Back in 2005, I needed to decide whether to keep an old car or get something more modern. Old cars can end up quite expensive if you let them.
That’s a darn good question and a subject near and dear to my heart. I drive a ’94 Honda Accord, which I got from a friend two years ago for a bargain. The fact that I have had the car for 2 years is excellent, but things are starting to “go” on it, so when is it time to think about replacing an old car?
Darn good question.
I guess the parameters you need to think about are:
- Do you still owe money on the car from when you first bought it? You don’t want to “jettison” an asset and keep the debt, now do you?
- If you total up the repair bills this year and divide them by the number of months, how much money is that? It would help if you compared that with how much a new/used/clunker replacement would cost. Remember buying another car has a poop load of expenses, including:
- Taxes (if you buy new)
- Transfer costs (if used)
- Gas mileage, is this older car getting lousy gas mileage? In these days of gas at $1/litre, that is something to think about (maybe a newer smaller car gets better mileage).
- Would it be cheaper to take the bus? This is a bigger question but maybe one to think about if you have moved downtown and are paying $100 a month in parking expenses! A car creates MANY extra costs, that maybe we don’t always look at.
- Do you need a second car (in my case, the answer is YES for now)? Maybe you can last a couple of months with only one car? Those few months might save you a few bucks and show that you didn’t need that second car.
Just a few things to think about before you push your old car off the cliff