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Over the entirety of this blog, I have continued to preach the importance of buying used cars, driving these cars until their wheels fall off and always buy cars in cash. What would push me to think about getting rid of my old car? It's simply one number:
That's the total amount of money we spent on car repairs in 2017 on both my car and my wife's car. That's a lot of money just to keep our two cars running! In the Summit of Coin household, it was the year of car repairs. Here is just a list of items that we had repaired:
- 2011 Toyota Venza (131,000 miles)
- 4 new tires
- Replaced the battery
- Replaced four struts and spark plugs
- 2005 Pontiac Grand Prix (147,000 miles)
- Coolant Pipes Burst
- Replaced electric motor for one window
- Front axel
- New front tire
- New wheel and new donut
That's a lot of repairs and time in the shop for our cars, but as I look back around...$2,700 of the repairs were self-inflicted by myself. I made two stupid decision that cost us $2,700. No matter the car I owned, I would have been out the $2,700. What did I do you might ask?
In the summer, there was some road construction on a road that I was driving on at night, and I completely missed the arrival of a curb. My right side of the car slammed into the curb, blew my tire, broke my axel and wheel. I pulled over to the side of the road and put on the donut.
I headed back to my house. On the way back, I blew the donut and destroyed the wheel trying to reach a decent parking spot. That simple mistake cost us $2,068.54 to replace the tire, the donut, and the wheels for both tires and the axel.
My other major mistake was that I dropped a cooler on top of my windshield. This basically destroyed the passenger side of my windshield and I could hear it crack as I drove around. I used Safelite to replace the windshield and it set us back $624.45.
I could have avoided this mistake by just moving my car out of the garage. It had crossed my mind before trying to grab the cooler from the top shelf of our garage. Sadly, I thought "I got this." That day I was reminded, to avoid shortcuts. If I would have taken the extra time to move my car, I would have saved our family $624.
Without those two uh-oh moments, we spent $4,753.66 on routine maintenance for two cars closing in on 150,000 miles. To put that amount of money in context, $4,700 is approximately $396.14 a month. That's less than the average car payment in America (which was $483 in 2016).
I always do an update on car payments versus car repairs at the beginning of each year. This year, however, I was feeling really frustrated with our cars (probably because of the cost of repairs in December). I half expected the numbers to show us that our cars were killing us and needed to be replaced (hence, the title). However, I was surprised to find that the data showed something different.
The data below is a continuation of the study that I started in 2015 comparing the costs of repair expenses to paying off a car payment at the average car payment amount of $483. The two previous articles in this series are "You Need a New Car, The Myth" and "Three Reasons to Hold onto Your Old Car."
As you can see over the last four years, we have spent a total of $14,146.47 on car repairs (this does include my two uh-oh expenses). Over half of our car expenses were this year, which makes sense with my wife's car crossing over the 130,000 mile mark. Repair expenses will always pop up on cars with lots of miles.
Even though we have spent $14K on our cars in four years, it's a lot less than going out and getting a car loan. In my above example, I assume that we bought new cars on loans at the average car payment amount in America. That $483 a month for two cars would have cost us $46,368 over the course of four years. That's a savings of $32,221.53 ($46K-$14K)!
On a four year basis, we have come out $32K richer than anyone driving around a car payment, but how did we do this year?
- Our expenses this year: $7,446.65
- Expenses of two car payments at $483 per month: $11,592
- 2017 Savings by owning our cars: $4,415.35
How about that? We saved $4,451.35 this year, despite throwing $7.5K at our cars. I told you that the data surprised me, but it really shouldn't have. It is always cheaper to own your cars and pay for the expenses than it is to drive around with a car payment.
Therefore, the simple answer to the question posed in the title is NO! However, nothing is ever simple. Life is more than just numbers. This year, we are excited to announce that we will be welcoming a second child into the world. That's two children, and a Grand Prix has a small backseat. What else goes into our decision?
Reasons to Move up in Car:
- 2nd Baby on Way
- Backseat in Grand Prix is small
- Repair expenses of the Grand Prix continue to rise
Reasons to Keep the Grand Prix
- Will not take out a loan to buy a car
- Savings is not where it needs be to purchase a car with cash
- My backseat can still hold two car seats
- We use my wife's car for all family travel
- My goal is to own my car for ten years (2019 is ten years)
In the end, the reasons to keep the Grand Prix outweigh the reasons to sell the Grand Prix. Therefore, we are looking at keeping the Grand Prix one more year. This will allow us to continue to put away money to pay cash for our next car.
This year, it is not time for us to begin looking for a newer car. It is still financially better for us to drive our old cars and let everybody else waste their money on car payments.
Would you make the same decision?