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CONSUMER REPORTS and other authorities will tell you that you get the greatest value for your car-buying dollar by purchasing a two- or three-year-old vehicle. They also often recommend selling your current car after you’ve owned it for about seven years.
We favor a different strategy—one that suits our family but certainly isn’t for everybody.
My wife’s No. 1 priority is that her vehicle be reliable. She insists that every time she gets in the car, it starts and delivers her to where she needs to be, with no worries along the way. To maximize the chances of that happening, we buy her a new car every eight to 10 years. She gets to drive a car largely under the manufacturer’s warranty, plus today’s cars are very reliable over their first decade.
I then get her old car, and continue to drive it until some major mechanical problem crops up or the body rusts such that it’s no longer structurally safe. Once one of those things happen, she gets a new car and I once again take over her old car.
This system certainly isn’t for everybody. The second driver of the car ends up with a car that’s eight to 20 years old. The final few years can be rough. The driver of the older vehicle better view a car as transportation only—because some of the amenities will stop working and won’t be worth replacing. If my wife’s heated seats stop functioning, we’ll get them fixed. If they stop working in year 10 or 12, they’re liable to stay not working.
The second person also has to be willing to live with the occasional minor malfunction, like the fuel pump failing or a radiator hose bursting. I can almost guarantee that these things will happen on a dark road at 2 a.m. or when you’re running late for an important meeting. They virtually never happen just as you pull into the garage after grocery shopping.
A 16- to 20-year-old car with major mechanical issues has low or no resale value. Still, buying a new $40,000 car and driving it 20 years comes out to a reasonable $2,000 per year. That’s the same as buying a $35,000 used car, driving it for seven years and then selling it for $21,000.
My brother Larry has calculated the savings I’d get by buying my wife a three-year-old car and driving it until it’s 16 to 20 years old. He tells me that I could have saved tens of thousands of dollars doing that instead of buying a new car. My response: Buying a new car makes my wife happy, and we’ve been happily married for 37 years, so I’m okay with the math.
The only time I’ve ever been slightly apprehensive about our car-buying strategy was when I was a young engineer. We were returning from a plant review, which involved several vice presidents. There was an extra seat on the company jet, and they asked me if I’d like a lift home. I jumped at the opportunity.
As we landed, two vice presidents mentioned that they’d gotten a ride to the airport and needed a lift back to the office to retrieve their cars. Everybody else on the flight was going in a different direction, so I reluctantly volunteered.
I was driving a rusty Chevy station wagon at the time. I threw the two child car seats into the back and swept the loose Cheerios onto the floor mats. These two VPs didn’t come up through the engineering department. They came up through marketing. They wore Armani suits and had watches that cost more than my car. They both hopped in. We talked business the whole way to the office. They both thanked me profusely for the ride—and never gave me a hard time about the car. For that, I am eternally grateful.
The best story I’ve heard about driving an older vehicle is from the brilliant actor and filmmaker Mel Brooks in his book All About Me! Brooks was parking his beat-up Honda Civic in the studio lot when Frank Yablans, who had run Paramount Studios and was now a producer, pulled in next to Brooks. Yablans was driving a Rolls-Royce with a leather interior. He looked over at Mel and said, “Mel… I’ll never be big enough to drive a car like that.”
Our car-buying system isn’t designed to minimize costs—and it certainly isn’t for the couple where both spouses dislike uncertainty. But it can be a reasonable compromise that allows a family to purchase a new car every so often.
Kenyon Sayler is a retired mechanical engineer. He and his wife Lisa are extraordinarily proud of their two adult sons. He enjoys walking his dog, traveling, reading and gardening. Kenyon’s brother Larry also writes for HumbleDollar. Check our Kenyon’s earlier articles.
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We’ve used different strategies at different times.
We started with two new Toyotas. They lasted us until our boys were in high school – 20 year and 300K miles, 18 years and 270K miles. TCO was really low for them both, so no regrets.
With kids of driving age, we switched to buying 8 year old cars with under 100K miles. Reliable tanks that can handle a fender bender.
With the kids gone, we thought of buying a new car, but weren’t sure it was what we wanted, so we leased. Good idea, turned it in after three years, bought an 8yo car.
We have a new PHEV on order, our first non-toyota brand, but the new KIAs seem to last pretty well. We hope to own it for 15+ years.
Bought a 2006 Hyundai Sonata brand new. Wife drove it first 5 years. Then I drove it until 2016. Included a monthly trip to Chicago (son at school, 800+ round trip) or NYC (daughter at school, 1,100+ round trip). Then, in 2011 – 2012, a weekly trip to Chicago during academic calendar year (my education), 800+ round trip, perhaps 60+ times.
Gave it to my brother in 2016, with 296,000 miles.
Only challenges:
Ignition switch (probably too many keys on my chain, wear & tear) and
Brakes, brakes, brakes, brakes … waited too long to change pads, etc.
We own two Hyundai products today. 2009 has 150,000+ miles, 2016 only 60,000
I bought my only new car, a 2012 Chevy Cruze. It was the 2nd year of the new model so I crossed my fingers hoping the first year bugs were worked out. What a piece of junk. Minor things kept annoying and then it wouldn’t start in my garage. I had to call the dealer to pull it out then tow it back to their shop. It was some kind of safety switch in the shifting column.
I hobbled along with it for 4 years because I knew resale was terrible, but I had my opportunity to get rid of it when a woman backed into me at Walmart. She was extremely distraught and crying and said her husband was going to kill her. Her teenage son was there too. She had no insurance either. My options were to call the police, they would then issue a citation for lack of insurance as well as anger her husband further. I felt bad for her and put my arm around her and told her not to worry about it. Just forget it as there was no damage to her old truck and mine was likely $2000 or so. I decided to show grace for someone with no apparent resources. I made no insurance claim.
My wife wasn’t too thrilled at my generosity but I said let’s trade for something else; which was a 2016 Kia Sorento AWD with 26,000 miles. That was 5-1/2 years ago. Still going great at 88,000+.
A year later(2017), I sold my 2002 Honda Accord that I had purchased in 2005 with 19,000 miles on it to my stepson. He drove it 3 more years. Had 275,000 on it when we said goodbye for his 2014 Toyota Corolla. I stuck with my old standby, Honda 4 door Accord purchasing a 2016 with once again 19,000 miles on it.
I have to have confidence in my vehicles and the backup screen is a must, but purchasing slightly used Asian vehicles has been the ticket for me.
Your correct Scrooge_McDuck88.
In addiction to our delightful lunch, he then picked up my tab there & asked me back to his friends condo/place in the MIA sky’s.
The elevator opened w/attendants standing ready to help with packages & such, and he told me how one occupants child -(iirc)- had recently died jumping from over 20+ floors up into the developments small decorative pool. Life eeh?
(I suspect I’m not disclosing confidential information.)
Life is certainly stranger than fiction.
Good luck & Best wishes……
Taylor Larimore once personally gave me a priceless piece of advice that has saved me thousands. When it comes to autos, if you can reliably count on an auto to get you from A to B,…thats best.
Upon leaving a MIA Yacht Club he frequented after a nice lunch he then pulled up in,(IIRC), a decade’s or so older dark blue Corolla or Camry (Toyo product) offering me a ride, near the timeline of the 08/09 financial downturn.
I promptly sold my high end Acura SUV and followed suit.
My annual excise taxes, insurance, maintenance, etc. and overall transportation costs plummeted thereafter.
I suspect his advocacies have helped many more folks than he can ever recall.
Good luck & Best wishes.
Evan- it must have been the Coconut Grove Sailing Club! I was a member there, and I knew that Taylor was a member as well.
I think it’s a good strategy. One thing to consider though regarding new cars being more reliable. On a new car, it’s true that you’re covered under the Manufacturer’s Warranty when something goes wrong. But sometimes there are recalls within the first couple of years. That’s probably most likely for a new car when that model year marks the start of a new “generation,” but it’s still something to consider. You may be spending time going to the dealer to address the recall(s), problems you wouldn’t encounter by purchasing a lightly used vehicle with initial defects already addressed.
We used to do something similar until I took a new position with my company that required frequent travel to the DC area. Our contract allowed for travel reimbursement at the government per diem rate, which averaged around $0.55 per mile over the decade or so I drove. The senior engineers I worked with had figured out the best thing to do was buy a highly reliable vehicle that got good gas mileage, and was comfortable enough that you didn’t mind driving 3 hours twice a week. The reimbursement more than covered a monthly car payment for a three or four year loan. At the end of the period you could buy the car or turn it and start the cycle again, depending on your expectations for future travel. It was a nice perk that somewhat made up for spending frequent weeks on the road.
I sold my 1990 CROWN Vic to my son after his air conditioner broke in his 1988 Volvo 740 a decade ago. He uses both cars, the Volvo in the winter, and the CV in the summer. Old cars are a money saver, and there is no savings when purchasing a new car today as the design is for replacement, rather than longevity. New automobiles cost a small fortune, are overloaded with costly trinkets like electronic key fobs, and are valuable only to the manufacturer for up keep.
We’re similar to the Sayler’s. My wife is very happy with the newer, more reliable car. Now I’m “stuck” with my 1993 Volvo. I can’t get rid of it because it simply won’t die and it’s so cheap to keep. All I do is change the oil every 5,000 miles. I’m afraid even if I stop changing the oil I still won’t be able to kill it.
We bought my wife’s 2007 Toyota Avalon Limited used in 2010 but still under warranty. She is still driving it with 180k miles. I have offered to replace it but she really loves that car. It has been very reliable. Everything still works, even the seats that heat and cool.
The only problem we have had is the battery died and I could not jump start it. AAA came to the house and replaced it. What a great service.
I love my 2008 Avalon that I bought new. I also only had a battery failure during the past 14 years. Since I retired three years ago I no longer worry about breaking down on my highway commute to/from Boston. I think I’ll drive this car into the ground. We use my husband’s newer car for longer trips . I am trying to convince him to someday become a one car household , but I’m not having much success.
So if you become a one car household, which car will you keep?
Smart…we’ve discovered most Japanese car brands last longer with fewer repairs.