When is it time to replace a car - is there a formula?

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DHolliday
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When is it time to replace a car - is there a formula?

Post by DHolliday » Sat Feb 08, 2014 10:11 pm

I bought a new car 8 years ago, all cash. It's served my family well, and is still running fine, but has already topped 100k miles. The car gets around 18 to 21 mpg.

I am growing increasingly concerned (paranoid) that it will start to require some serious repairs in the coming years if not months. My mechanic recently told me that I'll have to undertake some serious repairs to fix the axle (costing ~$3k - I think the car is valued at $7k).

So with that said, I'm really thinking about getting a new car, and am aiming at a boost in MPG.

I'm trying to figure out a good way to calculate whether or not it's really worth it for me to go through the trouble of buying a new car. Let's say I get $7k for this as a trade-in, throw in $3k from my bonus and finance 12k at 1.9%, is that better in the long run than having to probably spend thousands to maintain a car that will increasingly become unreliable?

I appreciate any insights.

Laura
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Re: When is it time to replace a car - is there a formula?

Post by Laura » Sun Feb 09, 2014 5:42 pm

You need to start saving for a new car now so you can pay cash when the time is right. If you had your last car for 8 years and had been making monthly payments to yourself you wouldn't have a problem now. I would probably start putting money aside for a new car but try to keep this one on the road for a while. 100k isn't all that much for a car today. I think even with some more money in the car you would be better off sticking with what you have.

Laura
The views presented are my own and not necessarily those of the Department of State or the U.S. Government.

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Watty
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Re: When is it time to replace a car - is there a formula?

Post by Watty » Sun Feb 09, 2014 5:59 pm

I am growing increasingly concerned (paranoid) that it will start to require some serious repairs in the coming years if not months. My mechanic recently told me that I'll have to undertake some serious repairs to fix the axle (costing ~$3k - I think the car is valued at $7k).

For that large a repair get a second opinion. Even if it really needs to be done you might be able to have it done with salvaged parts and save a lot.

likegarden
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Re: When is it time to replace a car - is there a formula?

Post by likegarden » Sun Feb 09, 2014 6:14 pm

Second opinions are important. I did that with a dentist and saved $2.5k. One car repair shop wanted $900 on a 2004 car; I went to another one who said only $300 are needed.
I replaced cars usually when the annual repair costs approach what a lease of a brand new car would cost. I am saying why should I drive in an old car and have all that hassle with it, when I could ride in a brand new car for the same expense. We usually buy new cars every 11 years, with cash.

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steve roy
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Re: When is it time to replace a car - is there a formula?

Post by steve roy » Sun Feb 09, 2014 7:08 pm

My rule of thumb: when a car starts nickel and diming you with repairs, sell the vehicle and buy a new one. You'll know when it's time because the car will be aggravating you big time.

Professor Emeritus
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Re: When is it time to replace a car - is there a formula?

Post by Professor Emeritus » Sun Feb 09, 2014 7:54 pm

Laura wrote:You need to start saving for a new car now so you can pay cash when the time is right. If you had your last car for 8 years and had been making monthly payments to yourself you wouldn't have a problem now. I would probably start putting money aside for a new car but try to keep this one on the road for a while. 100k isn't all that much for a car today. I think even with some more money in the car you would be better off sticking with what you have.

Laura
+1
That was my point about a sinking fund in another thread.

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White Coat Investor
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Re: When is it time to replace a car - is there a formula?

Post by White Coat Investor » Sun Feb 09, 2014 11:41 pm

DHolliday wrote:I bought a new car 8 years ago, all cash. It's served my family well, and is still running fine, but has already topped 100k miles. The car gets around 18 to 21 mpg.

I am growing increasingly concerned (paranoid) that it will start to require some serious repairs in the coming years if not months. My mechanic recently told me that I'll have to undertake some serious repairs to fix the axle (costing ~$3k - I think the car is valued at $7k).

So with that said, I'm really thinking about getting a new car, and am aiming at a boost in MPG.

I'm trying to figure out a good way to calculate whether or not it's really worth it for me to go through the trouble of buying a new car. Let's say I get $7k for this as a trade-in, throw in $3k from my bonus and finance 12k at 1.9%, is that better in the long run than having to probably spend thousands to maintain a car that will increasingly become unreliable?

I appreciate any insights.
I often buy them at 100K miles, then pay for the "serious repairs" you fear. It still works out well. My newest car is older than yours. The least expensive way to drive cars is to drive beaters and repair them until the repair costs more than the car. It's nicer to drive nicer cars, but there's no way it is cheaper and anyone who thinks it is hasn't driven very many $2-6K cars.
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Grt2bOutdoors
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Re: When is it time to replace a car - is there a formula?

Post by Grt2bOutdoors » Mon Feb 10, 2014 9:11 am

For $3K - you should be getting a heck of a lot more than just "an axle". For $3K - you should get 2 new front axles, 2 new struts/shocks (suspension), replacement of control arms, oil change, transmission change, tune-up. Someone is trying to take you for a "ride". If the axle was in danger of failing, the car should be taken out of service immediately. Do not drive a car whose axle is about to break. Therefore, what the other poster alluded to is 100% correct, take the car to another mechanic and have them take a look at the car - make no mention of the word "axle, control arms, struts" - let them make an independent decision if the car needs work or not, and let them provide a written estimate of all the work needed.
I've had my axle replaced and it did not cost $3K. Labor to change an axle is "2 hours and I'm being generous". Is your mechanic quoting OEM prices or is your mechanic actually employed by a "stealership"? What is the make/model and year of the car?
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SteveNet
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Re: When is it time to replace a car - is there a formula?

Post by SteveNet » Mon Feb 10, 2014 9:34 am

Grt2bOutdoors wrote:For $3K - you should be getting a heck of a lot more than just "an axle". For $3K - you should get 2 new front axles, 2 new struts/shocks (suspension), replacement of control arms, oil change, transmission change, tune-up. Someone is trying to take you for a "ride". If the axle was in danger of failing, the car should be taken out of service immediately. Do not drive a car whose axle is about to break. Therefore, what the other poster alluded to is 100% correct, take the car to another mechanic and have them take a look at the car - make no mention of the word "axle, control arms, struts" - let them make an independent decision if the car needs work or not, and let them provide a written estimate of all the work needed.
I've had my axle replaced and it did not cost $3K. Labor to change an axle is "2 hours and I'm being generous". Is your mechanic quoting OEM prices or is your mechanic actually employed by a "stealership"? What is the make/model and year of the car?
Agreed! I would like to know exactly what gold plated type of axle this is to cost 3K to repair...

Get another opinion/estimate.
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Jack FFR1846
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Re: When is it time to replace a car - is there a formula?

Post by Jack FFR1846 » Mon Feb 10, 2014 9:40 am

What kind of car costs $3000 for an axle? I have to think that it's a Ferrari or something similar for that kind of money.

I do my own mechanical and replaced 2 front CV axles on my wife's outback for $150 total. I had an 80's Mustang rear end completely rebuilt (new gears, axles, everything) by a mechanic for $900. Even if I had him to the labor (this was just the rear end rebuilding price), it might add another $500 tops.

There's more than just costs to consider. If your car becomes undependable because things often break and leave you stranded, that can be more important than the cost calculations. If you have to depend on your car for work and can't earn because the car isn't working, that needs to be considered.

I do understand that some cars seem to get to a point where everything seems to go at once.

Ok, so on the other side.....it doesn't matter what the car is worth. If you have kept it up and the only thing needing attention is this axle problem, you have a good running vehicle for $3000. If it goes a year before needing further attention, you're way ahead of a new car payment.
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bottlecap
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Re: When is it time to replace a car - is there a formula?

Post by bottlecap » Mon Feb 10, 2014 10:07 am

There is no formula. As others have mentioned the axle fix seems suspicious. You can get a new transmission for less than that. Seems like you need a new mechanic, not a new vehicle. In any event, how will you get a $7,000 trade in if it needs so much work?

Despite there not being a rule of thumb, I usually try to anticipate if I can get 10 times the repair cost in miles out of it. If I can, it makes me feel better about it, as that's the minimum a new car will decpreciate and I often stand a good chance of getting almost twice as many miles before the next repair.

I don't know why people get nervous about 100k miles, unless maybe you're driving a Chevy truck, like my wife. Even then, replacing the transmission every 120,000 miles is cheaper than a new vehicle... Just keep it well maintained. My guess is most cars don't need major repairs until 200k or so.

JT

TallPines187
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Re: When is it time to replace a car - is there a formula?

Post by TallPines187 » Mon Feb 10, 2014 10:44 am

I 'ditto' the second opinion recommendation - and checking with trusted friends to find out who they take their vehicles too as well. I am only the 2nd owner of a 17-year old Subaru - 170K miles - and repair costs (including rust repairs) has still got a long way to go before costing me as much yearly as a[new] car payment, and increased registration and insurance costs. And if and when I do decide it will not be for a new car. That's like investing in a fund knowing it's going to dive 20% the minute you sign the papers. Not a smart option for me. That's just my take, and it works well for me. Take time to make a sound decision for yourself ok.

snowman
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Re: When is it time to replace a car - is there a formula?

Post by snowman » Mon Feb 10, 2014 12:04 pm

As mentioned, there is no formula. 100K miles on a well-built car these days is really nothing - it's just slightly used, in my opinion. I do my own maintenance and repair; if you could post your model, I could potentially give you better answer. There are some problematic cars and trucks out there, but unless your car is one of them, you are much better off fixing it than replacing it.

Sounds like you are not mechanically inclined to do it yourself. If that's the case, ask your friends about good independent, locally owned repair shops. Avoid dealers and national chains. Get at least 2 more estimates. Read internet forums specifically dedicated to your model. You will learn a lot about your car and will have better idea what to expect out of it in the future, as well as how serious your current problem is and what is a reasonable cost to fix it.

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lthenderson
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Re: When is it time to replace a car - is there a formula?

Post by lthenderson » Mon Feb 10, 2014 12:38 pm

All three of my vehicles are older than 8 years and have more than 100k miles on them. They are just getting broke in! Maybe when they cross 200k I might upgrade or just drive them until the wheels fall off, whatever happens first.

wilked
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Re: When is it time to replace a car - is there a formula?

Post by wilked » Mon Feb 10, 2014 12:49 pm

DHolliday wrote:I bought a new car 8 years ago, all cash.
Why are you changing your methods now, then? Stick with the all-cash methodology...

As others said, 100k is not much. Be aware that cars do require maintenance, I doubt that $3K estimate is accurate / honest, and try and resist the new car itch

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BrandonBogle
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Re: When is it time to replace a car - is there a formula?

Post by BrandonBogle » Mon Feb 10, 2014 12:50 pm

DHolliday wrote:I bought a new car 8 years ago, all cash. It's served my family well, and is still running fine, but has already topped 100k miles. The car gets around 18 to 21 mpg.

I am growing increasingly concerned (paranoid) that it will start to require some serious repairs in the coming years if not months. My mechanic recently told me that I'll have to undertake some serious repairs to fix the axle (costing ~$3k - I think the car is valued at $7k).
As Laura said, you should have been saving money all along towards your next car, but at least start that now. You should not need a loan to buy a car, or you are buying too much car. As others have said, also get a second opinion on the repair. That said, if you end up at around $3k for a repair (even after a second opinion) on a car valued around $7k, then drive it until it breaks down (or needs other, immediate repairs) and replace. Now, needing to spend $500 on a car worth $7k, personally I would do the repair and keep driving.

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