My wife and I were having dinner with some friends the other night, and they asked me for some advice on their aging car. It's approaching 150k miles and starting to cost them more to maintain it every year.
Oh, and "I hate it," he said.
"How long should we keep it?", they wondered. They recently replaced another car when it was close to 200k miles. My car is about a thousand miles away from 150,000, so I'm basically in the same boat. It cost me more to maintain it in 2009 than any previous year. I don't, however, hate it.
If you're like my friend and me, your dilemma revolves around spending money. It's probably going to start costing more to keep up an old car at this point, but a new car is obviously a big investment. Even a lightly used car could put either of us in debt.
With that in mind, I'm sharing some thoughts with you on how to deal with a car once it starts showing 6 numbers on the odometer.
Look at the pros and cons. Once you've driven a car past a hundred thousand miles or so, you should start preparing yourself for maintenance and repairs beyond oil changes and brake pads. At this point, an alternator could fail, and cost you a few hundred bucks. An air conditioner compressor might wear out, power window motors may stop working, or a timing chain can break. If more than one of these things happen in a year, you might be watching $2000-$3000 swiftly removed from you bank account. If your car's trade-in value is not much more than the cost of the needed repairs, it could seem like a huge waste of money to keep it running. In my case, the car is completely paid off, so hanging on to it will keep me from going deeper into debt at the moment.
Get a clear picture of your finances. Now let's consider some reasons for and against buying a new(er) car. The thought of purchasing a brand new car is exciting for sure, but it can become a huge financial burden too. A vehicle's value degrades quickly once it is purchased for the first time. You will basically lose some of your investment immediately. For shoppers who can't pay cash, a new car purchase will certainly result in the accumulation of debt. A new car may still cost you more per year than repairing an older one. On the flip-side, you have confidence knowing this car has never been owned, abused, improperly maintained, or wrecked by anyone else. It's got a few hundred miles on it at most and every part is as new as it's ever going to be. If you take good care of it, you can expect many years of reliable service.
Make easy repairs; question big ones. Although problems with your aging clunker can be unpredictable, they aren't necessarily a death certificate. If it's creaking and squeaking, rattling and clicking, you may just need some new struts or bushings. You might be surprised by how smooth and comfortable your car used to be. You've got a bad alternator? Go ahead and replace it. Timing belts will most certainly break at the least convenient times, but that's not the end of the road either. My advice is, if you can handle a few of these slightly more serious, but not quite fatal repairs every year, go for it. It may seem like you are investing more than your car is worth, but you may also still be spending less than a new car loan would cost. Think of it this way: what option will carry you another 10k-50k miles for less money?
Start saving soon. Let's say you've got more serious problems, like a cracked head, serious electrical malfunction, or a failing transmission. These can cost you a lot more to diagnose and fix. If replacing your engine is the best option to save your car, it may not be worth it, unless you can do it yourself, or know someone who can give you a killer deal. Still, chances are the cheapest way to do this is with another used motor, so be prepared for it to show signs of wear. At the very least, a major problem like this should be a good sign to start saving for a new car, even if you don't buy one immediately. The decision to buy something new can take a while, so make the best of that time by preparing financially.