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When do you throw in the towel on an old car?

Earlier this year I sold my 2000 Honda Civic EX. The Civic had 36,000 miles on it, was in great condition and looked brand new both inside and out. Carmax only offered me $7500 for it, so I put an ad on craigslist and sold it for $9500. I think I could have priced the car even higher, but I didn’t want to waste my weekends haggling with car buyers. (I am frugal, but time can be a valuable commodity.) Thankfully the first guy drove the car, loved it, made an offer, and came back the next week to pick the old girl up.

To replace the Civic I bought a 1994 Oldsmobile Ninety-Eight Regency Elite Sedan. I went from a tiny, uncomfortable car with low mileage, to a huge, ultra-comfy car with over 100,000 miles. My husband and I paid $950 for the car, half of the kelley blue book value. A month or so after we purchased the car I noticed oil spots on the driveway. I took the car to Merchant’s Tire & Auto who riped me off at the cost of $540.74. (They didn’t fix a thing and the leak continued.) A few months later I took the car to a reputable mechanic who actually fixed the problem for $1,090.24. Yesterday I took the car in again, because the brakes were making a grinding sound whenever I stopped the car. Total cost: $1,177.38.

We spent $950 to purchase the Olds and another $2,808.36 to keep it running. For a grand total of: $3,758.36. That’s a lot more than I had planned on spending on this old clunker. In fact, that’s 40% of the price at which the Civic was sold. So I’m wondering do I throw in the towel and retire the old girl the next time something breaks, or do I continue to put money into her for a little while longer?

Here are the facts:

  • Although the car repairs cost almost $3,000 I probably wouldn’t have been able to buy a decent used car for that amount.
  • On the other hand, repairs have cost more than kelley blue book says she’s worth.
  • Knock on wood, the car has not broken down or left me stranded on the side of the road waiting for a tow truck.
  • I have AAA coverage.
  • My father pays for my AAA coverage. (When I was in highschool my father bought me a used car that broke down a lot. Whenever I got stranded I’d pull out my AAA card and feel like my daddy was looking out for me. Thirteen years later he still pays for my coverage.)
  • I no longer pay for comprehensive or collision insurance.
  • If I buy a new car or even a slightly used car I will certainly have to start paying these insurance bills again.
  • I can’t trade in the old clunker for a reasonable mid-sized sedan. At 6’1” I had a real problem fitting into my tiny Honda Civic. Since my surgery it’s really quite painful to drive in a small car for long periods of time.

Maybe the problem is that we bought a car with 100,000 miles on it. It seems the majority of car repairs occur around the 100,000 mile mark. Apparently alternators, brake rotors, brake drums, timing belts and starters only have a 100,000 to 125,000 lifespan.

So how long do I continue to spend money fixing the old clunker? Should I set a limit on our repair costs? When do I throw in the towel and give the old girl up?

Bigqueue

Wednesday 6th of December 2006

My rule of thumb for cars is that they will cost me about $2500 per year...no matter what.

If I'm paying it off, I may not be repairing it, but the payments are in that range.

Once paid off, I generally start doing regular maintiance and the costs are in that range. (Ok..so now maybe that is closer to $3000....but you get the point)

So normal repairs are fine to me so long as they don't come so fast and furious that I begin to get over that rate of expense....once that happens, or the car becomes too unreliable that I don't trust that it will always get me to home or work....then it is time to go.

That is my simple metric. To me a car is but a tool, and so tools do require calibration and repair at times...that is normal and to be expected.

One Frugal Girl

Wednesday 6th of December 2006

I should have clarified my reasons for selling the Civic in my posting. I am 6'1'' and have recently had surgery which has left me in a great deal of pain. Due to the pain, driving the Civic, a tiny car, especially for someone 6'1'' became more and more unbearable. I sold the car for $9500. I had purchased it for $16,000 six years earlier. The money from the Civic went directly into the bank where it sits and earns interest. My hope was that I could buy the Olds for $900 and not spend a lot of money fixing it up. In the mean time I could save enough money to buy a 'slightly used' mid-sized sedan that would be more comfortable to drive. Sometimes financial decisions involve more than just money.

Anonymous

Wednesday 6th of December 2006

I don't understand how it's frugal to sell a low-mileage car with an excellent reputation and great gas milage, like a civic, and get a giant gas-guzzling ready to fall apart unreliable monster that is going to cost you money.