When is the "tipping point" to getting a new car?

[Anonymous]

I understand that from a numbers perspective, it's never a better deal to get a new car if you have an old, safe one that you can still keep running. I currently have a 2001 model year car that fits into that category. I'm now getting into some very expensive repairs, and I'm wondering when you decide that sinking more money into the car is not wise, even if the repairs are less than buying a new car.

For example, in 2009 I put in about $750 in repairs. In 2010, $1500. In 2011, about $3500, which looks crazy -- but at that time, I knew I was going to have to pay a lot for something else going on in my life, and I definitely did not want to get into a situation where I'd be worrying about a car payment on top of those other expenses. I told myself that if I could get another year of useful life out of the car, then the really large expense would be worth it. I think that was a good decision based on those variables, because I've gotten more than a year of useful life out of it.

Recently, I was told that the car needs yet another $1,800 in new repairs. And I can pay that from my emergency fund, so it's not the money. But when do you know that it's okay to get something new, even if financially it doesn't look good on paper to do so?

I never just routinely trade in cars, FWIW. My goal is always to drive them for as long as possible. Complicating this for me is that the car gets really excellent mileage (diesel stick shift) and boy, I sure do hate to give that up, with fuel prices where they are. However, I'm not sure I want to get another diesel stick because it's hell in traffic.

Anyway, I know that this tipping point is probably different for different people. Just trying to get some different perspectives.

[Anonymous]

I think the part you're missing is that when you are making car payments, you are investing in something that (hopefully) will last for years. When you invest in car repairs (as you have seen) you are paying for one or two years at best. The tipping point is when you would have purchased a lot more time without worrying for the same price.

[Anonymous]

I save up cash, so when it's time for a new one I buy it so I don't pay out any more once it's bought and don't pay interest. However I still pay for repairs for a while. The tipping point for me is when don't feel the car is reliable any more and I find myself unexpectedly stuck (as opposed to some warning light that I have time to take to get fixed) I would use the "three strikes and you're out" rule. My last car never actually stranded me, but it was getting expensive and wasnt practical for the baby after a while.

[Anonymous]

A good question. The difficulty is that you never know what the costs will be down the line. You could talk to the mechanic to try to get a sense of the state of the main systems and what their useful life might be.
I don't know that the fuel efficiency should be a factor since you could presumably buy a new car with better efficiency if you wanted to.
One other factor is the hassle-you don't want a car to break down while you are driving it, nor to always have to be taking it in to the garage.
Then there is the decrease in value of the car itself. If you buy anew car, say for 20k, then you will be reducing the value of the car by 2 or 3 k every year you own it, while the reduction in value for a 12 year old car is negligible.

[Anonymous]

For me the $1500 would've been down payment for a new car and $3500 a year's worth of payments.I try to drive my cars 'til the wheels come off, but the constant fixing makes me mad.
I'd wait 'til next bigger repair-over $1200 and sell it instead.

[Anonymous]

I drive the wheels off my cars. I'm currently driving a 1998 CRV that I plan to keep for 2-3 more years. I get a new car when the cost of a repair job is more than 1 year of car payments. I consider it if the repairs are worth more than the vehicle and I can't be sure that I will get at least 1 year out of the car after it is repaired.


$3500 would be past that tipping point.

[Anonymous]

I think you are there OP.

[Anonymous]

OP here: I understand what y'all are saying. I probably was past that tipping point ages ago -- that $3500 repair came after lots of consideration, and it really was driven by a special circumstance and other big expenses that I knew were coming up.

But for the smaller but still pricey repairs, I always end up thinking "well, do I REALLY want to get into a car payment right now? $700 or $1400 or $1800 is STILL less than a new car, or even a nice used car, etc."

I really hate car payments, and I'm not in a situation where I can pay outright for a car. I think I gotta let this thing go soon, though.

[Anonymous]

OP again: one of the reasons I'm leaning towards repair is that my kid is currently being watched by my parents while I'm at work (and I'm extremely grateful to them for that.)

But soon there'll be a daycare expense and I'm not sure how that'll will fit in my budget, so I'm afraid to add a car payment to the balance. See what I mean? There's always some relatively decent reason to just cobble the old ride back together and try to get some more miles out of it.

[Anonymous]

ask your mechanic. I had a great relationship with my mechanic and he knew that my objective was to do preventative maintenance and repairs until the trigger that in his expereince was the sign that more things were coming.

My car was 11 years old when he identified the thing that in his experience other major items failed around the same time.

I did not have the flexibility to constantly have my car in the shop (part of the equation for me was I needed a reliable car to get my children to school and me to work)

[Anonymous]

I like to buy every 6-7 years when the new body style / model has had at least 1 year of being out to work out bugs. I also like having the new style for a few years.

[Anonymous]

Look into what your payment would be and what your interest rate would be. Unless you get a new car, you're going to keep having expensive repairs AND a daycare payment. At least with a car payment you're getting predictable payments and a reliable car that will probably have more safety features than your old car.

We were going to replace our 1998 with a late-model used car, but ended up getting a new car because the factory-financing was at such a low rate. If you are looking for a basic small sedan, your payments won't be bad.

[Anonymous]

I'm in the realiability camp, too. Mine's 15 years old and has never failed me (knock on wood). When she does she goes.

[Anonymous]

I agree, OP. buy a new car - but not a freaking Lexus!

You can't afford another major repair, and you certainly can't afford to be stranded by the side of the road.

Buy used, reliable, cheap.

Www.carmax.com

[Anonymous]

Anonymous wrote:I think the part you're missing is that when you are making car payments, you are investing in something that (hopefully) will last for years. When you invest in car repairs (as you have seen) you are paying for one or two years at best. The tipping point is when you would have purchased a lot more time without worrying for the same price.

This doesn't make sense. A car is not an investment. Say you have the choice between a $1200 repair and getting a new $20,000 car for $400 a month. Say the repair gets you a year and then you buy a new car. The comparison of where you are after 3 years is:

(if you did the $1200 repair) -- You've spent $10,800 over three years and now have a 2-year-old car.
(if you didn't do the repair and got a new car instead) -- You've spent $14,400 over three years and have a 3-year-old car.

If repairs can get you one more years, it should be worth it to you if the repairs are less than a year of car payments, discounted by how much you hate your car and want a new car. It isn't really a science.