Should I Buy a Newer Car?

Should I Buy a Newer Car or Repair My Old Car?

Here's a question from a PPJ reader:

We're talking about getting another car... Newer anyway. Our car is 6 years old and has 70k on it. So far it has been very reliable and has not had any repairs except for a rear wheel bearing replacement. We're concerned that the reliability might decrease because of the age and that repair costs will increase as the car gets older. One salient point is that we don't drive much these days. I think we only put about 5k miles per year. Does Dr Penny Pincher have any advice? Also at the last oil change they Ford dealer marked caution on the brakes, tires and struts. The brakes are original and the tires were new about 4 1/2 years ago.

Thanks for your question!

It is hard to beat a car that runs and is paid off! I drive a 13 year old Honda Civic with 205,000 miles on it and hope to keep driving it.

Dr. Penny Pincher's Car: A 13 Year Old Honda Civic with 205,000 Miles
Image Source: Dr. Penny Pincher

Every year or two, I think about getting a different car- especially when my car needs repair or maintenance. However, if I get a different used car, that car could need just as much repair or maintenance in the near future. If I buy a new car, it wouldn't require much maintenance, and the warranty would cover almost any repairs. However, new cars depreciate so fast that this is an expensive option.

The value of your current car is about $10,000. You could buy a 4 year old car that is 2 years newer and has about 20k less miles for around $15,000. So the price difference for buying a car 2 years newer would cost about $5k. You could buy a new car for around $25k. So the price difference for buying a new car would cost about $15k. Even if you only put a few thousand miles a year on a car, newer cars still depreciate rapidly.

New Cars Are Expensive and Depreciate Quickly. This Lincoln MKZ is $43,000!
Image courtesy of Mariordo - Mario Roberto Durán Ortiz CC-BY-SA via Wikimedia Commons

Now let's consider how much it would cost to keep your current car. New tires would cost about $600. Brakes and struts could cost over $1000. So, it would cost about $2k to keep your current car going. Keeping your current car would almost certainly be the least expensive option.

Are Older Cars More Likely to Break Down?

Considering reliability and the chances of breaking down on the road, I have driven some older cars with over 200,000 miles and have encountered problems while driving. Once my car started overheating- I pulled right into a shop and they repaired a valve in the cooling system for about $100 and I was on my way. Another time, I had a dead battery- I was able to get a jump start and make it to a car parts store to get a replacement battery. I have had flat tires several times.

Even Newer Cars Can Have Trouble On The Road- This New Car Was Hit From Behind.
Image Source: Dr. Penny Pincher

Driving an older car with more miles on it does increase the chance of car trouble on the road, but any car can break down. I carry a cell phone and have AAA to provide tow truck service when needed. Also, taking your car in for an oil change and inspection every 6 months or so will help spot problems early, reducing the chances of breaking down on the road.