Insurance is a key factor in the cost of ownership. The “best” vehicle for typical low operational costs (some small imports brands) sometimes have very high insurance rates. I think this is not stressed enough.
Depreciation is not important if you buy the car new and wear it out. It is very important if you buy it used since with high depreciation you pay a lot less, but still have a lot of service life left. That’s why it is usually cheaper to buy a used car and do some more repairs over the life than buy a new one and have to amortize all the depreciation. A good example is a Ford Crown Victoria, a fast depreciating, but quite a good car that’s long lived and cheap to fix.
In the final analysis it’s convenience over cost.
Thanks, Wha Who. If a car occasionally breaks down it’s no big deal if it can be fixed cheaply and easily. In the 60s Mercedes and Volvo cars were more reliable than Detroit products, but they cost a lot ot fix. On the whole my 1966 Chevelle Malibu cost less to operate than a colleague’s Volvo 240. However, his car had a better body, and outlasted mine.
We used to say, “If the neighborhood garage can’t fix it, it will be expensive to own”
Good point; a car that’s less likely to be totalled in an accident, and is cheap to fix, and nobody wants to steal would rate well, I imagine.
A good reason to own an older car.
Sorry OK, I got you confused with another poster. Many posters like Crown Victorias and Mercury Grand Marquis cars.
Lexus cars are no more durable and reliable than a Camry, and parts and service are much more expensive.
Partly disagree here…Parts prices for a Lexus is the same as the Camry or Avalon. I see no difference in prices. Service…Well don’t know yet…I do pretty much all my own (which so far is nothing beyond PM). But the dealer where we bought our Lexus from is also a Toyota dealer. They have one service area for Toyota/Lexus/Scion. Same dollar rate for all vehicles.
That’s good news Mike; where I live the Lexus dealer is located in a “luxury” car dealers park along with BMW, Mercedes, Infinity, Audi, Jaguar, Land Rover and has the same black marble and potted plants in the lobby, gourmet coffee and very high service costs compared to Toyota.
The Toyota dealer where I get mine serviced occasionally is owned by a large Chevrolet dealer, and their routine oil changes cost the same as at Jiffy Lube. No potted palms here and the coffee is so-so. The staff is extremely helpful and courteous.
As far as reliability goes…I haven’t seen anything come close to my wifes Accords. Her last Accord (96)…we gave away with over 230k miles on it…I put a total of $4 beyond normal PM…that’s it…$4. Car was fully inspected by a mechanic before we gave it to our Niece…and he couldn’t find one thing wrong with. In fact he wanted to buy it.
Keep in mind that depreciation is the biggest cost by far, and other costs are fuel, insurance, and maintenance & repairs.
Some people have another expense to consider and it’s not trivial- personal property taxes.
The first few years can be a significant expense, especially on high dollar vehicles. Also, if they retain their value, you pay more and for a longer period.
Insurance was an issue when I was younger…but not once I reached 40. Rates are only about $500/yr difference for a cheap new car as compared to a more expensive new car…And less significant if the car is a few years old.
Chevy Cobalt LS, 2007, 23,000 miles, 5 speed manual transmission, single owner, 65 year old female owner, wanting to sell it quickly. No major accidents. Exactly 5K USD cash.
Thanks again Docknick. You and CSA get beer on me when u r in Houston.
You have a point there. My cheapest car per mile was a 1977 Dodge Colt ( a Mitsubishi Lancer clone), which I bought for $1700 with only 20,000 miles on it from a senior. It had only automatic, nothing else, not even power steering. But both the Chrysler dealer and even Midas had parts for it.
I did not enjoy owning it, it was underpowered and uncomfortable, but it was sure cheap to run.
My most expensive was a 1976 loaded Ford Granada 351V8, which seemed to need parts and repairs on an ongoing basis.
In addition to all the other good points already made, some of this depends on the mechanical skill of the purchaser. One can almost eliminate depreciation if you find a ‘cosmetically challenged’ but mechanically OK car that’s 5-10 years old, buy it at a relatively low price, clean it up, fix it up (free labor) drive it, and sell it at near the original purchase price. Requires some luck and persistance, but I’ve seen it done.
I think Tom and Ray once recommended buying a beater with a good power train, so it would pass inspection and then only doing the essential items to keep it running safely until it bit the dust, at which time you start all over.
This certainly eliminates collision insurance, cosmetic upkeep and “unnecessary” mechanical repairs. It’s not my choice of living, but it works for some.
Mike; this is remarkable. I assume that brake work, belts and hoses are condidered normal maintenance & wear items in this case. As would be exhaust components,and two batteries, in my book a least.
By comparison, I had a 1984 Chevy Impala, which by that same mileage had been repainted, new front springs, heater core, alternator, starter motor, shocks, wiper motor, heater fan motor, water pump, radiator, fuel pump, rear axle seals, and a few other odds and ends. Yet this was considered a good car by many publications. And the most popular police and taxi vehicle by far. None of these items were excessively expensive, it made you cross your fingers as to what would go next.
P.S. Forgot to add timing chain & gear ($250) set which got very nosiy and was proactively replaced.
I assume your wife is also an above average and careful driver.
Beer for 8 young men? That can get expensive, even by the half keg! At least they won’t care about the weather after a couple of brewski’s.
Receiving a hand-me-down car, with a recent tune up, and because it had some dents they filled the gas tank for you. Then traded it with your buddy who had a old pickup, but again, since it was older, they tuned it up and filled the gas tank. Then sell the old beater pickup to the guy who learned to drive one just like it when he was twelve. With half that money buy back the origional hand me down car, that now has a couple extra dents and a smell from the trunk that you want to throw away the trunk key, and and have gas money for months. now that is a cheap ride.
JT, Expensive ? They Were Going To Buy The Beer, Anyhow !
CSA
You make an excellent point! I got to where I am today (financially) by buying “beaters” and fixing them up myself. Most of my best cars were $800-$1500 cars that needed some minor work but the owner wasn’t up to paying someone to fix them or wanted a new ride. I spent much, much less on transportation than many people my own age and my cars were not all that bad. In fact, most of them were very respectable and slightly older luxury or sporty cars. I didn’t buy into keeping up with the Joneses early on in life and the money I saved allowed me to buy tools etc and eventually other toys.
One friend was at the new car dealer looking over brand new trucks. When the sales crew came rushing out, he told them “I’m looking at the truck I’m going to buy in 3 years”. They all dispersed pretty quickly…
Thanks for all the good posts so far. As a quick and dirty summary, the results are somewhat expected for some, and also unexpected for others.
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The cars currenty touted as being “economical”, the SMART CAR, Prius, Volkswagen Golf diesel, have not been mentioned much,if at all.
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There is a general concensus that a good used car is more economical to own than bying that same car new.
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Posters wisely concluded that a car which is expensive to buy new will also cost more to keep running. Studies bear this out; in general a new car, driven to the end of its natural life will consume its own value in maintenance and repairs over its life. That life, of course varies greatly; it may be 20 years and 450,000 miles for a Lexus or 200,000 miles for a Jaguar, or 120,000 miles for an Aveo.
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The best buy seems to be a well depreciated good car that the public does not seem to like; it will depreciate most and will be cheap to buy. The flip side of the coin, of course, is a used Honda or Toyota with lots of hard miles on it. The salesman who just traded it in after doing little or no maintenance for 4 years came out ahead on this one.
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A simple car with few options (4cylinder, non-turbo, stick shift, etc) will costs less to keep running provided it is a good design in the first place.
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Keeping the car running as long as possible with safety and emission requirements in mind seems to pay off. At that time a major mechanical failure or rustout would end the car’s life.
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Highly fuel efficient cars are not necessarily the chjeapest to run. It’s only true if they are cheap to buy and are well designed. Some large cars, like used Crown Victorias and Buicks, have low overall owership costs.
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Insurance costs are important; some cars cost more to insure than others for reasons only the insurers know. Carrying collison insurance on an old low value car makes no sense.
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Considerable money can be saved by doing you own maintenance and some repairs based on you abilty to do these things. Needless to say, attention to mainteance schedules and being pro-active has a significant pay-off.
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Fuel costs become important if you drive more than average. For seniors and others who drive little, gas mileage is not a major factor, unless we go back to $4 gasoline.
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The car’s origin did not seem to be a major factor. Americsn designed cars got as many recommendations as those from Japan and Korea. Not many European cars were considered “economical” to own. Likely because of the higher maintenance and repair costs.
I look forward to additional creative comments and stories.