Should one buy a new car every 3 yrs, or wait till it is old, financially speaking?

Question

Does anyone know if it is better financially speaking, to buy and replace a new car every 3 years, or to keep it untill it is like 10 yrs. old? If every 3 years I put out $9000 to replace it with a new one, that would equil $27,000 in 9 years--about the price of a new car. Some say this is the best financial policy so that you can avoid waiting 10 years and then have to dish out almost the whole price since your car is worth far less after that time.It also keeps you driving a new model and more reliable car throughout the years. On the surface it appears to make sense, but I am not sure. Question: Is it I better to trade your car in every three years for a new one, or hold onto the one you got and then pay the bigger price at the end of its life cycle? Thanks so much for your input. I really appreciate your thoughts on this issue!

Answer 1

Keeping it makes more sense. Most cars lose almost half their value in the first 3 years. And even if you have a better-depreciating car, you're likely to lose more in the first 3 years...not just in terms of dollar value, but percentage-wise, than you are in years 3-6, or 6-9 and so on.



The best thing would be to get cars like 5-10 years old, hold on to them for a couple years, then move on. Those are still new-ish, and you can still find cars in perfect shape without much trouble. But the depreciation has slowed. You'll lose a lot less money that way, and you don't have to be driving beaters.



If you don't care so much about driving old cars, and are willing to do a little more maintenance, go with cars like 10-20 years old. As long as they stay in good shape, they're pretty much DONE depreciating. Once a car is between 1-2 grand, if you keep it in the same shape you bought it in, or better, you'll probably get what you paid for it when you're done.



Financially speaking, frequently buying new cars is one of the worst things you can do.

Answer 2

If you are going to trade every 3 years, you sort of have to finance for 36 months or it will catch up to you eventually. My dad did what you are planning, had perfect credit and only would put down like 1000 and would finance for 60 months. Last car he traded in was worth 10k when he traded ( and they were being generous as it was a suv, needed new tires and had about 1500 needed in body work) but he owed 20,000 on it. He asked me, "how can this happen, I have perfect credit!". I explained this is what happens with a meager down payment and never paying something off before trading.



If you are always going to have a payment, leasing may be the answer as long as you pick the right plan so you don't go over the mileage. This happens often when a younger person decides to lease and has a job closer to home. All of a sudden, they find a much better job where they have to drive 50 miles a day and bam, over mileage 3 years down the road . And if you want to get out before the 36 months is up, it will be expensive. This however, often lets you get more of a car than you would be able to afford if you were buying. Another positive, they can tell you what the car will be worth 3 years down the road the day you buy it. That way, 36 months from now, you could buy, if the car was worth say 15k, but locally it would be selling for 17k you would save 2000. If the car was selling locally for 10k and you would be losing 5k you could just turn it in. If you purchase, their is no guarantee what the car will be worth in 36 months.



I hope I gave you something to think about, or maybe I just confused you even more ;)



Good Luck!

Answer 3

I purchase and hold for 8 to 10 years minimum. I repair them myself so I don't have to pay for the labor repair bills after the warranty is out so that might be a consideration you have to make if you don't work on these newer cars. One thing about buying every three years is that the first three years of a new cars life are usually the highest on depreciation/devaluation. If you are always buying a new car every three years you will always be paying for the largest amount of depreciation. Compare the price of a new car with the wholesale blue book or even the private party price of the same vehicle that is three years older to see how much the car has depreciated to see how much you might lose. I figure that even with repairs the cost to operate the car is relatively cheap compared to always paying for sales tax, high license fees and huge depreciation on a new one. If you really want a new one every three years I would think that a good low interest rate lease might be a better bet. If you don't exceed the warranty period in the lease life you might get by with only servicing the car. Be really honest with yourself about the number of miles you plan on driving per year. Don't take a 10,000 mile a year lease when you plan on driving 20,000 per year. You will be hit very hard at the end of the lease with penalties for going over your mileage.

Answer 4

My parents had a 73 Gran torino station wagon 33 years and my mom had the trans and engine replaced w/ rebuilt parts. I got rid of it only cause it was a guzzler. It had rot and rust but it would piss people off because it was faster than it looked and I blew away a few mstangs with an old lady car bt it had 8 cylinder. I say if you find a car that you really like and feels right for you keep it. It sounds good but I really dont feel like going to a dealership(fun way to waste weekend) every 3 years. but until the ya find the right car then I guess I would go with it. And how environmentally friendly is that if that is what the car industry wants us to do go and get a new car every 3 years. If i had 2000 bucks to spend I rather get a nice bicycle. Lance for prez. Live strong.

Answer 5

purchase it outright. "what if it breaks? " then you particularly'll might desire to repair it, utilising a number of the money you're no longer dishing out each month on finance. "what if i'm getting a effective, 5 12 months old motor vehicle?" What makes you think of a 5 12 months old motor vehicle won't wreck? distinction is you will choose much less attainable funds for maintenance once you're paying HP on it. and don't think of a guaranty will grant help to a lot the two. At 5 years old the charges would be for placed on & tear products like clutches, exhausts, cambelt replace etc that are no longer lined via a guaranty. maximum of which satirically will in all likelihood already have been executed on the 7-8 12 months old £1500 banger. once you're on a good funds, finance is high-quality for a sparkling motor vehicle or one in basic terms some months old, yet identifying to purchase a 5 12 months old motor vehicle on finance isn't sensible.

Answer 6

Personally I'd keep my car until it died and than get another one. You wind up paying more getting a new/used one every 3 years.

Answer 7

No , You should buy a three year old car, approx every three years, think about it, and save money.

Answer 8

wait for the coe to drop before u change a new car

Answer 9

you will waist money if you buy one every 3 years. Ride it until it dies.