We have had a BAD run of luck when it comes to car repairs this year. In the last 90 days, we have tallied close to $5,250 on our highly-engineered, but aging SUV and Sedan. They are nice models – a 2011 BMW X5 and a 2012 Mercedes 300C – but now that they have celebrated their 6th and 5th birthdays, they are heading to the repair shop a lot.
We stopped taking them to the dealer a few years ago. Once they run out of warranty, we’ve found we can save about a third on maintenance & repairs by taking them to our trusted local garage. Still, we paid $900 for a lane-assist sensor on my wife’s car, $2,000 for a new parking brake control on mine, $1,100 for an alternator on hers, $600 for a new battery on mine, and a $500 deductible for two dings on the SUV (from a softball and a rock).
As you can see, the repairs are really starting to add up – and making me wonder if we are past the point at which owning them makes sense. Maybe we should just get new vehicles and get out of this mess?!
To analyze the situation, I looked at the Edmunds ‘True Cost To Own’ calculator and ran a time-series on my SUV. Cars have been my guilty pleasure, so it is good to put some numbers to our situation. To do so, I grouped the costs into three buckets: depreciation & taxes, maintenance & repairs, and insurance. Then, I aggregated them into three time-frames: The first 2 years (when depreciation is really high), the next 4 years, and years 7-10. Like a lot of readers have reported, we usually buy cars that are 2 years old, so these splits make sense for us:
No surprise, you can see why I am heading to the repair shop a lot right now. Years 5 & 6 are prime-time for car repairs and it will only go up from here. Insurance is still relatively high, but that will drop as time goes on.
The total cost per year continues to go down as depreciation goes away. The total cost to own (not including fuel) drops from $15K/year in the initial period, to $11K in years 3-6, to just $8K in the final years of this 10 year range. That’s what you would expect to see and you could trend the numbers out beyond 10 years with some basic assumptions.
One unfortunate thing I see about the economics of car ownership is that the depreciation – while the most significant part of the overall equation – is committed to upfront. Maintenance & repairs are with you for the life of the vehicle. Like a lot of things, you don’t think of how much you are losing everyday on depreciation the way you do when you have to fork over money to the mechanic every few months.
While maintenance & repairs are ongoing, happen unexpectedly, and usually under the worst of circumstances, depreciation was spent years ago – when you wrote that big check on the happy day you brought the vehicle home. I know the later years are the better place to be financially, but it certainly doesn’t feel like it!
How does this pattern of ownership costs compare with your experience?
Image Credit: Pixabay