When does it make most financial sense to ditch old car for new(er)? (truck, buy)
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Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by Ultrarunner
I've never had a car note... never intend to.
Never had, never will... (and drive a $35 dollar car ...that is just fine 4 me!)
I did sacrifice and buy the spouse a $25,000 'woman's' motorhome. That was a good idea, I needed the POINTS!!! after 30 yrs w/o AC / PS / electric windows... It will last through her short RV yrs (ill), then I will give it an honorable discharge. I will stay with my beaters, and vintage motorcycles. They are all VERY cheap and easy to keep repaired. If they ever break beyond repair... it will not be a crisis to get rid of a $35 car, and I have plenty of spares.
I never intend on living where I would need AC in a car. My SA house is EMPTY May - Sept, and in Thailand I ride a scooter. (better in traffic, so I can get in front of the cars and buses and race light to light!)
Clunker depreciation is irrelevant as it is going to be driven as long as economically feasible, then given to charity where it will become a tax deduction.
For most people it should be in the calculations...
If I continue drive my older car it is worth less each year and I can't factor in new car depreciation and not factor in what the old car is depreciating...
For most people it should be in the calculations...
If I continue drive my older car it is worth less each year and I can't factor in new car depreciation and not factor in what the old car is depreciating...
Old cars don't depreciate forever. Any clunker that is still running and can still pass whatever safety inspection is required by the state is worth a bottom price depending on the local market. Generally that car is worth at least $2,000 in any metropolitan areas.
The clunker is depreciating also...Probably at a slower pace than a new car, but should still be factored in..
Clunker depreciation currently running at estimated $800 annually. But as the others said in 2-3 years the depreciation will be basically zero as long as the car drives and passes emissions test which is not that hard.
Interesting argument between Ralph & Nicole. This would be my financial conclusion for what the "true and real" new(er) car costs are. You should take into account depreciation, interest and the difference in insurance and registration/taxes vs. the old clunker. Example calculation for AZ (my state) and a newer car bought for 20k:
Registration/taxes: run annually ~$150 more than current old clunker Insurance: no difference as higher collision premiums are compensated by lower liability insurance (older cars always more risky and expensive)
Depreciation: I estimate car loses 45% of value every 3 years, so 9,500 out of 20k or annually $3,167
Interest on car loan: as rates are 3% or less I would estimate annual interest at $150 p.a.
So the new(er) car would cost me ~$3,467 annually before any unusual repairs. Even if I put in $2,000 in repairs into our old clunker I will still be ahead financially. However I will still ride the old clunker. That's my financial calculation. Now: rip it apart!
There's no truth to that at all. My car is 16 years old and my liability has not gone up as the car ages. I have no tickets, 1 minor accident and I've been with my company for 2 decades. That's what counts, not age of car. My insurance now is less than $40 a month. If I were to get a new car, it would be a couple of hundred, there''s no way it's even close to even money.
There's no truth to that at all. My car is 16 years old and my liability has not gone up as the car ages. I have no tickets, 1 minor accident and I've been with my company for 2 decades. That's what counts, not age of car. My insurance now is less than $40 a month. If I were to get a new car, it would be a couple of hundred, there''s no way it's even close to even money.
Crap. What am I doing wrong? Mine goes up every year, without tickets or accidents. Maybe I have to talk to the agent.
2.2k for struts brakes and minor tune. Those are normal wear and tear maintenance.
Lets talk repairs.
What are you gonna do when that tranny start to slip? Another 1.5k that's repair to keep it running
What are you gonna do when that front axle snap? 250? That's repair. To keep it running.
What are you gonna do when that AC compressor locked up? 700? That's repair to keep you cool.
What are you gonna do when that alternator goes out. 300? That's repair.
That water pump leak. Another 300?
Those are hypothetical questions to you as an owner cause its very real.
If all of that do happen. You will have to fix it because it s necessary to keep the car running.
Before you know it. You ll be out 5k in cash. And your vehicle is still worth 4-5k? But it doesn't end there.
Repairs continue to rack up. Your car only get older.
But what's more annoying is inconvenient, gotta be towed to the shop. Gotta be in the shop for 3 days.
You gotta find a ride cause your cars in the shop.
Hope I didn't ruin anyone's day. Jus something to think about.
I've never spent $2200 on car repairs. Owned 12 cars since 1976. Bought most new and drove them until they were ready for the junkyard. Worst car I owned was a 1978 Camaro that I bought new and only had for 3 years. Most common problem I have had with GM cars is the intake manifold gasket. Driving a 2000 Honda Civic with 246K miles and never spent more than $500 on a repair.
Tranny start to slip: had this happen on all GM cars, 86 Cutlass with 113K miles & 97 Bonneville with 230K miles. Key is to find a good independent factory trained transmission guy.
front axle snap: had one snap on the 78 Camaro when I slid into a guard rail.
AC compressor locked up: never happened; just recharged a 98 Bonneville with a $27 bottle of refrigerant from Walmart
alternator: never had one go
water pump leak: never had one
The key is to find someone you trust who will work on your car if you can't. Also key to have another vehicle you can drive while one is being worked on. A cheap rental is another alternative for a few days.
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