Here’s why I kept my junker and saved the payments I would have made instead

Here’s why I kept my junker and saved the payments I would have made instead


Nothing can derail your finances quite like financing a dumb car in your 20s. Good for you.


And then doing it again in your 30s!


When we bought our last new car in 2015 (paid for most up front then 0% financing for the remainder that we paid off within a year), we were talking to the salesman. He asked if we were planning on rolling the payments on our old trade-in into the new financing agreement. Me: "No, that car has been paid off for years." Salesguy: "You don't have a car payment? I've had a car payment my entire adult life." Me: Tries to discreetly pick up my jaw off the floor. This guy was well into his 50s, meaning he's been paying on a car for 30+ years. Ugh. It literally made my heart hurt.


My dad is 6 months from paying off a $60,000 truck he put $15,000 worth of work into and told me the other day he's thinking about trading it in. He's 63. When I asked why the hell he'd do that he simply said, well, you're going to have a car payment.


Well how old is the truck? He might actually get a good return on the trade in with this market, especially if he's trading it in for a $25000 car instead of another $60000 truck.


That could be the case. This would be a decent time to downsize, but somehow I doubt it.


I'm assuming he's never driven a car into the ground and instead swapped cars every few years. I never understood that behavior. Cars are the worst direct investment. I finally had to buy a new car for myself, thankfully right before the chip shortage started (and I ended up leasing with the intent to buy out the lease later on) got the absolute base line model with AWD. The sales lady kept telling me that if I end up at the point of making more money and want more luxuries, I can trade in leases to treat myself. I already make good money and would rather see it being used or instead elsewhere. Besides, having a brand new car is more than luxury for me.


It's a bit wild to me as well but to be fair, car salesman usually have really good lease deals and while this person may have had a payment each month it may not have been much relatively speaking.


I didn't do it in my 20's, but I've gone and done it in my 30's. The pandemic made me deeply regret buying a brand new car in 2019.


I wouldn't regret that. New and used cars have jumped in value big time since the pandemic started. Your car might even be worth more now than it was then, not that you should sell it of course


Geez I just looked for fun and I could sell my 2015 car for 2/3 the price I paid for it lol. Too bad I'd need to buy a new car to replace it at the same over priced price.


That's what I tell the 4 - 6 people who call me every week telling me to sell our house at the currently high price we could get for it. I say, "And then I would just have to buy another house at an inflated price? And go through the hellish experience of getting it ready to put on the market and then the even more hellish experience of moving? No thanks". But, I bet realtors have been making stupid money all this time.


Instead of selling I just refinanced and as long as I pay what we have already been paying the last 4 years I now save 6 years worth of payments.


I did the same cut 7 years off. 14 more to go and will probably wrap it up in less that 10 anyways =)


We have been stupid busy, but not necessarily making stupid money. 1. Lots of people are smart like you. 2. Constant bidding wars mean that you: show 3 houses, write an offer, get beat by someone with cash, show 3 more houses, write another offer, get beat again, rinse and repeat. I have a bunch of buyers right now who are on a break until the market slows down. The Sellers that I do manage to grab are moving out of state so they aren't buying locally through me. Lots of work, but not a giant pile of cash.


Never mind if you can find a house you like. Maybe if you want to build new, but even that takes time to come together. Same thing with cars right now frankly. Usually you could probably find what you wanted in a new car on a lot somewhere. Or a special order wouldn't be that big of a deal. But right now, the new car lots have scraps, priced at a premium. Factories can't pump out what they usually do, so have fun waiting for a special order.


They love it! The realtor game is generally a 12% round-trip expense for every house you are messing with. 6% in and 6% out, either the buyer or seller cover somehow and you are somehow covering the next house the same way so your net effect is look at every house move as a 12% extra expense. Also include the issues of property taxes on your new housing adventure. Over bidding houses cause the taxes to go up a lot, but even if you remain flat that 12% price bump is matched in the tax rate that you will pay on every year for decades... In some areas I've seen where a house that people bought by over-bidding they will be pay taxes over a decade or two that could have put their kids through college but instead they or their kids will take on college debt.


I bought at Civic type R in early 2020 for 38k and vroom offered 42k for it this week. Crazy to me that a used car is worth more now then it was new almost two years ago now.


Don’t feel bad, I financed a Trailer so we could go camping every weekend ( during summer vacation), turns out it was terrible investment ( especially the last two years) but it sure looks nice.


Oh and I needed a bigger truck , cause I bought too big of a trailer cause I have 4 kids and they don’t like sharing beds


> The pandemic made me deeply regret buying a brand new car in 2019. Check out the used prices on your car. Maybe it has gone up in value. Mine did, I sold my Tesla Model 3 for $4,000 more than I paid for it, despite having owned it for 2 years and 34,000 miles. That $4000 is accounting for taxes and registration too. Couldn't believe it at first when I checked trade in and private party prices. I went to every local dealer, the big online car buying services and Carmax. Eventually I received a random text from the local Infiniti dealer stepping up their offer to $42,000. Sticker price on the car was $39,900 when I bought it, taxes brought it up to ~$45,000, and EV rebates brought it back down to ~$38,000. Dealers are absolutely desperate for any car they can get their hands on to have something in their lots. It was eerie seeing empty dealer lots everywhere. I've been very lucky with cars. My car before the Tesla was a Golf TDi which I also made a profit on, also roughly $4000, when VW bought it back because of the emission scandal.


Yes, I am curious to know what you reolaced your M3 with as well! Could be a good tip for the prospective buyers in the market :)


But what did you replace it with?


Have you ever seen the Flintstones?


I got a brand new Mercedes in my 20s and then a two year old BMW in my 30s, negative equity included and everything. I was clueless as to what I was doing, but buying whatever I wanted. I didn’t because conscious of how awful car debt was till the pandemic, actually. I started listed to Dave Ramsey right at that time. His YouTube channel got me through that.


Oddly enough, it was pretty good in late 2020 and early 2021. I *had* to buy a car due to an accident, and used car prices were only about 10% cheaper than new at 7%-10% interest..... vs new with 0%-0.9% interest.


Guy that I work with in his 20s. Had a relatively new car, didn’t like it, traded it in on a new one. Next year realized that with the amount his family drives gas is too expensive. Trades it in on a new plug in hybrid. Drives so fast and reckless the battery only lasts 15 minutes. Buys a new motorcycle the same year. Does not maintain it, or get a license. 1 year later it’s got a rusted chain, has been run out of oil after not tightening the oil drain plug, has given up on using it. Since he’s not using the bike, buys a piece of shit pickup with a blown transmission and fights with the dirt lot dealer over who pays for it. Ends up trading it in on a used Jeep so his wife can have a separate car. When I bought my new bike he recommended that I ask for an extra 5k on the loan (it was only a 7k bike) to pay down other stuff or buy other toys. Turns out he does this every time and has over 20k negative equity on his vehicles. He’s 25, has had 2 kids since I met him which is only 2.5 years. He takes every second of overtime he can get trying to make ends meet which led to marital issues from never being home.


Whoa whoa it was 2007 and my Dad co-signed.....and it was a 4 year old Honda Accord


Jesus I’m literally going through this right now. I was fortunate that my mom had bought me a Sentra when I started college and I had no payment then 2 years later I thought I was real grown with a server job and jumped into a 2018 Honda Accord 3 years into payments and finally deciding to sell it. Good thing it’s good to sell cars right now but Jesus the other car was paid off, I didn’t owe anything and it was a 2016 Sentra not even an old car and it was reliable. My worst regret


I want a new truck, but every time I start thinking I might do it i remind myself my ‘04 Silverado has less than 100k miles and I don’t have a payment. Sure the dash is cracked to pieces and the headliner is coming off, but it runs like a dream. And I don’t have a payment.


Did you say 04’ with less than 100k? My 04 Silverado has 230k and also runs like a dream. I plan to keep it until the wheels fall off.


Yeah, my wife’s father passed and left it to us. He only drove it to church on Sundays and all that lol. I keep seesawing between driving it into the ground and drooling over newer trucks. I will probably just keep driving it until I’m that quirky guy with the 30 year old truck that only he can start.


I would like to counter with financing a good car that's written off by a dumb person. 8 payments left and BOOM. Drunk douche in his mum's car.


If your APY is above 10%, you really need to work on plan B to get something that moves with cash.


Being able to raise their credit score by 50 points in a few months sounds like there was some low hanging fruit they were able to pluck.


My guess would be decreasing utilization percentage. Get approved for a card or two, increase availability on a card, and/or get added as an authorized user on someone's card. A good combo of these will see a dramatic increase in credit score.


That would be my guess also. I made a point of applying for a credit line increase with discover every year or two in my early 20s since they are my primary card and that, combined with a vehicle purchase/payoff and a house purchase has had mine consistently in the 800s outside of a ding for a hard credit inquiry for a few months a couple of times.


Seriously. 18% on a car payment? Craziness. My car payment is under 3%. Put 70% down also, but still. Not hard to fix your credit unless you made huge mistakes. And even then, mine used to fly up 20 to 50 points over the course of 6 months when I open a new card (sitting between 820 to 840 now, so no major increases anymore unfortunately...). Going from mid 600s to mid 700s should really only take a year or two depending on spending. Higher spending it goes faster, but only when paid off properly. 650 can hit 750 in 6 months if you're doing it correctly. Learn proper cash and credit management. r/personalfinance


>Learn proper cash and credit management. r/personalfinance Did you forget the sub you were on for a second?


shit, my mortgage is well below 3%. I know people have different situations, but 18% is credit card rate territory.


Check out credit unions OP. When I was younger they refinanced a loan from 11% to 3.5% for me on a old used car


Other financial suggestions, not to pick on you - perhaps throw some money at improving your credit score. 18% these days is horrific. Like lower-than-subprime. If you're putting money into crypto, while horrified by a $170 car+insurance payment... that's a little backwards to me.


I am shocked at 18% APR and that it didn’t seem to be all that bothersome to you. Anything over 3% would have me declining. If you’re going to consider getting a vehicle loan, make sure you’re not paying outrageous APRs like that.


I’ve never known anyone to get an auto loan at 10%. I got mine at 3% as well as a couple of my siblings. The highest I’ve personally seen someone get is 8%.


Bad or little credit is a serious issue. I worked with someone who could only get financed through car max and it was like 13%.


Some dealerships also just do high interest to all that apply. About 10 years ago we purchased a new kia van (traded in the next year since it was a terrible vehicle). We both had credit of around 750 at that time and put 5k down. They first came back with an offer for 13% interest and seemed dumbfounded on why we said no. Had to send it back to the fjnance dept 4 times before they came down to 3.75%. I told them from the beginning i would not consider a loan over 4%


i have always been told to never get financing from the dealership and always go to a third party bank to get the auto loan


This! The dealership is trying to quickly sell a car. They assume you are at their mercy, so they offer fast and easy financing (high interest). It wouldn't surprise me if they didn't also get a kickback from high interest financing too.


They absolutely do. It's called "reserves". It's the finance guy's commission from the bank for bringing them another customer. It can get taken back from them if you pay off your loan within a certain number of days, 60-120 depending on the bank.


I did this and still had a "pending rate" for lack of a better term with the dealership. Basically I had financing lined up with my credit union for up to some amount but the dealership wouldn't let me leave with the car without having signed saying if that fell through then their financing would go into affect. Wouldn't really have been a problem since the APR's were both within a couple tenths of a percent. I believe there are some boxes on California's boilerplate auto sales form for handling this exact scenario. In the end my credit union had the dealership paid within a couple of days and held the lien on my car.


I get pre approval from my bank. Then I go to the dealership and tell them: "I already have pre-approval from my bank. No, I won't tell you the rate they offered. If you offer me a better rate, I'll finance through you. If your rate is higher, I'll finance through my bank. There will be no negotiation. You have one shot. Let me know what rate you'll be offering." This is, of course, after we've negotiated the "out the door" price. This gives them an incentive to offer the lowest rate they can afford to offer.


Lol we just financed at 0% through our Mazda dealer. There’s no reason to not finance through one of the major dealers these days if you have good credit.


We bought a pre-owned car in 2020 that was 2 years old, before major pandemic used car inflation hit. It was exactly what we wanted and the price was below the estimated value. We walk into the financing office and they do the whole "how much do you want to pay per month" trick. I say lets talk the sticker price that they advertised, he says ***"ok lets talk financing, we're looking at 13% APR."*** My now wife and I looked at each other and laughed, then I stood up and said "yeah, we don't need the car this bad. The last dealership we were at offered 1.5% and we have excellent credit. Guess we'll just go back there." The finance manager then balked and said to hang on, he was "going to make some phone calls." Comes back 10 minutes later with a contract and an APR of 1.5%. They figured since we were young they could just slip it by us but we aren't stupid. I wonder how many people they get with a tactic like that.


13% is believable for really terrible credit. The person who got 8% was around 600 and had a foreclosure on their report but was in their 40’s and had many credit cards with no missed payments.


Bro my coworker bought a used newer pickup truck and has a 26% interest rate. I almost started laughing thinking he was joking when he told me. Hes not. There are a scary amount of people tp who interest rate means nothing to. Its just "Oh i can sign this paper and leave with the car I want, that means i can have it! Deal!". His payment is $700/mo. People are really bad with finances


Some people are not financially smart. They buy a car if they can afford the monthly payment when they sign the note. They give no thought to how long the term is or the total cost that they will pay for the car.


> They buy a car if they can afford the monthly payment when they sign the note. He cant even do that. He is constantly broke and telling me how hes late on rent or this or that bill. Its crazy. And he has a company truck so he almost never drives the pickup in question. I have no idea why he bought it. It just blows my mind how 1 simple financial choice can totally change your life. We are electricians and id guess he probably makes somewhere around $30/hr. If he put that same payment in the S&P500 he could have like $100k in the bank in 7 or so years but instead he lives paycheck to paycheck constantly behind on bills. All from 1 choice


That's outrageous. Higher than the max rate in some states


Yeah different lenders look at different things for car loans. It's not like a credit card or other unsecured debt. Having no missed payments on revolving credit is probably the largest factor, even moreso than DTI/available credit lines.


CarMax themselves probably didn't even finance it. They most likely gave it to another lender who offered that rate. Source: Tried to finance a car at CarMax, the lender was some bank located in Spain at 12-15% interest because I had no credit at the time. Grandpa offered to cosign with his perfect credit score and Carmax themselves offered to finance it.


I had basically no credit at 21. Bought a truck not knowing what I was doing. If I remember right bank of America was the loan and it was 21%. I also got about 10 other denied loan apps in the mail after I bought the truck. Luckily I paid it off in pretty short order.


Yep - when you have bad/no credit, nobody wants to lend to you, and if they do they're going to make sure they cover their risk. To everyone in this thread with a 3% or lower interest rate - yeah, obviously. You have excellent credit and you have a long enough history for it to matter.


My SO's credit wasn't great, but was able to get a good rate through our credit union. They did 6% car loans; didn't matter if you had 600 score or 850 score. Weirdly enough, the local car max brand tried to convince her that getting their loan at 14% was better than the 6% from credit union. Even their salesman was looking dumbfounded at their finance guy.


I worked at a dealership for many years and have seen loans over 20%. Painful and I really am sad for those buyers that they either had no other options, no understanding of what they were signing for, no one to tell them it was a bad idea, or some combination thereof.


Lol. I grew up in a military town, more than once I've talked to 18 year old kids fresh out of boot with a brand new Mustang/Camaro/WRX/Challenger and a 25% rate. I think my personal best I've ever heard was 28%.


This was years ago (early 2010s?) but I had a friend who got taken for 25%.


Jeeze definitely more possible in the years past but still that’s insane! I know I keep hearing the joke about a fresh out of the military guy getting a challenger at 30% apr.


Not a joke. I sold cars and the worst approval I had was a kid in the military who got approved on a very unreasonable car at 33%. I actually very much tried to advise them against it, but all they heard was that they could buy it, and that was that.


Coming from somebody who grew up in a military town and was in the car scene, that's not a joke.


I’m a used car salesman, just started in September. My first thing I did was go through clients that were ‘given’ to me and I found the highest interest rates and called that customer to help them. I was able to get one nice young lady from 23.49% to 13% by getting a newer, nicer car at a lower payment. Used car salesman get a bad name, but it’s nice that I’m able to genuinely help people.


I was in the military and the highest I heard of first hand from the borrower was 24%. I heard of higher than that but not directly, so I’m not sure how much of it was like an urban legend. Those young guys walk into a dealer with a steady paycheck not knowing any better an end up getting fleeced.


Buy here Pay here lots that do their own financing have rates like that or worse. People who have bad credit or can't get a traditional loan at a regular dealership for whatever reason are forced into that predatory loan loop. If your city has crappy public transit, having to buy from a lot like that may be the only thing that that keeps you able to continue to go to work.


Under $400 in repairs on a '99 vehicle causing him to look for newer cars, "minimum" $10k car price, 18% APR, 72-month financing term - something isn't adding up in the OP


My recent college grad credit at the time wasn’t too hot, and I think that had a lot to do with the 18%. The banker I spoke with said 12-18% was typical for my credit, and I didn’t want to even fathom paying that 18%. My credit is well enough now that I could play ball with lower APR options if I have to finance sooner rather than later. My main bank is hard to get a loan through and I’ve since established a relationship with another bank that has better rates as well. I’ll be doing more finance shopping than just my banks when the time comes, but I like that banks will cut you a check so that dealerships won’t attempt to up your budget for you.


not sure where you are from... but when I went to the bank and ask about a credit for my car, they told me it is better just finance from the car dealer (not small dealer, I am talking about directly with Honda, Toyota... ) because they will give me a better APR. But keep this in mind that they will run a credit check on you. This will affect your score for the short term.


Not sure what bank you’re going through, but I would strongly suggest opening a membership at a regional credit union. I work at one in Utah doing Loan Processing. The average rate that I’ve seen for probably 250 - 300 auto loans is right around 2.99-4.99%. I have seen some double digit APRs before, but they are definitely an outlier. I’m not sure what your credit score is, but A+ Credit and 60mo Term at my CU would get you 2.49% with Autopay from a checking account. Most Credit Unions are right around there too. Tbh Credit Unions are usually a good deal better than Banks in my humble (maybe biased since I work at one) opinion.


> I’m not sure what your credit score is, but A+ Credit lmao why would you talk about "A+ credit" to someone who was offered 18% APR... someone who has bad enough credit to get 18% APR may not even be permitted to open a chequing account at a credit union, it will depend on the credit union in question but if you're being offered 18% APR auto loans you are deep into subprime and some CUs will just tell you to get lost even if you don't want to borrow. they're certainly not going to magically get much lower rates from a CU if they get approved at all.


Where the fuck in America do car repairs cost $200 or $75 dollars? Mechanics on the west coast will wipe their ass on your center console and charge you $175. (For your information I have learned to do most non-“pull the engine out of the car” repairs myself in response to the over/inflated labor rates out here)


Seriously, came here to ask this. I cannot imagine a car repair costing less than $100 other than something like an oil change or wiper blades.


Right?! I didn't understand why OP was complaining about repairs that ultimately cost 300. I always heard that if 2 non-maintenance repairs over $1k occur within 6 months, it's time to start looking. The only thing that would make sense is if OP is buying the parts and doing repairs themself.


I like to DIY myself but let's be honest sometimes you need your car back ASAP and don't have the time to troubleshoot, get new parts and tools, research how to do it, struggle with accessing hard to reach parts, etc.


Midwest. Got a window replaced and was quoted $309 for parts and labor, my mechanic even cut that down to just over $100 when I couldn’t do $309; he even went to the junkyard to pull the window for me. A good mechanic is an amazing experience.


I have a good and trustworthy mechanic. Worth his weight in gold


Agreed. My old garage had 3-4 mechanics, but I was never satisfied with their explanation about my car problems. Then found myself a solo mechanic garage who actually told me to NOT change parts except when necessary. Suffice to say he got my business.


Some people may disagree, but I still wouldn't purchase a car above $10k with cash, why bother when there are so many 0% or 1% finance deals available. $13k is much better sitting in an account earning interest. If you can't find a rate below 2% then yeah it might be worth buying with cash, but with decent credit you should easily be able to get under 1% in the current market.


For used vehicles you won’t get anything lower than 3%. Those 0% deals are only on new vehicles.


Yikes on trikes - 18%?? I bought a car for the first time ever at 26 last year and mine was only around 6% with a “fair” credit score.


because nobody’s mentioned it, and this always comes up... A new car will be far safer than a 22 year old car. Think of that $150/month as a payment for new safety features. And aren’t those the Fords that were all over the news for rollovers where the roof crushes in and the occupants get smushed?


They don't have to be "old" to be good cars, you can do a bit of research and have a good deals. I bought a 4 years old 2011 mazda 2 for 7000$ at a dealer, and sold it 5 years later for 4000$. That's not even 1000$ per year for a reliable car. That's just one example but there's plenty if you know what you are buying. My current car is a 13 000$ civic SI and will still probably get my 6-7 K when I sell in in another 4 years or so. The depreciation is so much better when you don't buy new. PS: I must say I take very good care of my car, they always look new ;)


It's great seeing someone else who drove a Mazda 2. I love my little nugget


It turns out that the rollover issue was more a problem of people driving SUVs that had been used to driving cars. Up through 2010, the Explorer was built on basically a truck chassis. The firestone tires used would fail by having the tread separate, this is a handling emergency, and the driver would overcorrect and roll the vehicle. Ford blamed Firestone. Firestone blamed Ford for recommending a running tire pressure of 26psi, lower than what they were rated for. Big trucks and vans are squirrelly at tire pressures that low, the speculation is that Ford was trying to get the things to ride a little bit less like a truck by recommending that low pressure overriding Firestone’s recommendation. I am confident that I will probably never roll my Explorer, and I keep my tires at the maximum recommended pressure stamped on the sidewall. I won’t say never because I drive to ski areas and stuff happens, but I haven’t rolled a car yet.


Fair enough, I also factor in how little I actually use my car when calculating this. Sometimes I go a week or more without needing it. I know not everyone can do that though.


Is 18% a typical rate for a used car loan? Financing any car for 72 months seems like a bad idea, especially a used car.


18% is typical if your credit is bad. Used car at a good rate would be around 2.5-3% and only for 60 months


And Honda is offering new cars at 0% - 1.9%.


That's a lot more reasonable.


Not at all! Highest I’ve heard someone getting was around 8% and they had terrible credit at the time. My car is at 3%. Something people forget about when it comes to vehicles is the safety features, especially if you have a family. There’s being financially cheap and being financially secure. Driving an old car car isn’t financially secure. With my old used cars I was always worried about something going wrong, now I never worry about it and have freedom to drive as far and as long as the road will take me. I wish people on this sub would understand the importance of being happy and comfortable as well as financially savvy.


> is the safety features This to me is the most important factor that so many people ignore when touting the "buy a junker" mentality. The safety improvements between a 2021 vehicle and a 2011 vehicle are staggering. I have a friend who drives a 2001 Corolla who got into my car and could not believe how thick and solid my doors are compared to hers. I walked over to her car thinking she was exaggerating, and I was stunned at how thin and insubstantial her door was. And that's just the door. Don't underestimate the financial impact being out of work for a few months would have if you were in a serious car accident - or worse. By all means buy used, buy within your means, but don't put yourself in a tin can of a vehicle if you can afford something safer.


I think it depends upon the car though. I’ve got a 2009 Volvo wagon that feels secure as anything. I’ll never drive a tin can again.


To be fair, Volvo has been ahead of the game safety wise for a long time


Yup! I have a 10 month old child, there’s no way in hell I’m putting them in an older car. The extra money isn’t wasted and is far better used keeping myself and family safe. My most expensive car before my current one was $3,000 and had zero safety features. My current car costs a lot more but the safety and lack of worrying about being stranded far outweigh the price tag. People don’t seem to understand the frequency of accidents nor the odds of them getting in one.


Used to drive a 91 civic and now drive a 22. The differences are staggering.


Safety features bring insurance costs way down.


Yeah honestly my new car is only around $10 more a month on insurance. 2006 Toyota Yaris to a 2018 Kia Sportage was well worth it.


Hahaha you mean up! The more tech and the newer the vehicle the higher your insurance rates go..and they never bring it down...


Man, I feel better about getting 2.9 for my car. I was pissed I couldn't get the 1.9, and the dealership made me feel like I was some flake with credit so bad i almost couldn't get the loan.


Yeah dealerships do that.. I feel you on not getting the lowest rate. My mortgage as well as one of my siblings is 3% but my other sibling managed a 2.5% while we all have similar credit scores and bought within the same 3 months.


18% is borderline predatory. It means their credit is shot. Anything over 10% on a car loan is absurd. I sold cars for a while and once saw someone get financed with a 480 credit score. Their rate was something like 27%.


I bet they accepted it & came back 6 months later because they didn't like it. Sold the car back, took 6k less bought something that was 10k more.


THIS!!! I sold my newish car during the used car boom and pocketed $12,000. Now I drive my old stand by Honda with 200,000 miles. No hurry to pay a monthly car payment plus extra insurance. But, it's nice to know that if I really need to, I can.


>THIS!!! Why? It's not always the best decision. Running an old car is a risk. Sometimes it pays off, other times it doesn't. There's a much greater chance of some catastrophic repair needing to be done, and even if it's just frequent small ones, someone's employment situation might not tolerate them being frequently late or absent because of persistent car issues. Also getting one while your current car still runs gives you the option to shop around for a deal without rushing, can get you better value on your exisiting car, and makes it less stressful of you're not wondering if your going to make it to wherever your going. It shouldn't be evaluated on purely monetary terms because they aren't the only things at play. There's a whole host of "what ifs" that will have different impacts in each person's situation.


One of the risks is safety. I was on the beater car Kool aid until a friend of mine got in an accident in his beater. Now I see the appeal of a newer car.


I also sold my newish car for a premium price and kept my German beater. Now its coming up on 100k and the transmission is acting funny. Maybe I should have just gotten rid of the beater


>I also sold my newish car for a premium price and kept my German think I found the problem


Go to a oil change place and get a transmission fluid FLUSH make sure they put the right type of fluid and also see if they’ll change the transmission fluid filter. Many times people spread an old myth from the 60s that transmission fluid is lifetime. But by “lifetime” they mean usually about 100,000 miles that the fluid needs to be changed. The car industry THOUGHT they invented actual transmission fluid that never really needed changing but they found out they were wrong years later. It’s like thinking you never need to change your oil. Could you imagine how horrible that is for your car?


naw. Just buy another newish car with your newish car sales gains and be happy. Also, never rely on German beaters... ever , ever, ever, ever...


Well I wouldn't call it a beater but I bought a new ml320 in 1999. It has 320,000 miles on it and I haven't had a car payment in 15 years. Runs, rides, drives great. I have a great mechanic and keep it serviced.


I have two other “new” cars, hence why I sold the third oldest “new” car. The beater has a singular purpose and I just need it to run once a week.


> The beater has a singular purpose and I just need it to run once a week. What’re you doing with that car?


Parking it in a nefarious location for a week or more at a time


That’s awesome


Idk my friend has a 2000 Mercedes ml 320 with 306k Mike’s been overheating and low on oil for the last two years


diesel? diesels are different. Well, engine wise anyway. As any car ages, transmission, differential, steering, and many other parts are going to wear out. On a German car, you are going to be paying a lot more for parts compared to a Japanese car. But, I'd take a German or Volvo diesel over a Japanese car any day for my beater.


It’s gas and the power steering pump has also been out for years I’m about to replace it though


I just dropped $3800 for repairs on a 20 year old truck. Still cheaper than $800/month payments on a new truck.


Unless you do it again in 4 months


…and those were the only two options?


$3800 worth of what broke on a 20 year old truck? They're fairly straight forward. Or was this maintenance?


Not necessarily?


As a car enthusiast, I was so happy to finance my first sports car after landing my first job out of college. Got a used Infiniti G35 for 19K financed through a local credit union. Loved the horsepower and torque compared to my previous cars such as Miata, 240SX, and Integra. I paid it off and ended up selling it 3.5 years later to go back to school and pay tuition without loans. Loved it while I had it, but I needed to make a dumb finance to learn from it. I’m sticking with my 2016 Honda until it dies, hopefully a good 20+ years. I wish I was as smart and disciplined as OP to make the smart decision without having to learn from a mistake!


Bought a used Honda Civic for $1000 that was overheating. Replaced the head gasket and throwout bearing myself. It is running fine now. Going to ride this sucker until it dies.


Hell yeah dude, learning to wrench was one of the best decisions I made. Saved me so much over the years doing my own maintenance.




Get dependable used cars with good reliability ratings, always had used cars and was standed twice in 20 years, and 1 time it was because of an overdue maintenance item (timing belt). A brand new BMW can leave you stranded also, so it's not always best ;)


Yeah, there's a lot of extreme options being talked about here. I live near the great lakes; buying a car that's already ten years old is asking for trouble. I also wouldn't buy a new car when you can (outside of times with global supply chain disruptions) find a 3-year-old former lease or rental car with under 20K on them for 2/3 the cost of new.


Even before the pandemic, a ten year old Camry or Civic would run you $10K.


Safety features too. If you can afford a new car loaded with safety features, you really should. But if your finances don't allow it, keeping the junker is a lot better than cycling through slightly newer but still old cars.


The only safety feature my 01 CRV has are seat belts that sometimes work.


I'd really like to see data about the safety outcomes between different models of cars at different years. How new does a car have to be to be considered safe?


Backup camera alone is a game-changer.


I just use my rear kinetic collision sensor. Fun fact: I drive a beat up and rusty 84 pickup. I once backup up into a pole in a parking lot and when I went to inspect the damage I couldn't tell where the pole actually hit. I also once came back to a note on my truck from someone who backed into my front fender and left a really apologetic note explaining it and leaving their number in case I wanted their insurance information. I felt like I should have bought them a pizza or given them some sort of reward for actually bothering to leave a note considering my truck. I looked and literally couldn't tell where they hit and am pretty sure they likley had a huge hold in their fender. >\_>


Well, having an airbag helps. \*glances at my 84 Toyota pickup and it's lack of airbags\*




[1998 vs 2015 Toyota Corolla](https://www.youtube.com/watch?v=xidhx_f-ouU&ab_channel=CARTV)


Here's one that pits a [59 Malibu vs 09 Malibu.](https://youtu.be/fPF4fBGNK0U)


Obviously this varies by brand as well as model year. But you can get some crazy differences just going back to 2000... 2000 Fiat https://www.youtube.com/watch?v=8ceEh7R1KYA 2021 Subaru https://www.youtube.com/watch?v=az6DjY0gO6o


In my earlier driving years I went through no less than 5 different "old beaters" that were 10+ years old, 100k+ miles, paid off in full, and had problems with all. 2 Honda Accords, a VW Jetta, Hyundai Sonata, and a Jeep Grand Cherokee I never should have bought from a shady used car lot, but I digress. I'm not the most nor the least handy guy out there, but after the Jeep I got fed the hell up with buying used lemons. Once my wife and I got in a better financial place we started buying cars new. The thing is, since we had built some credit and set our priorities, we've never financed at over 3%, and we've bought cars that are popular in our area, so a 2-3 year old model is little if any savings anyway. I like knowing we are the first owners, we have the full warranty, and he have modern safety, tech and comforts. I've pushed back on the "buying used is the only way" mentality many times.


Yeah op isn’t actually making a great point like some of these comments are saying.


Yep same. I buy new cars or cars with under 5k miles on them. I hold on to them for as long as it is practical. For my Toyota, that meant over a decade since there were no major issues. People think they're saving a ton of money buying used, and it's just not always the case. Plus there's something to be said for knowing your car is going to start every single time.


Don’t forget, all the modern safety features


Definitely made the right choice. Also, taking a loan at 18% is almost always a terrible idea. Would be worth it to shop around and find a better rate. Note: I’d recommend using “experience” instead of “witness”. “Witness” and “spectate” both mean just watch.


I'm doing something similar. Instead of getting something newer - maybe with a working dash clock - I put new tires on my existing car. I never stopped the direct deposit split going into my credit union account though, so the money I was never seeing for car payments has been collecting. By the time I use up these tires, should have a nice amount built up for something nicer.


I think the bigger temptation for many is to buy more than they need. I am in my late thirties now, and I bought my first new car, a Mazda CX-5. Under 30k, AWD, Japanese reliability, LED headlights, pretty much all most people need. Some of the most reliable vehicles are quite cheap. Honda, Toyota, Mazda all have under 30k vehicles, new, that have a high chance at 200k miles in the Civic, Accord, Camry, Corolla, pretty much all the Mazda cars and some of the small SUVs, etc. For most average drivers, that would equate to 12-15 years of use.


Cash is king my friend. It takes no effort to walk into a dealership and buy a used/new car. It takes effort to get old faithful fixed again and again. However, remember this: You can always decide to buy a new/used car. It is not so easy to make up for a car purchase decision however. In other words keeping old faithful around gives you options - like getting that used/new car on your time/terms.


drive cars with proven reliability. when they break, dump the money you would dumping in a new car back into your proven reliable beater and repeat. profit.


The best part of this is that you have learned that saving a little adds up to a lot. If that euro trip costs more than $500, don't take it unless you are visiting family and planning a trip otherwise. Their objective is to get you to spend 2-3k on your trip and pay them back over time paying finance charges. Don't stop saving, get your emergency fund in order and your 401k loaded up asap! then perhaps you can go get a new car in a few years... ;)


Well done! I know im a stranger but I'm proud of you!




Yes! I had that happen as well! A brief time of financial crunch led me to make some drastic changes. To save money, I drove the oldest, clunkiest car I’ve ever driven for 6 months. Three months in, the starter went out, but it was a manual transmission, so I always had to park on a hill facing down so I could push start it. Not ideal, but we made it through the crunch! Hell yes to getting through the tough times! Then I sold it to a mechanic for about the same amount I’d bought it for. The insurance had been just a fraction of what I’d previously paid. All in all, I spent almost nothing to get around. It wasn’t pretty, but it got the job done. I found that once I got out of the habit of spending so much on car stuff, it was like the spell had been broken. We now stick with older cars, nicer, not so clunky ones, but ones that are 15+ years old that were well maintained and have excellent safety features for their time. One thing to consider is that I grew up in the Midwest but now live in Oregon. With all the salt on the Midwest roads in the winter, it’s almost impossible to have a car last this long. So I appreciate that this strategy might not work in other locations.


My 2003 Honda Civic never had any major needs, even after 200k miles. All the money I put in to it was just maintenance imo. I was shocked that CarMax bought it from me when I needed to upgrade to a car that could fit 3 carseats. They said the old civics were popular gifts for college students and they were always looking to buy them. After that car I paid cash for a very used Honda Odyssey to get me through the carseat years and it's still driving really well. I don't think I can ever give up the extra cash I save from not having a car payment. Especially since I don't drive everyday.


Can we stop thinking of cars as a purely financial decision. Your '99 Explorer is a death trap. Safety standards have progressed so far in the last 20 years that not upgrading is objectively stupid. People say buying a brand new car is a poor financial decision but if you can afford it, you are investing in living to use the money you can't take to the grave with you. I want to upgrade my '13 Mazda 2 ASAP because of things like brake assist and adaptive cruise control. This is like you going out and telling me I could have saved $100 by not buying a bike helmet last year. You're 100% correct, but that helmet kept my brain in good enough condition to still mostly work (and good enough that I didn't have to quit my job and go on disability payments), my 8 year old helmet likely would not have.


YES!!! This is the way. So many people buy cars with credit that they shouldn't and look for justification on this site.


And the banks don't help much. Before I bought my most recent car, I was getting inundated with emails from my banks begging me to finance a new car with them, and offering to finance more than my yearly income. A lot more. WHAT? Who spends that much on a damn car? Definitely not me. I like to eat. I mean, I can look around my neighborhood and answer that question with people driving cars I can't even imagine how they can afford with the jobs they have. I can't even imagine their car payments, and I have no idea how they eat or live with them. Nuts.


the problem is we're right smack dab in the middle of an unprecedented used car market. In August my trusty impala got some undercarriage damage and I had to scrap it. I ended up buying a Camry but it was easily $4k more than it would have been 2 years ago. I did as much research as I could and don't actually need a car day to day so I wasn't insanely pressured but it was nuts, I was watching cars disappear in real time on sites like Carvana or Carmax within an hour of listing. Other online postings are insanely outdated, I'd call around and the cars had been gone for weeks (update your damn sites.) The cheap Honda, Toyota sedans just aren't there like they usually are. Plus all the places those types of sites are posted on (marketplace, craigslist) are so full of scam posts right now, or people wanting $8k for a car with 300k miles. Those $3k-6k cars you could get away with just aren't there. If you're in a spot like me where your car can't be fixed you can end up in a very tough spot.


I never owned a new car, but I drive a luxury German car with low mileage that had all work done at my wife’s friend shop. I don’t owe it anything.


I think You did the right thing financially. I'm on my 2nd Nissan Altima, working my way to 200k miles or so. I only got 180k on the first one, but I drove it for more than a decade. If you can avoid the lifestyle inflation of always wanting a newer/bigger/better car, you can save a ton of money. Congrats!


ITT: everyone saying they would never touch a car loan above 8% and many saying anything above 3% is absurd. Meanwhile I'm twiddling my thumbs at my 9% loan... Yea it's not a fantastic idea but you practically need a car this day and age. And I wasn't going through another "junker/lemon" to save money.




I totally support people spending big money on new cars. How else would I then be able to buy it when it's 10 years old for a fraction of the price?


Additionally, in my experience people often overlook the added expense of full coverage insurance on a new(er) car. If you're paying for basic liability on an older car, insurance can easily be a 6-10x increase in expense regardless of the car payment. I'm fortunate that my older car runs great and I have been able to do nearly all the needed work myself which has not exceeded $2k over the past 5 years or so, but at nearly 300k miles I realize that's not going to last forever and I intend to pay cash (or at least have the majority of funds available on hand up front) for a new (to me) vehicle.


If they can afford it there’s nothing wrong with “emotionally driven process” There comes a point in a persons life where they should actually….. live.


New cars are a luxury. That’s for certain. The cost in depreciation is that luxury. Sometimes, you can comfortably afford a luxury, contrary to what Reddit believes.


> For what it would cost to rebuild that Toyota's entire drivetrain and suspension How much time would that take?


Good for you man. Along the same lines, I bought a house this last July. Not a huge fan of the fridge. But instead of just replacing it, because it functions right now, I just put around $100 each month into the account that my mortgage pulls from. By the time I need to replace it, I'll have plenty do so with.


Used vehicles are at an all time high. Trucks especially, you could have bought a brand new truck 5 years ago put 50,000 miles on it and it is worth more now.


I'm able to retire at 58 because I've saved tens of thousands by not having car payments in twenty years. My Tundra still runs strong and only has 165,000 miles and gets me to where I need to be just as good as a new car.


Keep the car and subscribe to ChrisFix on YouTube. Life changing.


Eh, you can do that if you want but I depend on my car for work and other commitments so unless we are talking like a 90s Corolla or early 2000s Civic then I'm not driving something over 20 years old that is constantly needing repairs like yours does apparently. Granted, I have two vehicles now but I absolutely must have transportation and I wouldn't trust something like that to always be dependable. There's nothing wrong with driving an older vehicle but you have to be practical about it.


"spectate rather than witness". Both of these mean the something. I know what you were trying to say, instead of witness you meant to say take part in. That was bothering me so I had to point it out.


Yeah, I quit taking out loans for new cars when IRS quit letting us deduct the interest.


I drove a 99 exploder until something in the engine exploded. Greatest car I’ve ever owned. I took it off-roading and used it as a daily driver. You could fix almost anything with a few basic tools. Bought an 08 exploder to replace it. Payments and insurance cost me less than 200 a month


Smart decision given all the factors you mention. I have a 2000 Expedition EB with 133K. Regular scheduled maintenance and only issue has been passenger window motor. Must have gotten lucky on the factory build day. Hoping to get 250K out of it.


That’s what I did for years. I drove older Hondas and was mechanically inclined so I could fix them myself if need be. I was able to buy a nice low mileage Acura TSX with cash and I own it. I’ll drive it for many many years and hundreds of thousands of miles if I can… If nobody runs into it.


Seems like it's almost always cheaper to just keep your current car running forever vs buying new? True?


In general, avoiding discretionary debt is one of the best financial planning moves you can make. Coupled with being able to defer gratification, it will serve you well. A car simply needs to be a reliable means to get from A to B, not a symbol of your personality or ego. Good for you.


My advise would also to be look if you can do the repair yourself (it's easier on older cars) you tube is your friend I've changed cam shaft sensors (£30 rather than £250) and suspension arms (x30 for 2 rather than £180) I also change the oil filter, oil and plugs in mine every year as well as antifreeze this will massively increase the life of the engine and if you do it yourself is relatively cheap my car is at 256000 miles and still runs like a dream


Never had a new car. Drove old VW's (50's-70's) old Mercedes (60's-80's gas, mostly diesel) Ford diesel trucks (80's mostly. Have one now, a 1985 dually body with a 95 IDI turbo) Cars you could turn a wrench on to keep going. Had a 1994 Honda Civic, drove that till the wheels fell off. Now have a 2007 Prius. Doing the same....I love this Prius, not gonna lie. Weird turd-shaped car and I really love it. Have 230k miles on it and it's starting to do voodoo electronic crap. Tire light comes on even if the pressure is fine. The inverter cooler pump died a couple of weeks ago ( my son is a electronic wizard and fixed that for me) and I feel like she might go awhile longer. Not sure what car will fill those Prius shoes, but probably try and go full electric if I can.


2002 Subaru Outback club checking in. I'm driving this beast until the wheels fall off.


There's a lot of factors that should be considered outside of cost when thinking about replacing an older car and buying a new car: \-New cars are expensive to insure (comprehensive and liability) \-New cars have a higher annual registration fee (DMV) \+New cars generally have better fuel economy (this is a huge positive when gas prices are elevated) \+New cars are very low risk for major repairs for the first 3-4 years of ownership (15k miles/year) \+A new car is far less likely to leave you stranded on the roadside (this has many implicit costs: the need for AAA or other services to handle these higher probability events; the loss of time to attend to fixing the car (liability) rather than focusing on work (assets). That said, I think students and single people who have limited resources at their disposal are far better off buying an affordable new car and making the monthly payment. While the overall cost of ownership may be slightly higher, the monthly cost of ownership will be extremely predictable. Young drivers are less likely to have a pool of money set aside to attend to repairs. This gives them the confidence to focus on their studies or getting to work on time and keeping the cash flow positive. For those who are settled into their careers, have a home with a garage, a place to keep general maintenance tools, and perhaps a wife or other family member you can depend on for a ride when your car acts up, that's when it makes a lot of sense to keep your vehicle until the wheels fall off. And hopefully, by that time, you'll have acquired enough wisdom to call yourself a shade tree mechanic so that you can avoid being swindled by your friendly neighborhood mechanic who most likely drives a nicer car than you do.


It all kind of depends on what's breaking. Some things are indicative of a car that's falling apart and some things are just normal wear items. $375 in repairs on a 22 year old car sound like normal wear items to me and the same price you would pay for a brake job that even a relatively new car would need. It's not like you're dropping a new engine or transmission into a $3,000 car.


A car from the late 90s has ALL the features a modern car needs....if you can see at the back install a modern radio and a backup camera...and you have basically a 2015 honda civic in your 90s car.... A good reliable old car is better and much cheaper than a modern car...and your older car wont lose that much value as a modern car


Sounds like you made a good decision. It really is too bad that car repair are so difficult. Every car I've owned I've actually made a profit from. However, I do all the repair work myself. Back in the day it was a lot easier, now it's a lot more work to fix things yourself. So you have to pay someone to fix the car, and that's what really cost the most.


Smart moves indeed. On a side note, my Brother was an insurance adjuster for a few years recently and was always astonished at the people he encountered who had middling incomes but $600 - $800 monthly car or truck payments. For depreciating 'assets'.


Well done! Took me too many years to learn to live with non-ideal cars. I would also advise against using credit for an international trip


Good for you! DD, 25 and a school teacher, had an anticipated $3500 repair on an eleven year old car I still own but she drives full time. I suggested she get another estimate (dealer) to see if the repair was legit. While at the dealer, she looked around the lots in the area. Zero selection on available vehicles she wanted. She will get the repair so she can run the car to the ground (5 years?). I told her to put away a car payment every month and buy a vehicle outright when she is ready. Buy the car outright, new or used. Car financing is dumb.


I drove a 98 Ford Explorer for like 15 years and over 300k miles. That thing was a champ. Minor repairs here and there, replacing the alternator was probably the most work that done on it.


Also, I bet you've realized that as much as I'm sure you want a new car because I'm sure most of us would rather drive a newer vs older car I bet you are realizing you really don't NEED to and while you very well might buy that newer car once you afford a 13k one regardless of how your current one is (and that is 10000 percent fine to do) I bet its going to stop you from thinking you really really need to buy a way more expensive car like so many do.


Not sure about your bank situation with the 18% loan and the stipulations, but at that point get a low intro offer credit card and buy a 10 y/o car for about $5k, and pay it off within 2 years I think like everyone else I’m horrified at the 18%, but also by the idea of “must be less than 4 years old”. I can see the benefit of lower maintenance on a newer car, but at the same time it shouldn’t be your only option