Wednesday, January 26, 2011

Car Prices

Yesterday our mechanic suggested looking into the cost of leasing a car instead of buying. His point was that --with used-car prices so high-- it might be cheaper to lease a new & reliable vehicle than to buy used. He said with a leased vehicle, you have no maintenance costs; maintenance is the responsibility of the dealer. He said that people often object to leasing because you have nothing to keep at the end of the lease period. But he said if we buy a 10- or 12-yr-old car with 100,000 or 150,000 miles on it, we won't have anything to keep after five years either. He has a point.

I looked at our old maintenance records. Given the cost of buying our used vehicles (whether we bought gently used or very very used) it appears that we've been spending somewhere in the vicinity of $2000 per year for each car. That's the cosst of the car plus the maintenance and repairs (but not gas, oil, insurance, etc). I don't know if that's low or high compared to other people, but it gives me a guideline when I'm looking at used cars. If it's a $2000 car, can I expect to get a year out of it without maintenance costs? If it's a $4800 car, is it reasonable to expect it to hold out faithfully for another 3 years? If it's a $12,000 car, is it realistic to expect it to last a minimum of 8 years without repairs besides the necessary tires and brakes and belt-changes?


  1. The thing that would scare me off of a lease is the mileage restrictions. You pay pretty high penalties for going over the mileage.

    Car reliability has been generally improving over the last decade, even among domestic cars. If you buy a 2-3 year old $12,000 car, I would expect that you could get 8 years essentially trouble free.... also, a car at that price point *may* have some remaining warranty or a certified-used-car warranty on it, which would "buy" you a little more time on w/ the car.

  2. You can thank the "Cash for Clunkers" program for your dilemma.