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I challenge you to find me one verifiable instance where someone spent an additional $28K over five years keeping a used $12K car on the road, not counting regular maintenance, registration, and insurance which would have to be paid even on a brand new car. Heck, I'm willing to bet that you can't find one that costs that much to keep on the road even including those items.
I think I can easily win that bet. But I am referring to my courier vehicle, not a car used for commuting and running errands. I spent something more than $29,300 for repairs and maintenance in the five years ending this month, on a VW Golf TDI worth about $5,000 or so when I started. Insurance was extra, so was about $23,000 for fuel.
Total cost of ownership has been a bit over $0.19 not counting insurance, for the last five years. There really hasn't been any further depreciation; though it has a few more scratches and tiny dings, it still looks okay. I don't think there is any other car that would be so cheap to drive, about 50,000 miles a year, for most every year of the last thirteen.
I've never really considered replacing it. It is super-reliable, holds a lot of cargo for its size, and it's still a lot of fun to drive. (Various modifications have raised both HP and torque by 60%+)
You are ignoring depreciation, which if often (if not usually) a greater expense than all other expenses combined. New cars always depreciate faster than used ones. Always.
In five years, the used car costing $12k may be worth $5k if it was very well cared for; or it could be worth $300 or so if sold to a wrecking yard.
But the $30k new car will depreciate somewhere between 45% and 55%. So will only be worth as little as $13k if it was well cared for, and considerably less if it was not. More money spent on maintenance and timely repairs usually pays for itself in a higher resale value.
I'm confused by this - your example shows the same rate of depreciation for both the new and the used car. You're also overestimating the amount of depreciation on a new car (depending on the make and model).
I think I can easily win that bet. But I am referring to my courier vehicle, not a car used for commuting and running errands. I spent something more than $29,300 for repairs and maintenance in the five years ending this month, on a VW Golf TDI worth about $5,000 or so when I started. Insurance was extra, so was about $23,000 for fuel.
Total cost of ownership has been a bit over $0.19 not counting insurance, for the last five years. There really hasn't been any further depreciation; though it has a few more scratches and tiny dings, it still looks okay. I don't think there is any other car that would be so cheap to drive, about 50,000 miles a year, for most every year of the last thirteen.
I've never really considered replacing it. It is super-reliable, holds a lot of cargo for its size, and it's still a lot of fun to drive. (Various modifications have raised both HP and torque by 60%+)
You spent almost $6000 per year , for 5 years, to repair and maintain a $5000 car and you call it reliable???!? I'm surprised you're not embarrassed to post about it. Am I missing something???
You spent almost $6000 per year , for 5 years, to repair and maintain a $5000 car and you call it reliable???!? I'm surprised you're not embarrassed to post about it. Am I missing something???
I'm assuming based on the last line, he modified it to his tastes and is including that cost in "keeping it on the road".
I think I can easily win that bet. But I am referring to my courier vehicle, not a car used for commuting and running errands. I spent something more than $29,300 for repairs and maintenance in the five years ending this month, on a VW Golf TDI worth about $5,000 or so when I started. Insurance was extra, so was about $23,000 for fuel.
Total cost of ownership has been a bit over $0.19 not counting insurance, for the last five years. There really hasn't been any further depreciation; though it has a few more scratches and tiny dings, it still looks okay. I don't think there is any other car that would be so cheap to drive , about 50,000 miles a year, for most every year of the last thirteen.
I've never really considered replacing it. It is super-reliable, holds a lot of cargo for its size, and it's still a lot of fun to drive. (Various modifications have raised both HP and torque by 60%+)
I don't think many other cars would have been as expensive to drive.
I can think of many ways to hit 250k miles for less than $35,000.
I don't think many other cars would have been as expensive to drive.
I can think of many ways to hit 250k miles for less than $35,000.
I don't see how. That's $0.14 per mile. When I worked out the all-in cost for my car doing 12,000 miles per year, I got $0.85/mile. A late model Corolla might be half that since it's less depreciation and better fuel economy. You still have to pay insurance, registration & inspection, property taxes in many states, tires, brakes, fluid changes, filter changes, etc. I suppose if you drive 40,000 miles per year in an econobox and do all your own maintanance and repairs, you could drop the cost per mile down close to that $0.14/mile but you wouldn't have grown-up's insurance with proper liability, medical, comprehensive, and collision coverage. You'd have a teenager's policy where if you hit something with your car, the lawsuit would take your house and drain your savings to zero.
I don't see how. That's $0.14 per mile. When I worked out the all-in cost for my car doing 12,000 miles per year, I got $0.85/mile. A late model Corolla might be half that since it's less depreciation and better fuel economy. You still have to pay insurance, registration & inspection, property taxes in many states, tires, brakes, fluid changes, filter changes, etc. I suppose if you drive 40,000 miles per year in an econobox and do all your own maintanance and repairs, you could drop the cost per mile down close to that $0.14/mile but you wouldn't have grown-up's insurance with proper liability, medical, comprehensive, and collision coverage. You'd have a teenager's policy where if you hit something with your car, the lawsuit would take your house and drain your savings to zero.
His $35,000 estimate was only including cost of car and repairs. He is adding another $30,000 or so in fuel and insurance based on his post.
His $35,000 estimate was only including cost of car and repairs. He is adding another $30,000 or so in fuel and insurance based on his post.
So 250k in five years for $65,000.
I may be changing from a really sweet telecommuting job where I'm doing 12,000 miles per year of personal driving to a huge commute. I penciled in $10K/year in extra automobile costs. That's above and beyond the fixed costs like insurance, registration, and inspection. $65K looks about right to me. Maybe a little high for a compact diesel sedan but for a $35K car that gets 25-ish MPG, that's what my costs would look like.
I may be looking at it wrong. I've been traveling an average of 2500 miles a month for several years now and I haven't dealt with that high of vehicle cost yet.
Was having this discussion with someone...I was of the opinion that you shouldn't buy a car more than 25% of your annual gross income IF you have no debts besides a mortgage. If you have debts that number goes lower.
So, if you make $100,000/yr with no debts then buy a car for $25,000 out the door, i.e. a Toyota Corolla LE or similar. If you make $150,000/yr perhaps a Acura ILX or similar.
Someone else thought that was ludicrous! He thought a person with average debts ($500-600/mo.) and income of around $40,000 can easily afford to buy a car for $30k otd.
All above assuming single/married household with typical living expenses (rent, utilities, discretionary etc.)
Well, there's afford and is it a good idea. I'm not much over the 25% gross mark although I don't quite make $80k/yr. I could certainly afford to pay the car payment on something that costs 3x that without worrying about. My only other debt is student loans and even then $900/mo wouldn't exactly be hard for me to pay. It'd be money I couldn't use for other things though, so while I could afford it I don't want to. I'd really have to watch my spending everywhere else or it would impact my saving rate.
I mean, put it this way. If I wanted roommates and a $60,000 car that would work out to be cheaper than a $20,000 car. I'd rather not have roommates and am willing to pay an extra $600/mo in rent plus all of the utilities not to have them. To me that isn't any stupider than paying for a $60,000 car instead of a $20,000 one. Kids change that but there's no reason someone who is single without kids like I am needs their own place anymore than they need a $60,000 car.
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