Some people think you should always buy new. Others think you should always buy used. Some would never pay to rebuild an engine on a car that is more than 10 years old. Others pay to rebuild engines on cars that are 25 or 30 years old.
Our society’s Kantian ethics tends to fall apart on certain subjects, and car ownership is one of them. It is difficult to behave in such a way as to believe everyone should behave the same. I prefer used cars, but if nobody bought new cars, eventually there wouldn’t be any used cars. That’s just pure ecology and entropy.
What I find misleading is when people talk about whether the cost of keeping a car running is worth the car’s resale value. Cars, and most vehicles, simply do not appreciate in value. In very rare circumstances, certain classic or collector cars may appreciate in value nominally, but this is usually due to their rarity and desirability, not anything inherently related to the vehicle as a mechanism. But at the same time, nobody really wants to put $5,000 into a car worth $300. When does one draw the line?
I was recently introduced to the concept of the Weibull Curve. It’s a fancy statistical, higher-level mathematically thingy, but it was described simply in a blog as a curve that attempts to predict the reliability of a system. A certain percentage of new mechanisms will fail early, but those that make it past that particular probability are statistically likely to continue working up until a certain point, after which the need for repairs becomes prohibitive. If only I had more of a mathematical/engineering background, I’d find it pretty fascinating to study, but I think it has some great qualitative value, too, as we all intuitively see this around us. It’s impressive when someone restores a car from the 1930s because of the sheer knowledge, effort, time, and money required to do so. There’s a whole world of forgotten technology out there that isn’t operated because the overall cost to restore it exceeds the gumption of people to make that happen. It is very much at the tail end of the Weibull Curve.
When a car gets really, really old, weird stuff starts going wrong. Whereas a good garage mechanic can change quite a few common wear items, how do you repair rust that has eaten through your subframe? Quite frankly, you don’t.
So a car’s end-of-life has an impact on whether more money should be spent keeping it alive. It does matter. But it’s extremely difficult to assess exactly how much life a car still has in it. Rebuilding both the engine and transmission might cost you $8,000, but you might get another 10 or 15 years out of it that way. A new car can easily cost you 4 or 5 times that much, not counting any interest you pay taking out a loan. If you buy the wrong new car, it could get 5 years in and still require a transmission rebuild! This was actually pretty common with the early CVTs (which I otherwise know nothing about).
See, in my opinion, if an engine or transmission was built so well that it lasted 20 years, rebuilding it pretty much guarantees it will keep going for a really long time. A rebuilt, shitty transmission that died within 5 years is likely to die in another 5 years. (Technically, you’re better off assessing how many miles it drove, as opposed to how many years it lasted, but the concept is similar)
And this is where the “value” of a car gets tricky. Just because an older vehicle is expensive to keep running doesn’t mean that buying a new car makes you better off. There are too many trade-offs to really know. My fear is that I would someday buy a nice 10-year-old car, only to have it experience all the problems that a 15- or 20-year-old car has, but that difference in price could have allowed me to rebuild the engine in the meantime, and I’d basically never have to wonder if/when the engine is going to blow. (Although…this depends on the quality of the rebuild, too)
Now, these things do affect resale value, and I think that’s what most people are thinking of. Personally, I hate reselling anything. Perhaps that’s just an introvert thing. But I’m also not sure reselling vehicles really accomplishes much, because you are almost always losing money anyway. Storing value in a car doesn’t make very much sense. A car is there to get you from point A to point B, and maybe a little fun and adventure every now and then. It’s not something that holds value well, so I don’t know why people pay so much attention to this. Every now and then somebody takes really great care of their car, and they think they can sell it for several thousand dollars above the going rates for it. I’m sorry, but nobody cares. It doesn’t matter how much you put into it, nobody really wants to pay you thousands of dollars over blue book value for a vehicle.
Now, a lot of people understand this, so if their car is only worth $1,000 but it requires $1,500 to fix, they get rid of it. The problem is, they go out and buy something else for $5,000 or $10,000 based on this principle alone, or they just buy new, which is usually around $25,000 at the low end. Pray tell, how did you save money? But then again, if the cost were $5,000 to repair, you actually might be saving money if you just buy another car that is $5,000! it is difficult to know, and either way, it helps to know what else could be wrong on your car.
What I don’t like is the idea of hopping from one used car to another. For me it’s a reliability issue. When you’ve put time or money into one used car, it’s nice to know that those problems are fixed. Now, this isn’t always true, as some replacement parts are just awful quality, but that’s also why I prefer to put OEM parts in my car most of the time, as they are frequently (but not always) of much better quality. When you jump to yet another used car, do you know what you’re in for? Are you prepared to pay once again for some of those same repairs in the next few years?
And what I don’t like about new cars is that they lose several thousand dollars being driven off the lot, and some estimates state they lose 15-20% of their value every year. Somebody doesn’t want to pay $4,000 for a rebuilt transmission, so they go out and spend $30,000 on a new vehicle! I’m really not convinced you’re saving money. That doesn’t mean you should never buy a new car, I’m just not sure paying 7.5x the cost of the repair is worth it (at least from a financial perspective).
You can tweak this cycle by doing the work yourself. It drastically increases how long the car is “worth it” because you are cutting out the cost of labor. Of course, you’re paying it with your time, so there’s that to consider, but still. My old roommate’s transmission went bad, but because he was a mechanic, he just went to the junkyard, pulled one that was compatible with his car, and changed it himself. Probably cost around $100. It wasn’t new or anything like that, but it worked. Granted, it was also a small car, and the transmission was light enough he could carry it himself, but still pretty impressive. If you can do that, a world of opportunity opens up to you in terms of vehicle life, at this applies even if you aren’t doing something as complex as changing the transmission.
I’m still determined that learning about cars is worth it. In fact, of everything you can do to your car, the absolute highest ROI is just understanding how it works. The problem is, there’s only so much you can learn from a Chilton’s manual, not to discount the venerable Chilton’s manual. My understanding of parts and systems has always been augmented by working on them. And, frankly, making mistakes, too, and those have real-world consequences. But the greatest ROI is understanding the vehicle, the next is doing basic stuff like filter changes, oil changes, maintenance items. Next tie rods, a few engine components. Then suspension, specific systems, etc, etc, you get the idea. The more complex, the less likely the issue, the lower the ROI. Remember, expertise comes at the price of time, and it takes increasingly more time to build expertise. So the highest ROI is at the low end, honestly. Unless you just enjoy the process.
And here’s the thing: I don’t actually enjoy working on my car. What I enjoy is learning about it and making it good again. There is nothing about putting my car up on jack stands that is enjoyable. I don’t like the process, I like the product. Learning opens my mind to what the product could be. “Hey, if I learn how to do this, then I can change that and never have to worry about it again!” And this of course goes back to being an INTJ – oh, the possibilities!
These are very incomplete thoughts, so I’ll be writing another part to this.