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I think we can all agree that even with a used car, there has to be a line in the sand at some point in the future when it is no longer economically feasible to try and keep the car running. That goes for anything mechanical, because everything has a useful life expectancy. But those lines can be much further away than 36 months.
What I have found often though is many think that because something hits 70k miles, or 100k miles that it is beyond it's useful life and is time to be replaced. Dealerships have done a very good job marketing to the point that people believe this enough to continuously lease or trade-in a vehicle. Couple that with the high price of a new car, and many will find a way to satisfy the urge for a new car with a lease. And sometimes that's ok, but sometimes it's not the best decision to make.
Credit scores play a lot into whether or not leasing is a good financial decision. Someone with a lower credit score that has trouble keeping up with their finances may look at a lease as lucrative because it scratches the immediate itch to have something nice and "trouble free" today within their monthly budget, but they fail to look at their specific situation long term and the long term impact to their debt to income ratio. Many (and I have a few friends who have said this) will say "We'll worry about that when the lease is up".
In the end it has come back to bite them. Someone mentioned looking at your ROI as well, but for a lot of people there are no investments so it doesn't apply. Too many are strictly looking at how much they can afford to spend this month before hitting 0 in the bank account. Not the overall impact to their long term financial situation.
Typically now that is what a Power train warranty goes up to, 60k or 100K and if anything happens after that point, those huge repair bills are on them. This is why you see so many Hybrids for sale at the 7 yr mark when the 100K coverage is up, there may be nothing wrong with it, but the fear for $4000 battery scares them.
Eventhough many will say modern cars easily go the 200K if maintained, sadly many of the problems you see on alot of car forums are between that 100-150K mileage mark, where you see timing chains starting to fail on some models, CVT's failing, random engine parts failing and being quoted $3000+ to repair something you probably have 2-3 more years of payments on. Just about any car now can go 70-100K with almost no problems, but after that 4-5yr mark, it just seems like things start to go and it feels like most cars now are just designed to have a 6-7r life span of reliability, which seems to also be the time when most people get tired of their car and want to try something different too. It seems to be the norm is this country to make 6-7yrs of payments and then trade it in when you are done.
You reach a point when you are paying for so many repairs that you practically have a car payment anyway. Then it's time to trade. Unlike the OP I would never pay $40K for anything. I buy used, usually a couple of years old. The car is new enough that you shouldn't have a lot of problems with it (if you buy a reliable model), but old enough that most of the heavy depreciation is past.
You reach a point when you are paying for so many repairs that you practically have a car payment anyway. Then it's time to trade. Unlike the OP I would never pay $40K for anything. I buy used, usually a couple of years old. The car is new enough that you shouldn't have a lot of problems with it (if you buy a reliable model), but old enough that most of the heavy depreciation is past.
This is what many who hate car payments or believe in car payments at all dont seem to realize owning a older car. A old car needing a transmission costing $3-4000, suspension work of $1000, new brakes and rotors $500, Tires $400-800, random failures like fuel pumps or other components running a minimum of $300-500 to get fixed that can all come back to back if a car wasnt maintained properly or has crossed the 150-200k mile in which things has passed their usable lifespan.
While it wouldnt be more than 1-2yrs tops worth of car payments, because if you pay $3-8000 for many repeated repairs many times on a car, you should have a almost new car that should run for years when those repairs are done. But $3000 to even $8 or 10K, is still cheaper than 60-84 months of $300-500 payments, so assuming the car will still be worth $5-10k after repairs, it makes sense to do repairs, but many people dont have $3-5K+ sitting around for major car repairs.
Yeah, my old Scirocco beats it handily, with gas-tires-oil costing me about 10 cents per mile, and the car, bought for $1000 in 2002, is still as good and worth more than that 15 years later. But you live in the black heart of Rust Country, and I don't. The car you bought new in 03 is now a rusty heap, soon you will have enough rust it's not roadworthy. Rust never sleeps. The car I bought old and used in 02 looks about the same as it did when I bought it, and runs much better. I never paid a cent in depreciation.
How many miles do you drive annually, and how many miles does it have in total?
How many miles do you drive annually, and how many miles does it have in total?
To work, 40 miles one way, so that's 400 miles a week just to work, times 50 weeks say, so about 20 to 25K per year. (20K assumes I go no where but work with this rig, which is not strictly true, but most of the miles are to/from work).
Total mileage on the body is unknown, beyond to say, a lot. The car came to me with what I think was the instrument cluster from a 5-cylinder Audi of the same vintage, the tach read about 4/5 of actual RPM. I drove like that for about 100K miles, not knowing any better about the cluster being incorrect for the car. That cluster had other issues, gas gauge worked only intermittently, speedo read way high, at an indicated 70 I was going about 55, so I got another, correct cluster and installed it, that cluster started with 250K showing, and now I am at 383K. Between that first cluster and this one I want to say I put on 200K easy. Just before I bought the car, the previous owner tore down the engine, put in rings and bearings, new clutch (said that was all it needed), so I have that.
Another estimate would be in 15 years of driving just to/from work, say 20K per year, well, that's 300K if I am doing the maths right in my head. Of course that would be if I only ever drove this car to work, which is not 100% true, have several other cars, so probably closer to 200K.
Not bad for a $1000 car IMHO. Although it's not really the car I bought for $1000 anymore, I have done a lot of repairs and some limited modifications ("Double Barrel" instead of "Toilet Bowl" exhaust manifold, GTI front brakes, relay-operated headlights, LED turn signal/running/brake lights, replaced a couple of head gaskets over time, replaced the bent rear "wishbone" axle that it came to me with, replaced or cleaned up a lot of high-resistance connections in the wiring, fixed many vacuum leaks). Have worn out several sets of tires, mostly anymore I use Michelin Defenders, because this seems to be the highest-spec 13" tire still made, and for the intended purpose of the car, it's a decent choice. Likewise several sets of brake pads and shoes.
I run Redline MTL in the tranny, 10-40 Redline in the engine, and a Pure-1 filter, 15K mile OCI. I run 90 octane Conoco no-ethanol gas exclusively. (The 90 octane Conoco is the best priced and most widely available ethanol free fuel around here, there is Chevron 92 available at some card locks, which I will run in my bikes when I get them back on the road, but I digress) Typically on summer fuel I get 40 to maybe 41 MPG, not driving like I stole it, but not doing the "eco-geek" thing either.
That is not advice, that is "this is how I spend my money." Nothing wrong with it, but it is not advice.
But if I were to nitpick, I would point out the fact that the poster left out several factors, such as;
- not everyone is trying to go low ball on cars, many people like spending on cars
- many people may have easy access to a $200/mth car payment, but not $2000 for a transmission repair, especially after dropping $300 on a wheel bearing repair a week before
- a lot of people who are low income and should be working on their own car, often do not have the tools, nor live in a place that allows it like an apartment complex
- some people, like me, desire newer cars if for anything, the increased safety features
But bottom line, it is not advice, it is someone who is saying how they spend their money, no different than me making a post about buying an IKEA sofa over something more expensive because after all, you are just sitting on it. There is also nothing wrong with debt, do not know why so many people go bonkers over it, as if their life will stop if they take on debt.
That is an impressive number of miles for a VW gasoline engine from that era. I think I do the same with my cars: drive them a lot, fix the stuff that needs fixing, make incremental improvements so that the car is better than new (at least in some respects). One Mk4 Golf TDI has a little rust, it was like that when I bought it; the other Mk4 Golf TDI is rust-free, I bought it new in California so it spent the first five years there. Both run better than new.
While it wouldnt be more than 1-2yrs tops worth of car payments, because if you pay $3-8000 for many repeated repairs many times on a car, you should have a almost new car that should run for years when those repairs are done. But $3000 to even $8 or 10K, is still cheaper than 60-84 months of $300-500 payments, so assuming the car will still be worth $5-10k after repairs, it makes sense to do repairs, but many people dont have $3-5K+ sitting around for major car repairs.
What a car is "worth" in $$$$$ is a false assumption based on imaginary facts. Any car has values long as can be used to serve your needs.
Here's my 1999 F250. This pic was taken last year. Truck looks the same except it has a different camper and winch bumper. 180,000 miles. Runs and looks perfect. Still can sell it for 13-14k. Requires nothing more than maintenance. Current cost to replace with new 65,000. With a few year old used around 4o-45k. And newer diesels are high maintenance and repair bills.
Most cars turn to hoopties because of a simple fact. Owner not having the money to maintain or repair it after the purchase or it's a second hand vehicke and just don't care. Then it becomes a domino effect. I appreciate Retired in Illinois post about my thoughts on cars.
But if you maintain your car and fix issues cars can last a long long time.
My wife's Infiniti looks brand new. It's a 04 with 175,000. We're selling it in a year and buying new. Our other car was a 04 Kia with 72,000 miles. Looked flawless like new. The few things that broke we fixed. Car was a great runner all these years. We sold it only because I needed the room and I was up to six cars
I sell at 200,000 miles if I feel the car is going to have problems. My diesels I'm keeping well past that mileage simply because the replacement cost is high dont need to spend 65,000 when my trucks do the same job.
My 01 recently went on a 1200 mile basically stop for fuel or switch drivers trip. Ran flawless no issues.. It has 165,000 miles on it.
Sure if you got a $1000 beater your the 7th owner this may not apply to you as your car is most likely a pos. My cars are all 14-19 years old but look new. I have no car payment.
To each his own this is just my opinion. It's worked well for me over the years.
Those old Fords hold a good value but you'll dump quite a bit of money into keeping them on the road once they get to that age. My mom has an early 99 7.3 F250 very similar to that one they use to pull their horse trailer and they have had it probably 10 years but not without some pretty expensive repair bills along the way. Old trucks always need something and are basically a part time hobby to keep up with, which is why most of them fall into disrepair as they get passed down the line.
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