When should I buy a new car?

September 2, 2005 4:52 PM

When should I stop spending money on my car and buy a new(er) vehicle?

Ideally, somebody could give me a handy mathematical relation between Blue Book value, cost of needed repairs, current income, savings, etc. and an explanation, but I'll take any good advice.

posted by nmiell to travel & transportation (8 comments total)

http://ask.metafilter.com/mefi/23309
posted by peep at 5:04 PM on September 2, 2005

Having recently gone through this after retiring my car after ten years of driving it, I can understand the difficulty in making this decision. Unfortunately, I don't think there's a pat mathematical formula. I think it's more a question of a few factors. Are you uncomfortable in your old car? Does it embarrass you to be seen driving it? Does your mechanic have a difficult time finding parts to make repairs? Are repairs more expensive than the value of the car? Do you live in constant fear your car might break down and leave you stranded? Is your car unsafe? Would you be happier in something new? Can you afford a new car without making sacrifices? If you answer yes to more than a few of these questions, I'd say it might be time.
posted by MegoSteve at 5:05 PM on September 2, 2005

I've owned a lot of beaters, and have a higher than average tolerance for being stranded by a vehicle. For me, the equation was simple:

Assume that you know roughly the Fair Market Value of your car, in working condition. You know the cost of repairs that you've done, and you have an estimate for the cost of repairs that are needed.

So... whenever the last six months worth of repairs, plus the estimate for the new repairs exceeds the FMV of the car, it's time to get another car.

FMV - (estimate + previous_repairs) = x
if x < 0, junk car.br>
Be aware that most of the cars for which I used this equation were worth $2,000 or less. Many were $1,000 or less. Some of them lasted for years.

And yes, sometimes this means that it's time to dump the car for what would normally be an inexpensive repair. I sold a diesel volvo to a junkyard once because the clutch cable broke.

Slightly off topic: I have a very reliable 1998 Subaru 2 door for sale in San Francisco for $4500 if you or someone else is so inclined. My email's on my profile page.
posted by toxic at 5:12 PM on September 2, 2005

It figures that the dup would be from the only days this year I didn't have Internet access.

Thanks everyone.
posted by nmiell at 5:31 PM on September 2, 2005

Definitely take insurance into the equation... if you're not doing that already. Other than that, unfortunately for you, I have no words of wisdom.
posted by elisabeth r at 8:20 PM on September 2, 2005

Personally, I have always enjoyed keeping a car driving for as long as possible. Each month the car is useful transporatation, I feel I save a $300.00 car payment. However, there comes a point when the repair is not worth the price of keeping the car. After 10 years, I would sell the older car if:
1. The engine goes
2. The transmission goes
Based on this criteria, it seems naturally to change the oil regularly, if not more often. Also have the transmission checked and the transmission fluid changed at least every 25,000 miles.

Perform these two tasks and chances are your car should last for 200,000 miles.
posted by Mckoan1 at 9:18 PM on September 2, 2005

I think factoring in the fair market value is foolish. While a car is an asset, a used car isn't much of one. It's primary purpose is transportation. Any replacement should thus be viewed as such. If you're wondering "Will a new Bentley be a better investment than my '85 Ford Tempo," the answer is yes.

But that wasn't your question. Your question was, "At what point is it no longer worth it to keep fixing the old one up." Thing is, any used car needs some work. Even if it's merely maintenance items like cam seals or spark plug wires. Unless you're going from an expensive foriegn to a cheap domestic used car, the cost of fixing these problems will be basically the same, regardless of what car you own. And the maintenance will have to be done, whether on your "new" used car, or your old one.

In general, it's only cheaper to get rid of your car when the cost of any single repair is more than the cost of another used car (that's in good shape). That parenthetical comment is important: you can always find a used junker that'll cost as much as a set of new tires, but what's the point if you're going to have to get new tires anyway?

Stuff on my list to "junk it": any serious engine work (rebuilding, head replacement, etc.) or any serious body work (rusted-out floorboards, frame, etc.)
posted by Civil_Disobedient at 5:45 AM on September 3, 2005

Don't forget to account for gas mileage, especially with the cost of gas lately. A new car might pay for itself in a few years if you wind up going to the gas station less often. For example, I traded a Toyota Camry for a Mazda3 about a year ago, and even then the amount I saved on gas was within $10 of making up the difference in my car payments every month.
posted by Jaie at 7:03 AM on September 3, 2005