Smart Buying Essentials

Keeping Your Old Car

OK, you've done your homework. You've studied charts, compared your choices, and now you are ready to buy a new car. All you need to do is get rid of your old clunker and purchase the car of your dreams. Hold on for just a minute.

You probably have a list of reasons to buy a new car. Reasons that might include the newest safety features, modern styling, or perhaps you need a larger vehicle to fit your growing family. These are just a few; the list goes on and on. Still, with all the good reasons to buy a new car, there is a very compelling one to consider holding on to the old car: Cost!

Taking a purely left-brain, economic approach, keeping your old car could save you thousands of dollars

It is true that older cars generally cost more to maintain, and are more likely to break down, resulting in an expensive and aggravating repair. But in other respects, older vehicles are cheaper to own and operate. For one thing, your used vehicle won't depreciate as much. Vehicles lose most of their value during the first five or so years of their lives, and this depreciation is the major cost of owning a new one. Buy a new vehicle and you can look forward to losing thousands as soon as you drive it off the dealer's lot.

Then There's Insurance

Insurance rates are likely to be lower on your used car. You may even want to consider raising the deductible on the collision portion of your premium. Or if your car is quite old, say eight years or more, you may want to consider dropping collision insurance altogether, lowering your insurance payment even more. You'd be foolish not to have collision insurance on a new vehicle.

Chances are you have paid off your loan or at the least, are close to making your final payment. And freedom from car payments is one of life's nicer pleasures. Buy a new vehicle, and unless you're rolling in cash, you'll be facing several years more of monthly principle and interest payments on a loan. Finally, annual taxes and license fees should be lower on your old car, depending upon the state where you live. Taken together, the savings from keeping your old car could easily outweigh the costs of any additional maintenance and repairs that it might require.

A Heap of Trouble

There does come a time when every vehicle is just plain pooped, when it becomes more trouble than it's worth. And when will the typical car or truck reach that point? Not too many years ago, the furthest reach of a vehicle's useful life was 100,000 miles. By then, if the mechanicals weren't worn out, then the body and chassis would be a conglomeration of squeaks, rattles and rust. But not today. Many modern vehicles can breeze right past that 100,000-mile mark with not a great deal more than a tune-up and maybe a new fuel pump or timing chain. And thanks to plastic body panels and factory rust-proofing methods, the tin worm is much less of a pest.

Still, as the miles pile on, repairs become inevitable. Here are some examples of components and the mileages at which they typically need replacement:

• Alternator, 125,000 miles
• Brake rotors, 80,000 miles
• Brake drums, 150,000 miles
• Brake calipers, 150,000 miles
• Clutch, 75,000 miles
• Headlamp, 100,000 miles
• Sealed front bearings, 125,000 miles
• Shock absorbers, 75,000 miles
• Starter, 100,000 miles
• Timing belt, 100,000 miles
• Timing chain, 100,000 miles

From this list, you can see that major repairs do not typically occur until after the 100,000 mile mark. But after 100,000 miles the repairs that do occur tend to be costly. Moreover, by 150,000 miles, paint and upholstery usually become rather ragged as well. And to top it all off, by 150,000 miles, the components that needed replacement at 75,000 miles may need replacement for a second time. From the perspective of pure economics, it's unwise to trade in a relatively young vehicle because it needs several hundred dollars worth of repairs. But it also may be financially foolish to throw thousands of dollars into a car or truck that's on its last legs.