The Cost Of Keeping Cars Grows More Visible As Time Goes On

BMW Hood

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:

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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

9 thoughts on “The Cost Of Keeping Cars Grows More Visible As Time Goes On

  1. Maintenance and repair costs go up. True for cars we drive. True for houses we live in. True for our bodies. It’s a fact of life. Decades ago, I decided that for me cars were transportation vehicles not objects of pleasure. Therefore, reliability and low-cost low-maintenance became primary decision drivers. Having owned many brands — American, English, Swedish, German, and Asian — Honda emerged as my go-to winner. Nobody notices my car as I drive by, but I could care less. It takes a licking and keeps on ticking. Color me happy.

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    • Good thoughts, John. We have had great luck with Honda’s & Toyota’s over the years. We’ve had 6 in total. You can’t beat the quality or reliability. My wife’s Mercedes also had very strong reliability scores when we bought it. Unfortunately, the repairs we are seeing now don’t make sense for a vehicle with just 35K miles.

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  2. I bought a Mercedes E500 brand new. Never again, just not worth the maintenance cost. I didn’t have the car for two weeks before the main control board went out. It was not a readily available part and so the car spent the better part of the next 5 months in the shop waiting for availability – it wasn’t driveable.

    I have to say all the accessories seem so cheaply made to me. The door knobs all broke, the birds eye maple steering wheel cracked in 5 places, the latch on the emergency call button cover broke (never used), the over-engineered cup holder has broken numerous times, the latches on the glove compartment all broke (flimsy material, but over $100 each), exterior trim discolors after a few years, lots of rattling and squeaks. I’ve also had big problems with the transmission, motor mount, shock absorbers, etc. However, I’ve found the paint quality to be superior, it’s held up very well and the car is still shiny after 13 years. The listed problems started occurring 4-5 years into ownership.

    Never had these types of problems with Hondas or Toyotas.

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    • Wow. That is quite a string of bad quality issues! I grew up with the perception that Mercedes were very well-built cars Dash sounds like neither of us are having that experience. You certainly can’t be Japanese for reliability.

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  3. Hubs and I have been having this same conversation, especially as cars have changed, and he is less able to do any of the mechanical work himself! (Wasn’t even able to change a light bulb in our Cadillac, because it involved unhooking some computerized doohickey in the bumper!) We have generally paid cash for our vehicles, and then “drive ’em till they puke!” But now we’re starting to consider leasing, as we could have made more money keeping our own money invested well, and letting someone else worry about the repairs!

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    • I’ve always steered clear of leases, but I hear you on the difficulty to repair newer vehicles. The ‘lane assist’ light on my wife’s car – a light that signals when someone is in your blind spot – cost $900 to fix a sensor that required the dealer to disassemble the whole back end!

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  4. I’ve had my trusty little Saturn wagon for 19 years and it’s still going strong. It is time for a new car, problem is that I just want my next car to be as good as my Saturn and I don’t think anyone makes cars as well anymore. Most people I’ve surveyed seem to like Honda. I have my eye on Subaru and the Outback is the closest to my Saturn in size and shape, but I’ve heard they have front end problems that involve costly repairs. Ugh, I might just start leasing. It would be nice if I could lease a winter car and then switch over to a summer car in the spring :). Leasing is just so rigid. Then again, I could just go without a car and bike, walk and bus, loose 10-15 lbs. and be healthier — that seems hard though. It’s really a dilemma to buy a car in a throw-away culture, they want $30-35,000 for whaaaat? takata air bags, cheap tires, etc., etc?

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    • We’ve had great luck with Honda’s and Toyota’s. I think their quality ratings are as high as they have (and better than Saturn was). Don’t know anything about Suburu. Bike, walk & bus sounds nice until winter comes. ❄️❄️❄️

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  5. Pingback: Financial Analysis: How Many Years Of Work Would A Luxury Vehicle Cost You? | Mr.FireStation

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