One Way to Keep Cash in Your Pocket -- Keep Your Old Car Running

As someone who usually keeps my cars for 8-10 years before getting another, I've always wondered about the decision many people make to trade in their cars and buy newer ones fairly often.

Of course it's a matter of choice and personal preference, but making new car purchases frequently can drain the budget. In today's paper I saw an article from Consumer Reports discussing this, and the numbers were eye-opening.

The bottom line they came up with was that keeping cars long after the final payments have been made can save in the range of $30,000 or more.

They compared the costs of buying and keeping a car for 225,000 miles as opposed to buying and financing an identical model every five years. Their analysis showed that many cars nowadays can last that long with few, if any, major repairs.

The comparisons took into account purchase price, maintenance and repairs, depreciation, interest charges, taxes and insurance for 15 years, comparing these with what it would take to purchase a new vehicle every five years (I have a feeling the cost difference would be even higher if the average of three years to get a new car were used).

Comparing a Honda Civic EX with automatic transmission cited the following results: an owner could saw as much as $20,500 properly maintaining the car over the 15 years -- $1,500 more than its purchase price!

Add to that the ability to bank the savings in a bank would allow that $20,500 to grow an additional $10,300 plus. This means that keeping this car fifteen years instead of buying new ones at the five and ten-year marks could leave the owner $30,800 richer!

They said that similar big savings could be achieved with other vehicles too.

The article stressed the importance of maintaining a vehicle properly to get the longevity allowing this to happen. A good friend of mine once stressed to me that the single most important thing to do for a car is to have regular scheduled oil changes. He said if you do nothing else, that will have the most impact on keeping the engine running longer (not that he was suggesting doing only that one thing -- he was just underscoring its importance).

The article mentioned other important aspects of maintaining a car to keep it running well longer than you would've thought -- following scheduled maintenance recommendations, using parts or fluids that meet vehicle specs, inspecting regularly to check for problems (open the hood to look, listen and smell for problems), and keeping the vehicle clean for its physical well-being.

Of course, everyone makes their car decisions based on a lot of factors and personal considerations -- the decision to buy a new one every few years may be important for a lot of reasons, and you can't generalize that it's always better to keep the older car running instead of getting new. But when it comes time to make that decision, maybe it can help to have an idea of the dollars and cents behind the decision. Maybe you might decide driving a good older one and keeping more money for yourself is a wiser choice after all.

Don't forget to think of what else you could do with that money -- maybe that would make the decision worthwhile.