The New Math of Driving Your
Car
Till the Wheels Fall Off
Liz Nickles of New York City says today’s car prices strengthen the case for sticking with her 2004 Cadillac DeVille.
Michael Bucher / ©2024 THE WALL STREET JOURNAL
By Joe Pisker, THE WALL STREET JOURNAL, May 2, 2024
Jeremy Morris is used to friends making fun of the Toyota Tacoma he has driven for 24 years. He still insists it was one of the best money decisions of his life.
The 45-year-old financial adviser in Coeur d’Alene, Idaho, estimates he saved more than $100,000 by never replacing the pickup. His ballpark figure factors in what he would have spent on a new car every five years, minus the roughly $20,000 he paid for repairs and upkeep over 300,000 miles.
There have always been people who relish driving cars till the wheels fall off, but the case for this frugal personal-finance move has grown stronger as the costs of car ownership have ballooned.
The average transaction price on a new vehicle was $46,660 in March, compared with $39,950 three years earlier, according to Edmunds, an online car-shopping guide. Repair and maintenance costs are up 8.2% year-over-year, and insurance costs are up 22.2%, Labor Department data show.
Jeremy Morris estimates he has saved more than $100,000 by sticking with his 2000 Toyota Tacoma.
The increase in car costs is one of the many developments that have led to higher inflation. The Federal Reserve, which is wrapping up a two-day policy meeting Wednesday, has attempted to address stubborn inflation by raising interest rates. That has also made auto loans more expensive.
Liz Nickles said her 2004 Cadillac still
drives well and feels sturdy.
‘A giant vanilla ice-cream bar on wheels’
Liz Nickles is proudly bringing up the nation’s average vehicle age with her white 2004 Cadillac DeVille nicknamed “The Pearl.”
“It’s like driving a giant vanilla ice-cream bar on wheels through New York City,” said Nickles, a baby boomer who is a writer and marketer. “It’s smooth. It glides.”
Seeing today’s car prices makes her cling more tightly to The Pearl. Finances aside, Nickles says the sedan feels sturdy and practically indestructible.
“The wheels are never going to fall off of that thing,” she said. “My wheels are falling off before its wheels, that’s for sure.”
PHOTO: MICHAEL BUCHER/THE WALL STREET JOURNAL
To cope, many owners are squeezing more life out of their current ride. U.S. vehicles’ average age hit a record 12.5 years in 2023, increasing for the sixth straight year, according to S&P Global Mobility.
Higher auto prices, in combination with longer vehicle lifespans and new technology, are changing the math on the optimal amount of time to keep a car. For Morris, the peeling black paint on his truck only makes him fonder of it.
“My long-term plan with the truck is never getting rid of it,” he said.
Your mileage may vary
The economics of long-term car ownership work better with some makes than others. Lexus and Toyota were the two with the fewest problems reported by owners in the first three years after buying them new, according to the latest dependability study by research firm J.D. Power.
Electric vehicles had some of the highest rates of problems reported in the study, in part because of their batteries and that they tend to come with more technology built in.
Low inventories and high prices in recent years have further complicated the math on car purchases, leading some drivers to rethink the inflection point at which it no longer makes sense to hold on to a vehicle.
Steven and Kristen Newton of Silver Spring, Md., once replaced their cars roughly every eight years.
When Kristen’s 2017 Ford Escape needed a new transmission last year, that normally would have been the couple’s cue to sell. But buying a comparable car was so expensive that they decided to put $6,500 into fixing theirs up.
“I’m so glad not to have a car payment right now, especially not an $800 car payment,” said Steven Newton, a 56-year-old federal contractor.
Newton added that their time owning the Ford might only be halfway over.
Owners typically consider unloading their vehicle when they learn of a repair that will cost 10% or more of what they would pay for a new one, said Drury of Edmunds. He cautions that people tend to underrate the value of paying for a major fix.
©2024 THE WALL STREET JOURNAL
© 2024, Liz Nickles & Associates, Inc.