Better to keep older paid-off car, or newer car to save on expenses?

My spouse and I are working on minimizing expenses. We have 4 cars: one 10-year old paid-off Optima, and three newer (2018-ish) cars totaling about $60K left to pay off between them (about $1500/mo car pymts). We pay about $85 on insurance for the Optima; and about $600/mo insurance for the newer three. One way of determining which to sell was based on car safety, with the assumption of a newer car being safer, though there are no known safety issues we've experienced with the older car (it's been maintained well). Then the other way of determining was based purely on which would save us more monthly expense to sell - one of the newer cars. Selling the older car would seem to save us $85/mo in expenses, while selling one of the newer cars and keeping the old would seem to save us at least $600.

Is the determination as straight forward as choosing to let go of the higher costing item, is perceived safety of a newer one more important, or is there another perspective we should be looking from to determine?

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  • I would also factor in how many miles are on the Optima, and how much it is going to cost in maintenance. It's $85 in insurance.... but what about other maintenance costs associated with an older vehicle? That should be a part of the equation as well.
    You also don't specify what the gas mileage is on any of the vehicles - are the newer ones higher or lower mileage than the Optima?

    And finally, if you think about the scenario of selling any one of the vehicles, which option gives you the most peace of mind. I generally spend some time imagining what it would be like if I sold something (or bought something, works the same way) and how it will affect me emotionally and mentally. If keeping the Optima makes you worry about managing the car's repair needs, then that's an added layer of stress. If something big happens to it (like a transmission issue) then it could easily cost $1200+ to fix, which is 2 months of owning the newer car (minus gas expenses, etc). So emotionally, which option feels the best to you. It might sound crazy, but if you don't factor that in you could end up making  the decision that makes the most sense on paper, but may cause you the most stress, which isn't helpful in the long run either.

    (I purchased my new(er) explorer when on paper I couldn't really afford the payments. But the reduced stress of having a fully working reliable vehicle gave me SO much peace of mind, I was HAPPY to pay the payments on it. And while there was about a year +/- of struggle to actually make the payment and not back slide into debt elsewhere, things have totally leveled out and I'm making extra payments on it to pay it off a full year (hopefully even more!) before the loan was actually up. So logic isn't always the best answer when it comes to things that have a big impact in your life)

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    • farfromtheusual Thank you very much for sharing this viewpoint - really appreciate it.

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  • I would ask myself which one has the better longevity track record. They are all safe these days so unless you have some reason to have the latest safety whatever it wouldn't be my biggest concern.
    600 is a lot. I would look carefully at how long that older one would last and then maybe have a car replacement fund ready to pay cash. If it has 5 years left and you could set aside 400/month you would have 24,000 for an electric/hybrid car which should be common by then.

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    • Black cat Thank you for introducing this thought - very helpful.

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  • How many drivers do you have? Are any of them flexible should a car break down? In my house, we have one newish car, and 3 older cars for four drivers. There are enough cars and flexibility that even though one of the cars is pretty unreliable, that driver has options should their car break down. If I had 2 drivers who really weren't flexible if a car broke down, I'd lean more towards newer cars for them.

    Like 3
    • Marisa Great question - I neglected to share: there’s the two of us spouses, each with one car; then 2 daughters in their mid-20s sharing one. We all drive the 3 newer cars; then there’s the 4th older car that we can do something with or not.

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      • nolesrule
      • Stealing From the Future fix is an improvement but is incomplete....
      • nolesrule
      • 3 mths ago
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      Cadet Blue Router would it be possible for the daughters to take on full responsibility for the car they are using?

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    • nolesrule That would certainly be the go-to goal. At this time, we have a family business that the girls operate daily. They work a lot of hours, and get paid by what we set from the business. We’re working toward more profitability and increased incomes for them, so are meantime balancing what we feel we can appropriately do. All of the newer cars are in my husband’s name. We’re working on enabling them to be financially more independent, and are meantime trying to appropriately carry what we can/should.

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  • Back in February, we made the decision to buy a new car to replace a 8.5 year old Cruze that had 170k miles on it (my commute is 75 miles round trip). The car had developed an expensive habit of breaking what seemed like every other month, and YNAB showed me that we could take what we got for selling, add it to what we'd been socking away in a "Cruze Retirement" category, and pay off our truck.  Also, YNAB showed me that a new car payment was easily covered by 1) the truck's payment, 2) the amount of money spent on repairs, and 3) the gas savings from not continuing to use the truck as my commuter after losing faith in the Cruze.

    I really didn't want to buy a new car, since my husband currently works from home, thus making car shuffling not a big deal (we've also got a third car that's mostly a toy, but can be used as a daily vehicle if needed). However, since I take my toddler with me to daycare near my workplace, I did not like the prospect of being stranded and having to wait awhile for a tow truck and hubby to rescue us (which took over an hour when the Cruze overheated last year out in the boondocks). The safety features of my new car also factored in to the decision.

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    • Lavender Cyborg Thank you so much for sharing from your experience and perspective.

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    • Cadet Blue Router Oh, and another thing: people are paying top dollar for used cars right now (especially only a couple years old like yours).  So, if you were to sell one of those, you could stockpile that money for either repairs or just to sit on for the replacement. Some people with newer model years are selling to Carmax and getting close to what they paid for the car originally, since there's a computer chip shortage that's caused a car shortage.

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    • Lavender Cyborg Wow! Glad you passed this insight along. Super helpful to know.

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  • I have a 15 year old car with 260000 miles on it that has never stranded me and a 3 year old car that stranded my wife yesterday.  If the optima has been reliable I'm never getting rid of it if I'm in your shoes. 

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    • Herman Thank you very much for your thoughts!

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      • AstronautEAP
      • Aerospace Engineer
      • Navy_Blue_Lobster.10
      • 1 mth ago
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      Herman let me guess - yours is a Toyota? I drive a 2002 camry, coming up on the 300k club, never had any problems with it😅

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      • ynaber2613
      • ynaber2613
      • 1 mth ago
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      AstronautEAP Big Toyota fan here too, I have a 2006 4Runner and cannot justify trading it since it has been very reliable and still feels new to me.  It only has 128K though, maybe I have another 15 years in it.

      Like 1
  • It depends if the older one is still working well. I think that it's worth it to use it yet rather than splurging on a newer car. I think it also depends on how much the newer car will cost. If it's worth the money that you can save from the older car's issues, I suggest you go with it.

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      • WordTenor
      • Can we agree that goals are dumb and immature? Sure.
      • WordTenor
      • 1 mth ago
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      Beige Captain Welcome to the forums! Can I ask why you’re posting on so many old threads? 

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