What is the average annual cost of owning a car if paying cash in lump sum in the beginning?
mike...@yahoo.com
magazine does. My calculation factors in inflation cost and
investment returns.
First, some assumptions are inevitable. Suppose I bought Toyota
Corolla ten years ago and paid $15000 total in cash [in 1st year
money]. With annual mileage usage of 12000 mi/year, and no any
accident, and in reasonable good condition, ten year later, the
residual value of the same car is about $2000 [in 10th year money]
according to Used Car book. Suppose the investment return is 5%/year
[remember that S&P500 average is 7% for the past 70 years], and the
inflation is 3%/year.
Suppose we do not factor in insurance premium and routine maintenance
cost such as $25 every 3 months for oil changes. But in the 10 year
duration, you have to buy 4 new tires at least once with cost about
$300 [in 5th year money], buy a new battery about $80 [in 7th year
money], replacing front and rear brake pads and shoes about $500 [in
6th year money]. That's it. Suppose you do not replace timing belt
(although factory recommended at $60000mi), fuel filters, muffler,
oxygen sensor and other things that also likely fail in the 10-year
duration. But assuming we do not fix it unless it breaks. That's fine.
So the TOTAL COST for owning the car after 10 years (in 10th year
money) is
15000*[(1+5%)^9]+300*[(1+5%)^5]+80*[(1+5%)^3]+500*[(1+5%)^4]-2000=22353
The average annual cost can be calculated as follows:
(1) Average annual cost, 1st year cost in 10th year money=$22353/10=
$2235, or 1st year cost in 1st year money=$2235/[(1+3%)^9]=$1713
(2) Average annual cost, 2nd year cost in 10th year money=$22353/10=
$2235, or 2nd year cost in 2nd year money=$2235/[(1+3%)^8]=$1764
(n) ...
(10) Average annual cost, 10th year cost in 10th year money=$22353/10=
$2235
Consumer Report would do the math as follows:
TOTAL COST for owning the car for 10 years is 15000 + 300 +80 +500
-2000= $13888
So, the average annual cost is $13888/10=$1389/year.
Al Bundy
I'm not going to redo all your numbers to what I would forecast.
However, I must point out that failure to maintain things like the
timing belt can cost you an engine and in turn add $2K to your
numbers. A $200 two bill doesn't make sense either. I would not
insure a car worth less than $5K except for liability. (That would be
self insurance.)
I favor looking at a five year envelope, but keeping the car
maintained and the value up. Also, my options are maintained that way.
If I keep my ride up and also keep my senses open, a steal of a deal
ultimately comes along and saves thousands on a good used vehicle.
In my opinion, when you buy a new car you just pay for all the repairs
up front. Vehicles are like people in that they age differently. Some
older cars are better than some newer ones will turn out to be. If you
seek to be frugal, a single formula like you want doesn't work. As
Tom and Ray say, "The man who seeks to spend the least always ends up
spending the most."
h
"Al Bundy" <MSfo...@mcpmail.com> wrote in message
news:24a36461-5f40-41f2...@i72g2000hsd.googlegroups.com...
>
> In my opinion, when you buy a new car you just pay for all the repairs
> up front. Vehicles are like people in that they age differently. Some
> older cars are better than some newer ones will turn out to be. If you
> seek to be frugal, a single formula like you want doesn't work. As
> Tom and Ray say, "The man who seeks to spend the least always ends up
> spending the most."
I buy cars that are at least 8 years old and usually keep them for 8-10 more
years. I paid $5,000 for my 1998 Subaru (in 2007) and it cost an additional
$600 in repairs/maintanance at that time. I keep my cars very well
maintained, and since I only drive 3,500-4,000 miles a year, I expect to
keep this one until 2017. I work at home and only need the car for errands
and business shopping trips, so I would never consider buying a new car. It
just wouldn't be frugal.
rick++
It was $42K over 13 years, total purchase price and taxes
$10.8K, 220K miles. I was actualy nursing it with a couple
of $500 repairs each year. It never passed my theshhold
of repairs being worth more than the car, until it was totalled.
In my newer one, gasoline cost have become largest factor
of the operating cost at about 40-45%, even though I
average 33 mpg (winter driving brings it down).
MSN-Auto publishes five-year TCO (total operating cost)
numbers whihc includes insurance, depreciation, gas and repairs.
I dont find those numbers too far off. You have to look at TCO.
Its cheaper to drive a Korean car off the lot, but they have had
higher depreciation and repair costs until about two years ago.
If you want shock yourself- look at the TCO for an
unpopoular US SUV.
Dave L
<h> wrote in message news:4794b9d2$0$22568$4c36...@roadrunner.com...
Very understandable. I've always had a used car until my current one, which
is an '05 bought new. Yes it is normally cheaper to buy used and the cost
in repairs are cheaper than car payments. But if it's an only car and you
do more miles, there's something to be said for reliability! Don't want to
be stuck hundreds of miles away from home, on a holiday weekend or in the
middle of the night :-) Especially for those who need to do the driving for
their job (fortunately I don't with the exception of driving to work!).
Of course, if bought new you'll know the maintenance you did to the car
without wondering how the previous owner took care of it. Then again,
3,500-4,000 miles are low.
-Dave
Rod Speed
> <h> wrote in message news:4794b9d2$0$22568$4c36...@roadrunner.com...
>>
>> "Al Bundy" <MSfo...@mcpmail.com> wrote in message
>> news:24a36461-5f40-41f2...@i72g2000hsd.googlegroups.com...
>>>
>>> In my opinion, when you buy a new car you just pay for all the
>>> repairs up front. Vehicles are like people in that they age
>>> differently. Some older cars are better than some newer ones will
>>> turn out to be. If you seek to be frugal, a single formula like you
>>> want doesn't work. As Tom and Ray say, "The man who seeks to spend
>>> the least always ends up spending the most."
>>
>> I buy cars that are at least 8 years old and usually keep them for
>> 8-10 more years. I paid $5,000 for my 1998 Subaru (in 2007) and it
>> cost an additional $600 in repairs/maintanance at that time. I keep
>> my cars very well maintained, and since I only drive 3,500-4,000
>> miles a year, I expect to keep this one until 2017. I work at home
>> and only need the car for errands and business shopping trips, so I
>> would never consider buying a new car. It just wouldn't be frugal.
> Very understandable. I've always had a used car until my current one, which is an '05 bought new. Yes it is normally
> cheaper to buy used and the cost in repairs are cheaper than car payments. But if it's an only car and you do more
> miles, there's something to be said for reliability!
And for minimal farting around. And it doesnt necessarily cost that
much if you keep the new car for a couple of decades either.
> Don't want to be stuck hundreds of miles away from
> home, on a holiday weekend or in the middle of the night :-)
And its just convenient not to have to fart around repairing stuff too.
> Especially for those who need to do the driving for their job
> (fortunately I don't with the exception of driving to work!).
> Of course, if bought new you'll know the maintenance you did to the
> car without wondering how the previous owner took care of it. Then
> again, 3,500-4,000 miles are low.
Doesnt necessarily have that much effect on maintenance tho.
Dave L
"Rod Speed" <rod.sp...@gmail.com> wrote in message
news:5vk7s8F...@mid.individual.net...
> Dave L <davelieu...@yahoo.com> wrote:
>> <h> wrote in message news:4794b9d2$0$22568$4c36...@roadrunner.com...
>>>
>>> "Al Bundy" <MSfo...@mcpmail.com> wrote in message
>>> news:24a36461-5f40-41f2...@i72g2000hsd.googlegroups.com...
>>>>
>>>> In my opinion, when you buy a new car you just pay for all the
>>>> repairs up front. Vehicles are like people in that they age
>>>> differently. Some older cars are better than some newer ones will
>>>> turn out to be. If you seek to be frugal, a single formula like you
>>>> want doesn't work. As Tom and Ray say, "The man who seeks to spend
>>>> the least always ends up spending the most."
>>>
>>> I buy cars that are at least 8 years old and usually keep them for
>>> 8-10 more years. I paid $5,000 for my 1998 Subaru (in 2007) and it
>>> cost an additional $600 in repairs/maintanance at that time. I keep
>>> my cars very well maintained, and since I only drive 3,500-4,000
>>> miles a year, I expect to keep this one until 2017. I work at home
>>> and only need the car for errands and business shopping trips, so I
>>> would never consider buying a new car. It just wouldn't be frugal.
>
>> Very understandable. I've always had a used car until my current one,
>> which is an '05 bought new. Yes it is normally cheaper to buy used and
>> the cost in repairs are cheaper than car payments. But if it's an only
>> car and you do more miles, there's something to be said for reliability!
>
> And for minimal farting around. And it doesnt necessarily cost that
> much if you keep the new car for a couple of decades either.
Nope, not at all. I don't put an enormous amount of miles a year on my car,
but it's nowhere under 5k! From experience, there comes a time when
unpredictable maintenance costs start adding up.
>> Don't want to be stuck hundreds of miles away from
>> home, on a holiday weekend or in the middle of the night :-)
>
> And its just convenient not to have to fart around repairing stuff too.
Exactly. The inconvenience of having to get the part to fix it yourself or
have someone else fix it. Happens at the most inopportune time as well.
>> Especially for those who need to do the driving for their job
>> (fortunately I don't with the exception of driving to work!).
>
>> Of course, if bought new you'll know the maintenance you did to the
>> car without wondering how the previous owner took care of it. Then
>> again, 3,500-4,000 miles are low.
>
> Doesnt necessarily have that much effect on maintenance tho.
Nope. Mainly peace of mind.
-Dave
Rod Speed
> Rod Speed <rod.sp...@gmail.com> wrote>>>> Al Bundy <MSfo...@mcpmail.com> wrote
>>>>> In my opinion, when you buy a new car you just pay for all the repairs up front. Vehicles are like people in that
>>>>> they age
>>>>> differently. Some older cars are better than some newer ones will turn out to be. If you seek to be frugal, a
>>>>> single formula like
>>>>> you want doesn't work. As Tom and Ray say, "The man who seeks to spend the least always ends up spending the
>>>>> most."
>>>> I buy cars that are at least 8 years old and usually keep them for
>>>> 8-10 more years. I paid $5,000 for my 1998 Subaru (in 2007) and it cost an additional $600 in repairs/maintanance
>>>> at that time. I keep
>>>> my cars very well maintained, and since I only drive 3,500-4,000
>>>> miles a year, I expect to keep this one until 2017. I work at home
>>>> and only need the car for errands and business shopping trips, so I would never consider buying a new car. It just
>>>> wouldn't be frugal.
>>> Very understandable. I've always had a used car until my current one, which is an '05 bought new. Yes it is
>>> normally cheaper to buy used and the cost in repairs are cheaper than car payments. But if it's an only car and you
>>> do more miles, there's something to be said for reliability!
>> And for minimal farting around. And it doesnt necessarily cost that much if you keep the new car for a couple of
>> decades either.
> Nope, not at all. I don't put an enormous amount of miles a year on
> my car, but it's nowhere under 5k! From experience, there comes a
> time when unpredictable maintenance costs start adding up.
Depends entirely on how carefully you choose the car that doesnt get that result.
>>> Don't want to be stuck hundreds of miles away from
>>> home, on a holiday weekend or in the middle of the night :-)
>> And its just convenient not to have to fart around repairing stuff too.
> Exactly. The inconvenience of having to get the part to fix it yourself or have someone else fix it. Happens at the
> most inopportune time as well.
>>> Especially for those who need to do the driving for their job
>>> (fortunately I don't with the exception of driving to work!).
>>> Of course, if bought new you'll know the maintenance you did to the car without wondering how the previous owner
>>> took care of it. Then again, 3,500-4,000 miles are low.
>> Doesnt necessarily have that much effect on maintenance tho.
> Nope. Mainly peace of mind.
It isnt peace of mind either once you realise that maintenance isnt that important with
modern cars as long as you do the basics like change the timing belt when required etc.
Dave L
I have all of the regular maintenance done. Sometimes strange things start
going bad, such as a VSS (vehicle speed sensor) and the speedometer stops
working. A clutch slave cylinder going bad. A master cylinder "washer"
going bad, and they thought it was the master cylinder! Dealer ordered the
part and was in there to replace it, and discovered it was only a worn
washer. BTW - this was on an '89 Honda Prelude, and started happening
around '04-'05. So still - wear and tear along with age, and will happen to
any car. Just depends how long it takes.
>>>> Don't want to be stuck hundreds of miles away from
>>>> home, on a holiday weekend or in the middle of the night :-)
>
>>> And its just convenient not to have to fart around repairing stuff too.
>
>> Exactly. The inconvenience of having to get the part to fix it yourself
>> or have someone else fix it. Happens at the most inopportune time as
>> well.
>
>>>> Especially for those who need to do the driving for their job
>>>> (fortunately I don't with the exception of driving to work!).
>
>>>> Of course, if bought new you'll know the maintenance you did to the car
>>>> without wondering how the previous owner took care of it. Then again,
>>>> 3,500-4,000 miles are low.
>
>>> Doesnt necessarily have that much effect on maintenance tho.
>
>> Nope. Mainly peace of mind.
>
> It isnt peace of mind either once you realise that maintenance isnt that
> important with
> modern cars as long as you do the basics like change the timing belt when
> required etc.
Exactly. Modern cars. When you have an old used car, it cannot be
considered "modern" anymore can it? I consider myself more vigilant of
maintenance than the "average" person I've seen.
-Dave
Rod Speed
The point tho is that with a well designed car chosen for its long life, you
can find that you only have a couple of very trivial repairs to do in 30+ years.
In my case it was just one alternator regulator.
>>>>> Don't want to be stuck hundreds of miles away from
>>>>> home, on a holiday weekend or in the middle of the night :-)
>>>> And its just convenient not to have to fart around repairing stuff too.
>>> Exactly. The inconvenience of having to get the part to fix it
>>> yourself or have someone else fix it. Happens at the most
>>> inopportune time as well.
>>>>> Especially for those who need to do the driving for their job
>>>>> (fortunately I don't with the exception of driving to work!).
>>>>> Of course, if bought new you'll know the maintenance you did to
>>>>> the car without wondering how the previous owner took care of it.
>>>>> Then again, 3,500-4,000 miles are low.
>>>> Doesnt necessarily have that much effect on maintenance tho.
>>> Nope. Mainly peace of mind.
>> It isnt peace of mind either once you realise that maintenance isnt that important with
>> modern cars as long as you do the basics like change the timing belt when required etc.
> Exactly. Modern cars. When you have an old used car, it cannot be considered "modern" anymore can it?
Yes it can when the design was something that hasnt been improved on with the latest cars.
> I consider myself more vigilant of maintenance than the "average" person I've seen.
Yes, and you have basically wasted your money doing that.
Stormin Mormon
--
Christopher A. Young
Learn more about Jesus
www.lds.org
.
"Rod Speed" <rod.sp...@gmail.com> wrote in message
news:5vnn1hF...@mid.individual.net...
Rod Speed
Stormin Mormon <cayo...@hotmail.com> wrote:
> Please trim this Christmas tree.
>
>
Dave L
>
<snip>
Doesn't make it modern.
>> I consider myself more vigilant of maintenance than the "average" person
>> I've seen.
>
> Yes, and you have basically wasted your money doing that.
Take care of my car and it'll take care of me. I don't do 3k oil changes
but also won't do the 10k my manual says for "normal" driving.
Rod Speed
>>>>> Nope, not at all. I don't put an enormous amount of miles a year
Yes it does. Nothing much has changed in the design of cars over that time
with the cars that were the bleeding edge of design at the time they were built.
The only real chance since then has been the anti pollution
stuff and that doesnt have a big effect on the useful life of a car.
Particularly with european cars, they were well ahead of the crap at that time design wise.
>>> I consider myself more vigilant of maintenance than the "average" person I've seen.
>> Yes, and you have basically wasted your money doing that.
> Take care of my car and it'll take care of me.
Mindless sloganeering aint rational engineering.
> I don't do 3k oil changes but also won't do the 10k my manual says for "normal" driving.
More fool you if you use modern synthetic oils.
Dave L
"old used car, it cannot be considered "modern" anymore" - Hmm... "old" and
"modern". Sounds like a contradiction in terms to me.
You didn't mention efficiency, safety and reliability. Reliability has a
big effect on the useful life of a car.
>>>> I consider myself more vigilant of maintenance than the "average"
>>>> person I've seen.
>
>>> Yes, and you have basically wasted your money doing that.
>
>> Take care of my car and it'll take care of me.
>
> Mindless sloganeering aint rational engineering.
No. But this works. Engineers will still tell you preventative maintenance
works. They're the ones who did the maintenance schedule... well, maybe the
sales and marketing people had some input too.
>> I don't do 3k oil changes but also won't do the 10k my manual says for
>> "normal" driving.
>
> More fool you if you use modern synthetic oils.
Huh?
Rod Speed
More fool you. I told you why it isnt.
> You didn't mention efficiency, safety and reliability.
Yes, but it had all of that anyway. Still does, I've still got it even tho I've replaced it.
> Reliability has a big effect on the useful life of a car.
And like I said reliability was never a problem in 30+ years.
Even the alternator regulator was just a nuisance, it didnt make the
car unusable and it was completely trivial to replace that myself.
Dead obvious what the problem was, trivial to change it myself.
>>>>> I consider myself more vigilant of maintenance than the "average" person I've seen.
>>>> Yes, and you have basically wasted your money doing that.
>>> Take care of my car and it'll take care of me.
>> Mindless sloganeering aint rational engineering.
> No. But this works.
So does changing the oil at the rate the manufacturer says it needs
to be changed, and using a decent modern synthetic oil when you do.
> Engineers will still tell you preventative maintenance works.
They dont say that changing a modern synthetic oil at a higher rate than
the manufacturer specifys does a damned thing except waste your money.
> They're the ones who did the maintenance schedule...
You're the one who ignores that and changes the oil at a higher rate pointlessly.
> well, maybe the sales and marketing people had some input too.
Corse they did.
>>> I don't do 3k oil changes but also won't do the 10k my manual says for "normal" driving.
>> More fool you if you use modern synthetic oils.
> Huh?
If you use modern synthetic oils, the manufacturer's oil change rate is fine.
Dave L
<snip>
>> "old used car, it cannot be considered "modern" anymore" - Hmm...
>> "old" and "modern". Sounds like a contradiction in terms to me.
>
> More fool you. I told you why it isnt.
Because you say it, doesn't mean it's correct.
>> You didn't mention efficiency, safety and reliability.
>
> Yes, but it had all of that anyway. Still does, I've still got it even tho
> I've replaced it.
Uh - ok.
>> Reliability has a big effect on the useful life of a car.
>
> And like I said reliability was never a problem in 30+ years.
Uh-huh. Sure.
> Even the alternator regulator was just a nuisance, it didnt make the
> car unusable and it was completely trivial to replace that myself.
Last I checked, a bad alternator could leave the car inoperable. Hence
unusable until fixed.
> Dead obvious what the problem was, trivial to change it myself.
>
>>>>>> I consider myself more vigilant of maintenance than the "average"
>>>>>> person I've seen.
>
>>>>> Yes, and you have basically wasted your money doing that.
>
>>>> Take care of my car and it'll take care of me.
>
>>> Mindless sloganeering aint rational engineering.
>
>> No. But this works.
>
> So does changing the oil at the rate the manufacturer says it needs
> to be changed, and using a decent modern synthetic oil when you do.
If you prefer synthetic, so be it.
>> Engineers will still tell you preventative maintenance works.
>
> They dont say that changing a modern synthetic oil at a higher rate than
> the manufacturer specifys does a damned thing except waste your money.
My previous statement on synthetic oil still stands.
>> They're the ones who did the maintenance schedule...
>
> You're the one who ignores that and changes the oil at a higher rate
> pointlessly.
Correct. I'm not going to wait and change at 10k using regular oil as
specified in the manual. It never said synthetic.
>> well, maybe the sales and marketing people had some input too.
>
> Corse they did.
Ha! We agree on something! lol
>>>> I don't do 3k oil changes but also won't do the 10k my manual says for
>>>> "normal" driving.
>
>>> More fool you if you use modern synthetic oils.
>
>> Huh?
>
> If you use modern synthetic oils, the manufacturer's oil change rate is
> fine.
How did we ever get on the topic of synthetic oils, anyway? The topic of
motor oil, synthetic vs. conventional oils, etc. is known to drag out.
On that note, I'm bowing out of this trivial discussion/thread
Take it easy,
-Dave
Rod Speed
>>> "old used car, it cannot be considered "modern" anymore" - Hmm...
>>> "old" and "modern". Sounds like a contradiction in terms to me.
>> More fool you. I told you why it isnt.
> Because you say it, doesn't mean it's correct.
Because you're too stupid to understand the basics just
proves that you are too stupid to understand the basics.
You cant manage that even with oil changes, so what hope
have you got with something more complicated than that ?
>>> You didn't mention efficiency, safety and reliability.
>> Yes, but it had all of that anyway. Still does, I've still got it even tho I've replaced it.
> Uh - ok.
>>> Reliability has a big effect on the useful life of a car.
>> And like I said reliability was never a problem in 30+ years.
> Uh-huh. Sure.
Like it or lump it.
>> Even the alternator regulator was just a nuisance, it didnt make the
>> car unusable and it was completely trivial to replace that myself.
> Last I checked, a bad alternator could leave the car inoperable.
Yes, but only if you're too stupid to notice the problem
and dont fix it until it bites you on the bum.
> Hence unusable until fixed.
Thanks for that completely superfluous proof
of why you dont do the maintenance yourself.
>> Dead obvious what the problem was, trivial to change it myself.
>>>>>>> I consider myself more vigilant of maintenance than the "average" person I've seen.
>>>>>> Yes, and you have basically wasted your money doing that.
>>>>> Take care of my car and it'll take care of me.
>>>> Mindless sloganeering aint rational engineering.
>>> No. But this works.
>> So does changing the oil at the rate the manufacturer says it needs
>> to be changed, and using a decent modern synthetic oil when you do.
> If you prefer synthetic, so be it.
There are good engineering reasons for using synthetic.
>>> Engineers will still tell you preventative maintenance works.
>> They dont say that changing a modern synthetic oil at a higher rate than the manufacturer specifys does a damned
>> thing except waste your money.
> My previous statement on synthetic oil still stands.
Nope, its face down in the mud like all you mindless pig ignorant shit.
>>> They're the ones who did the maintenance schedule...
>> You're the one who ignores that and changes the oil at a higher rate pointlessly.
> Correct. I'm not going to wait and change at 10k using regular oil as specified in the manual. It never said
> synthetic.
You are however changing it at a higher rate than the manufacturer has decided
it needs to be changed, and there is no good reason for the manufacturer to be
trying to con you into changing it a lower rate than is required.
>>> well, maybe the sales and marketing people had some input too.
>> Corse they did.
> Ha! We agree on something! lol
>>>>> I don't do 3k oil changes but also won't do the 10k my manual says for "normal" driving.
>>>> More fool you if you use modern synthetic oils.
>>> Huh?
>> If you use modern synthetic oils, the manufacturer's oil change rate is fine.
> How did we ever get on the topic of synthetic oils, anyway?
Its relevant to the change rate, cretin.
> The topic of motor oil, synthetic vs. conventional oils, etc. is known to drag out.
Its relevant to the change rate anyway, cretin.
> On that note, I'm bowing out of this trivial discussion/thread
Great, there is only so much mindless pig ignorant silly shit anyone should have to put up with.
> Take it easy,
Take it hard.