Philosophical debate - when is it time to buy a new car?

Kinja'd!!! "Chairman Kaga" (mike-mckinnon)
11/15/2013 at 12:32 • Filed to: None

Kinja'd!!!0 Kinja'd!!! 5

This is related to my ongoing issues with a 12 year old Camry.

When should you buy a new car?

I won't make this too full of if then statements. But to establish a baseline, let's say married couple, two small kids, own a home, have 6 months of savings, stable jobs with firmly middle-class household income, with two paid-for cars - one is an older import with close to 200,000 miles, but that has been well maintained, and a newer import SUV/CUV.

On the one hand is the Dave Ramsey drive it into the ground, dig it out, drive it some more argument. You'r a financial idiot if you buy a car more frequently than every 20 years or have less than $1,000,000 in the bank.

A less extreme argument is buy one once you have saved enough to purchase the replacement outright with cash. It should cost no more than 1/6th your annual household net income. You should keep it for at least 15 years.

Finally, buy a new car whenever you can afford it, when keeping up with an increasingly unreliable or needy car becomes too much of a burden, or when your life demands the change. Watch for good deals, maximize resale of your current ride, and trade in when you can get the best financing and incentives. Live a little.


DISCUSSION (5)


Kinja'd!!! Arch Duke Maxyenko, Shit Talk Extraordinaire > Chairman Kaga
11/15/2013 at 12:35

Kinja'd!!!2

"a 12 year old Camry."

There, that's when.


Kinja'd!!! RiceRocketeer Extraordinaire > Chairman Kaga
11/15/2013 at 12:50

Kinja'd!!!0

If it's your commuter ... the 1st option, assuming you don't hate the car. If you do hate the car, that's a different story.


Kinja'd!!! 911e46z06 > Chairman Kaga
11/15/2013 at 13:29

Kinja'd!!!0

As soon as you don't want to keep the old one anymore.

So it becomes too expensive to maintain, it gets to be too unreliable, or you just fucking hate it (like if you were to own, say, a Camry). Then it's time to upgrade.

If you need a formula, take what it will cost to buy a new one. Cost - (selling price of old car + savings on maintenance/repairs + savings on gas). Then take that number and decide if it's worth that much to you to get a new car.

And I disagree with the 'newer is better' idea, especially if you're just looking at the practical side of the purchase. In addition to the fact that older cars are much cheaper, there are very few new cars that the average person can work on themselves. If you get something a bit older, you can do a lot of maintenance yourself, which saves you significant money over the life of the car.


Kinja'd!!! Lemonhead > Chairman Kaga
11/15/2013 at 13:50

Kinja'd!!!0

My rule of thumb is that I keep a car until when the cigarette lighter breaks, the car is then considered totaled.

Kept the Passport until it went through 2 engines, 1 transmission rebuild, 2 A/C compressors, and had the rebuilt transmission finally go. A one-time $1500 bill is still cheaper than car payments for 5-6 years.

I probably would have fixed the transmission again, but my commute is 35 miles each way and the cost was too high. The new car gets twice the mileage so it cut the hit in my wallet down by over $200/month.


Kinja'd!!! GRawesome > Chairman Kaga
11/15/2013 at 13:56

Kinja'd!!!0

My method is when your DD can't reliably get you to work anymore it is time to move on. For me, that was 13 years in a Jeep Wrangler, but after being stranded on the highway twice due to computer issues (damn modern cars!!) I decided it was time to upgrade to something more reliable.

The decision then becomes do you keep the current car as a project or sell it/trade it in on the new one. The type of car usually dictates the answer to that question, but if there is some sentimental value attached that could factor in as well. 12 year old camry though, easy decision. Kick it to the curb!