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June 08, 2009

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We have a 2000 van with 89k that is due for its 90k maintenance, probably $300-$500. It runs great and is in very good shape. As we now drive it about 6k miles/year we plan to keep it another 8-10 years.

However, we have a 1992 van with about 145k miles that is rusting away, has a big crack in the windshield and is starting to blow a little white smoke out of the tail pipe, indicating possible head gasket trouble. I'm trying to decide whether I should fix the wind shield and do some maintenance this summer, but no way would I fix the head gaskets...not worth it. The bill could come close to $1000. But to replace with a good, reliable used car could run 10k. So I'm leaning toward paying the repair bill and keep it going another couple years. It only gets driven a couple thousand miles/year, mostly by my teenage daughter. If she's going on the highway she gets to drive the newer cars.

We bought a Honda Civic new in 2007 and hope that lasts us 15 more years. We purchased all 3 of our vehicles new. Our philosophy is to take care of them and drive them until they are virtually worthless.

Never purchased a brand new car, and never will. We also only pay cash upfront, so new finance fees. I also keep a car for more than 10 years & 100K miles unless the maintenance is over $1000 in any one year. Keeping it on life support is cheaper unless you care what other people think of what you're driving around in.

In my experience, slightly-used (<15K miles), are just as problem-free as any brand new car. The savings off the retail prices are well worth the risk. Having said that, if you can take advantage of the new car discounts and Federal stimulus contribution that make it worth the drive-off-the-lot depreciation factor, then by all means do so. I would still pay cash unless you can get 0% financing.

Almost forgot...

There are incredible deals on post-lease Fords on Autotrader right now, since Ford is no longer leasing vehicles. With the recent surge in the auctioning of leased cars, you should be able to find a lot of perfectly-maintained vehicles with very low mileage.

FMF talks about "buying someone else's problems". Many people don't buy used cars for that reason - usually because of one bad experience when they were young, poor and bought a really, really cheap vehicle. Much less likely if you buy a 3-yearold car from someone who always buys new and keeps the car for three years.

I have never bought a car with less than 60K on the clock, and only had a serious problem once. I try to buy from people I know in some way - a colleague, friend or family-member. (My bad experience was a GM dealer - what a surprise - NOT!) Reduces the risk of deliberate deception.

Most importantly, I have an honest reliable mechanic, who checks cars out for me before I buy, and I use for all my maintenance.

We just got a new (used) vehicle a couple of months ago. We only bought because I'm a stay at home dad and the car seat didn't work in the back of my 1997 F-150, and my wife didn't want to drive my truck to work (she did for 2 weeks though). Got a 3 year old Honda Pilot with 30,000 miles on it, paid about 15,000 less than what we would have for a new vehicle.

My wife's car is mostly just a commuter car - 20 miles each way to work, and it looks like we're going to be moving across country with her job, and it's going to be about a 28 mile commute each way there. Her Honda Accord has about 125K miles on it, she bought it used (with my help, prior to marriage) 6 years ago and it only had 40k. Haven't had one major problem with it. We're coming up on some more expensive repairs though, about $1000. We're going to repair her car and keep it for at least 5 more years, hopefully get at least 200,000 miles. In that time we'll save up to pay cash for the next car.

Buying a used Honda or Toyota is probably just as good as buying new (especially certified used) when it comes to reliability.

Not really related to the car question, but what ever happened to Terry Cullen of the WSJ, who wrote the source article 12 months ago? I believe she was canned when Murdoch bought the Journal, but I haven't seen where she wound up. Her Fiscally Fit columns were always interesting for personal insights, if not always the financial stuff.

Pretty much like you, I keep my cars until it becomes inconvenient to fix them. I don't pay cash for my cars, but I pay for them within three years of purchase. I bought my first car at 19 and soon I'll be 62, and I'm only on my sixth car. Not bad, eh?

I buy a new Honda every 10 yrs. My old Accord never broke down, not even once. I had to replace the tires once is all. Awesome!

I have kids and I live in an area of the country where if your car breaks down in the winter, you die. You are also likely to die because of the weather conditions (sliding on ice, getting stuck in snow).

Besides greater reliability, the newer cars have the best safety technologies--side airbags and anti-lock breaks etc.

No way am I "saving" money by compromising on safety.

Our most recent "car replacement" was when my old reliable '93 Saturn SC2 was stolen. Since it had 175K miles on it, we were going to replace it anyway, so we bought a Honda Element as we needed a small hauler more than another two-door.

A week after we bought the Element, the police found the Saturn parked in a nearby city, and so we gave it to charity after getting it back.

I'm very similar to you FMF. Once I have to start paying much over $1000 for a repair more than once per year, I start looking at new cars.

I personally do a lot of highway commuting so I will probably drive my current Corolla (Toyota gets high ranks for reliability by Consumer Reports) until around the 150K-200K mark.

My wife drives similarly to yours. We will probably get her a new car as soon as the family grows out of her car (i.e. kid #3 or #4) since she drives a little Mazda3.

So I don't know if there is a perfect timing for a new car. It's simply as the need arises. Note the word "need" rather than "want".

I'm I convert to buying gently-used cars (< 15,000 miles). I've bought 3 cars in the past 15 years and ironically the most problematic one was the new purchase. I've bought the last two at Carmax and both have been flawless in performance and maintenance over the past 4-5 years.

Like other, I usually wait until repairs get to be too expensive to justify keeping the car.

My main concern now is an upcoming cross-country move and whether it makes sense to sell one of out cars before we move (we'll need to rebuy one when we get to where we're going) or keep them both and pay to have one transported.

You will be glad to know that cars become much less of an issue when you are both well into retirement.

My car is a 1991 Mercedes 560SEL with 89,000 miles on it. I only use it when my wife and I need to go somewhere separately, consequently this car only does less than 500 miles per year. It only gets 12 mpg but the cost of gas is inconsequential compared with insurance and registration costs.

My wife's car is a 1998 Mercedes C230 with 54,000 miles on it and this car is used as first choice when either or both of us need to go somewhere. This car does about 3,000 miles/year and gets 20 mpg running around town.

Our vacation trips always involve taking an airport shuttle and flying wherever we decide to go. For day trips we go with our Senior Center and then our mode of travel is a luxurious 55 passenger bus.

Thus we have no plans whatsoever to replace the cars we have, sure I am tempted when I see a flashy vehicle that I could easily afford to buy but then my frugal background and lifestyle kicks in and I tell myself it would be stupid to get rid of a perfectly good, safe and reliable vehicle just to (maybe) impress others.

One lady I know whose husband recently died went out and bought a gorgeous red S type Jaguar and has told me that he would roll over in his grave if he ever knew what she had done - but we all have to remember that we can't take it with us. As one of my good friends often says to me, "When was the last time you saw a Brinks truck following a hearse?" That's food for thought!

I use pretty much the same strategy:
1. buy new - my current car is 2006 Honda Civic
2. try to drive until it starts giving me serious trouble or when I start worrying that it's going to stop in the middle somewhere
3. pay cash. Although I usually ask what rate I'd get and say I have not decided: let them think they can get money off me on financing until we agreed on the price. Plus, if the interest rate is below what I get on CD minus taxes, I'd take it.

Sometimes life interferes. My previous car was a 2003 Toyota Corolla that I planned to drive for a good long time ... until I totaled it 3 years later. Really nice check from insurance though - whatever they say about depreciation doesn't affect Hondas and Toyotas nearly that much. About 20% loss after 3 years of driving. Didn't even need to add that much for a new car. Sure total value is higher than resale value, but if you don't plan to resell why would you care how much you can sell it for? One interesting opinion I read once was that your own car is always more expensive than a similar car you can buy: you know how you take care of the car, you don't know anything about other people' cars. Initial loss in value = the cost of uncertainty. But for your own car - you are sure.

My previous car - 1995 Corolla, I drove for 8 years and planned to driver for longer, but when my parents car broke down I choose to give it to them. They still drive it. Old Limey - this is similar to your case: when you are retired and don't need to drive every day to work, you can get around with much cheaper car. My parents only drive around town - probably less than 4 miles a day.

I don't bother saving specifically "for car". I have enough in savings that I don't need to.

So funny you should post this... my husband and I just bought a new (to us) car today! We decided to trade in our 2006 Ford Focus wagon for a 2008 Ford Escape (small SUV).

The wagon was paid for, and because people are looking for fuel economy (and wagons), we were offered a good trade-in price for it. We paid cash for the Ford Escape.

It may not seem frugal to buy a small SUV, but here's why we did it:
1) Since we first bought the wagon, we have had two more children. The wagon simply didn't fit three carseats, which meant that we always had to ride in our other vehicle (a minivan). We wanted more options for family travel.
2) We live in a very rural area, and our township road is one of the last roads to be plowed in the snowy winter. Having an all-wheel drive vehicle will make a big difference in the work commute.
3) Improved safety. Our new vehicle has more safety features than the old one.

The key thing for us is that we had the cash to make the purchase, and had discussed the purchase for months. We'd done our homework as to what we were looking for, so when we saw what we wanted, we were able to move quickly on a great deal.

Living frugally opens up a lot of opportunities for you to live a good life!

I've only owned 2 cars; a Pontiac money sink (didn't even make it to 100k miles!) and a reliable Toyota. My hope is to get 200k out of the Toyota before I look at buying another car. At the moment, the car has 125K miles with regular maintenance (motor oil, belt, spark plug, transmission oil, battery, lights, tires, and coolant changes) and about ~$1000-1500 of other work including compressor, a few strut changes, brake work, and gasket replacement).

I bought a subaru forester two years ago with 62k miles. Now it has 81k. I plan on driving well passes the 200k mark, so it will serve us well for another ten years or so.

I have a Subaru Forester, too! Bought new in 2000, has just over 110,000 miles. No major problems. Moved to LA from Chicago 2.5 years ago, and I'm hoping the LA weather extends the life of the car (no rusting out from the salt or freezing temps to deal with).

I know I need to buy a different car some time soon. I bought my 1998 Ford Mustang in 2000 with 43K miles. 9 years later, it now has 183K miles. It's been a great car, I've only had to do regular maintenance on it. The problem is, is that there is no other car I'm interested in right now.

We do the same thing. We buy new cars for cash and we usually keep our cars for about 10 years. This saves us a lot of money over time.

An option I like is to buy dealer demos - they are technically "used" and so you get the big discount off the retail price, but they have never been owned by anybody else and usually have less than $2,000 miles on them.

I've had my Volvo for 3 years and am planning to drive it into the ground! I've heard they can go for over a million miles with good maintenance and care. I'm only around 40,000 miles now, so there is no hurry.

Realistically though, if I haven't totaled it by the time I turn 30, I may treat myself to a "new" car then...

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