NMA Article: Getting Your Money’s Worth
By Eric Peters, Automotive Columnist
Do you keep your cars forever?
It’s the smart move, financially. The typical $20-something-k new car takes a five year loan before it’s paid off. But if you only keep it that long, you’ve basically spent your $20-something-k (less whatever you get back in trade) to rent the thing for that period of time. The money’s gone — and you’re starting all over — with another $20-something-k “investment” that will leave you another $20-something-k out of pocket five years from now.
Do this dance over a lifetime of car-buying and you can easily spend $100k just to get from “a” to “b.”
But if you can hold onto that car for 10-12 years (or more) the money hemorrhaging can be staunched. You can even end up ahead — a car that has not only paid for itself, but which is actually saving you money.
For example, at the 10 year mark, a $22k car has only cost you about $2,200 per year (less gas and maintenance). If it’s still in good condition, it’ll still be worth something, too — so your net cost is even lower. (For the sake of argument, let’s say the car’s worth $4,500 at the end of 10 years; that means your actual net cost of ownership is only $1,750 per year. And each year that you keep the car after this point, the total cost of ownership will continue to go down.)
And when you factor in the much lower personal property taxes and insurance costs on cars that are more than five or six years old, you’ll be saving even more.
But to get from the dealer’s lot to ten years down the road requires some planning — and proper custodial care, too. Here are some of the things I think about — and do — when it comes to eking every cent possible out of the cars I own:
* Try to keep the car as simple as possible.
The more stuff a car comes with, the more stuff there is to break (and cost you money) down the road. When the car’s still relatively new, spending $500 to fix some faulty gadget is just annoying. But when the car’s older and only worth a couple thousand, forking over that $500 gets harder to do. It also defeats the purpose of trying to keep a car forever (or as long as possible) to save money if you end up spending money all the time just to keep it going.
This, by definition, pretty much excludes high-end luxury cars as well as a lot of sporty cars — which tend to come with things like adjustable suspension systems, turbos and superchargers, etc. Nothing wrong with owning such cars; just like there’s nothing wrong with a weekend at Atlantic City, either.
But if money-saving’s the object, neither of these things make much sense.
* Look for cars that are inherently tough/durable to start with.
A diesel anything is a great bet if your plan is to be driving the thing 10 (or 20) years from now. Diesel engines are made of tougher metal and built to withstand the tremendous pressures of compression ignition — which means that with proper care they can usually be depended on to last twice or even three times as long as an otherwise similar gas-burning engine.
As recently as last year, your options in diesel were limited. But now that “clean” low-sulfur diesel fuel has become available nationwide, the number of diesel-powered vehicles is increasing rapidly. In Europe, something like 40 percent of all passenger cars on the road are diesel powered. Given $4 per gallon gas here, we should be seeing a lot more diesels on our roads soon, too.
Be wary of hybrids, by the way. While they may offer a mileage advantage, no one knows how reliable they’ll be in the long-term, because they’ve only been in widespread service for a few years. Most have special supplemental warranties for the hybrid components — including the battery pack. But these typically expire after eight years. While economies of scale should lower the replacement cost, no one knows for sure whether that will actually be the case. And at current prices, the cost of replacing a hybrid’s batteries can be several thousand dollars. If you get stuck holding that particular bag, every cent you saved on gas could be washed away at a stroke. I personally would not hold onto a hybrid for a single day longer than the warranty’s in force.
* Garage keep it.
Indoor-stored cars are like house-kept pets; they both tend to live longer. The bodywork, especially. And this involves more than just looks. If the car (or truck) gets serious rust — especially in the frame/floorpan/critical supporting areas — it won’t matter how great the engine runs. Rust damage is not just unsightly, it can be unsafe — and it is definitely expensive to repair. And a car sitting outside is a car that’s more exposed to moisture, which eventually undoes even the best factory anti-corrosion protection.
Ironically, most modern cars have engines/drivetrains that will outlast the bodywork — exactly the reverse of the way things used to be. But the end result of either going South is the same…. a junker that’s ready for the crusher.
* Err on the cautious side, maintenance wise.
You’ve probably noticed that “recommended” oil and filter changeout intervals (as well as intervals for other basic service including spark plug replacement) have increased significantly over the past decade or so. Some new cars, for example, can go as far as 10,000 miles between oil changes. But if you want to get the most out of your “investment,” be sure to read the fine print. Often, these extended service intervals are based on so-called “normal” use. But the stop-and-go driving more and more of us do routinely may fall under “severe” or heavy duty” use — with much-reduced recommended service intervals.
It’s not penny-wise to scrimp on maintenance if it ends up shortening the useful life of your vehicle. Erring on the side of caution — and changing oil every 4,500 miles instead of once every 10,000 might cost you couple hundred bucks over the life of the car. That’s a lot cheaper than having to buy a replacement car a couple of years sooner than you otherwise might have had to.
* Keep it looking nice.
Maybe you don’t care about appearances — but most people do. And few people like to be seen driving a ratty-looking car, even if it still runs great. It’s not hard to keep a car looking nice for ten years or longer, just by washing it when it needs it and occasionally vacuuming out the interior and wiping down the dash/door panels with Armor all or some other protectant.
You’ll feel better about the car — and that’ll make it easier to drive it longer.
Comments? www.ericpetersautos.com (click on “Forum”).
Getting Your Money’s Worth
Further Reading: © 2009 NMA