Frugal Dad (one of my favorite bloggers) has a guest post from Neal Frankle of Wealth Pilgrim - why you should keep your favorite clunker, vs. turning it in for a down payment on a new car.
Lots of examples and charts here to prove his point.
And for your basic used car, I think he makes a lot of sense.
Daughter #2 is debating this issue right now. She owns a '96 Jeep Cherokee (our old Jeep). It looks great, and generally runs well -- except it needs about $600 of crankcase work done right now. Oh yes...and it has more than 250,000 miles on it.
A couple of guys offered to buy it for $800 -- a third (or less) of its Blue Book value, even with high mileage. Daughter would like to get another car, but not a new one. (She's very good at understanding and practicing frugality.)
So, should she fix the car, then keep it?
Should she fix it and sell it?
Should she sell it as-is?
Turn it in under the 'cash for clunkers' program? (which I THINK has been reinstated)
Should she donate it, instead? (She doesn't really need the tax deduction.)
I can see possibilities with every decision....but it's not my car. Daughter's not sure what to do. What would you decide?
3 comments:
That is why I like Honda's and Nissan's they wear well, need minimal work done and last and last and last.
Just read the recommended advice, and oddly enough, have a 2-week old car that we bought through the "Cash for clunkers" program.
First, I'd like to say.... his car is a Camry, which IMHO, doesn't qualify as a "clunker." I don't blame him for wanting to keep it.
Secondly, we traded in a 1992 Lexus, purchased when it was 10 years old, that belched a little puff of white smoke every time you started it. The reason? The former owners didn't drive it enough, so a part that would otherwise have remained flexible, hardened and cracked. My husband felt guilty every time he drove it. We'd been offered (at a stoplight!!!) $2,000 for this car, and had received two other offers for it, but my husband didn't want this car to remain on the road, beautiful though it was.
We bought a 2010 Prius which averages 48 mpg. We are happy with our decision and the car. We paid cash because we'd been saving money for our next car, so no interest payments. It's a pretty basic model, with only some of the frills that are standard with Toyota products.
We are happy Asian car purchasers, knowing many of those cars are made here in the US by American workers. We once had a Nissan that we drove for 150,000 miles, and gave it to our daughter, whose family drove it another 100,000 miles.
This makes sense, Ladybug!
Husband and I have also thought about buying Daughter's Jeep back, and trading it in for a Honda Civic or other gas-sipper car. I could use something with better mileage when traveling to teaching gigs.
It may be a moot question soon, though -- I've heard that the 'Cash for Clunkers' money is nearly gone.
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