Re: Economics of retaining an older car, versus a buying a new car

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From: Douglas Johnson <p...@c...com>
Newsgroups: misc.invest.financial-plan
Subject: Re: Economics of retaining an older car, versus a buying a new car
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Mark Bole <m...@p...net> wrote:

> Otherwise, I still recommend the "replace when
>repairs are 50% of value" rule, it's easy to follow and pretty much
>guarantees cash-flow payback in two years.

Could you show me the arithmetic on this? I still don't see how the resale
value of the car relates to the fix or replace decision.

I drive a 1995 Ford Explorer worth maybe $1500. It is very dependable and has
been averaging about $300 a year in repairs. A new replacement would be about
$26,000. Why should a $750 repair bill make me trade it?

-- Doug

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