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Do Buy/Lease a new Car or Spend Money to Keep Car Running

I have a dilemma; do I donate my 1996 Honda Accord or do I spend between $900 to $1,500 to keep it running for who knows many more years? My Honda Accord is running fine, but it is approaching 180K miles so I need to replace the ?Timing Belt? and the ?Waterpump?. I have two quotes; one for $900 and the other for $1,500. The Nada trade-in value for my car is between $1,175 and $2,400, and the clean retail value is $4,050 (I doubt someone will pay this much for a 14 years old car). I am thinking that perhaps it is time for me to get a new car or lease a new car. I can afford buying or leasing a new car; no issues with this option. If you were on this situation will you spend the money to keep the car running or do buy or lease a new car? Perhaps you know a good mechanic that will do the job for less than $900.

At 180K miles, I’d want to know about rust and structural integrity.

If the car is structurally sound, spending $1,000 or so for routine maintenance such as the timing belt is not out of the ordinary. And you have to admit, $1,000, even $2,000, is WAY less than the cost of a new car.

These cars can go 300K miles with proper care.

It’s a personal decision. Would you prefer to keep this car and see how long you can make it last, or are you in the mood for a change?

What new cars have you considered so far?

Unless you can write off the payments as a business expense, I don’t think leasing makes much sense. But that’s another personal decision.

The car has small rust spot; they are not so visible. You are correct; keeping the car running is much cheaper than buying/leasing a new car. I am looking at the Toyota Prius; the lease is for $210 for 36 month with $2,000 due at signing. The buying price is around $24,500 + tax and other fees. I own a small business so I could write off the payments as business expense.

And how do you feel about continuing to drive a 14-year-old Accord with nearly 180k miles vs driving a new Prius?

To me a car is something a need to get from one point to another. If I keep taking good care of the Honda, I think I could get 2 to 3 more years out of it. I only have one issue with the Honda; the driver window does not function fine in the winter time; the window does not go up when temperature gets below 20 degree. Well, it is more of the unknown with the old Honda. Will it break on the road during the winter time or will it last me through another winter? Yes, I will feel better (more secure) to be driving a new Prius during the winter.

Spend the money and get the belt and pump replaced. Ask if that quote includes the tensioner too…I’ll bet it does. You’ll not find another car that you’re happy with know to be reliable for $1000…or even $4000.

And getting rid of a car you own to replace it with a leased car is folly.
First of all, you’ll find that you’re restricted on the car’s use…and should you get a better job offer 30 miles away you’ll be screwed.
Second of all, when you finish paying the lease you will have nothing, nada, not even a wheel.
Third, should the leased vehicle turn out to be a lemon, you’re stuck with it. You cannot trade it, you cannot sell it, you don;t even have leverage to force them to fix it.

Leasing: bad
Buying: good
Holding on to a car you own: better than good

I don’t know in what part of the country you live, but $900 seems quite excessive for a timing belt package (timing belt, belt tensioner, water pump + accessory drivebelts-A/C, PS, alternator) for an Accord. Is it a 6 cylinder engine? You might might want to call around some more to find a cheaper place who also offers a 12 months/10k miles warranty on the job.
I would fix the Accord and keep it till the wheels fall off.

The $900 seems beyond steep. It can be done for less.

That being said 14 years old is pretty tired for any car. I would move on personally.

Well, since you state you can write the lease payments off as a business expense, I’d say go ahead and get a new car.

Leasing: bad
Buying: good
Holding on to a car you own: better than good

Leasing and buy are about the same. Most people who are buying aren’t truly buying when they trade them in when they’re paid off. Leasing loads all that trade in value into lower payments.

A car is valued by market perception. Buy a lemon? The finance company is the one taking the bath at the end of the lease (assuming you’ve stayed within the mileage). How many Explorers do you think were losers under leases? Not because they were junk, but because there were so freaking many of them produced. It was cheaper to buy a new one payment wise.

For someone owning a car to this number of years, leasing vs. buying has very little difference in costs. You’re getting a $30k car today for less $$ and will be paying future diluted $$ for the residual. Now you will be buying an expensive used car, but you had a cheap new one …so where’s the loss? AGAIN, that’s if you’re the longer term owner.

Fixing it is what I’d do. I’ll never have another car payment if I can possibly help it. Cars are a total loser no matter how you shake it up.

If you do buy/lease …search high and low for a unit with the lowest level of appointments. Just AC and cruise and the base radio. The more bells and whistles you pile on, the more things will become obsolete and make you want to get rid of it later on. Ford is plagued with gadgets. I can’t wait to see all that Bluetooth and wifi gear go bad or be superseded in a few years. Will they have some modular “plug and play” replacement? Nope. You’ll pay through the nose to keep that puppy functional …or you’ll drive it around in some state of varied dysfunction.

You’re hard pressed to find simple these days.

Good post.

Leasing and buying are comparable only if

  1. one drives a lease car fewer than the allowed miles

  2. the leased vehicle does not have chronic problems. You can trade a bought car, but you’re stuck with a leased car. In '05 I made a poor buying decision and bought a car that I could not drive due to physical problems. I traded two months later for something that I could drive without pain. If I’d leased, I’d have been screwed.

  3. the buyer in the comparison trades at the end of every loan. Personally, of all the people I know I only know of one that does this. This too, IMHO, is economically foolhearty. But at least if the buyer gets a lemon he/she can trade it.

You should be able to get a few more years from the Honda. $900 quote for the work is high, you should be able to get the work done for about $600 to 700 by a good mechanic. If you get a price too cheap, the job might not be the best quality work.

Since you can write off lease payments, check out the leasing option with your tax preparer or a CPA. If the tax benefit is significant you might do well to lease a new Pruis. Then you could buy the Prius at the termination of the lease and then depreciate the Prius as a business expense for a couple of more years.

Leasing for an individual to save money with a low monthly payment isn’t a very good idea. But for a business owner, leasing might be a viable way to go.

I’ve never owned a Honda, but I have a very old Corolla (87) that runs well, starts every day, and handles and drives and rides like it’s new and gets 35 miles to the gallon. It costs me what your car is going to cost you: scheduled maintenance.
You are going to pay for it either way. The difference is, do you want to pay for it on top of a car payment? And if you buy a new car I think you’ll find that the scheduled maintenance is not only required at shorter intervals than your current car, but is also more expensive and involved.
According to mcparadise, decide, IS the car sound? Does it shake when you’re driving it, is it rusting out, is the steering loose; is it safe? If not, and you can afford it, then buy a nice new car but stick to the scheduled maintenance. Your new car will be a lot safer than even a ten-year old car.
On the other hand, my last Corolla lasted 374,000 miles. I never spent a dime on anything except scheduled maintenance tires and brake pads until it hit about 340 k.
Or how about this, buy a new car and donate your Honda and get a write off?

Don’t forget, with the low payment rental (oops, I mean lease) options, you’re usually only allowed 10,000 miles a year. If you use this car for business purposes, you could easily blow past your allowed mileage and be charged large overage fees.

Also, with your current car, you need only liability insurance. Any new vehicle will necessitate buying collision and comprehensive coverage, which will raise your insurance costs.

Based on your posts and the fact that your current car is 14 years old, you don’t seem like the type who will want to upgrade every 3 years. $900 is 3 or 4 “car payments” tops. So if you get the work done and it goes even 6 more months, you come out ahead, if you think of it in those terms. Meanwhile, if you can afford a car payment, take that money and stack it up so you can pay cash for a “new” car in a few years. Or if you already have the cash, take that money and put it on the mortgage, or credit cards, or IRA, 401k, etc. Pay yourself, don’t pay a finance company.

An easy ‘fix’ for the window issue; don’t put the window down when it is below 20 degrees. I have to guide the drivers window by hand on my daily driver to keep it from jumping off its track and dropping down into the bottom of the door. But that’s way cheaper than a car payment.

I found a local mechanic with good reputation that will do the job for $700. I will do the repair and hope the Honda last me another winter or more. Thank you all for the feedbacks