One of my core beliefs about the US economy is that we all need to get more out of less, and it should be obvious that this is no longer a temporary situation. Cars are one of the biggest expenses in the typical household, so there’s plenty of economy to be had on that front. Learning ways to keep your car longer is at the top of the list. There are ways to keep your car longer than you think.
Having grown up in Mexico, it’s obvious to my friend Carlos that Americans view their cars as throw-aways. “Americans keep their cars for five or six years, decide that they’re “old”, and then replace them with something new. In Mexico, people keep their cars for 20 or even 30 years.”
“Is that even possible?” I asked. “I don’t think a car will last that long.”
“They will,” he responded, “because they do all the time in Mexico. Americans are quick to get rid of their stuff. In Mexico, you don’t have that option. You buy a decent car, take care of it, and learn how to fix it. A blown fuel pump doesn’t mean it’s time to replace the car – it means it’s time to replace the fuel pump.”
I’ve learned more about cars from Carlos than I ever imagined. No, I can’t fix my car – but he showed me how to get it fixed, and that’s really all you need to know. Read on.
How Long Can a Car Last?
Research supports exactly what Carlos told me. It turns out that cars are built to last a lot longer than most of us think. Many cars can easily run for 250,000 miles or more. Another friend of mine had a Saturn that ran just a few miles short of the 300,000 mile mark, so it’s definitely possible.
Unfortunately, our perceptions of how long a car can run don’t come close to that, and it causes us to buy new cars more often then we need to.
But as economic fortunes continue to tighten, there are more than a few signs that attitudes are beginning to change. The latest IHS statistics indicate that the average age of a car or light truck in the US is now at a record 11.5 years. That means that 50% of all the cars on the road are older than 11.5 years. The same source indicated that the average new car buyer will keep a car for 6.5 years, but it’s quite obvious that cars can last a lot longer than that.
Why It’s Less Expensive to Keep Your Car Longer
New car or keep the old car – when it comes to the cost to keep it running isn’t it just six of one, half-a-dozen of the other?
Nope, it’s not even close. New cars cost more money to buy, own and operate.
To start, when you buy a brand-new car you have to make a reasonable down payment. Generally at least 10% of the purchase price, but 20% is even better. On a $30,000 car, that’s $6,000 up front.
Then there’s the matter of the monthly payment. A five year loan at 4% for $24,000 will cost $442 per month. That’s $5,304 per year.
The conventional argument in support of buying a new car is that an older car will cost you just as much in repairs. That argument is largely a myth. In our household, we’ve never paid anything approaching $5,000 for car repairs for three vehicles, even though each is over 10 years old.
A more reasonable number – a maximum actually – would be $2,000 per year per car. We’ve never paid that for the repairs on any of our cars in a single year either. Most years, it’s less than $1,000 in repairs.
But even using the higher number – $2,000 – that’s still a lot easier on your cash flow than $5,300+ in monthly payments. And even with a new car, you will still spend a few hundred dollars per year on maintenance and minor repairs.
But even beyond the cost of acquisition, a new car generally carries higher insurance costs, and if you have them in your state, higher ad valorem taxes.
You’ll even pay more for the repairs that do occur. Since new cars are generally under some sort of warranty, you usually have to use a full service repair shop in order to avoid voiding the warranty. And car warranties usually have sufficient exceptions and fine print that you’re always out a large chunk of cash regardless of the promises made at the time of purchase.
Anyway you slice it, driving an older car is much easier on the finances than a new car can ever be. As my friend Carlos always says, “It’s much cheaper to fix a car than it is to replace it.”
Why People Prefer New Cars
So if it’s so much less expensive to drive your car longer, rather than replace it after a few years, why do people still buy new cars? I think there are basically two reasons:
- Personal preference for new cars, and
- “Easy” monthly payments
Preference + easy = another car sold. I think it’s that simple. People who can’t even afford to buy new cars buy them because they can. Their financial conditions seldom improve after the fact, and almost never because they bought a new car.
Anyway you crunch the numbers, it comes up in favor of driving your car longer rather than replacing it. Even if you pay cash for a brand-new car, and avoid the monthly payment expense, there’s still depreciation. A car will fall in value by something on the order of 50% within the first five years. That means that a $30,000 car will lose $15,000 in value in five years. That translates to an annual expense of $3,000.
And that doesn’t even take into consideration the opportunity cost of what you could have been doing with the $30,000 that you have invested in your car. (For example, investing the money to make more money.)
7 Ways to Keep Your Car Longer
How do you keep your car longer – certainly longer than the time it takes to payoff the loan, and even for 10, 15 or more years? And how do you minimize the impact of breakdowns and repairs?
1. Have regular maintenance performed. Follow the maintenance schedule provided in your car owner’s manual. Especially, have the oil changed every few thousand miles. I do it about every 3,000 miles. It minimizes internal engine wear. Also, about once a month pour a bottle of fuel injector cleaner in your gas tank. It will make your engine run smoother, and eliminate engine knock. Gumout, Autozone Techron and Lucas Fuel Injector/Carb Treatment are available for between $6 and $10 a bottle.
2. Garage your car. A lot of people use their garage as a storage unit. But protecting your car from the elements will help it last longer and run better.
3. Work close to home/reduce mileage. If you’re looking for a job or considering a business opportunity, stay with one that is as close to home as possible. Regular commuting in heavy traffic takes a serious toll on a car.
4. Drive your car easy. Driving a little slower is at the top of the list, but do your best to avoid heavy traffic, bad weather, long trips, and driving in mountainous terrain. All can accelerate deterioration of the car engine and the various systems.
5. Use a hybrid car repair strategy. This is a car repair strategy that I use that saves a fortune on car repair bills. Rather than going into a deep discussion here, check out this post which describes our latest foray into hybrid car repairs. Learn this strategy, and you reduce the cost of car repairs by about 50%. The use of this strategy alone can make keeping your car longer a no-brainer.
6. Get AAA. In addition to the travel discounts that you can get through AAA, they also provide towing (up to 200 miles per year with the Premier plan) and roadside assistance. You may need both when you’re driving an older car. Just having the service available is a welcome comfort. Have it even though you may have similar coverage with your car insurance. Those services may be limited with the insurance company, and it’s always nice to have more choices in a car crisis.
7. Rent cars for long trips. I have no problem driving my 16 year old Nissan Maxima around town, but I don’t use it for out-of-state trips. That’s part of my driving-it-easy strategy. Instead, I rent a car for longer trips. It could be for a day or for a weekend, depending on need, but doing so means less stress on my car. This is where AAA helps – we normally get a 10% discount on car rentals through Hertz. Becoming a gold club member with the rental company helps too. Renting a car is always a nice option to have for a long trip.
Bonus: If it ain’t broke, don’t fix it – dealing with car weirdness. I’m not including this in the 7 strategies above, because not everyone would agree with this. But another thing Carlos suggested to me was to never repair my car until the source of the trouble is obvious.
Cars sometimes do weird things. The source of the weirdness isn’t always obvious. If you bring the car to a shop, they may replace three or four components before the weirdness stops. His suggestion is to wait until the car doesn’t start, or has some obvious problem, at which time the source of the trouble will be clearly identifiable. That avoids having to play the costly process-of-elimination game, where perfectly good components are replaced on a hunch that they may have crapped out.
It’s a risky strategy, because the delay could result in a more costly repair, in addition to the fact that the car could very well have multiple problems. But thus far, I’ve found the strategy to be a solid one. As an automotive idiot, I’ve experienced repair shops making multiple repairs on my car without ever fixing the problem. Sometimes it just pays to wait – but you’ll have to determine if that strategy is right for you.
Cars can last a lot longer than we generally think. It’s just a matter of coming up with a strategy to make it happen.
What has your experience been?