It used to be that once a car hit 100,000 miles, it was destined for the junkyard. These days, 100,000 miles is merely the halfway point for a lot of vehicles. That's because many of the cars that rolled off the assembly lines in the past 10 years were designed to last much longer than their predecessors.
For independent mechanic Keith Exsterstein, it's not uncommon to see cars with xxx,xxx, xxx,x00 or even 200,000 miles come into his shop, Keith's Auto Repair, just outside of New Orleans.
"The cars nowadays are built better in terms of reliability," he says.
Even economy brands such as Hyundai and Kia have stepped up and are staying in the game past the 100,000-mile mark, formerly a death sentence for those models of cars, he says.
It all …show more content…
"You can see your ad valorem double or triple when you buy that new car," Nicol says.
Depreciation takes bite out of new car’s value
Depreciation is one of the biggest expenses of owning a car. On average, a car loses 15 percent to 25 percent of its value each year for the first five years, according to Edmunds.com.
"When you step into a new car, it's almost like you buy new depreciation," Reed says.
Making pricey modifications to your car doesn't help, either. Options depreciate very quickly, so that $2,000 navigation system you bought four or five years ago when the car was brand-new is not adding any value to the vehicle, Reed says.
"It's a depreciating asset. So, the less money you put into it, the better," Reed says. A better idea is to put that money into real estate or some other asset that will gain value.
The good news is that once a car is 5 to 7 years old, it's lost most of the value it's going to lose. So, as long as you're getting reliable transportation out of it, it's a good idea to keep that car for as long you can, Reed says. "Cars will always be worth something if they …show more content…
Japanese-branded sedans and compact cars tend to be more reliable and are generally the least expensive to fix, Exsterstein says. "If it's a (Honda) Civic or (Toyota) Corolla with 100,000 miles or so, I'd say keep it. But if it's a Dodge Neon, I'd say get rid of it because it's going to cost a lot more to fix when it breaks down," he says.
You might lock yourself out of a mortgage
If you're planning to buy a new house or refinance the one you have, adding a car loan to your debt load could wreak havoc on your borrowing abilities.
"Jumping to get that tempting car loan could price you out of the house you want to buy or the interest rate you want to get on a refinance," Nicol says.
Interest rates on a mortgage or refinance are based not only on your credit score, but also on your debt obligations. Lenders these days also tend to be more conservative. So if you've just taken out a car loan, the bank might not be too keen on giving you an even bigger loan, that is, a mortgage.
With interest rates at historic lows, Nicol advises making the most of these rates with a house first and putting the car on hold. "Even if you don't get the awesome car deals that are out there, it's still a much smaller purchase than a house," she
For independent mechanic Keith Exsterstein, it's not uncommon to see cars with xxx,xxx, xxx,x00 or even 200,000 miles come into his shop, Keith's Auto Repair, just outside of New Orleans.
"The cars nowadays are built better in terms of reliability," he says.
Even economy brands such as Hyundai and Kia have stepped up and are staying in the game past the 100,000-mile mark, formerly a death sentence for those models of cars, he says.
It all …show more content…
"You can see your ad valorem double or triple when you buy that new car," Nicol says.
Depreciation takes bite out of new car’s value
Depreciation is one of the biggest expenses of owning a car. On average, a car loses 15 percent to 25 percent of its value each year for the first five years, according to Edmunds.com.
"When you step into a new car, it's almost like you buy new depreciation," Reed says.
Making pricey modifications to your car doesn't help, either. Options depreciate very quickly, so that $2,000 navigation system you bought four or five years ago when the car was brand-new is not adding any value to the vehicle, Reed says.
"It's a depreciating asset. So, the less money you put into it, the better," Reed says. A better idea is to put that money into real estate or some other asset that will gain value.
The good news is that once a car is 5 to 7 years old, it's lost most of the value it's going to lose. So, as long as you're getting reliable transportation out of it, it's a good idea to keep that car for as long you can, Reed says. "Cars will always be worth something if they …show more content…
Japanese-branded sedans and compact cars tend to be more reliable and are generally the least expensive to fix, Exsterstein says. "If it's a (Honda) Civic or (Toyota) Corolla with 100,000 miles or so, I'd say keep it. But if it's a Dodge Neon, I'd say get rid of it because it's going to cost a lot more to fix when it breaks down," he says.
You might lock yourself out of a mortgage
If you're planning to buy a new house or refinance the one you have, adding a car loan to your debt load could wreak havoc on your borrowing abilities.
"Jumping to get that tempting car loan could price you out of the house you want to buy or the interest rate you want to get on a refinance," Nicol says.
Interest rates on a mortgage or refinance are based not only on your credit score, but also on your debt obligations. Lenders these days also tend to be more conservative. So if you've just taken out a car loan, the bank might not be too keen on giving you an even bigger loan, that is, a mortgage.
With interest rates at historic lows, Nicol advises making the most of these rates with a house first and putting the car on hold. "Even if you don't get the awesome car deals that are out there, it's still a much smaller purchase than a house," she