Everyone says it’s wise to buy a car and stick with it as it ages. After all, it makes no sense to take on a car payment if your old car is in perfectly drivable condition. I agree wholeheartedly with this sentiment. For the most part my husband and I tend to purchase our vehicles and stick with them for years.
We purchased five vehicles between 2000 and 2009; a 1999 Camry, 1999 Explorer, 1994 Oldsmobile, 1998 Jeep and a 2000 Civic. Two were picked up new off the lot, the other three were used. We paid cash for all of the cars except the Honda Civic, though I did pay off the loan within one year.
We keep detailed records of all of our financial transactions so I decided to see how much money we really saved by sticking with older cars. I had a sneaky suspicion that we spent quite a bit on maintenance issues over the past few years and I wondered exactly how much we paid to keep each vehicle running.
The numbers were astounding. From 2004 (the year we started keeping detailed numbers) until 2012 we spent over $20,000 on our vehicles!
In 2006 I sold the 2000 Civic for $9,500. In it’s place I purchased a 1994 Oldsmobile. I’ve written about the decision to sell the Civic and buy the Olds a few times before. After my surgery in 2005 I needed a larger car. The Civic was too small and too low to drive comfortably, so I sold the Civic and purchased the Olds for $950. Unfortunately, it quickly became a hole in the ground that sucked up all of our money. By the time we got rid of that piece of junk, (which by the way was the most comfortable car I’ve ever ridden in), we shelled out over $4,000 in repairs. As the car repairs kept mounting I gave up on the car and donated it to charity.
The Camry was purchased from my grandmother in 2007. We spent $6,271 on various repairs. $1,000 was reimbursed by my grandmother as there were a few small issues when we purchased it. We tried to keep the repairs a secret from her, but as soon as she heard there were issues with the car she offered to rectify the situation and promptly wrote us a check to cover our expenses.
My husband’s Explorer racked up an additional $4976. Unfortunately, some of these repairs included recalls that we did not know about until after the car was fixed. (In other words we encountered the issue before the company recalled the vehicle.) Seven recalls have been issued for that car since my husband drove it off the lot!
Finally we spent $5149 on repairing our Jeep Wrangler. We purchased this vehicle used from a former coworker and friend of my husband’s. We bought the car before the summer began and didn’t realize the air conditioner wasn’t working. While you can certainly drive a jeep without the air conditioning, (most of the time we drive it with the top off), there are those times when you want cool air. For example, a rainy day in the middle of the summer or stuck on the highway in traffic. Fixing the air conditioner and issues with the heater that followed cost us roughly $3,000.
We definitely made bad judgements concerning the purchase and maintenance on the Oldsmobile, but even putting that $4,000 aside we spent $16,000 on our other three vehicles. Is it just me or does that seem like a lot of money? Broken down across five years that roughly $3,200 per year. Maybe that’s not a lot of money to keep three cars running? What do you think?
6 thoughts on “Reviewing Our Expenses: Do Old Cars Really Save Us Money?”
I don’t keep your kind of records but I think that’s better than what we have spent maintaining a 2005 Kia Sorento (which has been fairly expensive to maintain) and a 2006 Honda CRV (which has been cheaper, but I suspect it needs air conditioning work). I just discussed this with my wife, who has a better head for finance than I do, and we concluded that anything under several hundred dollars per vehicle is money in the bank. It’s not only a matter of what the car payment would be on a replacement, but also the increased cost of insurance and registration for a new car. That’s just our over-morning-coffee estimate though, I’ll be interested to see if others have a different view.
Good point Michael. You definitely have to consider insurance costs which rise dramatically with newer cars!
Ehh… My back of the envelope math puts me in a similar dollar amount to you if you go by per year (perhaps a little less). I’ve been lucky to avoid lemons, but every car needs something once in a while, and I’ve yet to be in the position to buy new.
Good to know that I’m not alone in this one and that the costs are pretty comparative to yours.
$3,200/12=$266.67/month equivalent to leasing a nice car or a loan payment. That’s how I view maintenance on older cars, it’s what you do instead of having a loan payment. Your insurance and taxes are usually lower on older cars, but not always. My boss swears he went over numbers with someone and came to the conclusion that buying new saves money over the long term. It’s hard to believe a new car is cheaper, but your numbers make a case for it.
@Aubrey — That’s an interesting point, but it’s $3200 for three vehicles, which is more like $88 per month per vehicle. One factor that could save us money is simply getting rid of one of the cars, but my husband really loves driving the jeep in good weather so I don’t think that’ll happen anytime soon.