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September 12, 2008

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It's always cheaper to fix an old car than buy a new one. We have two 1998 model cars: a Honda Civic and a Subaru Forrester. Now that they are each 10 years old, they are starting to require fixes here and there. My civic needed engine work about 18 months ago for about $1200 total and 9 months ago needed a new timing belt and some hoses and whatnot, also about $1200. In the 10 years I have owned this car, it has cost me $20 every few months for oil changes, $400 a set of tires and about $2500 in repairs. Since I haven't paid a car payment on it in SIX years though, my total cost of ownership is MUCH better than if I had ditched it when the first major expense came up. It's now at about 125K miles, runs like a top and still gets 34-39 mpg. The Subaru is now starting to need the same things: belts hoses and general engine tuneup. That has been a little more expensive because we've needed 2 sets of tires, and since it is 4WD, it requires replacing all 4 tires at once. But it has 120K miles on it, and we bought it used for a great price, paid it off almost 3 years ago and the $1500 it needs will be the only non-oil, non-tire money we have ever spent on this very reliable car.
No way am I replacing these with new cars until they simply aren't fixable. We don't owe anyone anything for either car, no monthly payments, no lease payments, no more depreciation. Even if it costs us $1000 every year or two, it is still cheaper than a monthly car payment.

In this day and age, there's no way that 71,000 miles should be considered "big miles."

Jennifer --

How do you factor in reliability? In other words, what's it worth not to be stranded on a deserted road with no cell phone coverage?

@beloml: I agree. My last car (1990 Honda Civic) went to about 240,000 miles before I gave up on it, and in retrospect I should have kept paying the repair bills; even at that point it would have been cheaper than the new one I bought. If I'm not able to drive my current car (2004 Honda CR-V) at least that far I'll be very disappointed; a car built in 2004 should be more durable than a car built in 1990.

I agree with Jennifer. I have three cars with no payments: 1996 Saturn, 2000 Dodge Minivan, 2003 Saturn. The 96' Saturn has a new used engine $2500 + regular maintenance item. The minivan has 130K miles, regular maintenance only a few small repairs, but overall low cost. The 03' Saturn has 103K miles with about $2000 in major repairs over the past two years.
If I were to replace any of these cars it would cost me out of pocket $4-5000/yr, I do not spend that much in total in any given year.
The common theme I hear in your letter is reliability. That is a personal choice. That is why I have AAA. It is inconvenient, but can also generate alot of fun. The 2003 Saturn fuel pump failed while travelling in Lancaster, PA about 60 miles from home. It was our anniversary. We spent most of the afternoon on a rainy day riding in the cab of a grungy (sp?) tow truck. The driver was an interesting character talking about his fortune from our misfortune having an excuse to gamble in Delaware. Reliability is also always a question with anything mechanical, but regular maintenance and watching for signs of failure and replacing it before it catastrophically fails is a sure bet for maximizing reliability.

FMF - I totally agree!

In spite of my years on this planet I'm only on my second new car.

My first was a 1989 Toyota 4Runner. I loved it! Beat the you-know-what off it and it kept going. A few small things here and there but with tune ups, oil changes and general PM it kept going fine. And for a nearly 3,000 pound v6 SUV it got great mileage (25 mpg in the highway if I kept it between 55-60). Until things started to casade. I had to have the starter replaced twice and it still gave problems, especially in the heat of the summer. An axel seal broke. The heating coil condenser started leaking. Over all I could have put some money into repairing all these things but the many factor was I had lost the loving feeling of it.

So in in 2000 I bought my second new car, a 2000 4Runner. Still have it. Still beating the you-know-what off it. Still giving it all the right PM. So far nothing major.

So I agree. Reliability is a non-quantitative factor that has to be considered.

I have a 2003 Honda Accord with almost 120k miles on it. I drive it 40 miles per day roughly and it never acts up. The only thing I have had to fix is the air conditioner compressor which was maybe $500 or less (bartered for the labor). You can replace your cars every 100k miles if you want to but I think that's wasting money. If you get a reliable car, you can get up to 300k miles with proper maintenance. I'll drive this one till the wheels fall off and then some.

FMF, no offense - but you are buying the wrong cars if you consider 71,000 miles "decision time". My Jeep Cherokee is at 145k miles and I have had no major issues with it and fully expect it to last another 100k at best, 50k at worst. And I was not an easy driver on it in my earlier years. My wife had a Corolla that was over 150k until some idiot decided to run a red light and total it.

You drive a Subaru Forester right? Why not look into a Toyota (can't remember the model), but it's a similar small-station wagon type.

especially if you have a common car such as a honda civic... it'll be cheaper to do a complete engine swap that has like 35k miles on it and you'll be set for another decade.

I am surprised that you had trouble with a Honda Civic with somewhere around 95,000 miles on it. I have a 99 Civic with 194,000 miles on it and I've only had to put a radiator in it - that only cost me ~$200. The body has endured some minor dings and dents, but it still runs very well. I'm hoping to get at least 250,000 out of it before getting something else.

I agree with the comments that say 71000 is nowhere close to when you should be looking for a new car. I am in the "only buy new cars" camp but that's only a good deal if you keep them for 10-12 years. I am still driving my 1992 Pontiac (~180k mi) and have had hardly any major repairs. Having no kids, reliability is less of an issue for me, but here's our plan for the future. What I think is a good idea is to buy a new car every 5-6 years but keep them for 10-12. That way, there is always a relatively reliable one to take on long trips. That is a less feasible option when both cars die at once, but you could get a used one and then start spacing out your new purchases like that.

My '94 Suburban has 290,000 and the transmission is just now starting to act up. I probably haven't spent $2000 in repairs ever!! Since it's only the transmission, I still hesitate to think about buying a new car. If I do buy a new (used) car, I will try to buy one for cash.

I have a 1997 Honda Civic....over the years, I've had to replace the muffler, catalytic converter, and get regular tune-ups. It's got about 160k on it, and (knock on wood) runs just fine.

The engine is a little loud and the body is beat up a bit but I will probably run it to the ground before I buy a new car.

I have to agree with some of the sentiment here that you should be able to get much higher miles out of your cars.

My experience with myself and my family is that the Japanese manufactors that have been owned by myself (4 different cars now) have been exceptional up to high miles. The GM and Fords that have been owned by my family have all had constant repairs. Funny thing is after watching this my family is now finally starting to switch over to the Japanese cars, and they are getting the results I had. Thats just one anecdotal case but it has proven itself to me. My 96 Maxima went to 180K until someone totalled it. Only repair was a new starter 2 weeks before it got totalled. I now have a used 2002 Maxima that has 115K on it and has given me no trouble for the 2 years I owned it and if it doesn't get totalled its going to 200K atleast. We also have a 2002 Honda Odyssey with 120K on it. Had it for 2.5 years and bought it used with 70K on it. It has not had a single repair, only oil. Also had a 2001 Nissan PathFinder that we drove to 100K until we sold it to get the Van because of kids and poor mileage, but that one also gave us no trouble.

My philosophy as I have told my brother is if its Japanese I consider 100K to be the break in period. And I wouldn't even think about it being past its prime until 200K at the earliest and would expect it to be able to go to about 250K. That was my plan with the 96 Maxima until someone rear ended me at 50 mph while I was stopped at a light.

71K for a car to be high miles? Thats when I would first start looking at them to buy them. If I had a car that I felt I needed to start worrying about at 71K I would consider it an outright lemon.

I agree with the above. You live in Michigan and you are only getting 71K? I lived there for years and my family never got less than 175K+ on a car before we needed to replace it.

71K miles is low for a car built in the last decade. Our current stable has 2 Fords 2000 Mustang, 2002 Taurus and my 2004 Honda Accord V6 all paid for.
The Mustang (v6 5-speed) 83000 miles has gone through 1 set of tires and the only repair was a fuel pump. Kept it as a fun weekend car instead of trading.
The wifes Taurus has 62000 miles and has had 1 set of tires and only maintance items until this year when it started to misfire. >$200 to change the plug wires and it's running great.
I got the Accord when I got tired of driving stick on my commute and it has had nothing but maintenance, probably gonna need tires soon.
My conclusion is that since at least 2000 American cars have gotten much better and should last a good long time as many above have said. 1 major repair is not a deal breaker if the rest of the vehicle is in good shape. Payments on a new car runs $400-$500 a month so $4800-$6000 a year. Puts that $2000 repair in perspective.

FMF,
How many people do you know that have been "stranded on a deserted road with no cell phone coverage?" For that matter, how often do you drive on deserted roads with no cell phone coverage?

There is a huge difference between a car that's at the point where it's needing a number of repairs, and a car that will die while driving. Most parts don't fail instantly and catastrophically due to age. If you just take care of things when you first sense a problem and do all the recommended maintenance you're not likely to be stranded anywhere.

Here's how I determine the tipping point (I admit this was rather arbitrarily derived). Divide the purchase price of the car by the number of years of ownership. If over the past 12 months you've exceeded that amount in repairs you've passed the tipping point. This might not work for someone who puts a lot of miles on their car each year.

I have to start thinking about my next car. The one I have has 151,000 miles. My next car will probably be a certified car that is a year or two old.

100.000 miles is not at all too much and you shouldn't have such big engine problems. I hesitate to say that your driving skills are getting the car in this state.

A few thoughts after reading your comments:

1. Maybe I should look at keeping my current car a bit longer (though I'm not sure my kids will fit in it that much longer -- my son is growing like a weed and the back seat is getting to be cramped.)

2. I'm not having problems with my current car at this point.

3. For the commenter questioning my driving patterns -- I'd find it hard to believe that the issues we had with our previous cars were driving related. I can see brakes being an issue the way I used to drive (trying not to be that way any more), but not the obscure problems we were having.

Believe me, I understand reliability. Being in a city with no family, spouse, or significant other for rescue missions, an unreliable car would be a big concern. However, I'm wondering if your "decision point" is based on catastrophic failures (something that leaves you stranded) or if this is just increased maintenance - things like brakes, tires, belts, hoses, and timing belts that wear out and need replacement, but because these things wear out, not because they fail without warning.

There's a point in a car's life where wear items need to be replaced, and they all seem to come on at once. When I was a kid it was about 75k in my parents' cars. Now most manufacturers shoot for 100k. But once those things are replaced they're good, inexpensive, reliable cars for another 50k to 75k easily. The expenses don't stay elevated, but subside somewhat dramatically if you push through that bubble.

I'm by no means stating this to try to tell you (or anyone) when or what to buy in the car department. I could care less what anyone drives or how long they drive it. Your success in financial management speaks for itself and you clearly don't need a bunch of net commenters telling you how to manage your finances. But I think you would be giving up a lot more value to avoid a lot less risk on 6yr/100k Subaru than you were on a 12 yr/100k Civic. You should know that when making the decision. Just like your mutual funds, you need to know the *true* cost of all of your options, so you can make an informed choice. It will make the decision a better one, even if the choice doesn't change.

If in the future you set your goal at 100k out of a vehicle, a top notch, low miles, slightly used example of your desired vehicle might be well worth considering next time. Again, not saying if you don't you're a babbling imbecile that will spend retirement in a Whirlpool box by the river under the S-curve, just suggesting it's worth seriously considering before making a decision. Like the house purchase, you could wait for a truly excellent deal, and should easily get an additional 100k out of it over and above the mileage on the clock when you buy it, saving a bundle for college (or whatever) in the process.

I agree with most of the comments here. 71K is no mileage to replace a car just for that reason. We have two cars with 100K (7yrs) and 140K (6yrs) both bought new; other than around $1000/yr/car (including expenses on oil changes etc) we don't pay a penny. It feels good to not have a car payment!

Where I live the road tax on a new vehicle itself would be more than half of that we spend on maintenance.

My general plan is to buy a 2 year old car with a few miles and then drive it for about 10 years. I figure with todays cars you can easily depend on 100k miles and ought to get 150-200k before it starts to really fail.

My last car was a 1995 Dodge that lasted me over 10 years and 100k with minimal problems. I think I spent $150 for a minor repair once and $250 later to have the starter replaced. I'm now driving a used Toyota that I bought with over 80k mostly highway miles and I plan to drive it for 5-10 years till it hits ~150k range.


Jim

I'm in the same boat as Jim. Buy a model 2 years prior. Yea, I also agree with everyone saying 71k isn't enough, but if that's how you've seen it happen, maybe it's how you drive the car - that being said, we don't have all the info on it. So if it's time for a new ride, it's time for a new ride.

How do I decide it's time to get a new car? Economics, reliability, etc, are factors, but it's basically when I reach an emotional tipping point. When I got rid of my last car, it had had a few repairs, but was running GREAT (well, great for a 12-year-old car) as long as I checked the transmission fluid regularly. I got sick of checking the transmission fluid in the winter, and so I bought a new(er) car, which I still love four years later, even though I've had some hefty repair bills on it. It currently has 95k miles on it, and I plan to keep it for at least two more years, more likely four (at which point it will be 10 years old).

On the other hand, I DON'T love my husband's truck. It just feels clunky and unreliable to me, although we've probably spent the same or less on repairs for it. I dislike driving it, and now that we have a baby on the way, I am slowly convincing him that we should have a secondary car that's "safer" transportation (and seating more than 2 people would be nice). However, I'm sure we won't do that until HE reaches the point where the (perceived) inconvenience is great enough to let him justify the cost of buying a newer vehicle.

Trying not to repeat what everyone else has said...

We have 2 '96 subcompacts which are probably costing us $500-$800 to repair/year.

Two things would make us get rid of them even if repairs continue at that rate (I think eventually we'll have replaced all the stuff that tends to go around 100K):

1) Our mechanic is trusted and 3 blocks from home. It's easy for us to drop it off and walk home. We also only live 5 miles from work and work 0.5 miles from one another. Getting repairs done doesn't interrupt our lives. If we moved and this changed, we might consider getting "more reliable" cars.

2) We don't have kids. Subcompacts are perfectly appropriate for us right now. When we have kids, we will eventually outgrow the cars (at least 1). Then we've have to consider getting something bigger.

But until those 2 conditions have been met, it will be a while before even a late-model used car would be cheaper than repairs.

I got sick of being held hostage by high school drop outs... otherwise known as mechanics. Get yourself a Chiltons or Haynes manual for your car. They are available on Amazon oryour local parts store. Read the book. Cars are not magical. If you are bright enough to be reading money articles, you can do almost all your own work on a weekend. I began with simple things like changing oil and plugs. I just rebuilt my first engine last year. It is not brain surgery. You can do this.

Have you considered leasing? It might make sense for your wife given the low mileage she does. You could get her into a new car every few years and keep a low payment. It would be a great option for you given, what sounds like, your desire to get into something different every few years. Problem for you is your mileage is on the high side for leasing. Others who post here will disagree with the idea of leasing, I'm sure. But if you're not a person who is going to put effort and attention into maximizing the life of the vehicle, the numbers might make sense.

I think that if you are considering 71,000 miles the considering point, then I think you might want to consider a Japanese model. They consistently get High marks from Consumer Reports year in and year out. I have had 3 Japanese models and have been extremely satisfied. I have never had any major repairs on any one of these vehicles other than normal maintainence such as oil changes, tune ups and replacing worn tires. I had a used 94 Camry which was traded at 60,000 for a used 2 year old 95 Pathfinder only because I wanted a SUV. My 88 tercel, purchased new, had gone 110,000 before being totaled. My Pathfinder is up to 200k and the only thing I have had to replace is the speedometer which went out at about 80,000 and has gone out again. I was recently given a 2002 Corolla that has 70,000 which I expected to get to 150,000 easily.

I wouldn't lease! They are full of "gotchas" and should be avoided like the plague. It is basically renting your car as well and therefore works against getting ahead financially!

Brad

I would say any car built since 2000 will last a long time (200,000+ miles) if you pay attention to any symptoms and have them addressed promptly. I worked as a mechanic 30 - 40 years ago and then a car was pretty used up by 100,000 miles. We recommended tune-ups every six months and the cars needed them to run efficiently. Now you can go 100,000 miles on spark plugs? Incredible. What made the difference? Fuel injection and computers. Today's cars are sorely neglected - a fuel pump is a major repair? I don't understand why anyone who will keep their car for a long time needs to buy brand new. The best deal is a car with 6 - 12 months left on a warranty so that you can be sure any unique issues with that particular vehicle are resolved. Then drive the wheels off of it. When do you get rid of it? Before it is so used up or beat up that the only person that would buy it is the junkyard. This way you can buy a little more often and enjoy all the newer safety and convenience features. Can you think stability control, side air bags, mp3/bluetooth connectivity, night vision, heated/cooled seats and so on? Reliability today is incredible even on wear items. Early vehicles required patching a tire every time you went for a drive. In the seventies you always saw cars broken down, most often with flat tires, overheating, or ignition/fuel problems. Cars were as reliable as computer hard drives in the nineties. If you got your first license in the last 20 years, you have no idea how good you have it when it comes to reliability for everything, not just cars. Well, maybe except for Windows operating systems.

I used to keep cars about a year and a half..or so. The car I have now, I bought for about half the price of new when it was 2 years old and with 7,000 miles on the odometer. It now has just shy of 40,000 miles and is 5 years old. Its paid for so unless I total it, or it starts rusting to the point that the car loses its structural integrity and becomes unsafe to drive I plan to drive it until I can't buy parts to repair it when something breaks down. Many times most problems with newer cars are electrical related, (ie failed module of some kind.) When my car hits a certain mileage where these failures become more likely, I will buy replacement parts (such as an ignition module or Computer) and keep them in the car along with tools to replace the item so if I do have a failure on the road, its just a matter of swap the part and continue on. Most other failures usually begin to give signs of impending failure for a short time before it quits altogether, just take care of the problem early. Other than that, As long as it dont rust away or I wreck it, i'll probably keep it.

I have a 2000 Subaru Forester with just over 80,000 miles on it. The only non preventive maintenance repair I have had to do on it is replacing the A/F sensor. I plan on keeping it for at least another five to ten years.

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