All the recent headlines about Cash for Clunkers mean that a lot of people have new cars on the brain. But not every old car qualifies for the credit, so it’s hard seeing all your neighbors pull up in brand new rides when you’re still slogging to work in the same car that saw you through college. It’s even harder when Old Faithful starts to need the occasional tow, so if you’re like me, you’ve probably pondered whether your beater is worth the cost of increasingly expensive repairs.
This moment came recently for me, when my mechanic said he couldn’t promise my 10-year-old Subaru would make it across state lines unless I sunk $2,000 in repairs into it. There went my summer vacation.
The Subaru had treated me well over the years. Other than regular maintenance, it required only a brake job here, or new air filter there. But since the Kelley Blue Book value of the car was only $4,000 to begin with, how much sense did it make to spend half its worth to fix it?
As it turns out, there are benefits in holding on to a beater. I hunted around the Internet and found this chart to be particularly helpful. Spending $2,000 a year on maintaining a car I already own outright means I wouldn’t have to spend several times that amount on a down payment, taxes, licensing fees, higher insurance, and interest (assuming I would finance at least part of the purchase). And don’t forget that older cars depreciate at a much slower rate than new ones, so your money won’t disappear before your eyes.
The net difference between buying or leasing a new car and fixing an old one? At the end of three years, you spend about double on the new car — and triple on a lease. Knowing that, it sounds like I owe my mechanic a hug.
