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My wife and I are planner, saver types; we also had good fortune of
being born to families who stressed hard work and education and as a
result, we both have good careers, and have become financially
comfortable, without any inheritance :) Spouse was able to switch to
1/2 time, as one child started kindergarten last year, and seocnd will
start next year.
One of the elements of frugal planning is that, until we got quite
secure, we only buy what we needed, not what is advertised. So we
stayed, 1 car family, from 1996 thorugh 2004. During this time, the
1996 model Honda civic was driven an average of 25K miles/year. In
2004 we got another car (smallest SUV), and since then the 1996 civic
has been driven about 4K/year.
I have done every scheduled maintenance, without fail, and oil changes
all along, so the car runs (and has always run) without any issues,
and the emissions are very low, always only 2% to 5% of the levels
required for SMOG. So that's not at issue.
Now the civic paint is peeling, and a cheap repainting at Maaco is
estimated at $800. The car will hit 180K miles in a few weeks, and is
due for the major maintenance + the timing belt + water pump stuff
that is done at every 90K miles. All of this is estimated to be about
$1500. I estimate tires and brakes also, probably within a year, for
another $700 or more. So, within a year, it will add up to
$800+1500+700 = about $3000.
The car is probbaly worth 3500 due to mileage + usual wear and tear
after 14 years (& some dings), but no mechanical problem. We would
like to keep this car (we are not itching for a new car smell), but
does it make sense to put $3000 into a $3500 car? How critical is to
replace timing belt and water pump stuff every 90K?
We can afford a new car, without loan, and it won't impact our other
savings, yada, yada, but I feel crummey having to "throw-away" a
perfectly good car...
I would appreciate how prudent people who post on this newsgroup make
such decisions...
Thanks.
Bhoot Nath
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I would seriously consider keeping the car and keeping it road-worthy.
My '93 Dodge Caravan is still going strong with good maintenance and
replacement of wear parts. Do you really need to get it painted
professionally?
If your wife is picky/embarrassed than maybe, but after the 15th year,
I just
do a bit of hand-sanding and paint away any peeling with a spray can.
If your timing belt breaks, your motor may self-destruct. Stay safe
and
stay frugal. When it's time to replace it, buy a fairly late-model
second-hand
car. The previous owner has already paid for the most depreciation.
--------------------------------------
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Bhoot Nath wrote:
> [...] So, within a year, [repairs] will add up to
> $800+1500+700 = about $3000.
>
> The car is probbaly worth 3500 due to mileage + usual wear and tear
> after 14 years (& some dings), but no mechanical problem. We would
> like to keep this car (we are not itching for a new car smell), but
> does it make sense to put $3000 into a $3500 car?
No. Just try to sell it "as is" for $3K, someone will buy it for their
teenager, or perhaps a retiree who doesn't drive much (I've had personal
experience with both).
> How critical is to
> replace timing belt and water pump stuff every 90K?
Pretty critical, you don't want to stall out on a bridge, in a tunnel,
or outside of easy urban access. There are two types of engines when it
comes to timing belts, one kind self-destructs and the other just stops
working, you can do an Internet search to find more. Having stalled
out myself one morning, with a broken timing belt, on one of the busiest
bridges in the country, I can tell you it's no fun.
> We can afford a new car, without loan, and it won't impact our other
> savings, yada, yada, but I feel crummey having to "throw-away" a
> perfectly good car...
>
> I would appreciate how prudent people who post on this newsgroup make
> such decisions...
Let's not go to extremes. Unless you are on financial life support, buy
a newer used car when the annual cost of repairs to the old car exceeds
50% or more of the car's resale value. And don't forget to drop
collision insurance well before that time.
It's not just the finances, but the personal safety issue of avoiding
mechanical failures while driving in commute traffic, or being pulled
over because your car looks poorly maintained on top of some other minor
violation, plus the image of reliability and sensibility you project to
your neighbors and co-workers (unless you are lucky enough not to have any!)
-Mark Bole
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On 2008-07-05 14:15:08 -0700, Bhoot Nath <d...@y...com> said:
> We can afford a new car, without loan, and it won't impact our other
> savings, yada, yada, but I feel crummey having to "throw-away" a
> perfectly good car...
>
> I would appreciate how prudent people who post on this newsgroup make
> such decisions...
I have been told that imported cars like Volkswagens, Toyotas, etc.
last longer and need less maintenance than the big US made-in-Detroit
vehicles. I know little and care less about cars and don't know whether
or not that is true, but it seems like this issue could make a
differences in expenses in the long run. I realize it is nice to
support the local economy, but doing so to the tune of a few thousand
in maintenance expenses might not be prudent. Maybe a US citizen can
save money by dropping patriotism (just temporarily, of course) along
with collision insurance.
--------------------------------------
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On Jul 5, 4:15 pm, Bhoot Nath <d...@y...com> wrote:
> The car is probbaly worth 3500 due to mileage + usual wear and tear
> after 14 years (& some dings), but no mechanical problem. We would
> like to keep this car (we are not itching for a new car smell), but
> does it make sense to put $3000 into a $3500 car? How critical is to
> replace timing belt and water pump stuff every 90K?
Mark Bole has some good advice.
Newer cars are safer with better brakes, air bags, and stability
control.
If you are in an accident, you won't get more than the blue book
value. But, don't drop collision or uninsured motorist or you may
never be able to collect.
--
Ron
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to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
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Bhoot Nath <d...@y...com> wrote:
> My wife and I are planner, saver types; we also had good fortune of
> being born to families who stressed hard work and education and as a
> result, we both have good careers, and have become financially
> comfortable, without any inheritance :) Spouse was able to switch to
> 1/2 time, as one child started kindergarten last year, and seocnd will
> start next year.
>
> One of the elements of frugal planning is that, until we got quite
> secure, we only buy what we needed, not what is advertised. So we
> stayed, 1 car family, from 1996 thorugh 2004. During this time, the
> 1996 model Honda civic was driven an average of 25K miles/year. In
> 2004 we got another car (smallest SUV), and since then the 1996 civic
> has been driven about 4K/year.
>
> I have done every scheduled maintenance, without fail, and oil changes
> all along, so the car runs (and has always run) without any issues,
> and the emissions are very low, always only 2% to 5% of the levels
> required for SMOG. So that's not at issue.
What you are saying above is that there is absolutely no reason to get
rid of the car. As such, I'm not sure why you are even asking the
question.
> Now the civic paint is peeling, and a cheap repainting at Maaco is
> estimated at $800.
If they have any idea what they are doing, even a cheep paint job should
last 4+ years. That's $200 a year.
> The car will hit 180K miles in a few weeks, and is
> due for the major maintenance + the timing belt + water pump stuff
> that is done at every 90K miles. All of this is estimated to be about
> $1500.
So this $1500 investment should last 90K miles, at 4K miles/year, that's
$67 per year.
> I estimate tires and brakes also, probably within a year, for
> another $700 or more.
All of which should last at least 40K miles or $70/year.
You are griping because the car cost $337 per year in maintenance?
> The car is probbaly worth 3500 due to mileage + usual wear and tear
> after 14 years (& some dings), but no mechanical problem. We would
> like to keep this car (we are not itching for a new car smell), but
> does it make sense to put $3000 into a $3500 car?
Let's outline two options.
1) You invest the $3K into this car and it will be worth maybe $1600 in
5 years. Total cost $4.9K
2) You invest $10K into a very good used car which will be worth $4400
in five years. Total cost $5.6K. Or maybe you end up buying a car that
has hidden problems and it cost you even more...
I say go with the devil you know, and think about what that little Honda
would look like if you dumped the full $10K into it! It could end up on
the cover of magazines!
> How critical is to
> replace timing belt and water pump stuff every 90K?
The timing belt and water pump could probably last another 10 years at
the rate you drive the car, but if the timing belt goes out, the car is
done for.
> We can afford a new car, without loan, and it won't impact our other
> savings, yada, yada, but I feel crummey having to "throw-away" a
> perfectly good car...
Well hell. If you can afford it and it won't impact your savings, then
get a new car. Instead of throwing away the old one, give it to a worthy
cause and take a tax deduction while feeling good about giving.
--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
On Sat, 5 Jul 2008 16:15:08 -0500, Bhoot Nath wrote:
> My wife and I are planner, saver types; we also had good fortune of
> being born to families who stressed hard work and education and as a
> result, we both have good careers, and have become financially
> comfortable, without any inheritance :) Spouse was able to switch to
> 1/2 time, as one child started kindergarten last year, and seocnd will
> start next year.
>
> One of the elements of frugal planning is that, until we got quite
> secure, we only buy what we needed, not what is advertised. So we
> stayed, 1 car family, from 1996 thorugh 2004. During this time, the
> 1996 model Honda civic was driven an average of 25K miles/year. In
> 2004 we got another car (smallest SUV), and since then the 1996 civic
> has been driven about 4K/year.
>
> I have done every scheduled maintenance, without fail, and oil changes
> all along, so the car runs (and has always run) without any issues,
> and the emissions are very low, always only 2% to 5% of the levels
> required for SMOG. So that's not at issue.
>
> Now the civic paint is peeling, and a cheap repainting at Maaco is
> estimated at $800. The car will hit 180K miles in a few weeks, and is
> due for the major maintenance + the timing belt + water pump stuff
> that is done at every 90K miles. All of this is estimated to be about
> $1500. I estimate tires and brakes also, probably within a year, for
> another $700 or more. So, within a year, it will add up to
> $800+1500+700 = about $3000.
>
> The car is probbaly worth 3500 due to mileage + usual wear and tear
> after 14 years (& some dings), but no mechanical problem. We would
> like to keep this car (we are not itching for a new car smell), but
> does it make sense to put $3000 into a $3500 car? How critical is to
> replace timing belt and water pump stuff every 90K?
>
> We can afford a new car, without loan, and it won't impact our other
> savings, yada, yada, but I feel crummey having to "throw-away" a
> perfectly good car...
>
> I would appreciate how prudent people who post on this newsgroup make
> such decisions...
Another reason I heard recently for hanging on to an old car, or buying a
*used* one, is that it takes the equivalent of 1,000 gallons of gas/petrol
to make a new car.
--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
On Jul 5, 5:15 pm, Bhoot Nath <d...@y...com> wrote:
[snip]
> We can afford a new car, without loan, and it won't impact our other
> savings, yada, yada, but I feel crummey having to "throw-away" a
> perfectly good car...
[snip]
> Thanks.
> Bhoot Nath
Estimate the cost per year (over its useful life) of a replacement
car, and compare that to the cost per year of keeping your present car
(over its useful life). If you can realize the difference (over the
estimated useful life of your present car) when you sell, then the two
are equal. (I think this is right!:-)
Assuming a new car will be more expensive, and just pulling an example
out of the air:
New - $20,000 + $10,000 repairs over 15 years = $30,000 / 15 = $2,000
per year;
Old - $12,000 repairs over 8 years = $12,000 / 8 = $1,500 per year.
If you can sell for $4,000, then the alternatives are equal (the
$4,000 compensates you for the $500 higher cost per year of the new
car, over the 8 years, after which you would have to buy a new car
anyway). You can adjust for interest on the foregone $25,000, possible
higher insurance, etc.. You also want to include the availability of
replacement parts on older model cars, and how reliable your mechanic
is to give you that information.
The rest is personal preference.
P.S. Did you use car wax on your present car?
--------------------------------------
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to keep the conversations on-topic for financial planning. Other posting
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which we respond. For all of the other tips and suggestions, see "FROM THE
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"Bhoot Nath" <d...@y...com> wrote in message
news:bc849604-835f-4710-9df3-0d80736ebc52@z72g2000hs
b.googlegroups.com...
>
>..............snip>
> Now the civic paint is peeling, and a cheap repainting at Maaco is
> estimated at $800. The car will hit 180K miles in a few weeks, and is
> due for the major maintenance + the timing belt + water pump stuff
> that is done at every 90K miles. All of this is estimated to be about
> $1500. I estimate tires and brakes also, probably within a year, for
> another $700 or more. So, within a year, it will add up to
> $800+1500+700 = about $3000.
>
> The car is probbaly worth 3500 due to mileage + usual wear and tear
> after 14 years (& some dings), but no mechanical problem. We would
> like to keep this car (we are not itching for a new car smell), but
> does it make sense to put $3000 into a $3500 car? How critical is to
> replace timing belt and water pump stuff every 90K?
>
I find your numbers are probably too optimistic.
Using Edmunds
http://www.edmunds.com/tmv/used/honda/index.html
I did a little test run. Used car pricing varies depending on many factors,
including age, condition and location. I don't know your location, so I
used my zip code [Brooklyn, NY]. I don't know what model you own, color,
etc. So, I picked the highest line 4 door from the 96 model year. I used
175K as the mileage. Given you description of the body's condition, I chose
"average" -- that is a generous description, given your peeling paint and
dings, a dealer or other buyer would see your car's condition as
significantly below average.
I chose "gray" as the color, with A/C, 4 speed automatic and an AM/FM
cassette. The values suggested by Edmunds are significantly below what you
presently think the value of the car is:
-- trade in value -- $639
-- private party sale -- $1094
-- dealer retail -- $1887
Remember, my numbers are all guesswork -- imaginary car, imaginary
location. Keep in mind that you see the car as valuable because of
emotional factors [it always started, never gives trouble, it got us home in
that snowstorm, etc.] -- a competent buyer will consider it sans emotion.
I'd suggest that you do some further research -- use Edmunds, do a google
for Kelley Blue Book, and for NADA. You will get differing numbers
[markets are art, not science]. But I don't think you will get numbers as
high as what you currently project -- any 12+ year old car with peeling
paint and 175K mileage is likely to be difficult for a dealer to resell [and
make a requisite profit from] -- and not all that easy to sell to a private
party for 3.5K cash.
If my surmises are in the ballpark, what I'd consider doing is the
following:
I'd take that $3000 expense money you are projecting and put it towards a
newer vehicle.
Go to Consumer Reports -- read their car buying issue [in libraries, or for
a small fee, you can buy a year's full access to their website -- I
subscribe to both their paper edition and their website, it's quite
worthwhile]. I think you will find their evaluative philosophy and
criteria in line with yours. That will help you get an idea of what is out
there, what is reliable in terms of used cars and new cars, what fills your
needs, what to avoid, what is worth paying for, what realistic cost
projections are, etc.....
I'd consider a new car, or a low-mileage used car no more than 3-4 years
old. If buying a used car, unless I could buy such a car from an individual
I knew, and it was a car whose history I trusted --- I'd purchase it from a
reliable new car dealer. Yes, a new car dealer. The best combination of
used car + new car dealer would be a new car dealer selling the same brand
of used car, or a used car from/manufactured by that dealer's corporate
parent manufacturer [e.g., a Mercury from a Ford dealer, a Honda from an
Acura dealer, etc.].
Yes, buying such a used car would cost more than from a private party or
third party dealer. But......... here's why I'd spend that extra money:
As far as I know, in the real world, a dealer wants to market used cars that
will not give him headaches, or sully his reputation. If he takes back a
car from a lease, or gets it in some other transaction, he will tend to keep
the very best for himself, and let the doubtful and clunker vehicles go to
auction. If he needs used cars for inventory, he shops for inventory with
other dealers he trusts and/or thru his corporate supply chain. In all
cases, he is not looking of for headache vehicles. He does not want a shiny
vehicle that lived thru Katrina, or was hit and reassembled by artisans,
etc. So, in the case of a *reputable* dealer, what is sitting on his used
car lot is likely to be prescreened in terms of quality.
[the above theory goes out the window if you shop with a lousy dealer]......
As for the old car, you can either sell it, or, if you do not want the
aggravation, I like the suggestion that you donate it.
HTH
albert
> --------------------------------------
> Misc.invest.financial-plan is a moderated newsgroup where Moderators
> strive
> to keep the conversations on-topic for financial planning. Other posting
> guidelines include a request for brevity and another for trimming posts to
> which we respond. For all of the other tips and suggestions, see "FROM
> THE
> MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on
> the
> Newsgroup.
>
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to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
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Mark Bole <m...@p...net> wrote:
>Let's not go to extremes. Unless you are on financial life support, buy
>a newer used car when the annual cost of repairs to the old car exceeds
>50% or more of the car's resale value. And don't forget to drop
>collision insurance well before that time.
Let me suggest that the resale value of the car is relevant only if you are
going to resell it. If you are going to keep driving it, then the issue is the
cost of repairs vs. the net cost of buying another car.
>It's not just the finances, but the personal safety issue of avoiding
>mechanical failures while driving in commute traffic, or being pulled
>over because your car looks poorly maintained on top of some other minor
>violation,
Reliability and safety are real issues, but are hard to quantify. That makes it
easy to justify an unnecessary trade-in.
>plus the image of reliability and sensibility you project to
>your neighbors and co-workers (unless you are lucky enough not to have any!)
Or lucky enough to have neighbors and co-workers that don't judge people by
their cars. "Those that matter don't mind, those that mind don't matter."
-- Doug
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