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Depends pretty much on how much you drive. At work I noticed two people not driving big cars at the moment, but when you have a full size turbo-diesel pickup or Tahoe and drive 25-30 miles each way to work, that's expensive.
I will try to keep my cars until they stop working. Not having a payment saves a lot of money. However, anyone trying to buy a car, if they can get those low interest rates 3 or 4% or less (I saw 0% for 5 years on new trucks, no surprise). This is actually even money (since savings only get around 3%), and a very good deal. I don't think I'd buy a new car without those good rates, probably a 2 year old or so used car.
Of course in calculations, you have to consider insurance and maintenance, etc...
Figure out what you need to transport, how often and how far. Then buy a used vehicle that fits the use. It seems that the bottom of the cost per mile curve is 5 ys old with about 100k miles. Plan on spending about 1k or so catching up on the maintainence and new tires. Then keep the vehicle for another 5 -7 years with one major repair before the rust demons destroy it.
I don't drive much anymore, I work from home. My beloved Green Machine sits in my garage or my driveway most of the time. Maybe twice a week I get out.
I think at this point it would be a luxury I can't afford to get a new car, even if I bought it with cash. It would make FAR more sense to use that cash toward the gas, because as someone said, we don't know that gas prices won't have come down in a year.
My truck is in good working condition, I have never had a mechanical problem with it.
Even when I start back to school, I don't have that far to drive and it should only be twice a week that I go to class, either Monday and Wednesday or Tuesday and Thursday.
Yes I want to be better to the environment, but I also don't want to fall into the hole of rabid consumerism. I don't NEED a new car. I can use the money on the higher gas. When I am out of school and working then I can justify buying a new car.
mmm, why did my post get deleted for the stated reason "obviously didn't read the thread" when now I come back a few days later and there are posts very similar to mine all through this thread...
I traded my 2000 Sentra for an 08 Prius, even though the Sentra had no problems, got about 28 mpg., and was paid for. I generally keep my cars a long time.
The main reason I got a new car was the need for more space - had twin babies, car seats and stroller didn't fit well in the Sentra. I looked at minivans, but gas mileage was much lower than the Sentra. The Prius had the room we needed, was a bit cheaper than a minivan, and the MPG was much better than a minivan and the Sentra. Obviously the gas savings (I've figured about $65 a month) don't cover the car payment, but in 4 years it'll be paid for and if gas is $5 or $6 per gallon by then, I'll be in good shape.
I recently traded in my 2004 ford escape for a 2013 Toyota Yaris. My escape was paid off ....BUT I knew I was facing about $2000 in repairs within the next 3 months or so to keep the car running. Although I have enjoyed the ford, looking back I realized that for the past two years, I had some kind of repair about every 6 to 8 weeks...and the cost always seemed to hover between $300-$400. I finally decided enough is enough. I actually got a great deal on the Yaris after trading in my ford. The ford gas mileage was about half the rate of the yaris.....so I'm pretty happy about that. When I looked back at the pattern of constant repairs on the escape, I realized I was probably spending about as much as a car payment....which on the Yaris is $190 per month, although I am making double payments to get it paid off fast.
I suppose I could have just continued to dump money into a 10-year-old car that is giving me problems pretty consistently...or start fresh with something new and economical. I'm really happy with my choice. In my perfect world, I would have kept my escape and fixed everything a little bit at a time and kept it as a second car....but I decided against that plan and just start fresh.
I do miss the space (sigh)...but I won't miss my higher gas and repair bill.
Figure out what you need to transport, how often and how far. Then buy a used vehicle that fits the use. It seems that the bottom of the cost per mile curve is 5 ys old with about 100k miles. Plan on spending about 1k or so catching up on the maintainence and new tires. Then keep the vehicle for another 5 -7 years with one major repair before the rust demons destroy it.
Buy transport , not ego.
I like cars. The only current vehicle I've bought to transport stuff is my old Suburban. The rest of them are about making me happy. I have to like what I drive. Sometimes that's new, sometimes thats used. Sometimes it's "economical" sometimes not.
There are several important components to vehicle ownership: financing costs, depreciation, operating costs, and fixed (or holding) costs. Where most people absolutely get killed is depreciation--especially those who trade often. Operating costs are just that--the costs associated with maintaining the vehicle and fueling it. Finally, there's holding costs--licensing and insurance being two biggies in that category. Financing costs can be a killer is the vehicle is purchased with borrowed money, but even when buying with cash, the lost interest on that money has to be counted.
So, buying a vehicle SOLELY to save money on fuel is usually not wise because the hit on depreciation when selling the old vehicle, additional financing costs, and, in some cases, holding costs can more than eat up the fuel savings. The best philosophy, in my opinion and the one that I have used over the years, is to buy a vehicle and keep it for most of its physical life--usually at least 10 years, if not more. When I replace such a vehicle, I look for one that will meet my needs that has the best combination of purchase value, fuel economy, reliability, and longevity.
Another option for a person with a low fuel economy vehicle (a truck, for example) that still has remaining physical life and utility for the owner is to purchase a second fuel efficient vehicle and hold onto the older vehicle for its utility and more occasional use. That, however, requires a careful analysis of holding costs. For example, it may not make sense for a person who lives in a state with high vehicle registration fees or a person who, for whatever reason, has very high auto insurance premiums.
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