When, Exactly, Are You Supposed to Sell Your Car?

by David Bakke

cash for clunkersI wanted to pose this question to my very valued readers, as I am currently experiencing this dilemma.

If you follow this blog at all, you’ll know that I currently drive a 1994 Toyota Tercel.  It’s probably one of the best investments I’ve ever made, besides owning my first home.

But of course, it is a 16 year old car.  It gets me from Point A to Point B, but is definitely showing its age.

I recently decided to invest almost $600 in repairs on this car.  The fact that I was overcharged for these repairs and I am currently fighting them tooth and nail for a credit is a different story.

For the purposes of this discussion, though, let’s just keep in mind that I decided to spend the money.  Let’s also keep in mind that the average American keeps their car only 3-4 years after purchasing it.  So, the average American has never enjoyed life without a car payment!

A few questions:

Should I have?  Since the car is this old (and since I also invested around $200 in it for repairs about three months ago), should I not have just taken this latest repair job as a sign to get a new one?

Should I have even kept it this long?  There are quite a few minor inconveniences that I have to deal with on it, like the sound system is outdated; it doesn’t defrost very well in the wintertime, etc.

Should I let go of this are of “frugality” in my life and just go ahead and get a new car?  I mean, isn’t a monthly car payment simply a fact of life?

Well, here is my take on this situation.  As I said, this car is one of the best investments I’ve ever made.  Not because I have decided to still drive it after all of these years, but because besides regular maintenance expenses (tune ups, oil changes, tires, etc), I have spent a grand total of $1200 over the life of this car in major repairs.  I have no idea what the statistics are on this subject, but I’d imagine that number is pretty amazing.

That’s why I decided to invest this money this late in the game.  Because of the car’s track record.  If I can drive it for another year or so, then this “repair” investment was a great decision.  Heck, if I can drive it for another four months it was a great decision, if you balance it against four months of having a car payment.  Of course, if it dies tomorrow, then I guess it was a bad investment.

The minor inconveniences are just that-minor inconveniences.  If I had $15,000 lying around doing nothing, then by all means I would have already purchased new auto.  Unfortunately, I am not yet to that point in my life.  I can deal with those little annoyances just fine.

And finally, a car payment, to me, is simply NOT a fact of life!  As a matter of fact, life without a car payment is unbelievable!  Think of it. For most, that’s an extra $300 in monthly, spendable, or investable income.   Why wouldn’t one strive for at least some periods in life without one?

I’ll leave this post with this, and ask for all of your thoughts and insights on these concepts.

{ 4 comments }

1 Donna B March 7, 2010 at 2:03 pm

I think its time for a new car. i am in a similar situation. I’ve invested
$1800 since the fall in my 10 year old mini van with 117,000 miles. It has served me well, but its past time to start saving for a down payment on something new. My goal is to buy something new this fall. I’m sure the tercel gets good gas mileage but there’s lots of new safer cars with even better mileage. The car will be more comfortable, making your commute less stressful too.

2 David Bakke March 7, 2010 at 2:13 pm

Donna,

Yes, obviously the time is coming near, for me as well.

$1800 is a lot of money.

But I really, really really like life without a car payment!!

Thanks for commenting.

3 Qt March 7, 2010 at 2:20 pm

I would suggest you to spend the few (or not few) month you are getting from your last investment in your car choosing the next one, not waiting to be in a hurry when/if you’ll find yourself without one (or with a repair cost you would not consider a good investment).
That would give you the time to think about your “car needs”: you now have a child you didn’t have in 1994, maybe you are (or not) planning for more and 16 more years of experience as a driver should have thought you what equipment and options are useless, good to have or a must.
Remember to consider delivery time too (i had to wait a couple month for my last car as i got a couple of non standard option (like automatic shift that, this side of the Atlantic, isn’t very common… best car investment i’ve ever made, i’ll never drive a manual one anymore).

4 David Bakke March 7, 2010 at 2:23 pm

Qt,

Very insightful remarks.

I really do appreciate them. You’re absolutely right–I need to start doing a little planning–I am sure those car dealers smell “blood” when they know someone needs a car in a hurry

Thanks!

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