BETHESDA, Md — You’ve just made your last car payment. Should you keep the car or trade it in for a brand new vehicle? According to the Car Care Council, keeping your car rather than buying a new one is the way to go, especially if your goal is to save money.
“People who keep their cars, treat them as valuable investments and commit to regular vehicle maintenance, end up saving a lot of money,” said Rich White, executive director, Car Care Council.
The most common maintenance procedures and repairs to keep your car operating safely and reliably while maintaining its long-term value involve checking the oil, filters and fluids, the belts and hoses, brakes, tires and air conditioning. The council also recommends an annual tune-up and wheel alignment.
Over a four-year period, the difference in the savings between keeping a car and buying a new one is $10,894, according to Runzheimer International.
The cost comparison identified the expenses of keeping a 2003 6-cylinder, 4-door sedan that gets 21 miles per gallon (mpg) and costs $19,727, versus buying a new 6-cylinder, 4-door sedan with 23.5 mpg that costs $23,451 and had a down payment of $10,158, the trade-in value of the older car.
At the end of four years, expenses on the used vehicle, including fuel, license, registration, taxes, insurance, maintenance and tires, were $16,548. A resale value of $3,759 puts the total four-year cost at $12,789.
On the new car, expenses including the car payment, interest on the car loan, fuel, license, registration, taxes, insurance, maintenance and tires, totaled $32,258. A resale value of $8,575 puts the total four-year expense of the new car at $23,683.
“We advise our clients that if they want to see an increase on their investments every year they need to cut down on their expenses,” said Terry Mulcahy, vice president of investments for R.W. Baird in Mequon, Wis. “A new automobile is for most people their second biggest investment next to a home, so a great way to save money and increase financial assets is to hang onto their current vehicle rather than buy a new one every few years.”
The Car Care Council is the source of information for the “Be Car Care Aware” consumer education campaign promoting the benefits of regular vehicle care, maintenance and repair to consumers. For a copy of the council’s consumer-friendly Car Care Guide or for more information, visit www.carcare.org.
