Here’s some good reasons why you should keep your old car until it gives up.
Car payments and your budget
Is upgrading worth the expense? Can you afford to commit to monthly car payments that could go on for a few years? Remember, at the end you will have a new car and thanks to depreciation rates the value of that car will plummet quickly. Experts estimate that new cars depreciate at about 50% on average. Manufacturers are coming up with some very tempting deals to lure you into their dealerships. Some of them offer 0% interest rates, low monthly repayments, no deposit and another new car as soon as you pay off the current one.
Financial guru, Dave Ramsey asks a very good question – are car payments a way of life? He asserts that we don’t need car payments and can find a better way to save up for a new car. We live in a very materialistic and digital obsessed culture. Are we getting conditioned into thinking that just as we need that latest iPhone device do we also need to have the very latest in car technology? New cars come with rear parking sensors, Bluetooth connectivity and heated seats. Maybe we are getting greedily complacent.
This is the ultimate question – how much is it costing you to repair and maintain your current vehicle? Think about servicing, repairs, insurance and how much gas it guzzles. If the answer is ‘a lot’ then it may well be time to trade your old car in. Spending £200 per month on repairs and you might as well head to the local dealership. However, if the costs are still reasonable compared to car repayments then it may be worth holding onto your car for now while you save up to pay for a new car in cash and avoid interest payments. Sometimes it is more economical to do a bit of DIY yourself. Sign up for a local basic car maintenance course and you can learn to change the oil, brake pads and spark plugs yourself. Some short courses only cost about £100 and that is roughly the cost of two oil changes. Purchase your parts yourself and save even more money. Regular and thorough maintenance will enable your car to stay running longer too. Joe LoCicero who lives in Maine, USA, owned a 1990 Honda Accord and by looking after the car so well it reached one million miles. Now known as Million Mile Joe, LoCicero has his own website giving advice on taking care of vehicles so that they last and add value. Here’s a mixture of other reasons for keeping your old car:
- If it gets scratched or bumped you won’t be as concerned as you would be about a new car
- Depreciation is less of an issue
- Older cars can give you better mileage for your gas
- Insurance can be cheaper
- Who’s going to steal it?
- Less add ons and a more simple engine means fewer chances of things going wrong compared to new cars which are much more sophisticated
- You own your car and so the only other costs are fuel, insurance and maintenance
- So long as you can get from A to B - who cares?
- Check if repairs are really necessary – make sure your mechanic or garage aren’t just trading on the age of the vehicle. Maybe you don’t really need to get such major and expensive repairs done. In which case save the money on the repairs and car payments on buying a new car.
- Forget sentimental value, if a repair is less than half the car’s market value then it is worth getting the repair done
- There’s no guarantee that a new car won’t incur unexpected repair costs
- Keeping your car could be kinder to the environment than dumping it as unrecyclable car parts end up as waste and chemicals create hazardous waste.
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