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?