Keep old car or buy new

[RickLeibo]

my opinion

Natural gas wins!

[JoeP]

Ok, I just did a test drive of a newer luxury sedan. Just to see where I am with my car vs a newer one. And the verdict is keep the old car. Almost nothing in the new car appeals to me enough to spending $27K (that's the total cost after trade in. The dealer only offered my $3k).

The new car (same make and model as mine) had slightly more power, a little more interior space (not a factor we are not that tall, and the room in the old car is sufficient). That's it.

I will be fixing the car for about $400 now and fix the rest of the cosmetic issues like mirrors, subwoofer etc as DIY projects. There are good youtube videos showing how to do them.

Given the amount of work already put into the car, I think I should be ok for another 4-5 years with just regular maintenance. If and when a big ticket item like transmission or engine fails, I will go for a newer car. Hopefully it is five years!

Sounds like a smart solution to me.

I'd start saving into a "car fund" now, where you pretend you have a car payment, and divert a certain amount of your salary into a separate banking account. Just calculate how much your next car will cost, and divide by 4 years * 12 months. So if your next car will cost you $30k in 4 years, your monthly payment to yourself will be $625. If you already have money set aside, just subtract that from the projected cost. If you don't mind having a car loan (preferably 3 year), then you can aim lower, provided the loan amount is something you can live with.

[gostumpy]

Sounds like a smart solution to me.

I'd start saving into a "car fund" now, where you pretend you have a car payment, and divert a certain amount of your salary into a separate banking account. Just calculate how much your next car will cost, and divide by 4 years * 12 months. So if your next car will cost you $30k in 4 years, your monthly payment to yourself will be $625. If you already have money set aside, just subtract that from the projected cost. If you don't mind having a car loan (preferably 3 year), then you can aim lower, provided the loan amount is something you can live with.

THIS!

If you know that you will need to replace your car within a few years, start saving!

$10k can buy a really nice used car these days, so $10k in 4 years would be ~$200/mo saving up.. Good idea?

ANY SORT OF LOAN FOR A CAR, BAD IDEA! Never finance a car. Ever. Cars are things that should be bought with cash, the sheer amount of advertising, marketing, and pushy sales tactics to get people into cars with financing disgusts me... The industry is trying to support itself on people buying cars & paying interest on them!

You really think that 0% financing wasn't worked into the cost of the vehicle somehow?

I know from experience you can get thousands upon thousands off the price of a car if you show up with cash. Make them think you'll buy, then have second thoughts, all of a sudden the price just drops! But that only works with cash up front

[JoeP]

THIS!

If you know that you will need to replace your car within a few years, start saving!

$10k can buy a really nice used car these days, so $10k in 4 years would be ~$200/mo saving up.. Good idea?

ANY SORT OF LOAN FOR A CAR, BAD IDEA! Never finance a car. Ever. Cars are things that should be bought with cash, the sheer amount of advertising, marketing, and pushy sales tactics to get people into cars with financing disgusts me... The industry is trying to support itself on people buying cars & paying interest on them!

You really think that 0% financing wasn't worked into the cost of the vehicle somehow?

I know from experience you can get thousands upon thousands off the price of a car if you show up with cash. Make them think you'll buy, then have second thoughts, all of a sudden the price just drops! But that only works with cash up front

A couple thoughts on this.

We hate car loans, even "deals" where it is 0% or whatever. It ties you into a contractual obligation to make payments toward something that depreciates. If you experience job loss, salary shrinkage, or other emergency that needs money, you are still on the hook for the remainder of the contract. And if you have to sell the vehicle and it has an unsatisfied lien, then you'll have to clear that before transferring the title in a sale.

If you want to pay in cash, the best option is to never play into the sales person's hand, where they ask how much you can afford per month. Negotiate for bottom line, and don't tell them you'll pay cash...yet. Leave it open by saying something like, "I'm open to seeing what you have to offer," or, "I haven't really decided yet, but let's focus on the bottom line." If they feel you'll finance through them, you'll get a better price, because they will be willing to close a deal with a smaller margin, assuming they'll be making money off financing.

[tripods68]

[QUOTE=MKKShah;340687]Ladies and Gentlemen...here I am, asking the age old question again. Keep old car or buy a new one?

I have a 12 year old luxury sedan (that I bought used for $20K w/36K miles 8 years back). The car now has 160K miles, and has the following issues:
- subwoofer not working (replacement cost $400)
- a side mirror that is decaying, will be useless in a couple of years ($500)
- Potential transmission rebuild withing the next year ($2500)
- Engine is burning oil as well as leaking coolant, although at a manageable pace(one quart each pa).
- AC("climate control system") works for now, but may give way soon. Not sure of the cost of repair/replacement.

I have replaced all belts, hoses, water pump and struts at 150K miles. But I am worried about radiator, alternator, headlights etc. failing due to age.

My finances are not too bad. Net assets: $215K. Total HHI: $110K pa, total annual household expenses: 38K. No debt.

What would you do if you were in my shoes? Buy a new vehicle (either used luxury sedan, or new midsize SUV). My choice is only between keeping the old car vs getting either the luxury sedan or new midsize SUV.
/QUOTE

I'd keep the old car for as long as possible given that nothing in today's current market that appeals to you. You've done so much work already and replaced old parts. The biggest expense would be to rebuild transmission and engine. BUT so long you maintain proper oil interval change and replaced old gasket, you still have a long way for the engine replacement, except the transmission. The rest to replace old parts isn't at all that expensive to replaced; new radiator (you can get that done for $200) if you shop around. Headlights easy replacement, alternator, etc, especially, if you staggered times/dates to replace each parts rather than doing it all at once. I rather pay the cost replacing old parts, than paying a new car and with higher insurance cost. Good luck!~

[gipi]

When my car starts costing as much to keep running as a car payment would be, I start looking for a replacement. But if you like your car and repairing it, even though expensive, is going to be cheaper in the long run than replacing it, fix that baby.