Originally Posted By: fdcg27
Many of us have a sincere desire to keep cars for a long time.
This is partly a matter of economics and it's partly a matter of taking pride in maintaing a car and keeping it functional well past the point where the ignorant masses would have traded it.
Only someone with either a good sense of humor or a strong sense of irony would apply the term "resale vakue" to most cars.
Resale value is rarely sufficint to compensate for the capital cost of the car less any realistic allocable depreciation expense per mile.
My rule of thumb is that ten cents per miles is a reasonable allocation of depreciation per mile of use and you can get well below that if you keep the car long enough.
By that metric, the chance of recouping enough money in resale value to make trading the car off economically viable is almost non-existent.
And, no, neither your Dodge Dart nor anyone else's would have lasted a million miles, whether you wanted it to or not.
Unfortunately, you seem to assign the word ignorance to anything that doesn't match with either your worldview or the way you buy and maintain cars. No one said that cars are a good investment and I typically don't view keeping one for 10 years as a badge of honor or a chance to show someone my planning in frugality. My experience with that mindset with two cars ( Toyota and Mazda ) is that once you pass 140K or so miles diminishing returns starts to kick in and your .10 cent/mile depreciation goal can be easily usurped by water pumps, failed suspension components, failed VVT actuators, failed pulley assemblies and a host of other things that might crop up. If you fix them all yourself, some of them yourself, or none of them yourself, it's a significant economic factor and doesn't particularly involve ignorance.
You're looking at the idea of car purchase in a more one-dimensional way and it doesn't take into consideration that because many people save for cars in different ways, procure cars in different ways, and pay for cars in different ways, the concept of "resale" can mean different things to different people. I would admit that the concept of "resale" is typically used in 3 and 5 year increments and for most it's a losing proposition. However, if you substitute the word "resale" with "remaining value", it's a different story once you get near 100K miles and the car is just automatically parted out or Blue Book drops in a private party sale. If we take the word "value" in it's broadest sense then I think that most would agree that if you start saving/investing for the next mo. loan, this will give you a different financial result and bolster different options if you're interested in trading or selling a car at the five year mark.
If I made more than the particular car payment per month on the earmarked investment this would obviously change the dynamic again. I doubt that'll happen anytime soon. I would have to calculate if paying a 3-4K delta between the trade-in or sale value and the funds in my earmarked investment for the new car is a better investment every four or five years or every 10 years considering cost(s), value, depreciation, wear and tear, and maintenance on the vehicle plus the ROI of the investment. My guess is that example of a
To say that the ignorant masses are the only ones who sell or trade cars at the five year mark without understanding their finances or experiences with a particular car doesn't tell me too much. Telling me that by buying a Toyota or Honda I won't experience the level of problems of some other makes hasn't been my experience when these two vehicles above had more parts failures than expected replacement items like water pumps, timing belts, ball joints, etc. once they got into their golden years.
