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.