More frugal? Keep car or trade often?

Im curious what everyone thinks on this issue.

Is it more frugal to buy a new car..... and drive it
till its wheels fall off..... get 300k miles on it.

Or is it actually better to trade up every few years
and keep up on the new-ness "curve"?

Opinions? Advice?

 

All the financial advice I've ever heard on this says buy a reliable car and
drive it until its wheels fall off.

If this does become your plan, I understand that buying new (as opposed to used)
is fine, financially speaking.

 

YMMV.

The best pattern IMO is to buy a well reputed car in its 5th year with
normal mileage and sell it after 3 yrs. Resale value is still potentially
good. After that, the issues are never ending and get worse.

 

I agree that this is the best option.

Isn't it still better to buy a slightly used vehicle. Say one that has
only been owned for a year or less since you will get a great break on
the price and the car will still be like new. the only thing you need
to watch for is the possibility that the car was abused or that the
car is back on the lot because it was a lemon. Taking the car by a
trustworthy mechanic for a quick inspection should help spot the bad
cars.

 

I would add that you need to keep in mind the use of the vehicle. From my
experience in needing to driving from OKC to Dallas every couple weeks, we
keep one car new and one older vehicle. Works nice only having one car
payment.

Scott

 

The best pattern IMO is to buy a well reputed car in its 5th year with

So using your method above.....if a [person bought a
new car..... do you recommend selling it in the 8th
year then?

I arrived at 8 years by adding 5+3 as per above

 

In my humble opinion, in the case of Hondas that keep their value so well,
it is hard for me to justify buying a 1 year old one - the savings isn't
that great over buying a brand new one. If you were talking about a Chevy
or something, that would probably be a good plan - except for the part about
buying a Chevy ;-)

 

||All the financial advice I've ever heard on this says buy a reliable car and
||drive it until its wheels fall off.
||
||If this does become your plan, I understand that buying new (as opposed to
used)
||is fine, financially speaking.

Make it a highly desirable vehicle, drive it until repairs are too frequent,
then sell it as/to a private party. If it's a popular model when new, the
residual value will be much higher.

||> Im curious what everyone thinks on this issue.
||>
||> Is it more frugal to buy a new car..... and drive it
||> till its wheels fall off..... get 300k miles on it.
||>
||> Or is it actually better to trade up every few years
||> and keep up on the new-ness "curve"?
||>
||> Opinions? Advice?
||
||

Texas Parts Guy

 

Make it a highly desirable vehicle, drive it until repairs are too frequent,

Hmmm..... not a bad idea on getting a "desirable"
vehicle!

 

There is no unique answer to this. But generally, yes. This is what I am
doing. My car is in its 6th year at 80000 miles. I bought it new.

I bought my car at 27500$ (all in Canadian $$$)
After 4 years, the residual 14820$
After 5 year on the market, it worths around 11500$
After 8 years, at projected mileage, probably 7500$. After that, you will
think about redoing the paint, or the tranny. Less confidence in the
traffic, too.

Note the big drop between 4th and 5th year. But only 4000$ over the last 36
months - with no interest - is very pleasant. 1000-1500$ of repairs each
year. No car payment. )

But there are other scenarios as attractive. there are plenty of incredible
deals on the used market. As an example, Ford Focus, a fairly good car, are
almost given away. A 2-yrs old 25000 miles can be had for 8500$CAD
(7000$US).

I prefer something more sophisticated, thus the first scenario.

 

Keep

 

I definitely agree with you. Honda's hold their value so well that there
really isn't much difference between a year old one and new. There really
isn't any other car out there that holds their value so well. I believe
Toyota is a close second but I was disappointed at the retail value of a few
several year Toyotas when compared to used Hondas.

It is interesting to see commercials for KIA's or Hyundais that advertise
being about $1600 less than a comparable equipped Honda Civic. Perhaps this
is geared towards the completely stupid part of our population. That $1600
"savings" doesn't mean anything when in a year from now the Honda is worth
several thousand more than that KIA or Hyundai. Hell it will be worth
several thousand dollars more when you drive both of them off the lot. They
should have a depreciation gauge in cars. I have a feeling in the KIA or
Hyundai it would be equivalent to fuel gauge and go down just about as
quickly.

CaptainKrunch

 

There is absolutely no question that keeping your car and driving it into
the ground is the only way to go. Even if after ten years you have to put
several thousand dollars into it for a new motor which will get you a few
hundred thousand miles more.

There is no way anybody could argue this point, except for one problem.

If you have a car that is worth say......$3000 and it needs a new motor for
$2500 or so then you are putting more money in the car than it is worth.
But the only time this will come up is if you want to sell the car or if it
is in an accident and is totaled. You won't get the money out of the
insurance company that you have into it.

If you keep the car with no accidents then putting in several thousand
dollars in repairs is nothing when you consider what car payments would be.
If you had to put $3000 dollars into a car that is only $300 a month for 10
months. New car payments are for several years. Additionally insurance
would be more for a new car.

The only thing I wouldn't put big money into repairing on an older car is
the ABS system ( you still have brakes without this working properly) and
bodywork depending on what it is.

CaptainKrunch

 

Buy low mileage used and keep a long time is the least expensive way
to do it. Buying new all the time is the most expensive. This is because
a car depreciates the most the first few years.

 

I think the financial math would indicate that whether to buy a brand new car or
a slightly used vehicle depends on the make and model of the particular used
vehicle, its condition, and whether records were well-kept on it. Also, how well
one negotiates for both new and used.

FWIW, I think the radio financial talk show host Clark Howard says either way
(buying new or slightly used) is fine, financially speaking, as long as one
intends to drive the car into the ground.

We could run some numbers but I think there are too many variables to make this
too meaningful. The point is to drive whatever one buys into the ground.

I personally like knowing exactly how my car was maintained (and keeping it
maintained properly), so I have been buying new since my 2nd car. I'm now on my
3rd car. Guess I'll probably only make it up to five cars in my lifetime.

Otherwise, I agree with Pete and Captain K.

 

I also think the cost of financing is also a factor. With the current
rates so low, I decided to finance thru Honda Finance instead of
purchasing outright last year. I'm paying AHFC 3.64% on the $$$ borrowed
last year and am making well over that by keeping my $$$ in my account,
IOW, Honda's financing my car.

Make the system work for you.

 

Is it more frugal to buy a new car..... and drive it

It's better to lease a car every 3 years.

You can lease a BMW for $279/month and this includes all maintenance and free
loaners.





____________________________________

 

This guy is just another nut.

 

$1500 in repairs every year? damn- you must drive a VW!

 

But that doesn't matter if you intend to run the car into the ground.

Resale value should never be an issue if you're doing it right.
Reliability is the only issue. If you like the car, and if it's a
reliable one, and you're driving it into the ground, that's all that
matters.

People switch up cars (and houses) every few years because they're
indulging themselves and their need to have something new and shiny and
expensive--instead of money in the bank.