How much money will I save if I keep my car an extra year or two?

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Afty
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How much money will I save if I keep my car an extra year or two?

Post by Afty »

Hi wise Bogleheads,

Our second car is a 2012 Kia Sorento EX V6 with about 80k miles. My rule of thumb in the past has been to replace a car at 10 years old, so the Sorento would normally be due for replacement. However, we’re considering just keeping it because (a) I’m now permanent remote and don’t drive much anymore, and (b) car prices are high currently because of pandemic shortages. It’s in fine condition, some cosmetic issues but mechanically sound.

Can anyone help me quantify the amount of money we would save by keeping the Sorento another 1, 2, 3, 4 years? Let’s say the baseline is to sell it immediately and replace with a new Tesla Model Y at about $56k + CA tax & registration. Let’s also assume we would pay cash for the Tesla, so no messing with a loan or paying interest. How would one compute the savings? I don’t need a 100% solid answer, just a rough guess is fine.

Thanks,
Afty
mary1492
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Re: How much money will I save if I keep my car an extra year or two?

Post by mary1492 »

Similar to you, I look at it based on how long I intend to keep the car. You say you usually go for 10 years (similar to me - I begin thinking at 100,000 miles). Generally, I'd say to divide your all-in purchase price on the Kia by 120 and from that, estimate that you'll save that amount each month you hold off on buying a replacement. However, that holds so long as you have normal maintenance and no major repairs that unexpectedly arise. Additionally, it holds so long as you're thinking of replacing with a similar vehicle - the $56k Tesla is not a similar replacement vehicle for the Kia. So, in your case, with your usual 10 year holding period, divide the $56k + CA tax & registration by 120 and that's how much you'll "save" every month by holding off on purchasing the Tesla. You might also consider calling you insurance company and finding out what the cost differential is for the Tesla vs. the Kia. Considering the age of the Kia, I'm thinking the cost to insure the Tesla is going to be higher. So, you should figure that in as well.

Understand, that when you purchase a Tesla, you're also going to have additional costs - minimally you're going to need to purchase (and likely pay to install) a home charging system and any accessories that go along with it. My understanding is that charging off of the normal AC outlet is not going to do the job.
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bottlecap
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Re: How much money will I save if I keep my car an extra year or two?

Post by bottlecap »

There’s absolutely no way of calculating this for you. There are too many variables. What mechanical condition is your current vehicle in?

Selling a vehicle at 100k miles and ten years is likely a bad financial idea. But it is a popular idea amongst city/non-self-sufficient folks. I don’t really know how to describe it other than that, but I know you can reliably get 15 to 20 year old of a vehicle if you have even a small amount of knowledge in dealing with mechanics and/or a small amount of mechanical ability yourself.

I’ve never gotten less than 225,000 miles (and counting) out of a vehicle and I’m not especially mechanically inclined. It’s almost always cheaper than a car payment. But you have to do your own calculations.

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Not Law
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Re: How much money will I save if I keep my car an extra year or two?

Post by Not Law »

I don't buy a car unless it is at least 10 years old and has 100k miles on it.
tibbitts
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Re: How much money will I save if I keep my car an extra year or two?

Post by tibbitts »

Afty wrote: Sun Sep 12, 2021 6:16 pm Hi wise Bogleheads,

Our second car is a 2012 Kia Sorento EX V6 with about 80k miles. My rule of thumb in the past has been to replace a car at 10 years old, so the Sorento would normally be due for replacement. However, we’re considering just keeping it because (a) I’m now permanent remote and don’t drive much anymore, and (b) car prices are high currently because of pandemic shortages. It’s in fine condition, some cosmetic issues but mechanically sound.

Can anyone help me quantify the amount of money we would save by keeping the Sorento another 1, 2, 3, 4 years? Let’s say the baseline is to sell it immediately and replace with a new Tesla Model Y at about $56k + CA tax & registration. Let’s also assume we would pay cash for the Tesla, so no messing with a loan or paying interest. How would one compute the savings? I don’t need a 100% solid answer, just a rough guess is fine.

Thanks,
Afty
No, nobody can help you quantify the amount you'd save.

But you've already said you don't drive much any more and have a "fine condition" car with 80k miles. Apparently you don't need or want a different type of car. Not seeing any need to quantify anything.
mrjohnanderson007
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Re: How much money will I save if I keep my car an extra year or two?

Post by mrjohnanderson007 »

Go to kbb. Look at price of your current car with x miles. Look at price of same car 2 years older with x miles. That is estimate of what it would cost to keep your car for a few more years. Now go from there with new car price, license, tabs, fuel, depreciation, investment/opportunity cost, insurance, etc
gonefishing01
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Re: How much money will I save if I keep my car an extra year or two?

Post by gonefishing01 »

Go to Carvana and type in your license plate to see how much your car is worth. Used car prices are high right now due to shortages and Carvana/CarMax/etc are making great offers. Who knows how long this will last. Personally I’m upgrading this year even though my current 10 year old truck is in great shape because the no hassle buy offers are nearly what i paid for the thing a decade ago.
rockstar
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Re: How much money will I save if I keep my car an extra year or two?

Post by rockstar »

A gas motor should last you up to 200k miles. I've never had one past 160k miles.

When I brought my vehicle in as a trade at 100k miles, I was offered $6k. When I brought it in near 160k miles, I was offered $5k. Between those two periods, I replaced the tires once and replaced the spark plugs and did normal oil changes with air filter changes. No huge expense items, so I kept the vehicle. At near 160k miles, I started to have issues with the suspension system, so I decided to get rid of it.

I paid the car off in 5 years, so I had 7 years without a payment. And the expenses I incurred were minimum. If the expenses were much bigger things going wrong, I might have gotten rid of it sooner. It really depends on the vehicle. Some vehicles will last. Some will turn into money pits. It really depends.
Mike Scott
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Re: How much money will I save if I keep my car an extra year or two?

Post by Mike Scott »

How much will you spend on a new one? Postponing that expense might save you some money.
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5th_Dimension
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Re: How much money will I save if I keep my car an extra year or two?

Post by 5th_Dimension »

I can't help you with how much money you will save, however I 2nd the recommendation to check on the price you will get if you sell your Kia. Check Carvana and CarMax. We recently sold two cars. Carvana was higher on one, CarMax was higher on the other. No idea why.

Right now I think you are in a unique position. You can probably get more money for your Kia because of the crazy used car prices. If you were to turn around and purchase almost any new car the markups are crazy as well. But you want a Tesla, and Teslas have a set price. They have gone up like everything else, but you are not getting gouged like with so many other cars.

By the way, this is what we did. We sold our used cars for inflated prices and bought a Model 3. :sharebeer
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psteinx
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Re: How much money will I save if I keep my car an extra year or two?

Post by psteinx »

I've actually tried to do some calculations on this recently, in the context of buying a used car for my 16 y.o.

Take the price you'd ACTUALLY pay, all-in, for the new car. Estimate the value you'd receive for it when you get rid of it (in 10 years?) That's your depreciation. Now add in a capital cost. Even if you're paying cash, you'd be using that cash for something else. Now add in likely higher insurance on a new car, annual registration fees, etc. Then maintenance (that might be higher on the old car), fuel, etc.

If you're comparing "buy now" versus "buy 2 years from now", as a quick and dirty guesstimate, think about how much higher prices are now than normal, net of the extra proceeds you'd get for your used vehicle in the current market. I don't really know Tesla that well, but I suspect they've got things marked up in some fashion too, and/or will adjust prices downward when the current supply issues abate. FWIW, I estimate that new low end Hondas and Toyotas are currently selling for ~101-102% of MSRP+dest, OTD, vs. a more typical 90-91% or so. So that's a premium of about 11% of MSRP to buy now, versus in normal times. But, it's complicated. Substantial discounts may return in a year or two, but against higher MSRPs...
Jags4186
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Re: How much money will I save if I keep my car an extra year or two?

Post by Jags4186 »

FWIW if you’re thinking about buying a Tesla I would wait a year at least to see what congress does with the reconciliation bill. It is likely there will be some sort of tax credit for electric vehicles—current number being floated is $12,500. I would not be in a rush to replace if you don’t need to.
exodusNH
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Re: How much money will I save if I keep my car an extra year or two?

Post by exodusNH »

Afty wrote: Sun Sep 12, 2021 6:16 pm Hi wise Bogleheads,

Our second car is a 2012 Kia Sorento EX V6 with about 80k miles. My rule of thumb in the past has been to replace a car at 10 years old, so the Sorento would normally be due for replacement. However, we’re considering just keeping it because (a) I’m now permanent remote and don’t drive much anymore, and (b) car prices are high currently because of pandemic shortages. It’s in fine condition, some cosmetic issues but mechanically sound.

Can anyone help me quantify the amount of money we would save by keeping the Sorento another 1, 2, 3, 4 years? Let’s say the baseline is to sell it immediately and replace with a new Tesla Model Y at about $56k + CA tax & registration. Let’s also assume we would pay cash for the Tesla, so no messing with a loan or paying interest. How would one compute the savings? I don’t need a 100% solid answer, just a rough guess is fine.

Thanks,
Afty
If you do routine maintenance, a Kia should be good for 120-150k. I wouldn't keep it past that.

New cars have extra insurance costs plus the immediate depreciation. (Plus the opportunity costs of what you might otherwise do with the money.)
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markjk
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Re: How much money will I save if I keep my car an extra year or two?

Post by markjk »

If your driving habits have significantly changed (no commute) and your Kia is running well, I don't see a good reason to buy a new car right now. Why spend 56k for something that will sit in the garage most of the time? 80k miles is minimal in regards to wear and tear on your Kia. I bet you could easily get another 5 years out of it. The bonus is if you really want to go EV, you'll have even more options and better tech to choose from if you hold off a few more years to buy.

In regards to objective numbers .... as long as the car does not die and force you to buy on a moments notice, you are most certainly better holding off as long as you can. But as others have said, it's impossible to have a truly objective breakdown because of all the variables. I'd look at it this way, even if you had to put a large amount (say 2K per year) into the kia for the next few years, you are probably still better off waiting. The choices of EV models will sky rocket the next few years and the costs should come down as with most technical products through maturity and competition. Waiting to buy will only benefit you.

On the surface, I'd say wait. But in the end if you really want the Tesla and that is what this is really about, you might want to go for it. I'm also a fan of spending some of that money when you have the option if you'll enjoy it. Every single decision doesn't have to be the "perfect" financial one. Sometimes you have to splurge a bit.
Mr. Rumples
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Re: How much money will I save if I keep my car an extra year or two?

Post by Mr. Rumples »

Perhaps someone can better quantify my calculation: my girl (yes, my vehicle - she even has name) is 20 years old. At this time, I have been made aware that some of the plastics and such will start to fail. That was made clear this past May when I spent over $1,300 on a new timing belt and a number of gaskets and so forth. On the other hand, the year before I spent less than $75.

Since at my age, I plan on just one more vehicle before I can't drive anymore, I figure the longer I hold out with repairs, the better. While I would pay cash for a new vehicle, in my mind I figure a $500 a month payment - if I were to do that, which, again, I'm not. Thus, the $1,300 was paid for now by the extra months I got with her since May.

Then there is the inventory issue - getting what I want in the color I want at a reasonable price.

My old rule of thumb was that if the cost of repair exceed a year's car payments, I'd get a new vehicle. The problem with that is that now since its 20 years old, those repairs are going to become more frequent and a nuisance since I live in a semi-rural area and its the only vehicle.
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gazelle1991
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Re: How much money will I save if I keep my car an extra year or two?

Post by gazelle1991 »

I was doing my own calculation on this recently. What I came up with is about $400/month difference between keeping our paid for 2009 Lexus IS 110k miles vs. buying a new Tesla and keep it for 5 years.

Of course a lot of assumptions go into this calculation including depreciation, maintenance and repair, etc. so ymmv. I also included opportunity cost of $$$ locked into the Tesla financing or not at 2.5%.

I ended up going with a new 2021 Toyota venza instead. My calculation tells me the cost to own is a bit cheeper at +$150/month (5-year cost to own)
mnnice
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Re: How much money will I save if I keep my car an extra year or two?

Post by mnnice »

Not answering your original question but could you get by with one car? If you have ride share readily available it might be an option to just Uber on the rare occasion you need it. Then you can get rid of the insurance, registration, and maintenance expenses.
mnnice
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Re: How much money will I save if I keep my car an extra year or two?

Post by mnnice »

Not answering your original question but could you get by with one car? If you have ride share readily available it might be an option to just Uber on the rare occasion you need it. Then you can get rid of the insurance, registration, and maintenance expenses.
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wander
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Re: How much money will I save if I keep my car an extra year or two?

Post by wander »

Suppose my car is worthless and I need to buy a $100,000 new car. The longer I delay replacing the car, the more time that $100,000 can work generate income for me. Say 8% return equals $8,000 a year. I am talking about myself, because I know my worthless car can run well without any repair cost for at least another 100k miles.
aristotelian
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Re: How much money will I save if I keep my car an extra year or two?

Post by aristotelian »

Not Law wrote: Sun Sep 12, 2021 6:53 pm I don't buy a car unless it is at least 10 years old and has 100k miles on it.
Lol me too. I start thinking about getting rid of them at 20 years/200k.
namajones
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Re: How much money will I save if I keep my car an extra year or two?

Post by namajones »

Afty wrote: Sun Sep 12, 2021 6:16 pm My rule of thumb in the past has been to replace a car at 10 years old
Why?

My Camry will be 17 years old next year. Runs great.

As to saving money, the savings really start adding up the longer you keep the car. I look at total annual cost of ownership. Right now mine is under $2,000. That includes cost of car, insurance, upkeep, repairs, gas.

Cars are expensive. Why make them more expensive by buying a new one just as you're about to start getting the annual cost of ownership down?

New cars are pretty much the same as old cars. They get you from Point A to Point B.

The only new car that would really tempt me is one that drives itself.
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Watty
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Re: How much money will I save if I keep my car an extra year or two?

Post by Watty »

Afty wrote: Sun Sep 12, 2021 6:16 pm How would one compute the savings? I don’t need a 100% solid answer, just a rough guess is fine.
Here is how I would look at it;

1) Estimate how much the Sorento will cost for the next three years including depreciation, maintenance, insurance, gas, etc.

2) Find out how much it would cost to lease the Telsa for three years including all the costs and maybe adding a charging station to your house.

The difference in these amounts would be the extra cost over the next three years.

One other factor to consider is that the Telsa is likely safer than the Sorento so that has some value to but that would be hard to quantify.
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Watty
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Re: How much money will I save if I keep my car an extra year or two?

Post by Watty »

namajones wrote: Mon Sep 13, 2021 10:53 am Why?

My Camry will be 17 years old next year. Runs great.

As to saving money, the savings really start adding up the longer you keep the car. I look at total annual cost of ownership. Right now mine is under $2,000. That includes cost of car, insurance, upkeep, repairs, gas.
You also need to include depreciation to your list of costs to consider. One of the "problems" with a Camry is that they depreciated slowly so that even in a normal car market a 10 year old Camry is still worth a lot, and it will still be depreciating more each year.

I just looked at CarMax and just glancing at it it looks like 11 year old Cameys are selling for around a thousand dollars less than a 10 year old Camry.

Even with a Camry once it is 10 years old you can expect some non-routine maintenance. If you do not do most of the car maintenance yourself that can be a non-trivial cost even if there is not a major problem.

Combined the depreciation and non-routine maintenance for a ten year old Camry may be in the ballpark of $150 a month. That is not very different than the monthly cost of depreciation and non-routine maintenance of buying a new Camry and keeping it for 10 years. For example with a new car 120 months of $150 a month in depreciation is $18,000.

Car safety has also improve a lot. Between 2004 and 2017(the latest year available) the driver death rate for a Camry has improved from 55 to 34, per million registered vehicles.

https://www.iihs.org/ratings/driver-dea ... -and-model
manuvns
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Re: How much money will I save if I keep my car an extra year or two?

Post by manuvns »

two year of payments and taxes+ insurance - gas savings - maintainance .
Thanks!
feh
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Re: How much money will I save if I keep my car an extra year or two?

Post by feh »

markjk wrote: Mon Sep 13, 2021 6:05 am If your driving habits have significantly changed (no commute) and your Kia is running well, I don't see a good reason to buy a new car right now.
+100

Why replace a car that doesn't need to be replaced?
H-Town
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Re: How much money will I save if I keep my car an extra year or two?

Post by H-Town »

Afty wrote: Sun Sep 12, 2021 6:16 pm Hi wise Bogleheads,

Our second car is a 2012 Kia Sorento EX V6 with about 80k miles. My rule of thumb in the past has been to replace a car at 10 years old, so the Sorento would normally be due for replacement. However, we’re considering just keeping it because (a) I’m now permanent remote and don’t drive much anymore, and (b) car prices are high currently because of pandemic shortages. It’s in fine condition, some cosmetic issues but mechanically sound.

Can anyone help me quantify the amount of money we would save by keeping the Sorento another 1, 2, 3, 4 years? Let’s say the baseline is to sell it immediately and replace with a new Tesla Model Y at about $56k + CA tax & registration. Let’s also assume we would pay cash for the Tesla, so no messing with a loan or paying interest. How would one compute the savings? I don’t need a 100% solid answer, just a rough guess is fine.

Thanks,
Afty
It's very simple. You save 56k. It's the amount of cash out of your account if you buy a new Tesla Y (excluding tax & registration).

You pay cash, you spend.
You keep cash, you save.
Time is the ultimate currency. My ultimate wealth is the full control of how I spend my time.
OrangeKiwi
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Re: How much money will I save if I keep my car an extra year or two?

Post by OrangeKiwi »

feh wrote: Mon Sep 13, 2021 3:10 pm
markjk wrote: Mon Sep 13, 2021 6:05 am If your driving habits have significantly changed (no commute) and your Kia is running well, I don't see a good reason to buy a new car right now.
+100

Why replace a car that doesn't need to be replaced?
If you have access to a spare car, then there is basically no harm and all gain (financially) in keeping an old car until it dies or needs a repair costing a few thousand. Maybe a little benefit if the old car is that behind on safety standards, but I doubt anything from the last 20 years makes a meaningful difference on an individual level if you are only driving 5k to 15k miles per year.
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Artful Dodger
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Re: How much money will I save if I keep my car an extra year or two?

Post by Artful Dodger »

A lot just depends. I had an Audi that I kept til around 200k miles and the last couple of years repair costs got to be expensive. I think 10-12 years/ 150k miles is a pretty good rule of thumb. You also get the new tech and safety features sooner.
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Re: How much money will I save if I keep my car an extra year or two?

Post by tibbitts »

H-Town wrote: Mon Sep 13, 2021 3:15 pm
It's very simple. You save 56k. It's the amount of cash out of your account if you buy a new Tesla Y (excluding tax & registration).

You pay cash, you spend.
You keep cash, you save.
Except that by buying the new car you've now presumably removed present and future expenditures for maintenance and lowered future operating cost. So, not that simple.
Luckywon
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Re: How much money will I save if I keep my car an extra year or two?

Post by Luckywon »

tibbitts wrote: Mon Sep 13, 2021 3:24 pm
H-Town wrote: Mon Sep 13, 2021 3:15 pm
It's very simple. You save 56k. It's the amount of cash out of your account if you buy a new Tesla Y (excluding tax & registration).

You pay cash, you spend.
You keep cash, you save.
Except that by buying the new car you've now presumably removed present and future expenditures for maintenance and lowered future operating cost. So, not that simple.
+1. Estimating the true cost of decisions like these is a difficult task, and certainly not as simple as looking at the difference the first year or two. The way I would look at it to get a rough approximation would be to estimate what the average cost to you of holding a car for one year is likely to be going forward. I'd include estimation of tax, insurance and registration, which are very dependent on the individual car. The difference between that and the annual cost of keeping the Kia would be what I'd estimate the savings to be.
H-Town
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Re: How much money will I save if I keep my car an extra year or two?

Post by H-Town »

tibbitts wrote: Mon Sep 13, 2021 3:24 pm
H-Town wrote: Mon Sep 13, 2021 3:15 pm
It's very simple. You save 56k. It's the amount of cash out of your account if you buy a new Tesla Y (excluding tax & registration).

You pay cash, you spend.
You keep cash, you save.
Except that by buying the new car you've now presumably removed present and future expenditures for maintenance and lowered future operating cost. So, not that simple.
Sound like to me that you try to rationalize the reason to buy a new car now.

The OP does not need a new car. Any money out of pocket to buy a new car (which OP doesn't need) is an unnecessary expense.

How much of repair & maintenance really? 56k?
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tibbitts
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Re: How much money will I save if I keep my car an extra year or two?

Post by tibbitts »

H-Town wrote: Mon Sep 13, 2021 3:48 pm
tibbitts wrote: Mon Sep 13, 2021 3:24 pm
H-Town wrote: Mon Sep 13, 2021 3:15 pm
It's very simple. You save 56k. It's the amount of cash out of your account if you buy a new Tesla Y (excluding tax & registration).

You pay cash, you spend.
You keep cash, you save.
Except that by buying the new car you've now presumably removed present and future expenditures for maintenance and lowered future operating cost. So, not that simple.
Sound like to me that you try to rationalize the reason to buy a new car now.

The OP does not need a new car. Any money out of pocket to buy a new car (which OP doesn't need) is an unnecessary expense.

How much of repair & maintenance really? 56k?
I had already posted earlier in the thread that I saw no reason for the OP to buy a new car now. Only $1 more in cost for maintaining or operating the old car for the new one would result in the OP not saving $56k. The calculation is not as simple as you claim.
namajones
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Re: How much money will I save if I keep my car an extra year or two?

Post by namajones »

Watty wrote: Mon Sep 13, 2021 11:28 am
namajones wrote: Mon Sep 13, 2021 10:53 am Why?

My Camry will be 17 years old next year. Runs great.

As to saving money, the savings really start adding up the longer you keep the car. I look at total annual cost of ownership. Right now mine is under $2,000. That includes cost of car, insurance, upkeep, repairs, gas.
You also need to include depreciation to your list of costs to consider. One of the "problems" with a Camry is that they depreciated slowly so that even in a normal car market a 10 year old Camry is still worth a lot, and it will still be depreciating more each year.

I just looked at CarMax and just glancing at it it looks like 11 year old Cameys are selling for around a thousand dollars less than a 10 year old Camry.

Even with a Camry once it is 10 years old you can expect some non-routine maintenance. If you do not do most of the car maintenance yourself that can be a non-trivial cost even if there is not a major problem.

Combined the depreciation and non-routine maintenance for a ten year old Camry may be in the ballpark of $150 a month. That is not very different than the monthly cost of depreciation and non-routine maintenance of buying a new Camry and keeping it for 10 years. For example with a new car 120 months of $150 a month in depreciation is $18,000.

Car safety has also improve a lot. Between 2004 and 2017(the latest year available) the driver death rate for a Camry has improved from 55 to 34, per million registered vehicles.

https://www.iihs.org/ratings/driver-dea ... -and-model
Huh? What's your point, exactly?

My Camry is almost 17 years old, not 10 years old. I've never had any "non-routine maintenance." Well, I replaced the tires a couple of years ago. That's probably routine, though.

What repairs should I expect that would make it wise financially to buy a new car vs. keeping this one?
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Re: How much money will I save if I keep my car an extra year or two?

Post by H-Town »

tibbitts wrote: Mon Sep 13, 2021 4:22 pm
H-Town wrote: Mon Sep 13, 2021 3:48 pm
tibbitts wrote: Mon Sep 13, 2021 3:24 pm
H-Town wrote: Mon Sep 13, 2021 3:15 pm
It's very simple. You save 56k. It's the amount of cash out of your account if you buy a new Tesla Y (excluding tax & registration).

You pay cash, you spend.
You keep cash, you save.
Except that by buying the new car you've now presumably removed present and future expenditures for maintenance and lowered future operating cost. So, not that simple.
Sound like to me that you try to rationalize the reason to buy a new car now.

The OP does not need a new car. Any money out of pocket to buy a new car (which OP doesn't need) is an unnecessary expense.

How much of repair & maintenance really? 56k?
I had already posted earlier in the thread that I saw no reason for the OP to buy a new car now. Only $1 more in cost for maintaining or operating the old car for the new one would result in the OP not saving $56k. The calculation is not as simple as you claim.
Maybe, maybe not. I just know that OP wouldn't pay anything out of his or her pocket today. That means no expense. Zero. None. Let's keep it simple.
Time is the ultimate currency. My ultimate wealth is the full control of how I spend my time.
Topic Author
Afty
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Re: How much money will I save if I keep my car an extra year or two?

Post by Afty »

Thanks for the feedback and the gut check that it is not as simple to answer this question as it first appears. Some followups:
  • I 100% acknowledge that we don't need a new car right now. But we would like one. I would like to put a $ value on how much it would cost us to satisfy that want. If postponing the purchase for 2 years saves us $15k, then I would absolutely wait the 2 years. If it saves us <$5k I'd probably just buy the Tesla.
  • I would love to have only one car, but it's just not feasible for us. My wife works weekends sometimes, and I need my own vehicle to ferry the kids around in.
  • Regarding the additional costs of owning a Tesla -- our other car is a Model 3, so we're already prepared with a home charger.
  • Regarding the value of the Kia -- I have an offer from Carvana for $9k. That's pretty amazing for a 10 year old Kia IMO.
tibbitts
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Re: How much money will I save if I keep my car an extra year or two?

Post by tibbitts »

H-Town wrote: Mon Sep 13, 2021 4:43 pm
Maybe, maybe not. I just know that OP wouldn't pay anything out of his or her pocket today. That means no expense. Zero. None. Let's keep it simple.
Of course some operational costs like insurance might also be higher with a new car, but keep it simple? On this forum, with the endless debates about tilts, value of Roth conversions, etc.? I don't think that'll be happening.
gazelle1991
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Re: How much money will I save if I keep my car an extra year or two?

Post by gazelle1991 »

Afty wrote: Mon Sep 13, 2021 4:45 pm Thanks for the feedback and the gut check that it is not as simple to answer this question as it first appears. Some followups:
  • I 100% acknowledge that we don't need a new car right now. But we would like one. I would like to put a $ value on how much it would cost us to satisfy that want. If postponing the purchase for 2 years saves us $15k, then I would absolutely wait the 2 years. If it saves us <$5k I'd probably just buy the Tesla.
  • I would love to have only one car, but it's just not feasible for us. My wife works weekends sometimes, and I need my own vehicle to ferry the kids around in.
  • Regarding the additional costs of owning a Tesla -- our other car is a Model 3, so we're already prepared with a home charger.
  • Regarding the value of the Kia -- I have an offer from Carvana for $9k. That's pretty amazing for a 10 year old Kia IMO.
I would estimate that it will save you about $5k/yr to wait so about $10k for 2 years per my calculation.
namajones
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Re: How much money will I save if I keep my car an extra year or two?

Post by namajones »

Afty wrote: Mon Sep 13, 2021 4:45 pm [*] I 100% acknowledge that we don't need a new car right now. But we would like one. I would like to put a $ value on how much it would cost us to satisfy that want.
The less you want, the more you have.
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markjk
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Re: How much money will I save if I keep my car an extra year or two?

Post by markjk »

Afty wrote: Mon Sep 13, 2021 4:45 pm Thanks for the feedback and the gut check that it is not as simple to answer this question as it first appears. Some followups:
  • I 100% acknowledge that we don't need a new car right now. But we would like one. I would like to put a $ value on how much it would cost us to satisfy that want. If postponing the purchase for 2 years saves us $15k, then I would absolutely wait the 2 years. If it saves us <$5k I'd probably just buy the Tesla.
  • I would love to have only one car, but it's just not feasible for us. My wife works weekends sometimes, and I need my own vehicle to ferry the kids around in.
  • Regarding the additional costs of owning a Tesla -- our other car is a Model 3, so we're already prepared with a home charger.
  • Regarding the value of the Kia -- I have an offer from Carvana for $9k. That's pretty amazing for a 10 year old Kia IMO.
Everything is inflated now, including trade-ins so at least you do get that bit of good news if you go now. You want the car. I'd say just buy it and save the analysis paralysis. There is no perfect formula to answer your question completely objectively. It just doesn't exist. There are variables and unknowns all throughout this question that can be debated forever. That is a solid trade in value and you are going to buy the car in the next few years anyway with the way you are talking. I don't think it's a bad financial decision to buy it now either. I'd just go for it now based on all of the information you provided.
hudson
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Re: How much money will I save if I keep my car an extra year or two?

Post by hudson »

Afty wrote: Sun Sep 12, 2021 6:16 pm Hi wise Bogleheads,

Our second car is a 2012 Kia Sorento EX V6 with about 80k miles. My rule of thumb in the past has been to replace a car at 10 years old, so the Sorento would normally be due for replacement. However, we’re considering just keeping it because (a) I’m now permanent remote and don’t drive much anymore, and (b) car prices are high currently because of pandemic shortages. It’s in fine condition, some cosmetic issues but mechanically sound.

Can anyone help me quantify the amount of money we would save by keeping the Sorento another 1, 2, 3, 4 years? Let’s say the baseline is to sell it immediately and replace with a new Tesla Model Y at about $56k + CA tax & registration. Let’s also assume we would pay cash for the Tesla, so no messing with a loan or paying interest. How would one compute the savings? I don’t need a 100% solid answer, just a rough guess is fine.

Thanks,
Afty
10 year replacement: good plan
11-14 year replacement: good plan
Savings per year: $17K...the annualized cost of buying a Tesla (I broke your rules. I figured the monthly payment on a Tesla at 4.9% interest...48 months. X 12)

I also use the 10 year car replacement practice; but once I get to 8 years, I'll cheat if the moon and stars line up.
mary1492
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Re: How much money will I save if I keep my car an extra year or two?

Post by mary1492 »

hudson wrote: Tue Sep 14, 2021 8:09 am
Afty wrote: Sun Sep 12, 2021 6:16 pm Hi wise Bogleheads,

Our second car is a 2012 Kia Sorento EX V6 with about 80k miles. My rule of thumb in the past has been to replace a car at 10 years old, so the Sorento would normally be due for replacement. However, we’re considering just keeping it because (a) I’m now permanent remote and don’t drive much anymore, and (b) car prices are high currently because of pandemic shortages. It’s in fine condition, some cosmetic issues but mechanically sound.

Can anyone help me quantify the amount of money we would save by keeping the Sorento another 1, 2, 3, 4 years? Let’s say the baseline is to sell it immediately and replace with a new Tesla Model Y at about $56k + CA tax & registration. Let’s also assume we would pay cash for the Tesla, so no messing with a loan or paying interest. How would one compute the savings? I don’t need a 100% solid answer, just a rough guess is fine.

Thanks,
Afty
10 year replacement: good plan
11-14 year replacement: good plan
Savings per year: $17K...the annualized cost of buying a Tesla (I broke your rules. I figured the monthly payment on a Tesla at 4.9% interest...48 months. X 12)

I also use the 10 year car replacement practice; but once I get to 8 years, I'll cheat if the moon and stars line up.
So, if he says he's paying cash, why are you going to base your "annualized cost" on a 48 month payment plan and not the 10 year replacement plan?
hudson
Posts: 4416
Joined: Fri Apr 06, 2007 9:15 am

Re: How much money will I save if I keep my car an extra year or two?

Post by hudson »

mary1492 wrote: Tue Sep 14, 2021 9:20 am
hudson wrote: Tue Sep 14, 2021 8:09 am
Afty wrote: Sun Sep 12, 2021 6:16 pm Hi wise Bogleheads,

Our second car is a 2012 Kia Sorento EX V6 with about 80k miles. My rule of thumb in the past has been to replace a car at 10 years old, so the Sorento would normally be due for replacement. However, we’re considering just keeping it because (a) I’m now permanent remote and don’t drive much anymore, and (b) car prices are high currently because of pandemic shortages. It’s in fine condition, some cosmetic issues but mechanically sound.

Can anyone help me quantify the amount of money we would save by keeping the Sorento another 1, 2, 3, 4 years? Let’s say the baseline is to sell it immediately and replace with a new Tesla Model Y at about $56k + CA tax & registration. Let’s also assume we would pay cash for the Tesla, so no messing with a loan or paying interest. How would one compute the savings? I don’t need a 100% solid answer, just a rough guess is fine.

Thanks,
Afty
10 year replacement: good plan
11-14 year replacement: good plan
Savings per year: $17K...the annualized cost of buying a Tesla (I broke your rules. I figured the monthly payment on a Tesla at 4.9% interest...48 months. X 12)

I also use the 10 year car replacement practice; but once I get to 8 years, I'll cheat if the moon and stars line up.
So, if he says he's paying cash, why are you going to base your "annualized cost" on a 48 month payment plan and not the 10 year replacement plan?
You caught me!
I did break the rules. OK savings would be $15K per year...maybe....rough guess.
What would you say?
Casper
Posts: 228
Joined: Tue Oct 15, 2013 8:32 pm

Re: How much money will I save if I keep my car an extra year or two?

Post by Casper »

Afty wrote: Mon Sep 13, 2021 4:45 pm [*] Regarding the value of the Kia -- I have an offer from Carvana for $9k. That's pretty amazing for a 10 year old Kia IMO.
Inspired by this thread, I just got an online quote from Carvana for my 2013 Kia Optima. It was $13k, which is crazy. The estimate a couple years ago was $9k. I bought it used in 2016 for $17.5k.
MrDrinkingWater
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Re: How much money will I save if I keep my car an extra year or two?

Post by MrDrinkingWater »

Afty wrote: Sun Sep 12, 2021 6:16 pm Hi wise Bogleheads,

Our second car is a 2012 Kia Sorento EX V6 with about 80k miles. My rule of thumb in the past has been to replace a car at 10 years old, so the Sorento would normally be due for replacement. However, we’re considering just keeping it because (a) I’m now permanent remote and don’t drive much anymore, and (b) car prices are high currently because of pandemic shortages. It’s in fine condition, some cosmetic issues but mechanically sound.

Can anyone help me quantify the amount of money we would save by keeping the Sorento another 1, 2, 3, 4 years? Let’s say the baseline is to sell it immediately and replace with a new Tesla Model Y at about $56k + CA tax & registration. Let’s also assume we would pay cash for the Tesla, so no messing with a loan or paying interest. How would one compute the savings? I don’t need a 100% solid answer, just a rough guess is fine.

Thanks,
Afty
I read through most of this thread below your question. Besides considering how old your current car is and how many miles it has already been driven, what has your annual repair and maintenance costs been for the past few years? If the car really is in fine condition and mechanically sound, I'd keep it.

It sounds as if you've kept up on maintenance and do not have any deferred maintenance actions that you've put off dong. You may be 20,000 miles from needing to change the timing belt or get new brakes, and if you aren't going to be driving the car much, you'll easily get through the next year or two.
BreadandButter
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Re: How much money will I save if I keep my car an extra year or two?

Post by BreadandButter »

As I have gotten older, I think more about putting off non urgent replacements for a few extra years (roof, furnace, car, etc) since it may work out that I will need to pay that expense one less time during my lifetime. If you love cars though, this thinking may lead you to go ahead and get the new car.
Topic Author
Afty
Posts: 1765
Joined: Sun Sep 07, 2014 5:31 pm

Re: How much money will I save if I keep my car an extra year or two?

Post by Afty »

MrDrinkingWater wrote: Tue Sep 14, 2021 12:12 pm I read through most of this thread below your question. Besides considering how old your current car is and how many miles it has already been driven, what has your annual repair and maintenance costs been for the past few years? If the car really is in fine condition and mechanically sound, I'd keep it.
Repairs have been few and far between, maybe ~$50-100/yr averaged over the past 4 years. Maintenance -- we just replaced the brakes, don't remember the cost. Within the next year, I expect to need new tires at ~$1k and some fluid flushes at ~$200.
H-Town
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Re: How much money will I save if I keep my car an extra year or two?

Post by H-Town »

Afty wrote: Tue Sep 14, 2021 3:11 pm
MrDrinkingWater wrote: Tue Sep 14, 2021 12:12 pm I read through most of this thread below your question. Besides considering how old your current car is and how many miles it has already been driven, what has your annual repair and maintenance costs been for the past few years? If the car really is in fine condition and mechanically sound, I'd keep it.
Repairs have been few and far between, maybe ~$50-100/yr averaged over the past 4 years. Maintenance -- we just replaced the brakes, don't remember the cost. Within the next year, I expect to need new tires at ~$1k and some fluid flushes at ~$200.
I think the cost of repair & maintenance for Tesla would be high since the it's difficult to find part and it requires Tesla technicians. The car does not necessary needs any repair in the first 3-5 years. But you never know.

So back to my initial thought, you would save the entire cost of the new Tesla as long as you keep your current car.
Time is the ultimate currency. My ultimate wealth is the full control of how I spend my time.
mary1492
Posts: 94
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Re: How much money will I save if I keep my car an extra year or two?

Post by mary1492 »

hudson wrote: Tue Sep 14, 2021 9:27 am
mary1492 wrote: Tue Sep 14, 2021 9:20 am
hudson wrote: Tue Sep 14, 2021 8:09 am
Afty wrote: Sun Sep 12, 2021 6:16 pm Hi wise Bogleheads,

Our second car is a 2012 Kia Sorento EX V6 with about 80k miles. My rule of thumb in the past has been to replace a car at 10 years old, so the Sorento would normally be due for replacement. However, we’re considering just keeping it because (a) I’m now permanent remote and don’t drive much anymore, and (b) car prices are high currently because of pandemic shortages. It’s in fine condition, some cosmetic issues but mechanically sound.

Can anyone help me quantify the amount of money we would save by keeping the Sorento another 1, 2, 3, 4 years? Let’s say the baseline is to sell it immediately and replace with a new Tesla Model Y at about $56k + CA tax & registration. Let’s also assume we would pay cash for the Tesla, so no messing with a loan or paying interest. How would one compute the savings? I don’t need a 100% solid answer, just a rough guess is fine.

Thanks,
Afty
10 year replacement: good plan
11-14 year replacement: good plan
Savings per year: $17K...the annualized cost of buying a Tesla (I broke your rules. I figured the monthly payment on a Tesla at 4.9% interest...48 months. X 12)

I also use the 10 year car replacement practice; but once I get to 8 years, I'll cheat if the moon and stars line up.
So, if he says he's paying cash, why are you going to base your "annualized cost" on a 48 month payment plan and not the 10 year replacement plan?
You caught me!
I did break the rules. OK savings would be $15K per year...maybe....rough guess.
What would you say?
I would say that with your logic, you would/should use the all-in Tesla cost divided by 10 for the per year savings. I'm not understanding the purpose of using an arbitrary 48 month period when it has no relevance to anything in the analysis.

As others have noted, there are other parameters which come into play, but OP was simply looking for a rough estimate. I think your $15k or $17k numbers, both over $1000/month are well off the mark.
hudson
Posts: 4416
Joined: Fri Apr 06, 2007 9:15 am

Re: How much money will I save if I keep my car an extra year or two?

Post by hudson »

mary1492 wrote: Wed Sep 15, 2021 8:15 am
hudson wrote: Tue Sep 14, 2021 9:27 am
mary1492 wrote: Tue Sep 14, 2021 9:20 am
hudson wrote: Tue Sep 14, 2021 8:09 am
Afty wrote: Sun Sep 12, 2021 6:16 pm Hi wise Bogleheads,

Our second car is a 2012 Kia Sorento EX V6 with about 80k miles. My rule of thumb in the past has been to replace a car at 10 years old, so the Sorento would normally be due for replacement. However, we’re considering just keeping it because (a) I’m now permanent remote and don’t drive much anymore, and (b) car prices are high currently because of pandemic shortages. It’s in fine condition, some cosmetic issues but mechanically sound.

Can anyone help me quantify the amount of money we would save by keeping the Sorento another 1, 2, 3, 4 years? Let’s say the baseline is to sell it immediately and replace with a new Tesla Model Y at about $56k + CA tax & registration. Let’s also assume we would pay cash for the Tesla, so no messing with a loan or paying interest. How would one compute the savings? I don’t need a 100% solid answer, just a rough guess is fine.

Thanks,
Afty
10 year replacement: good plan
11-14 year replacement: good plan
Savings per year: $17K...the annualized cost of buying a Tesla (I broke your rules. I figured the monthly payment on a Tesla at 4.9% interest...48 months. X 12)

I also use the 10 year car replacement practice; but once I get to 8 years, I'll cheat if the moon and stars line up.
So, if he says he's paying cash, why are you going to base your "annualized cost" on a 48 month payment plan and not the 10 year replacement plan?
You caught me!
I did break the rules. OK savings would be $15K per year...maybe....rough guess.
What would you say?
I would say that with your logic, you would/should use the all-in Tesla cost divided by 10 for the per year savings. I'm not understanding the purpose of using an arbitrary 48 month period when it has no relevance to anything in the analysis.

As others have noted, there are other parameters which come into play, but OP was simply looking for a rough estimate. I think your $15k or $17k numbers, both over $1000/month are well off the mark.
mary1492,
Thanks for the reply!
I figured he was saving money by not buying a Tesla.
I got 4 years from the OP; he said that he was going to try to keep his old car maybe 4 years.
He did say that a rough guess would be fine. I figured how could I go wrong? I know...faulty logic.
WhiteMaxima
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Re: How much money will I save if I keep my car an extra year or two?

Post by WhiteMaxima »

I won't buy another car unless my current one dies. And I don't buy new.
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