When it comes to our cars, we each have our own thresholds of acceptance when it comes to the age of the vehicle. Some people really like driving a new car and feel the need to get a replacement or different one frequently. On the other end of the spectrum, some people look at car longevity in terms of piling up as many miles on their car as possible until it breaks down and needs to be replaced.
Personally, I’ve been someone who likes to drive a car until it’s racked up a ton of miles and is getting close to the end of its useful life. It comes down to the idea of maximizing the return on investment. The more miles I drive a car, the lower the lifetime cost per mile.
Let’s say you buy a car for $20,000.
- If you drive it for 100,000 miles, you have ended up paying $0.20 per mile.
- If you drive it for 200,000 miles, you have ended up paying $0.10 per mile
Now, of course these are simplified calculations. The car with 100,000 miles can likely be resold for some reasonable figure, while a car with 200,000 miles will have a very low salvage value remaining. However, the main idea holds: the more you drive a car, the further you’re stretching your investment. Why spend part of your working capital or take out a loan on another car?
- If you buy a new $20,000 car (today’s dollars) every 5 years, you will have spent $120,000 on cars over a 30-year period
- If you buy a new $20,000 car (again, today’s dollars) every 10 years, you will have spent $60,000 on cars over that same 30-year period.
This example of course doesn’t account for trade-in values, but the point is clear: the more miles you’re willing to drive your car – provided you keep it in good shape – the more you’ll save over the long run. In this case, it’s $60,000 over a 30-year period. Plus, with the $20,000 you save after the first 10 years, you could invest it and potentially earn a really good rate of return to grow it to much more than that.
My Last Car
I really extracted a lot of value out of the last car I had. It was a Toyota Camry, and I picked it up when it had around 95,000 miles. At the time, I had a horrendous commute which required a ton of driving. Public transportation or carpooling was not an option. Saving by sharing one car wasn’t an option either. I racked up the miles on the car, and a lesser vehicle would have broken down after a short amount of time. This car, however, worked out well.
Ultimately, I managed to drive this car to past 220,000 miles!
It’s a nice feeling for a money-saving type of person to get a great deal on a car that already has 95,000 miles, and then push it for another 125,000 miles.
At the time I sold it, I just had a sense that the car had reached a point where the good times would just have to end soon. They don’t last forever, and I didn’t want to be caught in a situation where I could be shelling out tons of money for repairs, or worse – be put in an unsafe situation due to car problems.
Selling a car before the problems start is important. There’s an optimal point, and be sure not to get too greedy. There’s saying I like, which is applicable in many situations including this: Pigs get fat, hogs get slaughtered. It’s ok to be a pig here, but don’t be a hog 🙂
Everyone is different
While I have taken pride in squeezing as much value as I could out of my last car, there are others that just don’t like to do that. For some people, it’s a point of pride or enjoyment to have a decent ride. Additionally, some people just have their own threshold of acceptance in terms of how many miles they would be willing to drive a car.
One gal I know just bought a new car after her last car (also a Toyota Camry) reached about 150,000 miles. Now, she did get into a fender bender which added to the decision. However, I think she also really just felt better about driving a new car than a car with 150,000 miles on it. The idea of getting another 70,000 miles or so out of the car likely wouldn’t have swayed her. Rather, that would have been a time where she preferred to start anew with brand new vehicle.
Another person I know likes to lease cars. He just really enjoys cars, and wants to drive a new one every 3 years. Being a “car guy”, he wouldn’t be too thrilled with the idea of driving the same exact car for 10 years. Cars are important to him, and aren’t just a vehicle to help him get from point A to Point B.
What is your preference?
You can see my preference, in terms of car longevity, has in the past been to squeeze as much value as possible out of car and not worry about how “uncool” it might be. Others, on the other hand, really enjoy cars and want a nice ride. I have to admit, seeing a few people I know with newer cars has gotten me tempted lately to look at cars even though I don’t need one and it would be a departure from my past philosophy.
This is why I wonder what you think about car longevity, and where you fall on the spectrum:
- Do you prefer to drive a car for absolutely as many miles as it can go before it’s no longer economically or practically viable?
- Do you prefer to get new vehicles frequently, since you really enjoy cars?
- Or, are you someplace in between?