OT: Car Decision Time

[flere-imsaho]

A couple of years ago my wife & I were thinking of getting a 2nd car. Although "her" car, a 1999 Toyota Corolla, continued (and continues) to work just fine, we found ourselves more and more in the position where we both needed a car at the same time. It was just more convenient to have 2 cars.

At that time, an opportunity came up. My Grandpa decided it was time for him to stop driving. My brother, who had coveted my Grandpa's pickup truck, wanted to buy it. At the time my brother owned my Dad's old 1993 Mazda 626. So, Ben (my brother) bought the truck, and I bought the car.

Since then the Mazda has worked out pretty well. It's an old car, with a lot of miles (234,000), but still drives well, is comfy, and gets over 30 mpg. I don't drive it a lot. Basically I drive it on occasions when I'm going somewhere and my wife is also going somewhere and we both need cars at the same time. Over the summer that was about 4 times a week, since that's how often I was going out to play Ultimate Frisbee. However, from now until next spring I'll probably only be driving it once a week on Sunday.

The problem is that it's starting to rack up the maintenance costs. I looked at how much I've spent on the car since I got it, and it averages out to about $220/month. The car itself is worth about $700.

Until now, I've put off thinking about replacing this car. I like the car for nostalgic reasons, and I'd like to get it to 250K miles, but I've still been thinking that it makes economic sense:

I figure to replace this car with one of similar utility, I'd be spending about $10,000 on a used car (Civic or something similar). Financing on this would end up running $250-$300. So my rationale is that as long as my maintenance costs on the Mazda stay below this range, it's still reasonable, economically.


The purpose of this post, then, is to have people question my judgment. Do so below, or in the poll.

[Draft Dodger]

as far as polls go, this one is definitely

[Bee]

Sorry, I'm going to need a diagram.

[JonInMiddleGA]

I waffle, here's why.

There's a point that most cars reach where you're throwing away perfectly good money, basically you get into a cycle where it's constant repair costs, that can easily end up totalling more than the car itself is worth ... but I can't really tell whether you're there or not. That would depend on several things, including what had/hadn't been recently replaced before you got it.

[Ksyrup]

Originally Posted by flere-imsaho

I figure to replace this car with one of similar utility, I'd be spending about $10,000 on a used car (Civic or something similar). Financing on this would end up running $250-$300. So my rationale is that as long as my maintenance costs on the Mazda stay below this range, it's still reasonable, economically.

As JIMG suggests, it's a little more complicated than this, and without more info, a more definitive "right" answer is going to be hard to give you, but just from this statement, one thing you're forgetting is that you'll likely get more worth out of spending $250/month toward a $10K car, even figuring depreciation for the next, say, 5 years, than you will putting $200 a month into a $750 car for another year. In terms of what you're spending per month, it's a wash, but in terms of what you're getting, you're almost definitely wasting money keeping alive a car that isn't worth anything.

[Bee]

Originally Posted by Ksyrup

As JIMG suggests, it's a little more complicated than this, and without more info, a more definitive "right" answer is going to be hard to give you, but just from this statement, one thing you're forgetting is that you'll likely get more worth out of spending $250/month toward a $10K car, even figuring depreciation for the next, say, 5 years, than you will putting $200 a month into a $750 car for another year. In terms of what you're spending per month, it's a wash, but in terms of what you're getting, you're almost definitely wasting money keeping alive a car that isn't worth anything.

There's also other factors to think about as well. Will your insurance go up with a newer vehicle? Personal property taxes if applicable? Does the $220 a month you figured include things you'll also have to pay with the newer vehicle? (Things like tires, etc.). One good thing about the old car is it has pretty much stopped depreciating...hehe. I think it's a toss-up based on what info we have.

[flere-imsaho]

I'll try to give some more info here.

For one, I've definitely put more money into the car now than it's currently worth. Even right now I have work yet to be done which will cost another $700 or so (about what the car's worth).

Having said that, the things being replaced aren't then re-breaking, and also aren't integral to the car. For instance, right now the work that needs to be done on the car consists of:

1. Replace the rotted out exhaust system.
2. Replace the front left stabilizer link.
3. Replace the Airbag diagnostic chip which has shorted.

More recently I've replaced struts here and there, and some other stuff. Nothing big, though. The various pumps are fine, and more than one mechanic has said both the engine and the clutch look to be in good shape.

All of which is reassuring, but on the other hand, I don't know if I want to continue the habit of getting nasty surprise whenever I take the car in for a service.

As for worth.... I judge a car's worth on its utility. This car's utility (or that of its replacement) will be to take me on short trips when I can't use the other car because my wife is using it. I don't use this car for commuting, and I don't use it every day, so it's not a make-or-break situation. In this scenario, it's just a tool, so the question is whether I pay $X in repairs to keep the tool working, or if I pay $X in financing to have a new tool.

Edit: No difference in taxes with a new vehicle. Insurance likely to go up. I pay virtually nothing in insurance now (basically liability and that kind of stuff) on this car.

[RendeR]

Dude, trade that PoS in on a NEW car, you can get deals on brand new vehicles now for less than 300 a month payments.

Get something that will last you another 10 years, pay it off in 5 and be happy.

[Glengoyne]

Should have be "Trout in the Tailpipe", but I went with the trout anyway.

I'd say if it is costing you a car payment a month, ditch the car. Although the 626 is one of my all time favorite cars.

[Franklinnoble]

You have your own home with a garage?

If you start learning to do your own maintenance, you could probably save a lot of money.

I like having my cars paid for, and I will probably drive them until they croak, like the end of the Blues Brothers....

[flere-imsaho]

Originally Posted by Franklinnoble

If you start learning to do your own maintenance, you could probably save a lot of money.

True, but the repairs I mention above are, I think, beyond my mechanical know-how.

[flere-imsaho]

Here's some numbers:

$10,000 loan financed @ 5.56% over 36 months = $302.64/month

$10,000 loan financed @ 5.95% over 48 months = $234.62/month

$15,000 loan financed @ 5.95% over 60 months = $289.64/month


Look at this from a simple cash flow standpoint. Assuming that insurance is also lower on my current car, arguably it makes more sense to pay ~$200 - $250/month to maintain it, then finance a newer car.

Unless, as I said before, that doesn't make sense for other reasons.

[Franklinnoble]

Originally Posted by flere-imsaho

True, but the repairs I mention above are, I think, beyond my mechanical know-how.

Yeah, I posted before I saw the specific list you posted. Still, I'm not a gearhead or anything - but I've managed to get by with some shop manuals and a lot of help from friends who are. Just something to consider...