Mike from Rhode Island writes:
I have a ’99 Nissan Maxima purchased new with 124,000 miles which runs like new. I have had to recently replace the starter/battery and it has had several electrical issues in the past such as starter coils. Engine oil is changed at 5,000 miles with synthetic and book is used on all other fluid changes.
The total repair costs have been averaging app. $1,000 per year for at least 2-3 years now. Since major parts are original such as transmission, water pump/radiator, etc., I feel it is only a matter of time that a big item will require a major repair bill.
At what dollar price point is it reasonable to keep spending money on repairs for a 10 yr old car, per year? I am not mechanically handy.
Sajeev responds:
That sounds like a good car to me. As the owner of a 14-year-old car that recently needed a $1200 transmission, I’d keep it. But I drive a Lincoln Mark VIII that looks new(ish) to many people: a guard at the Houston Auto Show thought it was a concept car headed for the show’s loading dock. So, yes, I like the old hooptie.
Question is, does the Maxima push your buttons? If not, consider your wallet.
Rust issues notwithstanding, a well-maintained car on a well-engineered platform always beats a monthly payment on a comparable new car. Take the new Maxima: currently leasing for $299/month for 39 months with $2,999 down. Screw that: the down payment alone buys a low mile engine and transmission. Installed. With a 6-12 month warranty.
And forget about buying a different used car, as you will inherit other people’s problems. Problems that you worked hard to avoid with your vigilant maintenance schedule.
Keep it. There’s no need to be mechanically handy. In my experience, just learning from websites like Maxima.org and looking for a trustworthy, non-franchise mechanic (that runs a clean shop and won’t freak out if you provide him the parts) will get the job done. Plus, with the money saved over monthly payments, you can treat yourself to a flashy rental car when the Maxima goes into the shop.
No more words needed. Nicely said, Sajeev.
A grand a year is nothing, really. A new car would depreciate at several times that rate, and buying a new car requires most of us to pay a large chunk of sales tax and a higher registration fee to get into it.
I wouldn’t rebuild an engine or a tranny, though. That’s definitely past the point when you move from preservation mode onto Craigslist.
Sajeev ‘What’s His Face’ is spot on…
The annual costs of a used vehicle usually level out at right around $1000 to $1200 annually over the long-term.
Some years you’ll pay for nothing but routine maintenance. Other years you may have to pay for one or even two major repairs. However over the long-run the costs usually work out to the amounts mentioned.
A few quick notes…
1) You don’t need synthetic for that vehicle unless you’re planning on keeping it for another 20 years.
2) This may be the right time to replace the struts and perform some preventive cosmetic maintenance. Get some tint on the sides, take care of the minimal rust (if there is any), and get it waxed and detailed.
3) I strongly believe you’ll probably end up selling it in five to seven years anyhow when the economics of car ownership change due to lower gas demand in the domestic markets. I would just keep on driving it, performing the maintenance mentioned, until it hits 200k. Your depreciation should only be around $30 to $40 a month at this point.
The traditional rule of thumb is that it’s better to keep your car until the repairs start costing you more than monthly payments would…. just as Sajeev shows in his example.
My wife is driving a 1998 328i with roughly 55K miles on it. She has covered parking at work and the car is garaged at home. She’s only driving about 12 miles a day, and so the paint and the interior are immaculate.
I’ve had to put on new shocks and struts, new bushings, a radiator, a water pump, belts and hoses and replace a speaker after the cone split.
I’ve also done tires and brakes of course, and I’m religious about the oil, the brake fluid and the coolant.
I can afford the hit for those things when they appear so it’s way cheaper to keep the car than it would be to replace it. Fortunately, she loves it and everything works so it would be crazy to get rid of it. I wouldn’t get much for it and the equivalent would be way expensive.
However, this approach requires that you have the ability to put some money aside for the day that the expensive transmission failure, et al comes.
If you won’t be able to come up with $4K on the day the transmission fails, you may be better off with a car with a warranty. Sure it’s more expensive in the long run, but those expenses arrive on a predictable basis.
Its a fact that it costs most people no less than $3-4000 a year to own a car. Buy a new or late model car and you have a payment, loan interest, depreciation, and higher insurance and taxes. On an older car, you will have repairs and maybe the occasional need for a rental. Normal maintenance, gas an so forth applies to both.
Market value for your car is irrelevant. If it has been well cared for and is reliable (and if you like it), an occasional $3k repair to an older vahicle is to be expected. Although your car may be worth only $5000, it has to be worth at least $15 or 20K to you because this is what it would cost to replace it (at a minimum).
I say if you like it and it is sound, drive it. When you have structural issues, when it is no longer reliable, or you are just tired of it, then trade.
I think about the used car carrying costs I could afford with my new car payment all the time: $728.00. 2-3 months of new payments = 1 yr in an E39 M5. Thus, when I need more doors, I will probably “inherit someone elses nightmare” in the form of one of these fine machines.
Keep driving the Maxima! My last used car experience is what put me in a new car. Now look!
Lower demand for gas in domestic markets? Then what? I thought you guys were lined up for $4.00 a gallon gas, padded up with tax?
I might add a few items on top of this good advice.
Keep a cash kitty and make it part of your budget per month the same as a car payment. When the car needs some repairs or maintenance , its not a burden.
Review the Maxima forums for lifecycle of certain parts and have them repaired on spec , not when they fail on you. I see too many people irrationally get new cars because of the reoccurring failure of known End of Life items. This includes plastic impeller water pumps, cam belts, belt tensioners, batteries , radiators,fuel filter, fuel pumps, hoses. Be a bit pro active and you will probably not get any car failures. I agree also if the engine or tranny have major failure, time to walk away.
BTW – I am not following this advice and upgrading my own car due to boredom.
that car is definitely well within the keep-it range of costs. 124k is nothing these days.
exactly my feelings on the subject. I am feeling positively smug.
Owning a well maintained older car where you have to have some repair work is not a big deal. Well built machines even require maintenance and repairs – no matter who built them.
In this case…the car’s been owned from new and has been taken care of. If you still like the car keep it and maintain it and get it repaired by a competent mechanic. In the short and long run you’ll save money either way over buying new.
Now the only drawback of owning an older car is it’s propensity to break down maybe slightly elevated over a newer or new car (one that is well built). For every long trips you need to keep this in mind but if this is your primary commuter for shorter distances or around where you live then it’s not a big concern. Make sure you have good AAA or roadside assistance.
How about a slightly different question:
At the very low end of the used market (1200-2000), if you’ve got a car of uncertain maintenance history, when does it make sense to bail out when issues start cropping up? I suspect that it’s best just to keep it and keep it running for as little money as possible, but does anyone else think differently?
Nothing really to add. If you like the car, $1000 a year is no big deal. If you maintained the car, there is no reason you will need a new transmission. I don’t know where you live, but you might even be able to find a local mechanic that specializes in Nissans. There is a guy in the Detroit area that calls himself the Datsun Doctor.
Keep it. I’d much rather being paying the repair bills on something really cool like the Maxima than on my 1997 Ford Escort Wagon which only has 70,000 miles on it. It’s paid for and has been very reliable but its about as exciting as vanilla pudding. But it’s going to my wife in the divorce so what do I care. :P
From the mechanical repairs/maintenance/tires my personal pain point is $200/mo over 12 months. At the dusk of the useful life of a car my decisions are based on the toll taken by the Rust Belt winters on the undercarriage and the body parts that cannot be easily swapped out: rusted rear quarter panels – bad, rusted front fenders – count toward maintenance.
My daughter’s Civic is just getting worn in at 114K miles (I have a quote of only $400 to change the timing belt). A buddy of mine had a ’93 Civic and changed the oil every 3000 miles. The crankshaft finally gave out at 378K miles. Another acquaintance has a Civic with 250K miles and still going strong.
Honda builds a sweet engine.
Your best bet is a sub 5000 dollar car you do brakes tires and oil on.
I have a beater 94 Escort I bought for 3500 9 years ago and still drive today. I have spent about 1500 in repairs over the years and it still gets 41 on the highway. Can’t beat it.
ctoan:
At the very low end of the used market (1200-2000), if you’ve got a car of uncertain maintenance history, when does it make sense to bail out when issues start cropping up?
If you are buying a $1200 pos, then drive it, do as little as you have to, and in a year or year and a half, rinse and repeat.
For years I have lived in the top end of your spectrum, though my price point has been $2500-3000. Although they are getting harder to find (everything is going up) I have found several nice, older low mileage big Detroit sleds that are one-owner old person cars. Well maintained and genuinely nice cars. I usually get about 4 years of inexpensive and trouble-free driving out of these, keeping them up to “good car” standards. Cars are still fine after 4 years, but I always seem to find something nice around this interval, then sell the old one for $1500-1800.
I am 3 1/2 years into the 93 Crown Vic (bought at 63K, now 105k) from my mom, that my teenager is now driving. About 2 mo ago, I was looking for an old Town Car, but found a 96 Odyssey with 208K that is really nice. It broke my cardinal old cheap car rule (rear wheel drive only) but it is growing on me. The old 4 cyl Gen1 Odysseys appear to run 300K and more with good maintenance.
Life cycle costing makes sense. Average new vehicle life expectancy is around 8-years or 150,000-miles. Some well-built ones can go twice that providing a reasonable preventive maintenance schedule is followed.
Buying a car with a reputation for quality, reliability and durability that one can live with over the long haul, maintaining it properly, and driving it for a dozen years makes for very reasonable average annual costs. Excepting a couple of lemons I dumped immediately when the warranty expired, my experiences have been positive.
I have not been confronted with the prospect of replacing a motor or transmission. I doubt the steep expenditure would make financial or other sense in an older car.
The way I look at it is that my car gets newer all the time. I try to replace wear items before they fail and nip any problems in the bud before they get serious. Now I’ve got a whole new suspension, steering system, brake lines, bushings, cooling system, window motors, and soon a new intake/vacuum system. I’ve upgraded along the way as well. I know the approximate life of these components and now I know how to replace them, so my costs are becoming predictable.
Even if you get a new car, I would keep the Maxima. A second car can be extremely handy. And I see no reason why an engine or transmission failure should occurr, but even then it should only cost a few thousand to fix and then you’ll be able to get years more use out of it.
I think Sajeev makes some good points. I own a 2002 Highlander with 200Km on it and I just replaced the transmission. I went through the same thinking that youre going through and I decided to keep the Highlander rather than going for something new.
My reasoning is:
1) 4K for a new tranmission for a 8year old car with lots of miles is a minimal cost if spread over the reamining life of the car
2) Its too damn expensive to buy new
3) The vehicle is basically very high quality and a small amount of repairs shouldnt scare me
4) I figured with the new trannie I can reach at least 250Km to 300Km
5) This is the first and only repair todate – although I expect more to come along
As an owner of a 200K mile ’94 Plymouth Grand Voyager who just put $900 into wheels, muffler, tire rod, and a transmission flush among other necessities, thanks for making that dent in my wallet feel that much less painful.
A lot of good suggestions here, including the budgeting and preventative maintenance comments.
When cars get this old, you should also consider reviewing your insurance costs to determine whether it’s worth paying for all of the coverages. You need liability, of course, but if the retail book on the car is low and you tend to not be the cause of accidents, it might be worth reducing your coverage and putting the savings into your repair kitty. Of course, you need to be able to absorb the hit if the car is wrecked and you are on the hook for the replacement cost, so run the numbers first.
I’m in a similar position, driving an old VW with well over 150k on the odo. It’s definitely worth keeping the car, but I would recomend going one further than locating a clean no-hassle shop, I’d try to track down a dedicated enthusiast.
I’ve found on my car that a lot of the predicted high cost repairs (new turbo at 150k for instance) aren’t actually necessary, as there’s usually a $40 part hidden away somewhere that can be replaced instead (in the turbo’s case a solenoid). Good luck getting a mechanic shop to not recomend the full swap, especially when it’s in the manual as recomended. They aren’t even going to discover the alternative cheap fix. I certainly wouldn’t have if I didn’t know some seriously obsessed german car enthusiasts.
If you do suspension work as Steven Lang suggested then I’d highly recomend not going with stock parts. I spent a little bit more on Billsteins for my ride and the car was instantly transformed by the better judged damping (it went from penalty box to keeper). The warranties on these parts are fantastic, and some companies will revalve them if you want a different feel. I have no idea what the Maxima community is like though, and even less as to what the focus is in the aftermarket community.
I’d keep it too. If you can learn some basic maintenance skills, you’ll cut your costs down a lot if you’re willing to do the work on your own.
My almost 6 year old Jetta had its injection pump fail a couple weeks ago. I blame the friggin’ ULSD and my lack of adding my own additive at the pump. But anyway, it cost me about $1000 for a rebuilt pump and labor. It sucked, but stuff like that can come up unexpectedly. Every mechanical component has a lifespan, sometimes it’s not as long as you had hoped. If you want security/piece of mind, a new car might be good. But I’d rather try to stay on top of maintenance and just keep driving my paid for Jetta. The pump failure was equivalent to 3 months of payments when I was still paying VW credit for it. The new pump has a 12 month unlimited milage warranty and it should last another 100000 to 200000 miles with proper care, so I’m not worried about it going again. Instead I’ll just keep throwing money in savings and will be prepared for any other unexpected costs. I’d love to buy a 2010 Golf TDI when they come out, but I like having a car that’s paid for.
The car that has givem me most pleasure was a 1990 BMW 535. I bought it in 1999 and kept it four years. The experience was so good I went and bought a new BMW X5 with “the lot.”
It was the worst mistake of my car life. The X5 was fine and had no problems but the financial drain was always dulling my experience. I could never feel that the car was good enough to justify the cost.
I now own a 1999 Mercedes CLK320 and I love it. Regular maintenance and repairs but no lease or loan costs. All praise to the well kept good used car.
Now the only drawback of owning an older car is it’s propensity to break down maybe slightly elevated over a newer or new car (one that is well built). For every long trips you need to keep this in mind but if this is your primary commuter for shorter distances or around where you live then it’s not a big concern. Make sure you have good AAA or roadside assistance.
Or simply rent a car for long trips. Unlimited milage rental is a good deal if you’re driving thousands of miles. If a rental car breaks down, you get a new car to continue your trip. Avoids the stress of finding a competent mechanic in an unfamiliar area.
Dorian666 is right. A lot of people end up with a new car because they can’t take a $1000+ hit on the budget for a repair. So instead they saddle themselves with a $400 monthly payment. They can take advantage of zero down, or trade as down, deals.
This makes sense when you live paycheck to paycheck and have zero savings. Zero down and cash back rebates are designed to take advantage of people like this.
But in the long run it is financial suicide.
The best thing is to make a monthly car payment, lets say $250-$300, into a savings account earmarked for big ticket repairs and eventual replacement. Then you at least earn a token of interest versus paying high interest on a depreciating asset.
Take the new Maxima: currently leasing for $299/month for 39 months with $2,999 down. Screw that: the down payment alone buys a low mile engine and transmission. Installed. With a 6-12 month warranty.
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That’s a very poor comparison. Maxima has gone wild with pricing and not many people are buying Maximas any more.
For practical use, I would say a 2009 Sonata is a better car than a brand new 1999 Maxima. And that new Sonata only costs half of a new Maxima.
Seems obvious too me.
Another cost savings is to drop all but the liability insurance. The most you are going to collect from your insurance company is whatever they determine is the “value” of the car minus your deductible. If you have a value of $3000 and a deductible of $500, your maximum payout is $2500. To win that jackpot, you will have to pay hundreds of dollars every year and take a claim against your insurance record (higher future rates).
A friend of mine, after dutifully paying for full insurance for many years had her car hit-and-run while parked on the street. When she made a claim she realized she had $500 deductible and her car was only officially worth $2200. She had to scramble to find a repair place that would bill only $2000 so she could keep her car (otherwise, the insurance company would have “totaled” her car and she would get $1700 and lose her car). In hind sight, it was obvious that paying $300 per year in additional premium was not worth it when the maximum payout is $1700.
My 1999 Chrysler Voyager (3.3L V6) has been very unexpensive to run, with regular maintenance runs like a champ, after owning it for 2.5 years and 40,000 km. later only gas, oil, coolant, wiper blades, a new battery and the stupid fan relay has been needed. :)
i travel very long distances and the thought of a breakdown out on interstate 5 is enough to keep me trading in. i buy luxury CPO sedans at about 30k miles and trade them at close to 100k when the warranty is about to run out. Repairs on AMG and M cars are typically thousands, not hundreds. otherwise i agree with the bulk of the comments to keep the car, as long as it is driven locally and you like it. but hey, life is short and have you seen the new mazda 3 grand touring? Bi-xenon headlights with auto level and swivel, rain sensing wipers, seat memory with 3 settings, keyless start, bluetooth, sat radio, heated seats, the damn things is a mini luxury car that is a hoot to drive!
wsn : That’s a very poor comparison. Maxima has gone wild with pricing and not many people are buying Maximas any more. For practical use, I would say a 2009 Sonata is a better car than a brand new 1999 Maxima. And that new Sonata only costs half of a new Maxima.
Fair enough, but considering this person’s relative happiness with his Nissan and the almost universal love for the VQ V6, I’d take an Altima over a Sonata.
1. Altima V6 SE: $26.4k MSRP, and about $780 a month for 36 months with 1k down @ 6% APR.
2. Middle of the road Sonata GLS V6: $20k MSRP after rebate, and about $590 a month for 36 months with 1k down @ 6% APR.
Either way, that’s a lot more change than the replacement parts (new, reman or LKQ) for Mike’s current car.
4th Gen Maximas were awesome cars. I sold a 97 with 135000 miles on it that ran like new 2 years ago (after replacing about $400 worth of worn suspension parts). I still regret it.
If you don’t mind the odd repair every year or so, then there is no reason not to keep the Maxima. I wouldn’t expect the engine or transmission to die any time soon unless it’s been abused. You’d be hard pressed to find a better car even though it’s 10 years old.
In your shoes, I’d keep the car. I’ve owned two Maximas. The first was traded with around 190,000 miles on the clock–still running well. The second was killed in an accident with about 182,000 miles. Both were solid, reliable cars.
Ultimately it comes down to how much you like the car. I’m in your situation now. With a ’01 Windstar, 80,000 miles, and OCD levels of maintenance…that needs another transmission (#2 for this van). I won’t be fixing it. While the van’s been decent (transmission #1 failed on the previous owner), I don’t like the beast and can’t imagine putting another $2k into it.
Sell it and get a GT-R.
Don’t even think about it:
a)You bought the car new: you know its complete history.
b)You say it runs like new.
c)124 000 miles? It’s barely broken in! (Especially if you maintained it in the least properly)
d)The body and interior are keeping up nicely (I assume – a few touch-ups or body repairs are not that expensive)
If you like it, it’s an absolute no-brainer: Keep it!
1000-2000$ a year in repairs? It’s nothing! A new car could cost you more in insurance alone.
i skipped the whole thing by buying a $2,000 ’88 toyota mr2 with 150,000 miles when i bought it.
at 20+ years old a lot of stuff breaks, however the great thing about a 20+ year old car (that is not really a collecters item) is that parts are cheap; i can get a 5 speed manual tranny for $400. even so called ‘big ticket items’ are not much; need a new engine? well the same engine came in the corolla for a number of years so i can get a full long block with ecu and everything needed for around $600. it does need a fair amount of repairs but everything is cheap. i’ve put 20k miles on it now and it has never even once left me stranded, it starts the first time every time. i do a lot of the work however so getting cheap parts and installing them my self saves a lot of money. sure, there are a lot of squeeks and suchs that you have to get over, but such is life.
then again i’ve upgraded every part that has to do with the suspension/brakes/wheels/tires with new aftermarket performance parts. $2,000 car + $3k in upgrades that were not needed at the time but improved the car, so for $5k i have a car that gets 30mpg, it’s more fun to drive then anything i’ve had the plesure of driving, sure it’s not that fast in a straight line, but it’s almost dead even with my 2000 civic dx, it atleast has pep. oh yea and with a g-meter i pulled 1.23g’s so i can mess with ‘vette ZR-1’s…downhill and weekend auto-x. it’s been nothing but an amazing car…unless you want to haul anything at all.
there are lots of 20 year old civics and corollas that altho nothing amazing, are easy to work on, parts for them are everywhere and cheap, they get just as good if not better gas milage then a lot of new cars and can be bought for very cheap and it does not depreciate, i bought it for $2k two years ago and right now the market value for my car, even with 20k more miles then i bought it is almost exactly the same at $2,000.
“At what dollar price point is it reasonable to keep spending money on repairs for a 10 yr old car, per year? I am not mechanically handy.”
I agree with what some others said that once you are spending as much a month on it as a car note, it’s time for it to go.
I had a 1997 T-100, fantantic truck, ran it to 275K miles, but finally started getting nervous that something major was going to go on it and Toyota parts are not cheap, so I cut it loose.
Currently I have two GM B-bodies, a Caprice and a Roadmaster, for which the parts are ridiculously cheap for and since I am somewhat mechanically inclined, I plan on keeping them around for awhile. I will say age starts to play a significant factor for a daily driver. I’ve noticed the last few months replacing a lot of “age” relevant items on my 125k mile 1992 Caprice, radiator, gaskets, etc, and the Houston sun is working over the interior, but I also can’t replace it with another one. So far this year it has been running me about $100 dollar a month in repairs on “little stuff”. But liability only for it runs about $20 bucks a month, and I don’t have to sweat about the bank coming to get it if I lose my job in this economy.
Also, instead of having two new(er) cars in my driveway with notes owed on them, this allows me to have four used cars in the driveway that are all paid for instead. And if the aforementioned job ever goes south, I have my own “bailouts” sitting in the driveway waiting to go on Craigslist if worse comes to worse.
I have friends who all drive new cars all the time and tire of the notes and want to get a cash car. But I always advise them if you are going to own a cash car, expect it to be in the shop a couple of times a year and plan accordingly.
There are also those souls who do not know how a screwdriver works, and have no interest in learning. For those, I advise a trip to your favorite new car dealer and ask about their extended warranty.