To Buy or Not To Buy
June 22, 2011 4:59 AM Subscribe
When does it make financial sense to replace a car?
I'm driving a 1990 Mercedes sedan with 200k+ miles on it. The last few years have seen an increasing number of quirks developing, and I figure in the past 5 years I average about $600 a year in unexpected maintenance/repair expenses (ie, not including oil changes, tire replacement, brakes). I keep hearing that you get the most value out of a car by driving it into the ground; that it's almost always cheaper to keep fixing what you've got than to replace it. However, it seems reasonable to believe that I'm due for some kind of major repair work (tranny rebuild, engine mount replacement) or failure that essentially totals the car. So I've been keeping my eyes open for a replacement, with the intent of selling what I've got while it's still fully drivable.. but I keep thinking I can eke just a little more value out of my current car, and not being able to feel really good about replacing it.
I'd like some suggestions for algorithms / formulas to help quantify this decision.
Something like the popular NTY "buy or rent" calculator, except I'm envisioning something that takes your current vehicle info, proposed replacement info, and helps one understand what kind of net monthly/yearly amortized cost difference is actually present. Factors I'd like to see included: year/make/model, insurance cost differences, brand maintenance cost differences (ie, German car maintenance being typically more expensive than Japanese or American), a plausible curve for increasing repair expenses over time, etc. Other things I'm sure I'm not thinking of.. etc.