Are you having car envy? Maybe you are driving an old ride, but you see that shiny new, fast car that passes you by and you think you need a new car. Sit on that thought for a while and consider the benefits of keeping your older vehicle. Many cars are still going strong at 200,000 miles!
There are many advantages to driving an older car. Here are a few.
Advantages to Driving An Older car
You save money each month because you have no car payment.
The average monthly car payment for a new car is $554 and for a used car $391 (Experian.com). Also, the interest paid on a loan is money you are putting in someone else’s pocket. Add that up over say 3 years and you have doled out somewhere between $12,000 to $20,000 – money that you might have enjoyed otherwise by taking a vacation or even saving towards a down payment on a home!
You save money on yearly license fees, ownership taxes and processing fees.
CO licensing fees can vary from $50- several hundred dollars depending upon the age and weight of the vehicle. The newer the vehicle, the more expensive. Ownership taxes decrease yearly by age of the vehicle, and processing fees are just a fact of life.
You save money by not losing value in depreciation.
Buying a car is not an investment – it will not appreciate over time, no matter how well you take care of the car. When you purchase a new car, the car loses value the minute you drive it off the lot. For example, a car that cost $36,000 brand new will lose over $16,000 in value in the first 3 years (RethinktheRatRace.com) – that is money you cannot recoup upon resale.
You save money because maintenance and repairs simply cost less over time.
Newer cars come with lots of extra bells and whistles, along with the expensive computer-driven parts that can, and do, fail. More complex engines generally require more complex (and more expensive!) repairs. Older cars are generally more simple and straightforward, therefore being less expensive to repair.
You save money on car insurance.
For example, my 2017 CRV (which I purchased used) costs $1400/year to insure, whereas our 2005 Honda Odyssey only cost $725/year – half the price! Both of those include comprehensive collision coverage, but if your car is old and battered enough, you may decide to not even include collision and/or comprehensive insurance, thus saving even more $$.
You save emotional energy, because you don’t care if your old car gets a few bumps and scratches.
You won’t get upset when the shopping cart rolls into your car, or that distracted driver bumps into your rear end. It just doesn’t matter as much!
Of course, when you have an older car and you are faced with a hefty repair bill, you are faced with a decision whether it is worth it to put the money into your older car. That is a tough decision… you must weigh the value of the car, the cost of the repair, the overall condition of the vehicle including expected upcoming repairs, and especially what it would cost to replace the vehicle. Our Service Advisors at Honest Accurate Auto are really good at helping our customers decide whether the vehicle is worth keeping or ready for the junkyard – it truly is not to our benefit to fix a car that will continue to have problems for our customer.
Your car simply must get you from point A to point B safely and reliably…it doesn’t have to look pretty or go fast. Consider this couple (CashCowCouple) that bought a 1996 Saturn for $1700 and sold it 10 years later for $1500 – now that is an inexpensive ride, even taking into account moderate maintenance and repair costs. During that time, they saved $6300 to purchase a newer (but used) Mitsubishi.
If you are considering purchasing a new car (average price $36,000 in 2020) or a used car (average price $20,000), sit on it for 6 months before making a decision.
To help you realize what it feels like to purchase that new(er) car, write yourself a check each month for the amount you think you might spend on a vehicle (use the averages above for down payment, monthly loan payment, sales tax/ licensing fees, and additional car insurance) and deposit that money into a separate bank account. At the end of 6 months, you will either have a larger down payment for a vehicle, money for your retirement account, or for whatever else you have in mind. Maybe take some of that savings, say $100-$150 and have your fine “older” ride cleaned and polished by a professional auto detailer…instant satisfaction at a fraction of the price.
Keep putting that money away and you will be surprised how quickly your “nest egg” grows! Now you can make a more informed decision on whether you can live with your old beater for a few more months or even a few more years.
Don’t forget to get your car maintenanced, schedule your appointment with us today!