When's the right time to buy a new car?
Discussion
If you have a say 10 - 15 yo daily that's getting on a bit in terms of miles and needs some age-related repairs inc suspension, gearbox, engine, is there ever a time when it becomes uneconomical to repair? New cars are shiny but depreciate heavily whilst older ones may need more regular tlc. So does it ever make sense financially?
I guess it depends on the cost to renew your transport. Replacing a car worth £500 with another one worth £2000 is different to replacing with one worth £40000. The depreciation on the more expensive car will buy a lot of repairs on the older one. I guess that's why smart people run sheds?
I suspect it's almost always cheaper to repair than replace but we sometimes just like new stuff.
I suspect it's almost always cheaper to repair than replace but we sometimes just like new stuff.
Sheds only "make sense" when breakdowns don't negatively affect your life/career/sense of wellbeing etc.
If you're self employed and charge by the day or hour, then a £350 1996 Renault that breaks down once a month and only costs £100 to fix will lose you £600 in lost earnings every day it does it.
The car and its direct costs are not the whole picture. Ignoring for a moment that this is Pistonheads where most people have an active interest in more inspiring cars, when talking about financial sense one has to consider that the car is a tool and if the tool fails there are consequential losses. This is different for everyone.
If you're unemployed or retired, it probably only costs you the direct repair cost. If you're a normal staff employee it may cost you the direct repair cost plus a day's annual leave, a bus ticket or a taxi fair. If you're self employed or performance paid employee it'll cost you the direct repair cost plus lost earnings.
It would take a very large income to make depreciation on a new £50k car every 3 years make financial sense, but buying a £500 car and running it until it dies doesn't suit everyone financially either.
If you're self employed and charge by the day or hour, then a £350 1996 Renault that breaks down once a month and only costs £100 to fix will lose you £600 in lost earnings every day it does it.
The car and its direct costs are not the whole picture. Ignoring for a moment that this is Pistonheads where most people have an active interest in more inspiring cars, when talking about financial sense one has to consider that the car is a tool and if the tool fails there are consequential losses. This is different for everyone.
If you're unemployed or retired, it probably only costs you the direct repair cost. If you're a normal staff employee it may cost you the direct repair cost plus a day's annual leave, a bus ticket or a taxi fair. If you're self employed or performance paid employee it'll cost you the direct repair cost plus lost earnings.
It would take a very large income to make depreciation on a new £50k car every 3 years make financial sense, but buying a £500 car and running it until it dies doesn't suit everyone financially either.
wormus said:
If you have a say 10 - 15 yo daily that's getting on a bit in terms of miles and needs some age-related repairs inc suspension, gearbox, engine, is there ever a time when it becomes uneconomical to repair? New cars are shiny but depreciate heavily whilst older ones may need more regular tlc. So does it ever make sense financially?
The engine and gearbox needs repairing? is it 1971? If you buy a well-made car with a manual gearbox and you look after it, the powertrain will comfortably outlast the bodyshell. Engine and gearbox repairs are a thing of the past where well-maintained cars are concerned.
Everything else is cheap really. A lot of cars get scrapped or shifted on as they fail on a number of suspension or brake parts... but at this point in the car's life these parts are often 80k+ miles old- replace them, all at once is probably the most economical way- and there's no reason the suspension and brakes shouldn't be good for another 80k.
The next killer of course is rust but cars don't rust as much as they used to either.
Basically repairing the car is pretty much inevitably more cost effective than trading up to a much newer car. Depreciation is huge.
jamieduff1981 said:
Sheds only "make sense" when breakdowns don't negatively affect your life/career/sense of wellbeing etc.
If you're self employed and charge by the day or hour, then a £350 1996 Renault that breaks down once a month and only costs £100 to fix will lose you £600 in lost earnings every day it does it.
The car and its direct costs are not the whole picture. Ignoring for a moment that this is Pistonheads where most people have an active interest in more inspiring cars, when talking about financial sense one has to consider that the car is a tool and if the tool fails there are consequential losses. This is different for everyone.
If you're unemployed or retired, it probably only costs you the direct repair cost. If you're a normal staff employee it may cost you the direct repair cost plus a day's annual leave, a bus ticket or a taxi fair. If you're self employed or performance paid employee it'll cost you the direct repair cost plus lost earnings.
It would take a very large income to make depreciation on a new £50k car every 3 years make financial sense, but buying a £500 car and running it until it dies doesn't suit everyone financially either.
Wise words. If you're self employed and charge by the day or hour, then a £350 1996 Renault that breaks down once a month and only costs £100 to fix will lose you £600 in lost earnings every day it does it.
The car and its direct costs are not the whole picture. Ignoring for a moment that this is Pistonheads where most people have an active interest in more inspiring cars, when talking about financial sense one has to consider that the car is a tool and if the tool fails there are consequential losses. This is different for everyone.
If you're unemployed or retired, it probably only costs you the direct repair cost. If you're a normal staff employee it may cost you the direct repair cost plus a day's annual leave, a bus ticket or a taxi fair. If you're self employed or performance paid employee it'll cost you the direct repair cost plus lost earnings.
It would take a very large income to make depreciation on a new £50k car every 3 years make financial sense, but buying a £500 car and running it until it dies doesn't suit everyone financially either.
I don't rely on mine, but really don't like breakdowns. I don't buy the "replace when the repair costs more than the value of the car either". Used cars here are very cheap, so that distorts the figures, on a £500 car a decent service could be more than the car is "worth" but might leave you with a perfectly good car for the price of that service.
My thoughts on my last car were that when the annual cost of repairs, not service items, gets near what it had cost me per year in depreciation, then it's time to move on.
Jasandjules said:
As said above, when the cost to repair is more than the value of the vehicle. I also found (just gone through this) that I was getting a bit frustrated with little bits and bobs going wrong, and felt it was time to say goodbye before more serious issues arose.
This is the usual benchmark but the mathematician in me doesn't think it's the whole story.Bad case scenario: engine dies and needs replacing.
Cost to replace engine: £1500. New lifetime: 75,000 miles
Cost to buy another car: £500. New lifetime: 15,000 miles
Obviously the replacement car is a gamble and could do 200k without issue (and there's little guarantee a replacement engine would be trouble free), but I don't think repair costs vs. replacement vehicle cost is the be all and end all. Sometimes better the devil you know.
smifffymoto said:
Simple.When YOU can financially afford too.
Not really. For me its about looking where to spend one's cash. 40k in my example can buy a lot of repairs but as cars gets older they start to cost more. DMFs and torque converters are over a grand to replace and we all know diesel fuel pumps can cost a fortune. In many ways I do long for a time when cars were simpler, cheaper and more modular to repair. They maybe more reliable and economical now but they also seem mechanically to be engineered to do a specific mileage. Weirdly the bodies and exhaust seem to last forever.Gassing Station | General Gassing | Top of Page | What's New | My Stuff