Keeping car vs buying new (payment, vehicle, savings, average)

[d2mini]

I've had my Audi A3 for almost 5 years so it's almost paid off. Woot!
It only has around 45k miles and I love the car so I was planning to just keep driving and sock away the "payment" each month, saving for an eventual new car.
But now we are moving and my commute is about to triple. I'm expecting to put a solid 30k miles per year on it. IMO, this will cause the equity to drop like a rock. I know a vehicle is not an investment, but I've always been able to sell my cars at their sweet spot of equity, allowing for an upgrade on the next car, keeping payments about the same. This is the first time in my life I will be paying off a car and the first time I like a car enough to want to keep driving it. So i started doing some simple math. Hear me out and then let me know what you think.

Let's use round numbers and just say my car right now would be worth $20k with 45k miles. That's $20k towards the downpayment of another car.

Now let's say I continue to drive it for another two years. The car will have over 105k miles. Let's say it's now worth what???? $13k? Meanwhile, by saving my monthly payment I've saved a total of $10k, but lets remove $1k for some repairs out of warranty. So $9k. Add that to the $13k and I've got $22k for a downpayment on another car.

So if my guesstimations are any where near correct, I'm not coming out ahead by much by holding on to the car. I suppose if I really drive it into the ground I would continue to inch up that saved amount, but being a late model german car (also modified to Stage 2)... not sure how long I can realistically see it lasting before running into major problems.

So overall, would you say that in my case, putting on a lot of miles, I don't have much of an argument either way in keeping vs selling?
Or is there something I'm not thinking about or not calculating correctly?

Something a bit more fuel efficient might make the hassle of getting something new worth it.

TIA.

[Keim]

Yes, you are forgetting the depreciation of the new car you propose buying. Cars depreciate the most in their first year or two. You will lose much more money to depreciation if you buy a new car.

[yellow4yield]

You save money by keeping a car and maintaining it. Even if it needs a new engine for several thousand, that is cheaper than the payments in one year on a new car.

BUT... If you *must* have a reliable car because of work or whatever, then get a new one every so many years. Or own two. Then when one is in the shop, you can drive the other.

[Troof]

Drive the sh*t out of that Audi! 45k miles... she's still a baby.

[d2mini]

Thanks for the replies.

But I'm not seeing how they apply in my case?

I don't see how depreciation comes into play in this case since I'm keeping it for 5 years or more.

And as far as the current mileage, yes... still a baby but that mileage is about to go up dramatically as I've illustrated above. So far, it sounds like my calculations are correct... keeping it for another few years is not doing anything for me financially.

I've been doing some more math.
The savings in gas on a more fuel efficient car could net me another 1.5k in savings per year.

[Keim]

1. My point with depreciation was that you've already lost most of the money you are going to lose on the Audi. It won't depreciate nearly as quickly now. Buy a new car and its worth will drop like a rock for the first few years. You seem to like buying new cars, and appear to be trying to justify it. New cars are NEVER a good investment. They almost always depreciate. Invest your former car payment. Save up til you have cash for the next car, letting your money compound and work for you over a few years.

2. Your more recent comment gives an estimate of 1.5k in fuel savings. So? How much are you spending to purchase that new car at this time? You mention a car payment-so I assume you aren't paying cash. How much will that new debt cost you in a year? I've never seen the numbers work out such that it was worthwhile to sell a car simply to improve economy. Wear out your current car, then get something with better economy.

[d2mini]

This is what I was trying to figure out in the initial post, which I asked everyone to read and see if my math made sense.

If I end up NEEDING a new car in a few years, it seems like I am no more ahead financially having held on to it.

I'm not trying to justify it at all. If you read the first post I said I planned on keeping this car because I really like it. And there is nothing else out there right now I like as much.

[Caltovegas]

Gas is projected to go to a high of $5.00 a gallon soon. Consider the interest to be paid on a new car plus insurance.. I say drive it into the ground.

[Lacerta]

My opinion:

If you are going to be putting 30k a year on your car (that is a ton for me, as my car is 14 years old and only has <80k miles on it), then have a car you like to drive. Sounds to me like you are trying to decide your current car, which you like, and a new car, which you haven't found anything you particularly like. To me, that would be an easy decision. I would keep the current car UNLESS you find something you do like and that has significantly better fuel efficiency.

My parents put a TON of miles on their cars around town every year (real estate agents). My mom's minivan has over 280k miles on it over a 12 year span. That still isn't as many miles average as you are talking. She hasn't bought a new one because there's nothing out there she likes as well, and the mileage really isn't any better. She's been saying for 5 years that she needs to get a new car, but still hasn't done it.

If I end up NEEDING a new car in a few years, it seems like I am no more ahead financially having held on to it.

Yes, but you aren't any further behind either. And if you DON'T end up needing a new car in a few years, you ARE ahead. I would never buy something new just because the one I have MIGHT break down sometime in the indefinite future.

[d2mini]

Originally Posted by Lacerta

Sounds to me like you are trying to decide your current car, which you like, and a new car, which you haven't found anything you particularly like. To me, that would be an easy decision.

Exactly. Easy.
Except now my gas bill is going to at least double. Doh!
Oh well, at least I won't have a car payment for a bit.