Whether you have a classic car, a car you can’t let go of for sentimental reasons, or a plain old beater car you keep out of sheer utility you may be wondering how much it’s costing you to maintain your car, and how it compares to getting a new car.
Here are the facts you need to know about the costs related to owning an old car.
The Cost-Effectiveness of Driving an Older Model Car
There are pros and cons of keeping your old car and getting a new one, but the primary consideration is the total cost of everything, including maintenance and repairs.
Repair Cost vs. Monthly Payments
When your monthly repair costs begin to exceed an estimated monthly payment for a new car, you may want to consider getting a new car. If you are looking at a brand new car or even a new-to-you late model car, you need to look at what the payments will be compared to keeping and maintaining your current car.
For example, the average selling price for a new car in the U.S. is $28,400. Assuming the interest rate is 5.73%, that’s a payment of $927 per month for three years. If you take the same payment of $927 and extend it to five years instead of three, the monthly payment decreases to $587, but you also have to factor in the interest payment of $1,887 for five years. The bottom line is that buying a new car is expensive, especially if you don’t have at least an average credit rating.
Insurance and Registration
Car insurance and registration fees are other aspects of owning a car you need to consider. These auto fees are more expensive for newer model cars. An older model vehicle is often less than $100 to register, but this depends on the state you live in and what other fees are included in the registration.
Let’s assume the registration for a 98’ model car has a registration fee of $95. A new model vehicle can have a registration fee that is four times this amount, again, depending on the state you live in.
While you can get various discounts on auto insurance for new vehicles because of their safety features, if you decide to lease a new vehicle vs buy a new car you are required to have liability and collision coverage in most states.
Carrying an insurance policy that has liability and collision coverage can easily exceed $200 every six months. With an older model vehicle, you are not required to have collision coverage, only liability coverage, and the insurance premiums are not as expensive. The amount of car insurance coverage you pay for every six months vs the potential out-of-pocket expenses at the time of an accident is the trade off.
DIY Car Repairs
If you know a thing or two about car repairs and feel confident in making the repairs yourself, having an older car may not be a bad idea. Going to an auto repair shop for car maintenance will be hundreds of dollars because you are paying for the car parts, time, labor, and the expertise of the mechanic.
If you can make the auto repairs yourself, you can save hundreds, sometimes thousands of dollars. Car parts are not as expensive as you may think. While you’re considering paying over $500 for car repairs, you can buy some car parts for less than $100.
Regular Car Maintenance
Regular car maintenance is essential for both older and newer model cars. Scheduling regular vehicle maintenance improves your car’s longevity, especially if your vehicle has a lot of miles on it.
If you tend to procrastinate on oil changes, changing your car’s fluids, and other regular maintenance, driving an older model car may not be the best idea. Older vehicles require extra care to ensure all the parts continue to function as they should.
How Much Money Can You Save in Gas?
Older model vehicles are known for being gas guzzlers. If this statement is true for your older model car, you may be considering purchasing a newer model vehicle. If you’re in the market for a car that’s more fuel-efficient than your current vehicle, consider selling your junk car and upgrading to a newer model vehicle that has excellent gas mileage.
Can You Make More Money Driving a Newer Model Vehicle?
Depending on your profession, having a nice car makes a difference. High-profile jobs, such as a lawyer or a salesman, may require you to have a newer model vehicle to boost your credibility with clients.
Other jobs, such as a delivery driver, may also require you to have a newer car. For example, if you make food deliveries with Uber Eats, you are required to drive a vehicle that is no older than a 2005 model.
Some people purchase new vehicles for safety reasons, but many of the older model cars have many of the same safety features newer model cars do.
Safety features are present with new and old cars. Although old cars don’t have fancy technology, such as lane departure warning, parking assist, and other new features, old cars still drive and handle well and are more sturdy than newer vehicles because they are made of mostly metal.
If the pros outweigh the cons for you to get a new vehicle, junking your car and selling it may be the best option.