Childfreelife’s Weblog











{August 22, 2008}   Repair the old car or buy a new one

I have a radical notion: your car is not an asset it is a bill. The worth of your car is not its sale value, but whether it gets you to work and play and looks nice enough to help your career along if need be.

So lets say in my career having a nice car is unnecessary. And my (piece of s**t) pos car breaks down and needs a $500 repair. Should I finance a newer car since my old car isn’t worth more than a thousand dollars? No, because its a pretty good bet that the $500 repair will keep my car going for 2-6 more months without needing new repairs, and monthly payments on a financed car will equal or exceed that amount over that time. I am saving money on new car payments by repairing the car I own outright.

However, if part of the value of my car is to look swank, then buying a car for its “asset” value might not even be wise. A car is a bill, and if what I am purchasing with this bill is swankness and transportation, then leasing a car for 2 years and then upgrading to a new car is a better deal for me than buying a swank car and paying it off over 5 years, but trading it in after two and running the loan into the next car (minus the reduced value of my trade in which is less than I paid into it). If I buy a new car every two years and trade it in, the loans on the next cars just keep getting bigger. Also if the car I bought was say a (ahem) hummer and the value went way down in the last two years, trading it in sucks! But if I leased it for two years, the dealership just takes it back, they get stuck with its crappy value not me. Then I can lease a Prius or a Mini next and look swank and smart this time around! And isn’t it nice that I can switch down to a smaller car and not worry if the kids’ car seats will fit in it? Or if my kids will destroy the inside of my car costing me cleaning fees on my lease? I don’t have kids, sweet!

Financing new cars is a debt, leasing a new car is a bill. If you are trying to avoid debt, a lease or repairing your pos car might be more your style.

Advertisements


cemeteryconsort says:

beware the lease. We had friends that leased a car, and they had an accident shortly before it was time to turn it in. It became a nightmare of repair costs just to get rid of the thing, as I recall.
Also consider safety when keeping an older car. I had my Jetta for 18 years, but it was getting to a point where I was woried about brake lines letting go, and the reliablility of the engine, which I wouldn’t push too far at say highway speeds.Also replacement parts were getting a bit hard to come by. But I think I got my money out of that car, and then some.
Cars are not an investment. Few cars are ever going to attain ‘classic’ status, and esp. not with today’s cars. Buy a car that suits your need, and drive it into the ground. Keep on top of minor repairs like tires and oil, and god willing your car should last a good long time.



stepher says:

Lease = fleece.

Also IMHO buying new is never a good idea either.
We buy late model used vehicles and haven’t had anything but success.

Good luck!



Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

et cetera
%d bloggers like this: