Tuesday, October 20, 2009

Old Cars vs. New Cars

As long-time readers of Militant Ginger might have realized, I have an allergy to modern automobiles (with some notable exceptions.)

While the style and character of older cars is inarguable, the practicalities of driving vintage (and in my case, not-so-vintage) vehicles is debatable. They're not as reliable, they often cost more to run and definitely cost more to maintain. But how much more?

I'd always lived by the assumption that my classic car saved me money. Running a clunker meant no monthly payments to make, cheaper insurance and no big outlay when you bought the thing. But how does that pan out in reality?

Well, for the first time ever I challenged my assumption and ran a comparison between my wife's fairly new Toyota Rav4 and 'The Locomotive' - my '89 Town Car.

You won't be surprised to learn that I was right - I do save money driving a 'clunker' - but not nearly as much as you might imagine. In fact, over five years, the cost of driving my classic is only a couple of thousand dollars short of what my wife pays.

It makes for astonishing maths. I've broken it down here - obviously, rounding up some of the figures and balancing others out (the Rav4 doesn't do the mileage The Locomotive does, for instance, so I did a miles-per-gallon comparison based on my commute.)

The assumption is that the sticker price on a 'new' car is ten times higher than that of a classic - meaning you're out of pocket from the very beginning. In fact, it doesn't mean that you lose out - especially since a newer car runs leaner, cleaner and more reliably than a clunker.

I'll clarify a few things from my chart. 'Monthly costs' includes maintenance bills spread out over the year, along with any car payments - for example, The Locomotive's two visits to the shop totaled $1,950 - a monthly cost of $163 - while the combined maintenance costs of the Rav4, plus the monthly hire-purchase payments, came to $250.

At the end of the day, I do come away almost $500 richer a year thanks to driving my Lincoln instead of the Rav4 - even taking into consideration the fact that it's thirstier and less reliable. And while I'm very happy with a 'monkey' in my pocket each year - that's still not nearly what I expected to be saving - especially given the fact that my car's paid for outright.

In fact, if we'd walked into the Toyota dealership and bought that car outright, instead of on hire-purchase, it would have ended up costing us less money than my Lincoln after five years. We'd have been saving $165 a year.

Mind you, when I'm in the financial situation to walk into a dealership and buy a nearly-new car in cash, perhaps I won't feel the need to quibble over a few hundred dollars - in which case, I'd still pick classic style over Japanese reliability any day of the week.


paisley penguin said...

Very interesting. Since I have been with the hubs he has always had his cars that were paid for but needed maintenance. Mine have always been newer and I have been making payments. I did have a paid off Jeep for two years.

Now I am considering paying off my car, savings money for a down on a Mini and then double or tripling the payments to get it paid off.

Meghan said...

As I get older, I learn that things don't get old, they get 'classic'. That goes for cars too.

Suki said...

Hehe, my uncle had/has a car that was 40 years old. He'd paid over three times its cost in maintenance, and had to nurse the thing all over the place. Now THAT is old, beyond classic!
After five(ten?) years of being persuaded to get a new car, he got a year-old Maruti Alto(tiny 4-seater). They're saving potloads :P

To go off on a tangent, there is one thing I completely fail to understand.

Why does one person need an SUV or Landrover? What's wrong with the 4-seater tiny fuel-savers that are all over the streets in India?

Roland Hulme said...

Ha! we called them 'Chelsea tractors' because it's only really rich people in the Chelsea district of London who could afford to own them. The closest they got to the countryside was driving past Hyde Park.

We had a Land Rover growing up - but we lived on a farm, so that was acceptable.

You're not wrong, Suki - but I'll admit we got rid of our 'small' car (a Suburu) because it was so damn scary driving on the American roads in a car that was half the size of the SUVs and trucks.

Patricia Moller said...

I like the old cars better. They are made out of metal. Nowadays, cars are lighter but they are more economic in nature. Check out this vintage used lincoln mkx.