People are keeping their cars longer

[bjl584]

http://www.cnbc.com/id/102156346?trknav=homestack:topnews:4

[JoeP]

We're one of those who keep cars longer, but not due to loans. We keep them longer because we want to avoid car loans, we maintain our vehicles regularly and in most instances ourselves, and we see little need to drive something newer.

My car is a 2001 and is perfect besides some rust. No blue tooth, no CD player, no nav and no cameras. People at work ask when I'm going to buy a new car. It occurred to me: if I drive this car for another 4 years, how often during those 4 years would I wish I had parted ways with $30k for a new car or even $20 for a good used one? I can say right now, I do not have a burning desire to spend money that doesn't have to be spent on something I really don't need.

[disneysteve]

We're one of those who keep cars longer, but not due to loans. We keep them longer because we want to avoid car loans,

Same here. It is sad that the reason people are keeping the cars longer is due to 6 and 7 year car loans. I was just listening to Suze Orman this morning. Somone called in and asked if they could afford an $80,000 Tesla. Their plan was to buy it on a 7 year loan. Of course, Suze denied them.

It is not hard to find affordable cars. My current car was $16,000 in 2012. Hardly extravagant and something that most people could manage with a downpayment and a 3-year loan. It's a fully loaded 2006 Camry. I expect to have it for about 8-10 years.

[phantom]

I just can't bring myself to think of people keeping their cars for 7 years 9 months instead of 7 years 6 months as being all that significant. Sure, I'd care about the trend if I were in the business of selling new cars and thinking about it multiplied by all the car buyers. But, as a consumer, I don't see an extra 3 months as significant. My husband's last car made it about 8 years, but that could have been 7 years 9 months or 8 years 3 months. (I didn't know my husband when he bought it.) We got rid of it when it started having problems that were getting too pricey to justify fixing, and those could have easily started a little sooner or a little later.

Count me in as someone who just isn't all the interested in getting new cars all that often. It's fun to get a new or new-to-me car, but I find such big purchase decisions to be a bit draining. Spending 5 digits on a purchase requires some careful consideration, and actually parting with that kind of money can be a bit painful.

[disneysteve]

I just can't bring myself to think of people keeping their cars for 7 years 9 months instead of 7 years 6 months as being all that significant.

It doesn't sound like a big deal but if you multiply it out, it becomes one. Also, this is just the latest data point in a trend that has been going on for several years. If you search back a few years, the average was even shorter.

I find such big purchase decisions to be a bit draining.

I'm glad I'm not the only one. I find the whole car buying process to be unpleasant and exhausting. I try to do it as seldom as possible. I got a car in 1982 (which was purchased for me - I wasn't involved), 1991, 1998, and 2012. So I've only personally purchased 3 cars since I started driving 34 years ago.

[JoeP]

I just can't bring myself to think of people keeping their cars for 7 years 9 months instead of 7 years 6 months as being all that significant.

Those figures represent averages, so it's probably not the case that a group of people keeping their car an extra 3 months is worthy of a news article. What I got out of the article was that longer car loans are the root cause of this trend. Maybe the end of the car loan signifies a "wait 2 years before looking again" period that would have been there for shorter loans.

Yes, any 5-digit expenditure is painful. Car loans are the financial equivalent of Novocain, where the trauma of a large expenditure is traded for dozens of smaller cuts over a long period. It isn't until after that you take a look at your net worth and realize the loan took off a lot more than amputation would have.

[phantom]

Yes, any 5-digit expenditure is painful. Car loans are the financial equivalent of Novocain, where the trauma of a large expenditure is traded for dozens of smaller cuts over a long period. It isn't until after that you take a look at your net worth and realize the loan took off a lot more than amputation would have.

My Novocain is including the value of a car in my net worth, then using KBB to depreciate it periodically. As long as there's some value in the car, I figure there's no reason to realize the loss all at once. It still stings though.

[LivingAlmostLarge]

I find it strange people buy cars so often. But then I know many people who do and in the time we've had our cars only our neighbors have kept theirs. LOL. And they are likely to be running a tight race with us on keeping it longer.

[disneysteve]

I find it strange people buy cars so often.

Same here. I just don't get going out and buying a new $20,000+ item every 2-3 years.

I also don't understand the whole "starter home" concept. When we bought our "first" house in 1994, it was with the expectation that it would also be our last house, at least until retirement. However, we have friends who bought around the same time who have moved 2 or 3 or even 4 times since then (and not to relocate - they've stayed in the same general area).

I think these two things - cars and houses - are what sink many people's financial well-being.

[scfr]

My Novocain is including the value of a car in my net worth, then using KBB to depreciate it periodically. As long as there's some value in the car, I figure there's no reason to realize the loss all at once. It still stings though.

I see it a little differently. I'm actually pleased that our vehicles have depreciated as gradually as they have. People make blanket statements like "drive a new car off the lot and it loses 20-30% of its value" but in my personal experience that hasn't been true.

But yes, cars are depreciating assets. Thank goodness for appreciating assets for counterbalance.

[LivingAlmostLarge]

I am definitely in a starter home so I get that concept. Buy what you can afford because seriously sometimes where you live dictates the type of home. But keeping buying more and more expensive cars? After like $50k does it matter?

[luckykate]

I'm not a big car enthusiast myself. I use mine only to drive and don't think much else of it. Don't care about new models/features and such and like using mine until it's on its last legs!

[Peaples]

Agreed

[NormanR]

Its true I used to change my car with a lot more frequency. Now I just don't see the point and prefer to use it until it actually needs to be replaced!

[97guns]

I'm in the market for a new car but won't be buying be, I'vebought my final new car in 2008 and sold it in 2013 for a 12k loss.

I'm looking at a 2015 vw Passat for around 14-16k with less than 15000 miles, they sold for 24-26k when new so they have taken a 10k hit in less than a year