Should I buy a new car? The car-dilemma

In the past while I’ve noticed that my car has been needing repairs more often, and I’m getting to the point where with a 7-year old vehicle the repairs are increasingly costing more. Should I buy a new car? Some of my friends and some family members have suggested I lease (!) or buy a new car. HAH, fat chance on the first one. I’ve known from the time I began thinking about getting my license that a lease isn’t a good deal. In fact, one of my siblings ended up leasing and I harass her regularly to start saving because at this rate she will not be able to afford the buyout at the lease expiry and will be sucked into another lease. Anyway I’ll leave my rant on the rip-off leasing industry for another post.

Back to the topic, I think I’m making the right choice here but I feel like I need some reassurance from others on this one. Should I buy a new car? … or stick with it.

My car, last fall

I bought my 2004 base model Chevy Aveo in January of 2006. It had 24K on it, one female owner and was dealer serviced to that point. It’s a base model, doesn’t even have a tape deck! Just the radio, the manual windows are the AC and of course it’s not an automatic. I bought it at a fair  price and ended borrowing about $6,400 from the bank to pay for it. I paid the loan back by late 2007. (if memory serves me)

I’ve been driving car-payment free for more than 3 years now and I love it! Honestly, once you’re done tackling your creditcards… pay off your car! One of my friends is doing the same thing, she’s a few months away from paying off her car in full because at some point she realized that the $200+ payment every month would be really nice to have back to spend on other things. I feel the same way, I will NEVER again voluntarily buy a car on a loan. Which leads me to the title of this article; The car-dilemma.

My car is about 7 years old now, so far I’ve put very little money into it and that’s going to change this year. I think my repair bills have been $500 max per year so far including tire and oil changes. I counted on spending about $900 a year on repairs when I bought it so I’ve got some wiggle room to catch up to the budget.

Unfortunately I need to replace my summer tires this year, they were already disposed of last fall by my mechanic. My winter set will last one more winter but will also need to be replaced next year. On top of that I’ve got some stuff that will need to be fixed:
1) a ‘clunking’ noise in the front driver wheel well -> Turned out to be something-something links. Spent $360 in repairs in the last  few weeks on that, oil change and patching a flat tire & balance.
2) a clutch bearing, or something, when I push the clutch something makes a loud whirring noise, quoted at $1000 inc labour*
3) an axle something on the rear-right.

(notice how great I am at describing car parts?) I was told that repair #2 can wait until it basically breaks one of these days and #3 was temporarily fixed two years ago but is acting up again. I’m told the part for problem #3 alone will run $476  + a few hours of labour. Also, at a recent servicing I was told I need to look at the brakes soon… and don’t forget, those new tires I need. Yikes.

I’m really wishing I knew more about cars at this point… That’s a lot of money and a lot of time in the garage this year and I’m not quite sure yet how I’m going to pay for it. Obviously my student loan repayment is going to suffer but I cannot be without a vehicle: no public transit + I live in country + I need to be able to get to customers and work, so I don’t have much choice. The brake-thing will be resolved by me going to buy the parts myself (hey maybe I can order online, suggestions?) and my father installing them but that’s the extent of our techy-car-savvy.

Some of my friends and some family members have suggested I buy a new car instead. I tell them they’re nuts! They argue, why would I put a couple of grand into my old car? I’ve argued that I will put upwards of $3000 into my car per year to keep it driving, I would/will even replace the engine if I have to, which is generally met with scuffs and laughter. Honestly though, buying another car will increase my insurance premium because a new car costs more to insure and will need full coverage if bought on a loan. Buying another car will mean borrowing, something I just mentioned I will NEVER do again. Buying another car isn’t actually cheaper! I would end up with a car payment of about $200 a month or about $2,400 a year + maintenance and repairs OR I can keep driving my little car and just fix it and have no monthly obligations on the thing. And most importantly; buying another car doesn’t solve the problem, the new car will also eventually get old!

Seems like a fairly easy choice to me but a lot of people do not understand this, what do you think? Do you drive a beater or a new vehicle and why?

Ps: I’m keeping an eye on my vehicles maintenance schedule using this maintenance guide.

*I feel pretty comfortable with my mechanics, it’s a locally owned and operated business. They always phone me to get my permission before they do anything and 9/10 times it’s the owner of the shop phoning because he lives down the road from me and I used to deliver his paper when I was a teenager. I think having a good relationship with people you do business with is very important, I’ve been bringing both my own vehicle and my work vehicle there for 5 years now.

9 thoughts on “Should I buy a new car? The car-dilemma

  1. It seems like an easy choice, but it’s not – it’s a choice a lot of people make without thinking about the long term ramifications of it, so to them it is easy.
    Right now, I drive a new(er) car. I bought it brand spanking new off the lot 1 year and 2 months ago, and I bought brand new because before that I had a 25 year old car that was quickly becoming a money pit and making it difficult for me to save for a new one.
    Eventually, your car is going to throw craps, and while no one wants to admit it, it’s good that you’re getting prepared. It’s difficult to save for a new one while your primary focus is keeping your old one running, but I’d urge you to divert some funds from your student loan repayment to a new car. I’d buy a used vehicle (I know I didnt do it, but I plan on doing it in the future) and see if you can get something that will last you 5 or so years without taking out a loan – if you can, start saving up for another one during that time as well.
    This situation is not fun, but good luck.

    1. wow, 25 years old, makes my car seem a young’un. My SLOC is still open… pretty good limit on it, may just put all my efforts into getting as much paid off as possible and if my car throws serious crap I would have the SLOC to back me up and I could withdraw some of the funds… though that’s of course a less than ideal situation. This has def. reminded me though how important it is to have some money saved up

  2. It’s up to you. I’ll drive my car until it dies, and its 22 years old.
    I personally couldn’t fathom having car payments, so if you want to buy a new car, evaluate how much you have saved up.

    1. Hmm, I don’t think I’ll ever buy new, when I do decide to get a ‘new’ car I’ll probably go for something thats a year or two off the lot. I’m going with the ‘I’ll drive my car until it dies’ at the moment… I suppose I’ll see what else the year brings. Only more motivation to keep getting rid of debt!

  3. Hmm. We have gone through a string of beaters (the oldest was one year younger than me). We bought a 10yo car late last year and unfortunately have already had to sink 2k into it, sigh.

    If I had the cash for a downpayment I would seriously consider a new car and driving it into the ground. (Obviously it would need a very comprehensive warranty, otherwise there’s no point.) But I don’t, so it’s a moot point.

    I really don’t know. I mean, we have sunk a lot of money into our crap cars, but it’s a bit of a gamble either way.

  4. Forgot to mention; only recently passed the 100k so still doing pretty good that way… should be able to put on at least another 50 before I run into serious problems, I hope?

  5. My current car is a ’99 Ford Escort with almost 175k miles on it. I’ve had a few small repairs that I’ve had to make in the previous year, but other than that, it’s been worry-free since I got it a few years ago. The car itself was free, just had to have the engine replaced. So overall, cost me about $1.5k or so. When my car recently had some issues I took to looking at cars online. I really want to do some more research and number crunching, but I think there are some instances where getting a great deal on a new car might be a better long-run alternative to always having a beater. Using I could find a 2011 Honda Civic for about $15k. If you wanted to keep it until it dies, the car should last you at least 10 years. That’s $1.5/yr for the car itself, then you need to factor in insurance and repairs. Repairs should be fairly low in the first few years, especially with warranty. To avoid dealing with repairs and issues later which might cost more, you can sell the car for approx. the price you paid minus $1.5k/yr (from what I see on Craigslist and eBay). Obviously, this is more expensive than a beater as long as you don’t need a major repair. But once your car needs a major repair, it could cost you nearly that much and you have the inconvenience. I think there’s also some premium for having a newer, nicer car.

    Now, I am going to continue to drive my Escort for a while (probably until it finally dies on me), but I definitely want to start saving and assess my plan for buying my next car. Whether it’s new or used, I know I need to put aside a good amount of change. Don’t want any surprises.

Leave a Reply