11/24/15 8:42 AM

When it comes to cars, there're often a lot of number getting thrown around: horse power, 0-60, leg room...

But my other thread got me thinking about another kind of math: What math do you use to calculate whether to keep the existing car before the repair/maintenance cost outstrip the depreciation of a newer replacement car? (or other equation you use instead)

In the past, I've been using the rough number of $1000/year, which happens to be the yearly depreciation of cars in their "mid-life" (6-10 year). That number has climbed higher lately to more like $1500. (just plug my car in Kelly's, by changing the year, keeping the same options) That's probably because the cost of cars had gone up A LOT.

My car, for example, have had some repairs after it had gone beyond the 100k mile mark (that's when even extended warranty finally ran out). All the repairs had been in the hundreds $ range. Replacing brake pads too, were under the thousand mark. So it's easy enough to justify keep running it. But now there's some expected maintenance/repair looming which creep above the thousand dollar mark, I don't see the point of keeping it any more.

Still, I know quite a few people who choose to pay for the big work if they have reasonable hope it will enable the car to go for a few more years. (I live in affluent Westchester county of NY. Many of these people can afford another car but choose not to) I can see their rational also. If the repair gives a car a new life of 2-3 years, the cost spread over that period may still be lower than the depreciation of a newer car which can even be a bit more than $1500.

It's fuzzy math. Everyone probably does it differently. I thought it might be interesting to share.

(all that, of course, is assuming you're reasonably happy with the car in question)

11/24/15 10:57 AM

If you take good care of your car, as in follow the car manual's recommended service, and address service needs immediately, rather than procrastinating, the car should last more than 200,000 miles without a major repair, like a new transmission. Most folks will just desire something new before hitting that mileage point anyway.

On the way to and from airports, over the years, speaking with several livery car drivers (owners) to which indicate they get up to 300,000 miles before it becomes too costly to maintain the car (and that includes American branded cars, like Government Motors). Likewise, the 300,000 miles is the benchmark for NYC taxis. The once ongoing concern with Toyota Prius has been how durable they are - which is no longer an issue as they have a track record of being just as reliable as 100% petrol engine taxis.

11/24/15 12:32 PM

I tend to buy luxury cars at around the 75-90k mark. As an example, I'm driving a s420 Benz, absolutely best Benz built until the most recent pre-Chysler cars. It was close to 100k new, I paid 5k for it with 91k miles, and put another 2k into upgrades (new wheels/tires and some maintenance items). I budget 2-3k for repairs. Why would I be willing to do this? To lease a similar vehicle would cost around my buy in as a down, and the lease payment would be at least double what my annual cost is for repairs. And the repair number is worst case. So for me, even with "exorbitant" annual costs, I'm driving a 1%'er car on Camry coin.

This, of course, discounts the inconvenience factor. While Mercedes gives roadside assistance for life no matter whether you're the original owner or not, when my car is down I don't get a loaner. Multicar household, though, so not a crisis.

And as posted above, if you don't defer maintenance, cars can routinely go 2-300k today. But you can't skimp-ie trans fluid changes etc need to be done religiously even if the manufacturer claims they're "sealed for life" as a marketing ploy.

11/24/15 2:52 PM

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Why would I be willing to do this?

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11/24/15 3:06 PM

For a lot of people, the inconvenience factor isn't so much the down TIME. One can get a loaner car from Enterprise for $20/day, which isn't a big deal. But the unpredictablity of it is. My car, for example, had me stranded in Maine once. Then forced me to modify another trip due to electrical issues.

As cars get older, sometimes it isn't just the major repairs costing a lot, but also the collection of smaller repairs which really eats into the enjoyment of it. Though I think that's when the luxury brand starts to shine there...

11/24/15 3:09 PM

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My car, for example, had me stranded in Maine once. Then forced me to modify another trip due to electrical issues.

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11/24/15 5:20 PM

For me (and my wife) the risk of being stranded on a trip outweighs possible cost savings of making the car last longer. That said the probability of such an event is very fuzzy for any given trip so it really comes back to gut feel. We are a two car household but we don't put much more than 10K miles per year on both cars combined. The result is that we buy a used car (typically 2-3 years old) every few years and sell them when they get about 10 years old. They are not high mileage cars when we sell them (or buy them) but at that age we are more comfortable just passing them along to the next owner in the chain.
The short answer is that you can only vaguely predict annual repair cost and like cooking frogs, it can creep up on you. IMO the math doesn't exist on a personal level - only in the abstract.

11/24/15 5:49 PM

I tend to accept the multiple analyses that have concluded that it's almost always cheaper to keep a car on the road than buy a new one, but I don't really care as I'm more concerned about the inconvenience of taking a car in for repairs (let alone downtime). So I buy a new car and 7-10 years later conclude it's time to get another one, and do so. Generally for whatever reason there is just one car I want, and I get that one. The only car I have test driven and not bought was a new generation Saab 9-5, which I would have bought if I thought the company would survive. But I didn't so I got an A4.

11/24/15 8:05 PM

I will never buy a new car again. I tend to do what Greg does, buy a car with anywhere from 25K to 60K miles, and keep them until about 130-140K miles. For me that is approximately 7-8 years, depending on starting mileage.

I bought a 3 year old BMW M3 (2003) in 2006 for $23k. It had 32K miles and origianlly cost $55K. I still have it and it now has 55K miles.

I bought a 07 BMW 530xi with 25K miles for $25K. Loved the car, but wanted the wagon version, so I sold it with 44K miles for $22.5K. This car listed for $55K new.

My wife's car is an 08 G35x. Bought it in 09 with 28K miles. We still have it and now it has 87K miles.

New cars are just so costly IMHO. Even a new Corrolla, a pretty basic car, with a modest amount of stuff is $21K. A decent to/fro car, but I don't fit and it isn't comfortable for any length of time. So I opt to get a comfy car that has leather heated seats, a decent sound system, and some other niceities.

As far as, sell or keep, that is a toughy. I look at it this way. If I spend about $2K each year to keep a solid car running that I like and it comfy and has the stuff I like, I keep it until the cost to own is about 25% of the estimated book value. Then I sell it and repeat the process.

11/24/15 9:04 PM

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(You are more tolerant than me.)

That's unforgivable in my book.

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And you still want another BMW?

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11/25/15 12:13 AM

I've not known a good older car not to be reliable, as long as (per Jesus Saves advice) problems are not allowed to linger and accumulate, and as long as key maintenance items are attended to religiously on time.

Exceptions might include my 1980's Audi, which had unreliable major and minor assemblies that could cause money bleed.

But a subsequent (new) Isuzu purchase in early '89 has never, ever let me down in nearly 27 years, and has cost next to nothing to maintain, really next to nothing.
Even the one time that I ran it out of gas on the freeway passing through one of the rougher sections of Los Angeles, I coasted it nearly into a gas station two blocks from the freeway!
Of course I'm a cyclist and a bicycle commuter, so mileage to date has only amounted to 160k.

11/25/15 5:47 AM

What dddd said, exactly. In my years of driving "junk" luxury cars, I've been stranded exactly once, by a blown head gasket in a Benz, and it was my own fault as I was aware of symptoms and had been putting off the repair.

You need to maintain the cars, proactively. If you treat them as disposable, they'll bite you. But the basic structure of most modern vehicles is such that 100k maintained cars are as reliable as 30k cars, with rare exception. Even cars with terrible reps (A4 and 6 Audis for example) are ok if you keep at them. The Audi's are a giant pain to work on though, too tightly packaged.

My one complaint is with early to mid 2000's German interiors. They used a latex paint on many of the interior surfaces for environmental reasons and to get a "soft" feel, and the stuff flakes like crazy. Ditto the general stuff in same era Bimmers, leather isn't up to snuff, headliners fall, dashes crack etc. VAG cars and Benz's hold up much, much better.

Personal preference is for cars without integrated nav/infotainment and other electric geegaws. That stuff breaks and is expensive. While its not essential, I hate having cars with stuff that doesn't work, hence I avoid them. Its why I like pre 2000 stuff, although finding it with lower mileage gets hard. Lots in Fla and Az though, old folks Benz's out of estates.

11/25/15 6:54 AM

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Personal preference is for cars without integrated nav/infotainment and other electric geegaws. That stuff breaks and is expensive. While its not essential, I hate having cars with stuff that doesn't work,

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11/25/15 7:44 AM

A driver for my son's transportation program uses this strategy: go to an auction, spend ~$1000+, do the initial maintenance to make it solid, drive it for a year. Repeat annually.

Granted his market segment is different, but his plan has its strengths.

11/25/15 10:14 AM

The appeal of buying a brand new car, or one that's "certified pre-owned", is no initial down time to catch up on maintenance.

Most people don't actually SKIP scheduled maintenance. But people do often delay the work, typically due to schedule conflicts.

For those who're in a 1-car family, that down time IS significant. And that applies to on-going routine maintenace down the road too. (that only applies to those of us who don't do the work ourselves, otherwise, there's real not a "down" time)

If my car's due for oil change in the middle of summer, I have to devote a Saturday to bring it to the shop to get it done. So if the weather is great for riding, the oil change may get postponed for another week, then another week... you get the idea.

So the frequency of repair can turn out to be a factor even though the repair is not cost prohibitive. When a car gets to an age that requires more frequent albeit minor repairs, the joy of ownership starts to fade...

I'm not one who WANTS all the new gadgets in a newer car. So for as long as the car remains relatively trouble free, I tend to keep running it. The high cost of newer cars are a big deterrance to changing cars too frequently. For my last 2 cars (Camry & BMW), I trade them in in large part because there's something I'm unsatisfied with them: the Camry snow performance, the Bimmer frequent dented rims. So I'm not the least bit motivated to try to keep them running till them become dust. In fact, that explains why I'm most motivated to change car in late fall. I don't want to go through another winter when I'm quite likely dent another rim or two!

11/25/15 10:40 AM

Frequent dented rims is a consequence of the trend towards 40 and 30 series tires. Crisper handling but much much less rim protection.

11/25/15 11:52 AM

And totally less forging ride. We are farts when it comes to big low pressures on bikes and cars. ;) Even the Del Sol had 65s

11/25/15 3:40 PM

I think I've mentioned this in the past, but when sticking with the same car over several sets of tires, one becomes familiar with the tire pressure of front and rear tires which gives even tread wear over their lifetimes. And I found that pressure to be just a couple of pounds higher than specified, though this mostly reflects the 2-3 lbs lost over the course of each 6-8 weeks before re-topping.

Maintaining full recommended pressure at all times also helps prevent rim dings.

I keep a known-good air guage on hand at all times, and use a floor pump to correct pressures myself. There are even times when I'm on the road somewhere, finding myself killing time, perhaps waiting for someone after I try to arrive a little early.
And that is a great time to check the fluids and tire pressures, since I stash a spare floor pump permanently in my truck. The pump is also handy for inflating a slow leaking tire or topping up a needed compact spare that hasn't been looked at for five years. And of course it is always on hand for pressure adjustments when I drive to a CX race, where "crashing" more-rigid barriers can necessitate a few extra pounds.