I went most of my life without a car, but I now live in a remote area managing several forest properties. I love where I am and expect to continue this lifestyle for a long time. Sadly, because of how far apart everything is, I drive a LOT, I just drove my first car, a subaru, from 160k to 200k miles in three years and it's now on its last legs if not already finished (it's had repeated head gasket failures). I had bought that car used pretty cheap ($4k) and I loved it except for the engine problems, I'm not sure how much of it was the car vs the mechanics I took it to, but anyway, it ended up costing me $14k between original cost and repairs, and I only got 40000 miles out of it. I might get $1-2k selling what's left of it. Bummer.
So I just spent the last two days researching cars.
My instinct is to buy a cheap old used thing and keep it running. I do all my own maintenance and will fix things that don't require really big expensive tools. However, everyone in my family is telling me to get something newer that will probably last me a long time, and I'm starting to come round to their perspective.
The facepunchable act I am contemplating is this:
Buying a 2017 highlander hybrid from a dealer, 52k miles, $25k cash. (I'd buy one from a private seller but no one is selling something like this.)
Here is my rationale for this particular vehicle:
- It gets 29mpg. Gas is ~$4.50 to $5 around here right now, and I imagine will in general go up over the next decade. All the older SUVs get ~18-22
- I'm likely to be driving a LOT, so it's quite possible I'd use up the vehicle before the expensive battery replacement, which is the main downside of the hybrid.
- I'm mostly driving on winding mountain roads with a lot of braking, so the hybrid is more useful than if I was always in flat country.
- I usually drive multiple times a week on rough dirt roads, and often drive on poorly maintained forest roads etc, including in winter. I haven't experienced living with a FWD vehicle in these places - maybe it would be OK, but in my line of work and life it seems like the AWD might be merited even if it isn't for most people who buy them. High ground clearance is a must either way.
- From my research just now, the Highlander is the only SUV with a track record of no serious mechanical problems. The Rav4 is a close second, but some years do have some engine problems. The CRV has engine problems in every year, the Rogue has transmission problems in every year, etc.
- I sleep in my vehicle regularly. I'm 6'4" - my equally tall brother has a newer Rav4 and it's too short to sleep comfortably. The highlander would be way nicer for long road trips and micro-vanlife. Also I could comfortably sleep in it at home and let a guest use my cabin sometimes in the winter.
- The bigger interior space would be really useful for me as I always have a lot of stuff with me, tools, camping gear, food, etc. And I tend to haul stuff like firewood or building materials or furniture a few times a month. I've done quite well using my subaru as a truck and not needing to get a truck.
- The newer SUVs have higher ground clearance than most older SUVs.
- Biggest one: Having a vehicle I can rely on and am not worrying "will it make it on this long trip without problems" would be really good for me. It's also really inconvenient to have to take the car to a shop, since I live an hour from the shops and have to get rides back and forth if they need to keep it... I went through that for several long periods with my subaru and it sucked.
I'm going to guess annual inflation and annual returns on investment of 4% for my math. No doubt that's wrong but gotta go with something.
If I extrapolate out across 10 years, say I drive 15k miles per year and bring it to 200k miles. Say it depreciates to be worth $10k (2033$). That's depreciation of $2700 per year (2033$). And I'll be saving avg $1,184 per year (2033$) in fuel over a 22mpg -- more than that if gas goes up.
Here's an example alternative scenario:
I buy some 2009 smaller SUV for $5k today with 150kmi getting 22mpg, and drive the same amount, fixing things as they break, and at the end it's worth $4k (2033$) Over those 10 years I'm spending only $340/yr (2033$) in depreciation, but not saving on the fuel.
If the 2009 needed no more repairs on average than the 2017, that would mean I've got an extra $12000 (2033$) in my stache at the end of the 10 years, equivalent to $8000 (2023$).
But then let's suppose today I could choose between the 16 year old highlander hybrid with 200kmi, that I got to maintain for most of its life and know everything that's happened to it, and gets 29mpg at who knows what gas prices in 2033. Vs the now 24 year old vehicle with 300kmi and likely some serious mechanic work on it. My self-maintained highlander could likely go another 100k miles, whereas at that point I likely need to sell the 2009 and get something else if I haven't already. Imagining myself in that situation right now, I'd definitely part with say $5000 (2023$) to have the younger car that I took care of with 100k less miles on it. So canceling that part of the equation, I'm left with $3000 (2023$) that I've saved by going with the cheaper car. I would guess that the difference in repair cost needed to keep the 2009 running from 200kmi->300kmi would be at least $3000 (2023$) as compared to the likely maintenance on the 2017 model. Probably a lot more than that.
I haven't accounted for the likelihood of wrecking the car to where it's a loss. I don't intend to pay for insurance on the vehicle, only liability, that's a calculated risk to self-insure. It could happen. I'd have to weigh that vs the risk of the cheaper/older vehicle having bigger problems than average, which is not unlikely in an old used car - and has already happened to me. I can't easily find the odds of getting in a serious car-totaling accident so I'm not sure how to factor this in, if I had to random guess I might say the expected average cost of accidents on 150k miles on a $25k car is in the ballpark of... I dunno.. $3k?
I think financially, if I were to really do all the math in a spreadsheet with every risk factor etc, it's not a huge difference. My hunch is maybe thousand or two in favor of the old car. But the newer car has all the benefits listed in my rationale - most importantly that last one about being more reliable across the decade that I'm using it. That would mean a lot to me.
Some possible cons of getting the newer car:
- I can't necessarily extrapolate the reliability of older models of highlander or other toyotas onto a 2017 model -- we haven't seen these newer vehicles long enough to know how they will do in the long run - maybe they haven't shown their flaws yet. BUT, we also don't know how well a 2009 will do over the next decade either as all its rubber and plastic degrades.
- Related to above, I have a suspicion that like everything else, cars built 10-15 years ago have higher quality materials, maybe not better designs, than those built today.
- I hear from some people that new cars are harder to work on because of all the electronics, that's a reason I'd prefer an older one, but not sure how much difference it really makes.
- I feel bad about getting a newish car and using it the way I will be - it'll get scratched inside and out - I can baby it for a while, but probably not for too long.
- I feel sheepish to be seen driving a new-looking SUV. But I can suck that up.
Please Mustachians, find the flaws or blind spots in my reasoning and tell me.
