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$31,000 To Drive Your Beater Into The Ground

Consumer Reports has put out a report that confirms what most people have known their entire lives, using something until you can’t use it anymore is cheaper than replacing it every five years. Everyone knows that a new car loses the most value right when you drive it off the lot and everyone knows that buying used it a better value proposition, so why did Consumer Reports even bother? Well, because until now, many of those maxims were merely rules of thumb with no hard numbers put to them and so CR puts some hard numbers. According to Consumer Reports, if you are willing to drive your car past 225,000 (15 years) instead of buying a new Honda Civic EX (their example car) every five years for that same span, you could save yourself $20,500 in costs plus earn yourself $10,300 in interest (5% interest rate, 3% inflation) on that saved money for a grand total of about $31,000.

$31,000 isn’t chump change and while you will have to drive your rickity ol’ beater for that likely to be rough last 25k, it’s saving you some serious cash on a serious depreciating asset. CR gave a list of good cars capable of even making it to 200k and they are all Toyotas, Hondas, or Lexus. The bad bets were a mix of generally high end cars such as Jaguars, Mercedes-Benz, BMWs, and even a few Nissans, VWs, and a Volvo SUV thrown in for good measure. If you’re driving a Jag, Benz, or BMW, you’re likely not all that concerned about making it to 200k and saving that $31k anyway, so it makes sense that those cars wouldn’t be designed to make it that far (that’s not to say they can’t or that all of their owners are spendthrifts who care more about image than money, but we’re speaking in generalities and probabilities).

Source: CNN Money [3]

(Photo: jdmcfish [4])