Author Topic: Wait for car to die or trade for lower mileage?  (Read 5978 times)

nataelj

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Wait for car to die or trade for lower mileage?
« on: July 03, 2013, 12:27:51 PM »
I currently drive an inherited 1998 Ford Taurus station wagon. The car is in decent running condition but is approaching 180k miles and showing signs of wear and I'm trying to decide of I should hold it as long as possible or get something new and sell it.

My initial approach is to just drive the car into the ground. I keep the oil changed and have replaced tires and brakes recently enough to expect that all to last a while, and the last time a mechanic I trust looked at it he figured I'd be able to crack 200k with it fairly easily if I took care of it.

That said, I feel like crossing the 180k range puts me in the region when things are more likely to go wrong. The car has a few dents and scratches, is starting to show rust here and there, and I had to put tennis racket handle tape on the steering wheel recently when it started to come apart in my hands (literally). The rear shocks squeak and groan in a way that makes me think longevity will be largely luck based, etc. etc. Nothing structurally wrong yet but the car is just showing age.

None of this would be a problem if I didn't have a job or had a second car. In that case I'd drive it until it died and then shop for a new one ala http://www.mrmoneymustache.com/2011/04/19/how-to-come-out-way-ahead-when-buying-a-used-car/. My problem though is that if this car dies I'll need to have a car immediately (I have not yet achieved the mustachian goal of a life fully enabled by biking), which leaves me using zipcar and/or renting for a time while I shop for a new and better car. Having not bought a car myself before I've read articles like the MMM one above which all indicate that when buying a used car on craigslist like in the above it generally takes a few weeks.

Renting and using zipcar for a few weeks though is likely to offset a lot of the cost savings for riding my current car into the ground and getting a new one cheap though! Which leaves me in a dilemma, do I look for a "new" car on craigslist now and sell the old one (very low expected sale price) or do I ride it into the ground and hope I find a good option quickly when that moment hits? Or does this make the immediate availability of a car from a used dealer a better option for me?

Thoughts or advice? Anyone out there have a good rule of thumb for how long getting a new car on craigslist is likely to take? Suggestions for building more car redundancy into my life to reduce the cost of car needs in the interval between cars? Also, recommendations on the point at which I could safely determine my current car dead and what mileage I might be able to actually expect are welcome too, all will be useful in my rule of thumb calculations. Thanks so much!

Forcus

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Re: Wait for car to die or trade for lower mileage?
« Reply #1 on: July 03, 2013, 01:49:45 PM »
Well I would first define your needs. If the car breaks down does it cause an immediate issue? As in, no backup plan to get to work and work is intolerant of transportation delays? Do you travel long distances in places where you'd rather not break down? Or is this a car that goes short distances (say, 5 miles) between places and you have access to bus services, a friend, etc. as a backup? Yes, as you approach 8 orbits around the Earth's equator, things will go wrong.. but if issues can be mitigated, I don't see a need to change things up.

You could have the car last another 75-100k or it could blow an engine tomorrow. Hard to know. If the car has no real value (like, sub-2k) running, as I suspect it does, I'd simply wait for a big problem to happen (say, bad engine, transmission, car breaks in half, etc.) and junk it for $300-400, activate your backup plan, and go shopping. If you do it right, you'll also have the cash saved up to be able to pay for the next ride without borrowing.

I think you are still in the sweet spot of low cost car ownership, a car with little value so dents and dings don't matter, insurance should be cheap, but still enough life left to be usable. Once something in that equation changes, then it's time to shop.

nataelj

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Re: Wait for car to die or trade for lower mileage?
« Reply #2 on: July 03, 2013, 02:03:03 PM »
Thanks Forcus! Your thoughts are appreciated.

Everything you say makes sense and your comments about the sweet spot of being cheap are right, but it still doesn't address my bigger concern about the costs of transportation while looking. My needs are specifically to have a car for commuting daily. I already have enough saved to buy outright if I need and would aim for something cheap enough to stay in the "sweet spot" you discuss even if I bought something else, but if my current car dies and it takes a month to find the new car I might end up stuck renting a car for a long time. And as rentals aren't cheap, that prospect makes me concerned. Is that concern legit? And if not, can you explain more why it's not something I should worry about?

Forcus

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Re: Wait for car to die or trade for lower mileage?
« Reply #3 on: July 03, 2013, 02:10:54 PM »
Yeah I didn't address that part but I've seen cheap rental deals, like described above. I don't think that even if you had to rent for 2 weeks that it would eat up the savings of waiting to upgrade. Here's what I would do:

1) Pretend shopping on CL, Autotrader, etc. See how long it takes to come up with suitable vehicles.
2) If you can come up with a list of, say, 10 or more within a day, then I wouldn't worry about finding one when the time comes. Keep driving the Taurus.
3) If you live in an area where cheaper, reliable high MPG vehicles are somewhat scarce, see how long it takes to accumulate that list.
4) If it takes, say, 2 weeks or longer, I'd think about keeping an eye actively peeled for that perfect used car, upgrading when it comes along, and then selling your current ride while its still running.

Eric

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Re: Wait for car to die or trade for lower mileage?
« Reply #4 on: July 03, 2013, 02:53:26 PM »
I'd start shopping now.  I'm not saying start buying now, but definitely start shopping.  Keep track of years, mileage, and prices on Autotrader, Cars.com, and/or Craigslist.  That way, you'll know what it's going to cost you and about how long it will take you find something new.  And if you find a great deal before your current car kicks the bucket, it might be worth buying it now and either storing it until your current car dies or just making the switch.

nataelj

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Re: Wait for car to die or trade for lower mileage?
« Reply #5 on: July 03, 2013, 03:05:44 PM »
Thanks, that's all useful advice. On a related topic too, are there any good rules of thumb for which repairs or maintenance tasks are worth doing to extend the live of the car vs. those that can start to be skipped as costing more than they're worth?

MrsPete

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Re: Wait for car to die or trade for lower mileage?
« Reply #6 on: July 03, 2013, 08:49:34 PM »
My husband and I have been there /done that three times in our married life.  Each time we've literally driven the car 'til it broke down so badly that the repair bill was too much to consider paying.  And we haven't had a crisis because of this.  The first two times the cars had the good grace to die in our own driveway.  The last car made its death rattle as my husband was driving home, and he was able to pull into a restaurant parking lot, where the car caught fire.  He put out the fire with an extinguisher he was wisely carrying in the car . . . and the restaurant staff felt so sorry for him that they brought him a huge iced tea in the parking lot. 

Our thoughts:

- We buy new cars and drive them 'til they're dead.
- When the car reaches the point you're describing, there's no point in trading it in.  It's worth basically zero -- but it's still useful to you.  Even if you pay a few repair bills here and there, it's better than spending on a new car, and it's absolutely better than making payments! 
- He drives the in-danger-of-dying car because he doesn't want me stranded on the side of the road alone.  He's chivalrous that way.
- When we think the car's on its last legs, we go ahead and start shopping for what we think we want so that we aren't completely out in left field when the time arrives.  When we bought our last car, it took us literally one day to buy the car because we already knew exactly what we wanted.  We did have to visit three lots to get the price we wanted.   
- Each of our last three cars has lasted 18 months - 2 years longer than we expected; thus, we've had 5-6 years of near-free driving from the cars.
- We figure that we're saving enough by pushing the cars 'til there's no more good left in them that IF we needed to do so, we could -- push comes to shove -- rationalize renting a car for a few days or a week IF the car died at an inopportune time. 

nataelj

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Re: Wait for car to die or trade for lower mileage?
« Reply #7 on: July 03, 2013, 09:13:06 PM »
MrsPete, thanks so much, that's great insight! I'm curious about one thing. When you say you buy new cars do you mean actually outright new? Or new to you from a user dealer/on craigslist? Your advice is sounds but I'm pretty much 100% on board with MMM in his articles about used always being preferable, in which case my timeline for acquiring a replacement car might be longer changing the math for me. Do you have experience with or thoughts on this?

gooki

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Re: Wait for car to die or trade for lower mileage?
« Reply #8 on: July 04, 2013, 12:41:03 AM »
Start shopping now. If you find a car with significantly lower mpg at the right price. Buy it and sell your current one while it is still working.

This is assuming you are a cash buyer.

From my experience, those who can afford to be patient buying their cars generally pay 20% less, vs someone in a hurry.
« Last Edit: July 04, 2013, 12:43:44 AM by gooki »

OzzieandHarriet

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Re: Wait for car to die or trade for lower mileage?
« Reply #9 on: July 04, 2013, 06:43:39 AM »
I'm with MrsPete. I got a bit of flak here for saying I was going to buy a new car, but I've been there with the cheap used ones, and it hasn't been happy. If my funds were more limited and I needed a car, I would definitely buy a used one, but my feeling is it costs you somewhere along the line -- either in time or $ for repairs.

I kept my last car (a Ford Escort) for 18 almost trouble-free years; I traded it in when I bought the new one (they "gave" me $500 for it), and it had about 82k miles on it. It only had problems in the last year, at which point I felt repairing was not worthwhile because the car was starting to fall apart, literally. And yes, I read MMM's most recent blog post about learning to fix your own car; not for me. I economize in so many other ways, and I am reluctant to compromise on the safety issues involved in repairing and driving a car. Call me a fuddy-duddy old lady. YMMV :)

nataelj

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Re: Wait for car to die or trade for lower mileage?
« Reply #10 on: July 04, 2013, 07:50:16 AM »
Gooki, I think shopping now is a good idea but after the other comments I'm starting to think I shouldn't buy unless I find the absolutely perfect car at the perfect price. Even if my car died I wouldn't be in a hurry to buy, I'd just have to foot the bill for a rental for a few weeks, and given the other comments below that sounds less expensive than I feared.

OzzieandHarriet, I appreciate your comment but I'm just not with you there. I think MMM explained why well at http://www.mrmoneymustache.com/2011/11/28/new-cars-and-auto-financing-stupid-or-sensible/, the biggest point to me is that I could do almost exactly the same thing you're doing if I bought a 3-year old car from someone who took care of it. I'd lose the first few years, but I'd also miss the first depreciation, which is a MAJOR hit, and the highest insurance and tax period. In your example you discuss having a car for 18 years. If I put in the leg work to find a quality three year old car that would drop to 15, but the costs for it would drop a LOT. It does mean a bit more legwork to find a used car that's still in good quality but our culture is so full of people who buy a new car every 2-3 years that it's not hard to find quality used.

I'm more with you on the safety and repairing since I haven't had time to learn how to do all that myself, but I think it might be worth reconsidering on this issue. I've never once seen an instance where the math on this actually worked out well enough to justify the extremely large extra cost to add the short period at the beginning of a car's life to your usage time.

Paul der Krake

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Re: Wait for car to die or trade for lower mileage?
« Reply #11 on: July 04, 2013, 08:31:22 AM »
Get the word out that you are in the market for a used car. Friends, coworkers, etc. In my opinion, you are less likely to purchase a lemon from them than from a complete stranger and more likely to get a better price.

gooki

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Re: Wait for car to die or trade for lower mileage?
« Reply #12 on: July 04, 2013, 07:03:52 PM »
Lets do some maths.

Say a likely scenario is it takes a month to find a replacement vehicle, and negotiate the current owner down in price.

Driving car until death.
Value at end of life - scrap metal $50.
Cost of renting a vehicle for 4 weeks. $600
Total loss $550

Buying now.
Value of car while still working $500
Cost of rental $0
Total gain $500

Difference between the two $1,050

How much are you looking at spending on a replacement? $5,000? If so you could potentially save 20% by buying now. Looking to spend $10,000 you save 10%. Looking to spend over $10,000 then yeah I'd wait for it to die.

And yes I agree only jump in when you find the right car at the right price.

PS I always assume people are spending well under $10,000 when looking to buy used cars privately.
« Last Edit: July 04, 2013, 07:05:49 PM by gooki »

nataelj

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Re: Wait for car to die or trade for lower mileage?
« Reply #13 on: July 04, 2013, 08:59:22 PM »
Gooki, that all makes sense and the back of the napkin calculation of up to $600 for the rental is in the same ballpark as an earlier comment which gives me more comfort with that as the likely range for that. Useful for me to know. That said, what is not factored in to your calculations is the usage I get. The current car might die on me tomorrow but it might also run with only oil changes for another 40k miles. That's a long time to use the current car, with the potential benefit of possibly reducing the amount of cars I have to buy in my life (a nice net savings) and the added benefit of more time to invest the "new" car money and/or more flexibility in my current emergency fund (though I'll be keeping that cash fairly liquid to be prepared for car death so the return on that is low).

If I sell now I'm effectively limiting the potential upside of my current car and starting the clock on the new one which leaves me back at this same point earlier with it too. Your calculations all makes sense for the current exchange itself but when you throw in usage time I'm not sure they would hold up anymore, and the added benefit of the current one potentially lasting a long time makes the math turn in its favor a fair bit (though this too is worsened by my current poor gas mileage). Having never done this before I'm not sure how much longer my current car is likely to last, somewhat a roll of the dice regardless I think.

So for the moment this all leaves me tending toward keeping the current car but doing a fake round of shopping for a new one in case something absolutely perfect comes along (though it'd have to be damn perfect to warrant the jump), or at the very least to know what I want and speed through the process if it does die. Further thoughts or parts of my calculation that look wrong are appreciated though!

Forcus

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Re: Wait for car to die or trade for lower mileage?
« Reply #14 on: July 05, 2013, 07:50:12 AM »
I think you are thinking about it the right way so good luck in whatever you do!

Rebecca Stapler

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Re: Wait for car to die or trade for lower mileage?
« Reply #15 on: July 05, 2013, 08:19:05 AM »
You have all the right factors in mind, so when you're shopping and evaluating whether it's the "perfect" car, the upside of your current car's potential use will go into your estimation of whether it's a "perfect" car, right? As the miles tick up on your current car, the "perfect" car will probably be easier to find because you will have less potential in your current car. KWIM?

At the very least, understanding now what models and years will work for you will benefit you when it comes time to make the switch. That's legwork you can do now to cut down on your legwork later.

MountainFlower

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Re: Wait for car to die or trade for lower mileage?
« Reply #16 on: July 05, 2013, 03:47:34 PM »
We were recently in a similar position, but we had a 98 Jeep Grand Cherokee with 220K miles.  The car was running just fine, so I decided that we should sell it while we could.   Imagine our thrilled surprised when we got $2000 trade in on it (we bought a 2007 from a used car dealer)  DH wasn't in a big hurry and got the exact car he wanted for a good price even before the trade was factored in. 

I'm so glad that we didn't wait for it to break down.  I think we came out way ahead and no one was stranded.  Also, we didn't do that $500 repair that you know was imminent only to have it really die a month later.  It was DH's car and a car is a condition of his job.  We really couldn't be down for long.