Some interesting, but important news on the automobile front. It would seem that our preaching about running a car into the ground makes financial sense. We have always suggested that our clients buy a quality car with cash, drive it for as long as possible, then buy a new car with cash. According to Consumer Reports magazine, by keeping your car for 15 years, or 225,000 miles of driving, you could save nearly $31,000! This is compared to the cost of buying an identical model every five years, which is roughly the rate at which most car owners trade in their vehicles. These are significant savings, which if invested properly could make you a millionaire.
The key to success is to buy a “Quality Car�. Many people equate the word quality with expensive. This is not true generally. Certain vehicles if maintained properly will easily last to 225,000 miles. Some standard brands bear recognition. Honda, Lexus, and Toyota. Mercedes is not on the list folks…Well it is, but on the bad list…Cars to avoid.
The magazine did some math:
Calculating the costs involved in buying a new Honda Civic EX every five years for 15 years – including depreciation, taxes, fees and insurance – the magazine estimated it would cost $20,500 more than it would have cost to simply maintain one car for the same period.
Added to that, the magazine factored in $10,300 in interest that could have been earned on that money, assuming a five percent interest rate and a three percent inflation rate, over that time.
In order to makie it to 200,000 miles, a car has to be well maintained. The magazine recommends several steps to help your car reach such a high milestone.
• Follow the maintenance guide in your owner’s manual and make needed repairs promptly.
• Use only the recommended types of fluids, including oil and transmission fluids.
• Check under the hood regularly. Listen for strange sounds, sniff for odd smells and look for fraying or bulges in pipes or belts. Also, get a vehicle service manual. They’re available at most auto parts stores or your dealership.
• Clean the car carefully inside and out. This not only helps the car’s appearance but can prevent premature rust. Vacuuming the inside also prevents premature carpet wear from sand and grit.
• Buy a safe, reliable car. Buying a car with the latest safety equipment makes it more likely you’ll feel as safe in your aging car as a newer model.
The magazine recommends several cars that have the best shot at reaching the 200,000 mile mark and a few that, according to its data, aren’t likely to make it.
I know it works. My Ford Escort has 220,500 miles on it. It still works!
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