When to replace an old car
August 29, 2005 11:02 AM Subscribe
At what point is it not worth putting any more money into keeping an old car running, and just going out and getting a new one? What's the equation?
I'm driving a '91 Volvo 240 wagon, and as my mechanic tells me, this Swedish battlewagon will probably still run fine the day they tow it off to the junkyard because all the rest of it - body, etc - has slowly fallen to pieces. I'm wondering - especially with gas getting so pricey (I get 20 mpg) - when it'll be worth it to just spring for a new (actually, used) car that gets better mileage and doesn't require $500-1000/year in repairs and upkeep.
I'm driving a '91 Volvo 240 wagon, and as my mechanic tells me, this Swedish battlewagon will probably still run fine the day they tow it off to the junkyard because all the rest of it - body, etc - has slowly fallen to pieces. I'm wondering - especially with gas getting so pricey (I get 20 mpg) - when it'll be worth it to just spring for a new (actually, used) car that gets better mileage and doesn't require $500-1000/year in repairs and upkeep.
Cost of ownership over time is basically the sum of two curves: Depreciation (i.e. decrease in resale value over time) and Maintenance (cost of repairs and upkeep over time). By looking at the sum of these two curves, you get the cost per day of owning the car. The cost starts out out very high (when you drive a new car off the lot), it reaches an extended minimum between approximately 60K and 130K miles, and then it starts to go back up as the car begins to require expensive repairs. You want to sell the car before it goes back up.
Toyota wrote a very good white paper about this. I will try to locate a link on the web and post it.
That's the general case. The specifics of every car will vary widely, of course. If it's cheap to maintain and it serves your purposes, keep it.
posted by alms at 11:26 AM on August 29, 2005
Toyota wrote a very good white paper about this. I will try to locate a link on the web and post it.
That's the general case. The specifics of every car will vary widely, of course. If it's cheap to maintain and it serves your purposes, keep it.
posted by alms at 11:26 AM on August 29, 2005
I've done similar calculations to the one Doohickie is suggesting and found that I was much better served by buying a good used vehicle than a new one.
That being said, when I bought a used vehicle I spent money up front that I was willing to lose to get it inspected by a reputable organization (BCAA), did a lot of research into the history of the vehicle (Carfax, etc.) and checked out the rating of the vehicle model for repair requirements (numerous websites).
In the end, I settled on a '96 Mazda B3000 pickup for a very good price. I could have bought a brand new pickup for about the same reliability, but it would have been many thousands of dollars more. The used pickup was purchased from a dealer that offered a warranty as well, so the benefits of a new vehicle were lessened even further.
posted by Kickstart70 at 11:31 AM on August 29, 2005
That being said, when I bought a used vehicle I spent money up front that I was willing to lose to get it inspected by a reputable organization (BCAA), did a lot of research into the history of the vehicle (Carfax, etc.) and checked out the rating of the vehicle model for repair requirements (numerous websites).
In the end, I settled on a '96 Mazda B3000 pickup for a very good price. I could have bought a brand new pickup for about the same reliability, but it would have been many thousands of dollars more. The used pickup was purchased from a dealer that offered a warranty as well, so the benefits of a new vehicle were lessened even further.
posted by Kickstart70 at 11:31 AM on August 29, 2005
Oh...and I took off two days of my holiday time to make this purchase. It was worth it so that I could make a non-rushed judgement of vehicles. I turned down about 10 trucks before I settled on this one.
posted by Kickstart70 at 11:32 AM on August 29, 2005
posted by Kickstart70 at 11:32 AM on August 29, 2005
Another thing to factor in are insurance and registration costs, which are often cheaper for older cars, and would go up, perhaps significantly, if/when you replace the Volvo with something newer. That $500 to $1000 in repairs and upkeep could get eaten up quite easily just on insurance alone.
posted by ambrosia at 11:34 AM on August 29, 2005
posted by ambrosia at 11:34 AM on August 29, 2005
From a pure dollar amount standpoint it will never be cheaper to buy than fix. Something new and you'll be paying at least $200 a month or $2400 a year. You could beat that on the first year if you replaced the, transmission, clutch, radiator and a few other things all in the same year but what about next year? Barring completely unlikely events you'd be ahead the following year. A new used car makes the math harder but you still over time have the same things in both vehicles that die and need replacing, one just had more up-front money to offset.
Once you factor in annoyance it becomes more subtle. One should also consider safety features, tho at 91 your car has a driver's airbag. Do you normally have someone in the passenger seat? If you you might want to consider the lack of a passenger airbag in the 91s. Or perhaps side curtain airbags matter to you.
Body rust is probably the only thing that could cause a car to be effectively unrepearable, tho if you're a massive cheapskate there's always bondo and primer.
If you're really concerned about price effectiveness the best thing you can do for yourself is pay cash. Car loans are for suckers - you agree to make payments on something that is worth 70% of that purchase price the second you turn off the lot all so you don't have to defer gratification for 3-5 years ONCE. Because if you made payments to yourself for the rest of you life you would be able to use that money to buy new every 3-5 years no different than a loan (once you made it past the first period).
Well, except that you could earn 3-11% every year rather than paying 5-15%.
posted by phearlez at 11:34 AM on August 29, 2005 [2 favorites]
Once you factor in annoyance it becomes more subtle. One should also consider safety features, tho at 91 your car has a driver's airbag. Do you normally have someone in the passenger seat? If you you might want to consider the lack of a passenger airbag in the 91s. Or perhaps side curtain airbags matter to you.
Body rust is probably the only thing that could cause a car to be effectively unrepearable, tho if you're a massive cheapskate there's always bondo and primer.
If you're really concerned about price effectiveness the best thing you can do for yourself is pay cash. Car loans are for suckers - you agree to make payments on something that is worth 70% of that purchase price the second you turn off the lot all so you don't have to defer gratification for 3-5 years ONCE. Because if you made payments to yourself for the rest of you life you would be able to use that money to buy new every 3-5 years no different than a loan (once you made it past the first period).
Well, except that you could earn 3-11% every year rather than paying 5-15%.
posted by phearlez at 11:34 AM on August 29, 2005 [2 favorites]
The Toyota whitepaper is here. (If that link doesn't work, you may need to go here and provide some information about yourself.
posted by alms at 11:37 AM on August 29, 2005
posted by alms at 11:37 AM on August 29, 2005
I pretty much agree with everything phearlez said.
The nice thing about fixing up old beaters is that, in general, once you fix the part that's busted, it's good for at least another 5-10 years. If you're changing the fluids and other degradeable parts on schedule (hoses, gaskets, seals, spark plugs, etc.), the cost of repairs should be minimal, with the occasional "big" repair every 8 years or so (usually in the form of a new fill in the blank pump, but even these can be purchased rebuilt for cheap and will work nearly as good as new).
The big "caveat" is that if any single repair costs more than the price of another used car with low miles and in good condition, then you should move on. There are very few repairs that will cost this much, however. A new engine, or extensive body repairs are the only thing that comes to mind.
posted by Civil_Disobedient at 11:45 AM on August 29, 2005
The nice thing about fixing up old beaters is that, in general, once you fix the part that's busted, it's good for at least another 5-10 years. If you're changing the fluids and other degradeable parts on schedule (hoses, gaskets, seals, spark plugs, etc.), the cost of repairs should be minimal, with the occasional "big" repair every 8 years or so (usually in the form of a new fill in the blank pump, but even these can be purchased rebuilt for cheap and will work nearly as good as new).
The big "caveat" is that if any single repair costs more than the price of another used car with low miles and in good condition, then you should move on. There are very few repairs that will cost this much, however. A new engine, or extensive body repairs are the only thing that comes to mind.
posted by Civil_Disobedient at 11:45 AM on August 29, 2005
Oh, this also assumes that you have a good source for parts, and/or that maintenance parts aren't priced through the roof. With Volvos, I'm not so confident, but you can find parts for used GM/Fords or Mazda/Honda/Toyotas years after they're discontinued or substantially changed.
posted by Civil_Disobedient at 11:49 AM on August 29, 2005
posted by Civil_Disobedient at 11:49 AM on August 29, 2005
CD made me think about one thing important in these circumstances - knowing what repairs are easy to do when doing others. For example, my car has had a small leake from the water pump for the last six months because I knew I'd be doing a timing belt change soon and the belt has to come off to replce the pump. When I get that done I'll also have the belts changed since they come off to do the job anyway.
Happily you don't necessarily need to know these things yourself - A good mechanic will help you strategize repairs to save a few bucks. They're happy to do it since it's in their interest to agree to do these repairs at a reduced rate at the same time: they're doing most of the work anyway, why not make a few more dollars to do this additional job at the same time? A less good mechanic will help you strategize if you prod them about it. Cartalk.com has a mechanic finder with comments and ratings.
posted by phearlez at 12:07 PM on August 29, 2005
Happily you don't necessarily need to know these things yourself - A good mechanic will help you strategize repairs to save a few bucks. They're happy to do it since it's in their interest to agree to do these repairs at a reduced rate at the same time: they're doing most of the work anyway, why not make a few more dollars to do this additional job at the same time? A less good mechanic will help you strategize if you prod them about it. Cartalk.com has a mechanic finder with comments and ratings.
posted by phearlez at 12:07 PM on August 29, 2005
I am basically in the same boat funky. Driving a '92 740 wagon. I scored on the mechanic end of it though. Met a guy at Lowes who is a Volvo mechanic who does sidework. Gets the parts to me at cost and only charges $30/hr for labor. And he only charges actual labor time, not the book labor time.
I had a quote for approx $1000 for front end work (that was going to end the car for me) ball joints, struts, bushings, alignment, some other stuff from a shop, he did it for $320, AND he picked the car up and dropped it off, though that was because he was going to 2 concerts at SPAC on 2 consecutive evenings.
So, as long as he doesn't get hit by a car I am sticking with my brick.
posted by a3matrix at 1:39 PM on August 29, 2005
I had a quote for approx $1000 for front end work (that was going to end the car for me) ball joints, struts, bushings, alignment, some other stuff from a shop, he did it for $320, AND he picked the car up and dropped it off, though that was because he was going to 2 concerts at SPAC on 2 consecutive evenings.
So, as long as he doesn't get hit by a car I am sticking with my brick.
posted by a3matrix at 1:39 PM on August 29, 2005
A few years ago, I did get to the point where repairs on my beater got expensive enough that I decided to buy new. It seemed the car needed about $1500/yr in repairs, which is what I paid for it in the first place. Plus, as someone else mentioned, my risk of getting stranded somewhere was pretty high, so I really didn't feel comfortable using the car for anything other than city driving.
Buying new wasn't really smart from a financial standpoint, since I'm further in the hole than I would be fixing the old car. The smart thing would have been to buy slightly used, since I could have gotten a pretty new car for about 2/3rds the new-car price. As it happens, that would be near the break-even point with my $1500/yr repairs, and I would be able to take my car on road-trips.
posted by adamrice at 1:42 PM on August 29, 2005
Buying new wasn't really smart from a financial standpoint, since I'm further in the hole than I would be fixing the old car. The smart thing would have been to buy slightly used, since I could have gotten a pretty new car for about 2/3rds the new-car price. As it happens, that would be near the break-even point with my $1500/yr repairs, and I would be able to take my car on road-trips.
posted by adamrice at 1:42 PM on August 29, 2005
I see a lot of Volvo wagons rolling around in Austin TX, most of them and their drivers look comfortable. Volvos age well too, minor dings and rust become them as much as a few creaks becomes a good person as they age.
Barring any known future issues, I would keep it. If you need a change, get some quality window tint, maybe a mild stereo system, or go get it detailed. Keeper.
posted by buzzman at 7:18 PM on August 29, 2005
Barring any known future issues, I would keep it. If you need a change, get some quality window tint, maybe a mild stereo system, or go get it detailed. Keeper.
posted by buzzman at 7:18 PM on August 29, 2005
phearlez writes "Body rust is probably the only thing that could cause a car to be effectively unrepearable, tho if you're a massive cheapskate there's always bondo and primer."
Or, if you can avoid feeling the need to keep up with the Jones, skip the plastic. My power wagon won't be winning any beauty awards but I'm only concerned with how it goes rather than how it looks. And in the last three years I've only replaced the u-joints (mind you there are eight of them at ~$20 each).
And I've had it for over ten years and no one has even tried to steal it despite being parked on the street most of it's life. Which is better than anything else I've owned.
posted by Mitheral at 11:07 AM on August 30, 2005
Or, if you can avoid feeling the need to keep up with the Jones, skip the plastic. My power wagon won't be winning any beauty awards but I'm only concerned with how it goes rather than how it looks. And in the last three years I've only replaced the u-joints (mind you there are eight of them at ~$20 each).
And I've had it for over ten years and no one has even tried to steal it despite being parked on the street most of it's life. Which is better than anything else I've owned.
posted by Mitheral at 11:07 AM on August 30, 2005
I've got a big old dent some SUVillan put in my miata that I don't bother to repair for similar reasons but I am reluctant to let rust progress unabated. You don't have to bondo it but I wouldn't let a hole continue unprimed. I agree, it's a wonderfully liberating feeling to not have to worry about where you park, etc.
posted by phearlez at 11:38 AM on August 30, 2005
posted by phearlez at 11:38 AM on August 30, 2005
This thread is closed to new comments.
One thing that does not have a hard dollar value is the faith you have in the car: How likely is it to leave you stranded? How bad could it get if you were stranded? (Do you often make long trips?) That kind of stuff.
posted by Doohickie at 11:25 AM on August 29, 2005