Just wondering if anyone thought about the reason to trade in lets say, at 100k mi while the vehicle is worth 10-15K vs. keeping the vehicle until the end, when no or little equity can be recovered.

My school of thought has been is to get out of the car while still can get some money out of it, in order to lessen the burden of a downpayment on the next car.

What would make more sense if the annual mileage is 15-20k mi?

 

I am not sure by what you mean of keeping a vehicle to the end, until the wheels fall off ? Here is what I have done for my last two Lexus. I drive a vehicle for 10 plus years and take the money that would have been made for car payments after 3 years of financing into savings, money market, short term CD's, etc. When it's time to get a new vehicle I pay cash for it. Both of my last two and current Lexus were bought that way. How did I know when it was time to get a RX ? My Ford Explorer's tachometer quit working. When I took it to the Ford dealer for repair they informed me that Ford quit making that part but I may be able to get one at a salvage yard. That's what I did and then I knew it was time for a new SUV. Goodby Explorer, hello RX I kept my Explorer up and it looked like new but when you have to start getting parts at a junk yard to keep it up, it's time. I also put an add in the paper and sold the Explorer for twice what it was worth as a trade-in.

Cat

 

that sounds like a solid plan. me likes.

 

The problem is with the RX, parts are just NOT in junk yards.

 

^+1....would love to cannibalize an RX330!

 

Very rarely will you come out ahead by trading in. Either keep the car or sell it privately. You are basically paying the dealer a convenience fee when you trade in. I also can't look it the trade in value as equity, since you paid about $40,000 for something that is now worth maybe $13,000.

My old car (1999 Grand Prix) has 171,000 miles on it. Last year, the fuel pump went out. It cost $800 to fix. I decided it was worth it to fix, since that is only 2-3 new car payments and that the motor and transmission run like new(knocking on wood).

If I knew when the motor or transmission was going to blow up, I would wait until 1 week before that happened and sell it at auction before I had to spend $$$$ to repair. Most vehicles built in the last 15 years will last well beyond 150,000 miles with adequate maintenance. That's why I make sure I purchase the exact vehicle I want, cause I know its mine for at least 8-10 years.

 

I always plan on keeping a car for at least 8 years, when buying a 2 year old car. 7 when 3.

 

I gurantee you can find RX parts in a junk yard. The RX is the most popular luxury SUV in America. My first Lexus was a 1995 ES300 that I bought new. It did not have a CD player although it was wired for one as all ES models were. The CD player in that model of Lexus was in the trunk and held 6 CD's. The operating buttons were in place for CD operation with the casset tape whether your ES had a CD player or not. I got one out of a totaled ES and plugged it into my car and it worked beautiful. Saved a bunch of money by going this route instead of ordering one from the factory when I ordered my car. I'm not suggesting that everyone do this, just making a point that there are parts for your RX at your local salvage yard, just say'n



Cat

 

I'm with catdaddy. + if your repairs are costing more than a monthly payment (whether you pay cash or not), it's probably a good time to get rid of the car. Getting out of a car while you still can get money out of it really doesn't apply since the greatest depreciation hit you take is in the first couple of years. Depreciation tappers off dramatically the longer you keep the car.

 

968 makes some good points about depreciation. Some folks have to have a new car every couple of years. Some change cars like they were socks. Most of these folks will never own their car (the bank will or the leasing co.). I try to take care of my cars and fix anything that breaks on them ASAP. I enjoy watching those car auctions of classic and old cars on TV like Barret-Jackson, Meachum, etc. There is no reason you can't keep your car looking new with routine maintenance and still save a lot of money at the same time, and then when you are ready, pay cash for that next car. Once you get into that trend, it's becomes easy to save that money. Not trying to ruffle anybody's feather but leasing to me for 95% of the people that do is the biggest waste of money I have ever seen. You work for a company that leases a car for you to drive, that is great or if you are so financially well off the money you loose by leasing doesn't matter, but to lease a car for private use for most, uhm,uhmm,uhmmm.



Cat

 

EHHHH,Eeeehahahahah...thaaaat would be cool!