Wow. Is that "check engine" light on again? Didn't you just have that looked at? Come to think of it, your car is approaching that age, isn't it? A bit more grumble in the engine, a touch more sway in the suspension -- you hate to admit it, but every time you take old faithful into the shop, the same thought tickles the back of your brain: Is it time for a replacement?
How much is too much to spend on repairs? It's a question we've all had to ask at one point or another. Perhaps it would help to have a basic sense of what auto maintenance typically costs over time.
The average American household owns 1.9 vehicles and spends around 1.5 percent of its annual income on auto repairs. In 2004, the standard family unit earned $54,453, which means they laid out around $817 annually on repairs, or $408 per vehicle. That number does not include the 3.7 percent spent on gasoline and motor oil ($1,007 per car), or the 2.2 percent ($599 per car) shelled out for insurance [source: U.S. Bureau of Labor Statistics].
Is that a lot? It depends on how you look at it. Like all complex machines, cars and their components have projected operational lifespans. Manufacturers anticipate that some components will fail often and that you'll replace them as part of routine maintenance, while others will last longer. The long-life components will generally be more costly to replace, but even those might not be so bad if you think of the cost spread over the lifetime of your car -- spending $500 to $800 to replace an alternator stings a little less if it's already kept you humming along for 75,000 to 100,000 miles (120,701 to 160,934 kilometers).
If you own your car long enough, you'll have to replace or rebuild an awful lot of it, but that doesn't mean it's necessarily a bad idea. After all, new cars are expensive. They also depreciate an average of 45 percent over the first three years of ownership -- between 48.3 and 79.3 percent over the first five years [sources: Weisbaum and Clarke].
In the next section, we'll look at why preventative maintenance saves you money in the long run. We'll also explore why, if your car is more broken-in than broken-down, it's probably cheaper to keep her around a little while longer.
Value of Preventative Auto Maintenance
Spending more than $400 annually on maintenance and repairs may sound like a lot, but it's nothing compared to the added expense of buying a new car, especially if your current car is paid off. In fact, by some estimates, every five years you drive your car after paying it off saves you the monetary equivalent of a new car.
To understand how, let's compare a new car to a paid-off car with standard maintenance. To make it interesting, let's stack the deck in the new car's favor by saying that you drive 24,000 miles (38,624 kilometers) per year, which is double the national average. In five years, that adds up to 120,000 miles (193,121 kilometers) under your wheels, which translates to 35 to 40 oil changes. At $40 apiece, you're looking at $1,400 to $1,600 -- let's call it $1,500. Figure in another $2,200 for miscellaneous service costs (filters, hoses, tire rotations and so on) and another $1,500 for a few major items like a timing belt replacement, new brakes and shock absorbers. Tally that up and you get $5,200, or around $1,040 per year.
Now let's compare that to a new car. According to the National Automobile Dealers Association (NADA), the average price of a new car sold in the United States in 2009 was $28,966, but we'll lowball it and say you found a good deal at $24,000 and financed $20,000 at 7 percent interest for 48 months. That comes out to a monthly payment of just under $479, which tallies to $5,747 per year [source: U.S. Federal Trade Commission].
In other words, for the cost of owning a new car for one year, you could own a paid-off car for five years, drive it into the ground, and still have money left over for tolls.
According to Consumer Reports, the average life expectancy of a new vehicle is around eight years or 150,000 miles [source: Weisbaum]. A well-maintained car also means a safer trip for you and your loved ones. And who can put a price on that?
For more information about preventative auto maintenance and other related topics, follow the links on the next page.
- How Car Financing Works
- How Car Rebates and Incentives Work
- How to Calculate Fuel Cost
- How to Figure Out the Cost of Taxes on Your Car
- How much liability car insurance do I need?
- What is the actual cost of a standard car loan?
- What is the actual cost of auto insurance?
- What is the actual cost of roadside assistance?
- What is the average cost of a parking ticket?
- What is the average cost of a speeding ticket?
- Bankrate.com. "Auto Loan Calculator." (Aug. 13, 2010) http://www.bankrate.com/calculators/auto/auto-loan-calculator.aspx
- Clarke, Warren. "Top 10 Cars With the Best Residual Value." (Aug. 13, 2010) http://www.edmunds.com/reviews/list/top10/115129/article.html
- Consumer Reports. "10 Best and Worst Cars for Depreciation." (Aug. 13, 2010) http://editorial.autos.msn.com/article.aspx?cp-documentid=435652
- Jeanes, William. "A Keeper Is Cheaper." AARP Magazine. July 2009.
- Jones, James V. "Integrated Logistics Support Handbook." McGraw-Hill Professional. June 8, 2006.
- National Automobile Dealers Association. "NADA Data 2010." (Aug. 14, 2010) http://www.nada.org/Publications/NADADATA/default.htm
- U. S. Bureau of Labor Statistics. "Age of Reference Person: Shares of Average Annual Expenditures and Sources of Income." 2004. (Aug. 12, 2010) ftp://ftp.bls.gov/pub/special.requests/ce/share/2004/age.txt
- U.S. Environmental Protection Agency. "Emission Facts: Greenhouse Gas Emissions from a Typical Passenger Vehicle." February 2005. (Aug. 14, 2010) http://www.epa.gov/oms/climate/420f05004.htm
- U. S. Federal Trade Commission. "Facts for Consumers." April 2006. (Aug. 14, 2010) http://www.ftc.gov/bcp/edu/pubs/consumer/autos/aut11.shtm
- Weisbaum, Herb. "What's the life expectancy of my car?" March 28, 2006. (Aug. 13, 2010) http://www.msnbc.msn.com/id/12040753/