Continuing to own an old car vs. buying a new one

[Juddog]

This is my dilemma. Some of the dealerships in the area are offering a pretty sweet deal on their 2008 models. I have heard of the Mazda3's going for $200 under invoice for example. The deal is 0 % APR and zero down payment, for a 36 month payment plan.

Now I ran the numbers, and for a Mazda3 based upon stock that would be about $500 a month. My current car is a 1996 Mazda 626. I have already spent $5k in repairs on it last year - new radiator, transmission rebuilt twice, new shocks / struts, front ball joints replaced, new back tires and wheels, the list goes on.

The problem is this - the car I have now is leaking oil slowly from somewhere, I haven't figured out where yet, but it may be the engine seal, which I'm told is a $800 repair. On top of that something on the front right is broken (most likely the front right ball joint) which is another $200-300 repair. I also need new wheels and tires for the front to replace the ones I have now which wobble like mad if I drive 40+ mph (the whole car shakes when I get on the thruway).

Is it better to get a new car at this point, and count everything I spent during the last two years as a lost cause? I totaled up all my repair bills from last year and the year before; I was stunned to realize I have paid $8k fixing this damn thing through mid 2006 to the present.

On the other hand, I want to keep the car because now that I did spend all that money fixing everything, I would feel that I was letting it go to waste. I bought an extended contract (warranty) on the transmission which failed 3 times since 2006, so I'm good for another couple years there, radiator is brand new, car is still in fairly decent condition.

Of course there is a third option, which my wife mentioned to me: Buy the new car, keep the old car and don't bother with the repairs needed, and basically run it into the ground then junk it. This way I don't have the huge repair costs. I am at a loss as to what to do, as I know right now I'm looking at about $1200 - $1500 in maintenance / repair on my existing car, which would be 3 months of paying for a new car.

 

[AMCRambler]

I don't know about a new car, but if that one giving you fits is more than 4-5 years old, I'm thinking you'd be better off getting a newer used car. Get a 2006 or a 2007 Mazda 3, they are running about 11-12k. To me buying a brand new car just doesn't make sense. You drive it off the lot and it loses 2-3 grand of it's value. Yeah there's the warranty, but a car that's a year or two old will still have some warranty left and it will be transferrable, but honestly how often do brand new cars have major issues in the first 3 years?
On the other hand, you've put a lot of money into keeping that car up and running and it sounds like you've replaced a lot of the parts that need replacing at the higher miles. But keep it or sell it, you're still going to pay those costs. Keeping it, you pay for the repairs yourself, selling it you'll need to account for the poor mechanical condition of the car in your asking price (unless you find a sucker!).
I made the same decision recently, and to me it just wasn't worth putting any more time or money in my 8 year old car. To save money I did a lot of repairs myself and it was every couple of months and something else was breaking and needed to be fixed. Even now that I have the new wheels and I was all ready to clean up the Ford and sell it, the damn thing finds a way to suck more of my money. I didn't drive it for a week and then I go to drive it over to my parents place to wash, wax and vacuum it out and the parking brake cables start hanging up. I didn't want to sell the car with a stuck parking brake making it impossible for people to test drive so once again I had to bust out the wrenches, tear it apart and replace the rear cables. $100 bucks in parts and several hours of my time and it's fixed. Then I go to start it and drive it home and what do you know, it won't idle. Just starts and stalls. Several more hours of my time spent troubleshooting and come to find the idle air control valve is sticking. Cleaned that out, cleaned the EGR valve out and she's running like a champ again. At this point I just want to sell it before I have to fix anything else!

So anyway, I feel your pain and good luck with your decision. For me, a newer more reliable car was the way to go.

 

[Billb2]

By the time you get to looking at whether the repair costs or payments are less, it's well past the time to buy new.

$9.5k/2yrs = $400/mo. YIKES!

And don't drive a car with a broken ball joint, at least not over 10mph!
If a ball joint fails, there will be complete loss of steering and possibly braking too.

 

[Juddog]

Originally posted by: Billb2
By the time you get to looking at whether the repair costs or payments are less, it's well past the time to buy new.

$9.5k/2yrs = $400/mo. YIKES!

And don't drive a car with a broken ball joint, at least not over 10mph!
If a ball joint fails, there will be complete loss of steering and possibly braking too.

Should I try and trade it in then when getting the new car? It would probably only be a $1000 trade in (which makes me weep with dollar bills given that I've paid more than that in repairs in just a couple months).

 

[AstroManLuca]

With all those repairs, you won't be able to sell it for more than $1000 anyway. And if you do get the repairs, you still won't be able to get $1000 + cost of repairs.

If you go with a newer used car, just make sure you get one without too many miles on it. Just think of it like this - every mile it's already been driven is one less mile you'll be able to drive it for. If the car is going to last 200k miles, and it already has 60k on it, you'll only get 140k out of it, and the last 20-30k will probably be kind of bad.

I'd say just lay out your possibilities and don't rush it. Think of what you'd be willing to pay for a used car and how many miles is an acceptable amount, and compare what you'd pay there to the cost of a new car, keeping in mind that a new car will get you an extra few years of life and comes with a warranty. Buying new is NOT always a bad idea, especially when used cars, even ones with 50-60k miles, are only a few thousand less.

I ended up buying a Honda Fit after looking at a few used cars. The one I was interested in was a Mazda 3 s with 60k miles, and the guy wanted $11k. But for about $4k more I got the Fit. Not quite as fancy a car, but it was brand new.

 

[Juddog]

Originally posted by: AstroManLuca
With all those repairs, you won't be able to sell it for more than $1000 anyway. And if you do get the repairs, you still won't be able to get $1000 + cost of repairs.

If you go with a newer used car, just make sure you get one without too many miles on it. Just think of it like this - every mile it's already been driven is one less mile you'll be able to drive it for. If the car is going to last 200k miles, and it already has 60k on it, you'll only get 140k out of it, and the last 20-30k will probably be kind of bad.

I'd say just lay out your possibilities and don't rush it. Think of what you'd be willing to pay for a used car and how many miles is an acceptable amount, and compare what you'd pay there to the cost of a new car, keeping in mind that a new car will get you an extra few years of life and comes with a warranty. Buying new is NOT always a bad idea, especially when used cars, even ones with 50-60k miles, are only a few thousand less.

I ended up buying a Honda Fit after looking at a few used cars. The one I was interested in was a Mazda 3 s with 60k miles, and the guy wanted $11k. But for about $4k more I got the Fit. Not quite as fancy a car, but it was brand new.

Well I had thought about this, but the 0 % interest and zero money down has me hooked on the idea of a new rather than used car. When I had bought my existing car it was a year old, and I found out later the previous owner(s) were unkind to it. With a brand new car, it falls under various warranties that seem to sweeten up the deal.

 

[Demon-Xanth]

Sell the car when the cost of maintaining exceeds the cost of buying.