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When Is a Car Used Up?
Feb. 21st, 2006 02:12 pmI like to use up my cars before I sell them. However, it's not that easy to tell when they are used up.
After my first car had been through quite a few repairs, I found an article that listed all the things that typically go wrong with that make and model. By that time, I had already replaced most of those things. So I decided it might be a whole different car, a reliable car.
But no.
I decided to sell that car the fourth time that my mechanic explained that it would cost all my savings to fix it. Then I went without a car for four years.
My second car I sold after a collision had made it so that I could no longer open the trunk, and then the engine started smoking and the brakes started feeling very different. Too many things.
Some people say that when it costs more to repair your car than your car is worth, then it's time to buy a new car. I think that's a little odd. I'd definitely agree that if it costs more to repair your car than it would cost to buy a new car, then it's time to buy a new car. You never hear that, though, because then people would never get to buy a new car, and people like to buy new cars.
It probably makes more sense to compare annual costs of your current car and your next car. Let's say your current car is 20 years old, and you bought it ten years ago for $3000. That makes the annual cost for buying it $300. Add to that the costs for insurance, gas, etc. Then add the annual cost for repairs.
If you keep the car for another year, it would cost only $272 per year instead of $300 to purchase it, but your repair bills are likely to go up.
So, once those costs exceed annual costs on whatever car you would be buying next, that's when it's time to sell.
Except, of course, that repair bills clump. You may need two repairs in one year, then nothing for the next three years.
I remarked in an earlier entry that this time I will start looking for my next car after I've owned my current car for ten years, even if it is not used up. This is because waiting for the car to be used up makes it harder to be properly picky when buying the following car.
Another idea is to wait until I have twice as much saved as I need (I contribute $50/month toward my car-buying fund), and then start looking. Then even if I buy a lemon and regret what I have done, I have enough money already to just buy another one. Assuming my next car will cost $4000, that will take about the same amount of time as waiting the ten years.
So, how do you decide when to trade up?
After my first car had been through quite a few repairs, I found an article that listed all the things that typically go wrong with that make and model. By that time, I had already replaced most of those things. So I decided it might be a whole different car, a reliable car.
But no.
I decided to sell that car the fourth time that my mechanic explained that it would cost all my savings to fix it. Then I went without a car for four years.
My second car I sold after a collision had made it so that I could no longer open the trunk, and then the engine started smoking and the brakes started feeling very different. Too many things.
Some people say that when it costs more to repair your car than your car is worth, then it's time to buy a new car. I think that's a little odd. I'd definitely agree that if it costs more to repair your car than it would cost to buy a new car, then it's time to buy a new car. You never hear that, though, because then people would never get to buy a new car, and people like to buy new cars.
It probably makes more sense to compare annual costs of your current car and your next car. Let's say your current car is 20 years old, and you bought it ten years ago for $3000. That makes the annual cost for buying it $300. Add to that the costs for insurance, gas, etc. Then add the annual cost for repairs.
If you keep the car for another year, it would cost only $272 per year instead of $300 to purchase it, but your repair bills are likely to go up.
So, once those costs exceed annual costs on whatever car you would be buying next, that's when it's time to sell.
Except, of course, that repair bills clump. You may need two repairs in one year, then nothing for the next three years.
I remarked in an earlier entry that this time I will start looking for my next car after I've owned my current car for ten years, even if it is not used up. This is because waiting for the car to be used up makes it harder to be properly picky when buying the following car.
Another idea is to wait until I have twice as much saved as I need (I contribute $50/month toward my car-buying fund), and then start looking. Then even if I buy a lemon and regret what I have done, I have enough money already to just buy another one. Assuming my next car will cost $4000, that will take about the same amount of time as waiting the ten years.
So, how do you decide when to trade up?