How satisfied are you with your present vehicle? Unless additional safety features, increased fuel economy, or other compelling reasons really justify the cost of a newer model – or you’re sick of driving the same old workhorse year after year – repairing a good older vehicle and continuing to drive it is often a wiser move. If your car is in relatively good shape, why not spend your money to restore it?
What does your present vehicle cost to operate each year? Will you want to pay much more than that for a new one? Vehicle-related expenses include more than just the cost to purchase the vehicle; they also include ownership and operating expenses, which can vary greatly from one model to another.
Ownership expenses: These expenses include things like the price of the vehicle, how much it costs to insure and finance; the cost of such government red tape as titling, licensing, and registration; and the value the vehicle loses over time from depreciation. Operating expenses: These expenses include things like what you spend on fuel, oil, maintenance, repairs, and new tires. They may be relatively low for the first few years while everything is new and warranties cover many repairs and some basic maintenance, as well. After that, as the vehicle ages and warranties expire, parts begin to wear and maintenance is definitely your responsibility, so operating costs will rise, especially if you’re lazy about preventive maintenance.
Annual ownership and operating expenses vary greatly from one model to another. How much have you paid in interest on your car loan? How much did last March’s brake job cost? How much money a month do you spend in gas when you stop here and there to put five or ten dollars’ worth in? Unless you’re the type who keeps diligent track of where all your money is going, you’re probably going to have to wrack your brain to remember, and then end up guessing at, your car expenses. To get a really accurate picture of the amount of money going into your car, you need to keep track over a long period of time – preferably a year. In other words, don’t wait until Saturday of the weekend you’re heading out to car shop before you figure out how much green stuff your car guzzles.
You may not like to think of it this way, but your present car became a used car the very day you bought it. Viewing your current vehicle as though you were considering whether to buy it again can provide you with the necessary objectivity to evaluate it accurately and decide whether it’s worth any further investment of time, effort, and money. Unless you’re madly in love with your car and cannot bear to part with it, it’s usually foolish to spend more money fixing up an old vehicle than it will be worth on the present market when you’ve finished sprucing it up. Determine the “blue book value” of your aging steed and compare it with your mechanic’s estimate of what it will cost to return it to health.