times more than an assembly line.

Then there's the cost of your parts vrs the parts an assembly line uses. You go to NAPA or Pep Boys and pay retail. THEN you go back two or three more times because it was the WRONG part. The assembly lines purchase in quantities of hundreds of thousands of units in an entirely different pricing system. They also use "OEM" quality parts... by definition... and there are serously important quality differences in automotive parts.

Then there is the availability of parts for old vehicles. At some point, there just won't be any more NEW parts for that old keepsake. Then you get into the fun world of junkyards and used or remanufactured parts.

The bottom line is that all vehicles must ultimately be replaced, so the only question is when. The answer is before you put money in that you can't get back out. If that car's book value is $10K and you spend $5K replacing the engine, the value is still just $10K and you kept it.... $5K too long.

I just read back through this and it seems to be "all over the place". Sorry if it's confusing. Oddly enough, that's exactly how I have found this subject over the past 15 years.

I think it's brilliant, makes perfect sense, and is a REAL WORLD example, which is refreshing..........

The only 20 year old car I would drive is a well cared for Ferrari, Porsche or Lamborghini that goes like bat out of hell..........I think that's LBYM versus a new one.............

 

[free4now]

I love this board... posting this question anywhere else would get a raft of "when the repairs cost more than the cost of a new car", but here everyone realizes that point never happens.

The decision comes down to when the desirability of the old car is too low and you can afford a replacement.

The "desirability" of a car stays very high as long as the car is under warranty and the manufacturer hasn't introduced a replacement model.

I've bought my last two cars new in the first year that model was introduced by the manufacturer. This tends to extend the period that the car looks and feels modern and safe. Also I tend to buy cars whose styling is more futuristic, which extends the amount of time before they start looking dated.

In the case of my last car the event that motivated me to sell was when it was on the verge of failing california smog emission standards and there was a new vehicle (the 2004 Prius) coming available that was much more desirable to me.

 

[CyclingInvestor]

In the case of my last car the event that motivated me to sell was when it was on the verge of failing california smog emission standards and there was a new vehicle (the 2004 Prius) coming available that was much more desirable to me.

When I own a car, they are usually very used - the last one I bought (now deceased)
had 266k miles on it when I got it. The car before that was retired when it failed its
CA emissions test as a "gross polluter" (no visible exhaust, though), and the state of
CA paid me $1000 to retire it (much more than it was worth).

 

[Milton]

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.

Agreed. I have had very good experiences with Toyotas, but if I were in the market I would also consider Honda, and perhaps Nissan or Mazda.

Never a [-]lemon[/-] car made by one of the 'Big Three' (Shrinking Three?) manufacturers.

 

[W2R]

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.

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 !

As long as this thread has been revived, I thought I'd add that earlier this week my power window fixed itself, too!! I really don't get these magical, self-fixing power windows but I'm pretty happy about it. I didn't do a thing to cause it to start working again. My only hypotheses are a big change in the weather or else just being shaken as I drive around over the potholes here.

I suppose my working power window means that my Solara still counts as being repair-free after 7 years.

 

[Texas Proud]

As long as this thread has been revived, I thought I'd add that earlier this week my power window fixed itself, too!! I really don't get these magical, self-fixing power windows but I'm pretty happy about it. I didn't do a thing to cause it to start working again. My only hypotheses are a big change in the weather or else just being shaken as I drive around over the potholes here.

I suppose my working power window means that my Solara still counts as being repair-free after 7 years.

Nano Bots...

 

[Meadbh]

This is sort of off-topic, but I think it's handy to tie-in with the actual car purchase.

I read about this tip in one of the Motley Fool books and have since used it to help my FIL get a motorcycle and friends with their cars...

Basically, sit down and figure out what model and options you want. Come up color options that appeal to you. Then, fax every dealer for that car in your area and outline what year and model you're looking for, what options are necessary and which ones are desired, tell them something to the effect that you're accepting bids for your business and will decide on where to purchase within the week. Also, just tell them that you'll determine how you will pay to purchase the vehicle after you've chosen a dealer.

To make the comparison easy, ask for a quote that includes all costs such as tax, title, licensing and anything else. After you have that price, you can expand your search range (say you looked everywhere within 50 miles, maybe go 200 miles out). With those people, tell them the lowest price you've been quoted so far and then ask them if they can beat it.

Word the letter nicely, follow up and thank people you haven't chosen. Walk into the winning dealership with the faxed quote and buy your car. No emotions, no bartering, no haggling, and you'll save a ton.

When my FIL was here, they were thinking about a 2006 HD Sportster for his girlfriend... the 2007's were out so they thought they'd be able to get a decent deal. Prices in one place they looked were only down $500. We went to a dealership here and they had them marked down $1500 but they'd need to pay to get it railed to Arizona (FIL was in the middle of moving there).

I faxed every dealership in the area, every dealer around where they were going to be in Michigan to get his stuff, and where they were going to be in Arizona when he moved in with her. I told them I wanted a 2006 Sportser (I forget the exact model) and preferred color x or y, that we'd determine financing after we selected a dealer, and my current lowest price was $6000.

The feedback we got was awesome. Some dealers told us there was no way they could match that price and that it was a great deal. Some offered a similar price but would discount the rail shipping. some offered gear. I think we ended up with a dealership in Michigan that came down another $500 and threw in two helments.

all told, not bad for 10 minutes work.

I read about this technique and used it when buying my present car 12 years ago. It put me in the driver's seat. I had dealers calling me with their best deals and I was very happy with the result.

 

[cute fuzzy bunny]

I went with Cardirect.com on my last two purchases, and i'm a haggler. The deal on the lexus was better than anything I came up with on my own and the honda deal was stupendous. I called the local honda dealer and asked if they'd come close to matching it to save me a bit of a drive and they didnt even call me back.

Smooth transaction...I spec'ed the car I wanted, the dealer that carsdirect had the best relationship with had someone drive that exact car from another dealer, then I went to the selling dealer, signed the papers and was driving hom in the new car within 45 minutes, including the test drive.

 

[starter82]

I love this board... posting this question anywhere else would get a raft of "when the repairs cost more than the cost of a new car", but here everyone realizes that point never happens.

Huh? Of course that point happens. It might not be easy to determine when it occurs, but it would seem to have to occur. I don't know of anyone who's been driving a car heavily (i.e., realistically) for 4 decades.