Used Cars Are Not Money Pits. New Cars Are.

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And it’s time again for my monthly car rant, the game where I show you, the readers, how buying new cars and getting car loans is single-handedly keeping the middle class broke.

For those that aren’t familiar, feel free to review a few of my favorites, including:

And of course…

Today we’re going to tackle the ridiculous idea that “cars with high mileage are too unreliable and cost too much in repairs.” This crowd is my favorite bunch, because it’s usually accompanied y a sort of whinyness that only people who waste gobs of cash on cars have.

And this post isn’t going to be accompanied by stupid averages that don’t actually apply to real people, but with cold, hard facts from my own experience and that of my family and friends. So sit back, buckle your shiny new seatbelt, and prepare for a kick in the muffler!

Keep Your Clunker

The Typical Life Of The Average Car For One Owner

Again, I could site studies and such that show the average life of a car, but that’s just not the real world. What I want to talk about is the average life of a car for one owner. So here’s a fun re-enactment of the relationship between man….and machine!

Bob: “Hi dealership guy. Phew, glad I made it past all those hoodlums and thieves from Craigslist to a place of real honesty. Now, can you show me a car that will probably work for my family, but gets you the highest commission? Oh, and make sure you tack on undefinable fees for another few grand and a warranty that I don’t really need.”

Sales Guy: “Perfect. Now, if you could sign here and here and here and here. Oh, and don’t forget here for the auto loan that doesn’t let you feel the pain of how much you are actually wasting on this depreciating hunk of metal. It’s a great interest rate over 7 years! But don’t forget to trade it back in for a ripoff price before the loan is finished so we can keep you chained to the neverending misery of financing an investment that loses 10% or more of its value every year. Oh….and here’s some crappy free coffee.”

Bobs Car

Back at home….

Bob: “Man, what a great deal I got. Can’t wait to tell everyone about it!”

2 years later….

Bob: “My car is a car.”

5 years later…

Bob: “Wow, check out the shiny new model. It even has some feature that doesn’t really matter, but my current car doesn’t have! I NEED THAT FEATURE! Plus, the battery on my key fab is running low. I can’t even pop the trunk without using the real key anymore. Yup, this hunk of crap needs WAY too much maintenance. What a money pit! Time to go visit my buddy Mr. Sales Guy…”

Back at the dealership….

Bob: “Mr. Sales Guy, my car is old. It has over 100,000 miles on it, it’s probably about to implode. I need something with LOW MILES, otherwise I’ll keep wasting a bunch of money on my car, and that would suck.”

Sales Guy: “Bob, I have the perfect vehicle for my commission. Come check it out!”

The Typical Life Of A Car In My Household

Jake: “Hey Mr. Craigslist dude. Thanks for showing me your car. I’ve already done a ton of research of this model, because Google is so easy to use. I searched your car out because of the features, lower miles (under 250,000) and overall look. Let’s take it for a test drive with my mechanically inclined brother so we can make sure the engine, transmission and suspension are in good shape.”

Craigslist Dude:  “Sure thing. Let me know how much you think it’s worth, as my prices are flexible, and the buyer has all the leverage. I’m just trying to get some money out of it to pay for my minivan that I just bought.”

Jake: “Cool. It’s in good shape, but the issues here, here and here show me it’s really worth about 70% of your asking price. I’ve got cash. That work?”

Craigslist Dude: “Seems fair.”

Honda Accord

Back at home….

Jake: “Got a smokin’ deal on this ride. And since it’s a Honda or Toyota, it’s got another 100k miles in it easy. Plus, I bought it 15 years old, so it’s not depreciating anymore.”

2 years later….

Jake: “Ride is still sweet, maintenance has been low, and still getting great mileage.”

5 years later…

Jake: “Still daily driving this awesome machine. 250k+ miles and runs like I just drove it off the showroom floor. Gunna keep driving this until I want something else to play with.”

The Car Maintenance Myth

There are too many people who make car purchases based on fear. I have said this from my first car post, and will continue to say it. Cars with high mileage (over 100k miles) don’t need more maintenance the new cars to keep them running reliably. Let’s compare Bob and Jake above.

Bob did the “smart” thing and bought a lightly used car with low miles (40k) for $18,000 financed at 4% (for a total of $20,667 after interest). He also spent another $3,000 for the extended warranty to take care of any maintenance. Great move! He had the oil changed 20 times, replaced his entire braking system (recommended), got 4 tune ups, new suspension parts, new tires, timing belt replaced, and a bunch of other junk. His warranty covered it all, but he paid the $50 deductible 6 times. Out another $300. BUT BETTER THAN A CAR DEAD ON THE SIDE OF THE ROAD! Car is now worth $8,000.

Jake, in the meantime, bought a car with 204k miles on it for $1,600, and was prepared to keep the car maintained himself (with a socket set, an oil pan and a car jack). Over the 5 years, he changed the oil 15 times ($225), replaced the brake pads and rotors once ($300), tuned up the car once ($75) and replaced a broken taillight ($10). His crazy “money pit” car cost him (HOLY CRAP!) $610 in total maintenance. Even if Jake got lazy and had the local lube shop change the oil, he’s still only out $800.

Used Cars Are Not Money Pits. New Cars Are.

Now, Jake’s (my) story is real. I have owned several cars over 200k miles and keep them running smoothly with the least amount of work possible. I drop in $100-$200 per year for maintenance, and my cars have performed well, and still sold for nearly the price I bought them for years earlier.

I strategically buy 15-20 year old Hondas and Toyotas for $3,000 or less, drive them for 5-7 years and sell them for what I bought them for (or more!). The cars usually get 30+ MPG’s and are fun to drive. The maintenance is minimal, and sometimes even less than newer cars, because they are less complicated.

Every time I post about buying used cars, someone inevitably asks about maintenance, and how at some point, it’s worth it to just get a new car because of how much money is dumped into keeping that used car running. And someone else usually has a story about how their transmission blew and it was going to cost $3,000 to fix, so they scrapped the car and bought new so it wouldn’t happen again.

What they SHOULD have done is just bought a better used car, and learned from the first one. It’s usually some kind of dodge or kia or something that died, so don’t buy that crap anymore. Buy a used Honda or Toyota. Bring a mechanic friend along and make sure the tranny isn’t jacked up. And, for the love of automobiles, PLEASE GO HERE FIRST BEFORE BUYING A CAR! Type in “common issues with (your desired car)” and find out in 2 seconds something that could save you thousands.

Our Cars Are Still Running. Why Would We Buy New?

In my family, here are the top mileage cars we have owned and driven until we sold them or parked them. These cars all still run/ran, and don’t have any major mechanical issues.

  • 1986 Honda Accord – 370k+ miles
  • 1994 Honda Accord (my daily driver) – 300k miles
  • 1994 Honda Civic (sold) – 276k miles
  • 1985 Celica GT-S (sold) – 200k+
  • 1987 Supra Turbo (sold) – 200k+

I don’t see a reason to buy a new car. Our used cars have proven nothing but reliable with a little TLC and maintenance. Why would I spend $24,000 on a car now worth only $8,000 when I can spend $1,600 on a car now worth $1,600? The math always wins, and now you know the maintenance isn’t even a factor.

Happy car hunting 🙂

Jacob Wade

Jacob Wade

Jacob Wade has been a nationally-recognized personal finance expert for the past decade. He has written professionally for The Balance, The Spruce, LendingTree, Investing Answers, and other widely-followed sites. 
He’s also been a featured expert on CBS News, MSN Money, Forbes, Nasdaq, Yahoo! Finance, Go Banking Rates, and AOL Finance.

In 2018, Jacob quit his job and his family decided to sell everything (including their home) to take off on an adventure. They traveled the country in an RV for nearly 3 years, visiting over 38 states, 20+ national parks and eventually settling in the sunshine state!

59 thoughts on “Used Cars Are Not Money Pits. New Cars Are.”

  1. Could not agree with you more. It always cracks me up when people bring up the higher maintenance argument, because for some reason, those people are the ones that have some kind of problem with their car every other month. We love our >10 year old Honda with over 200k miles on it. Never had a problem with it in over 3 years.

        • Here’s my stance on cars with “constant issues” that continue to drain money from wallets.

          Sell it.

          For every Honda that has some mechanical issues, there are hundreds out there that can go 100,000 miles with minimal maintenance. Don’t hang onto to something that continues to fail.

          • I had a mechanic who specialized in Hondas – he said that the Civics and Accords made in the 1995-1996 era were exceptionally well-made and reliable, but in later years some of the Honda manufacturing has changed. The early 2000s Accords, for example, has a history of transmission failure.

            There can be issues with both used cars and new cars. Neither are automatically a “money pit” just because of the virtue of being used or new. We chose a new Civic because the price of Civics 1-3 years old are almost just as expensive, and we didn’t want to go older than that.

            It’s all about finding something that fits your price and priorities.

          • Well said. “Price and Priorities” are the most important thing. And yes, I’m a sucker for 1994-1997 Accords and 1992-1995 Civics. Proven reliable , great gas mileage, fun to drive.

            I guess the one thing people never consider, but is the silent killer, is depreciation. I wouldn’t say either new or used is a money pit in terms of maintenance, both could be reliable. So the real difference is how much the car loses in value over its life. And a new car will always lose more value than a used one, just how it works.

            So I choose a well-loved, used car that barely drops in price over the years, and is just as reliable as new car. Plus, lower cost of insurance, more availability of cheaper parts, simpler to work on are the money saving perks of owning an older vehicle.

  2. I’ve been thinking recently that our 2000 Toyota Corolla is looking a little tired, (not thinking about replacing it mind you), but maybe it just needs a really good wash?

  3. I am afraid. I am single and none of my friends are mechanically inclined. I am driving 2004 Honda and I pray it never dies.

    I get the oil changed when recommended and I trust my mechanic.

    It still costs me over $200 per year for upkeep. Oil changes, lights go out, fuses die, need new tires etc.

    • Pam, don’t be scared. I think you’re set. With a 2004 Honda and a trusted mechanic, you have all the tools you need for a long-lasting vehicle. Just don’t go buy a NEW CAR if your hubcap falls off 😉

    • I bought a used VW Vanagon. Oodles of fun, and appreciating in value. I spent $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ to keep it running. My mechanic was a genius, and I compared prices on parts. $200/year maintenance is reasnsable as hell. When you own a vehicle, you can’t be afraid, there are so many good old cars out there that have weeded out their worth, and their shortcomings. New cars are a huge risk, because they are unproven if they are a new model. And, just like the post suggests, they depreciate like crazy.

      • Those vans are AWESOME. Would love to have one for road trips, plus, you could always paint it like the Mystery Machine 😉

        Yeah, maintenance only costs as much as your level of fear. A few good tools, some youtube videos and some buddies to help makes $200 a year totally reasonable.

  4. Not to mention the much lower insurance rates of a lower cost car without comprehensive coverage! You get whacked?…..get another sweet deal on a Honda or Toyota.

    • I didn’t even get into the ridiculous amounts of money people waste on insurance! Comp. coverage is required on cars with cars payments. So not only are you paying interest on a depreciating asset, but flushing money down the toilet with expensive insurance as well.

      If my can gets totaled, I’m out $1,600. But comp. coverage is EASILY another $1,600-$2,000 PER YEAR! Ick!

  5. My 1992 Honda Accord has cost me about $3K in maintenance during 2013 and the clutch still needs to be replaced. While buying used is always preferable [unless you have more than $1M in assets] if you are not a DIY mechanic, upkeep costs are relevant.

    Also, with a used car, you can’t stop the deterioration of the plastic interior, so many things just pop off, since they are dried out from exposure.

    But despite these issues, it’s better than a car note.

    • Definitely better than a car note. Sorry to hear about the troubles, but don’t hang onto it if it’s draining your wallet so badly. There are a ton of other Hondas out there that WON’T cost $3,000 in maintenance. Just find a mechanic buddy, and have them go look at a few used Hondas with you to ensure you buy something that will last.

  6. I totally agree with this article and hope to do this with my next vehicle.
    I have a car that I paid cash for about 5 years ago, so I’m not looking to buy anytime soon. It’s a 2008 Kia. I don’t know how long it will last, but I will definitely never ever buy a Toyota. I had a ’99 Corolla before this and it almost killed me….lost steering control and drove me under a semi on the highway. Not an experience I ever want to see again. Maybe a Honda someday though.

  7. Love this! I could not agree more. My car has 218,000 miles on it (it’s a Pontiac) and it’s still running great! I see zero reason to replace it as long as it is paid off (and has been paid off for 14 years) and runs well. I’m keeping it until it’s dead!!

    • I miss my trusty Pontiac! It was just a cheap junky, 1994 Grand Am. I bought it as a first car when I was 19, for cash – that was back in 2003, so it was almost 10 yrs old when purchased.
      That car was terrific. I was Canadian, and it took me all the way from northern Canada down to the southern US – twice! With no issues. Countless small road trips around my hometown also, and it survived our brutally cold winters.
      I paid $2500 in cash ( $1000 was from my grandparents). When I moved to the US in 2009 and had to sell it, I pocketed $900.
      Sadly I didn’t learn from that and my new spouse and I foolishly bought a new-to-us 2007 Camry. Still regretting that purchase, as the payments stink. We do plan to drive this car into the ground, and are doing our best to take care of it.
      Our other vehicle is a 2000 Dodge truck and it’s doing well.

  8. When I bought my car, I was only looking at Hondas and Toyotas as well. I ended up with exactly the model I wanted – a 2006 Toyota Echo with 65,000 miles for $4,500. I’m impressed with how many miles you’ve put on your cars! With that example I should be able to drive mine forever.

  9. While I do tend to agree with you, I am not so sure where the facts are. Personal experience is anecdotal, not fact.

    Aside from that, I do agree and think the advice is right on. I did buy a near new car instead of a older used car recently… so hypocrisy is being flung around here. My older car was running more or less like a champ, but didn’t have AC, and seats that mangled your back alignment. The car I eventually bought had 9K miles on it and was selling for $6,000 below market value because it was 2 model years old. I thought that was a pretty good deal.

    • I could cite a bunch of sources, such as THIS ONE or THIS ONE, but I don’t like to just site a bunch of people looking at averages, I want to show you, the reader, can mimic what we have personally done.

      Sounds like you rocked a sweet deal, and 2 years old with 9k miles is awesome. What make/model is it?

  10. Yes!!! I agree. I would love a new car at times, but logically it is so stupid.

    My now ex husband and I purchased a 2005 Camry in 2011. It was our dream car. We got it for $3,000 less than they were being sold for in our area by going 25mins away. It was owned by an older female teacher who was simply upgrading and only ever drove it to and from school, so very low mileage and full log book history, even a tyre plan! Top of the line model too, with woodgrain interior and extra’s like a tow ball and things we wanted, but weren’t needed. Perfect.

    The car has never skipped a beat and every mechanic tells me how good it is. My ex managed to cause 2 dings so the left side looks kind of less appealing, but who cares if it is mechanically sound, very safe and will last me years.

    When we separated he originally took the car, but my dad helped negotiate to get it for me in settlement so I would have a reliable car. Thanks to the dents the value was a whole lot less than if I had to buy another.

  11. While I agree that some used cars are not money pits, they sad issue is that many are. You are buying the right cars, but not everyone does. I have seen way too many older cars that have serious issues.

    You understand how to take care of your car, but a good majority have no idea how to do such a thing. If a new car is not taken care of, then it will be a terrible used car for the next owner. While your experience is good, I have seen more cars in my day that have been terrible. I not only work on cars for people, but my brother is a great mechanic and has seen way too many cars that needed way more work than they were worth.

    I am not saying go out and buy a new car, but I am saying that it all depends on how well the car was taken care of. You have to do your research and get a mechanic to look over the entire car, not just test drive it.

    • I hear you Grayson, but I don’t want to tell people that it’s ok to waste tens of thousands of dollars just because they don’t want to put in a few hours researching the right car. Heck, even without friends, internet forums are an AMAZING resource to find common issues with cars, and you can even put up a craigslist Ad and ask if the car is even worth looking at. Then once you decide to look at a car, $100 will pay for a mechanic to look it up and down for you and help you get a great deal, or say NO to the car if it’s not worth it.

    • I am in the 15-20 year range, because at that point my cars don’t lose value. But 7-10 years is acceptable because you’ll get more life, and most of the depreciation has already happened.

  12. I’ll admit, we did let fear influence our most recent car decision at least a little bit. As you know, I was getting rid of a 1998 Honda Civic with 150k that just kept needing repair after repair. Given that this is pretty much the exact kind of car you talk about getting here, it honestly made me wary, especially since I have 0 mechanical skills. So we paid more to get a lightly used 2007 Honda Odyssey. We paid cash and it was much less than a lot of other used cars we looked at, but still much more than we could have paid for an older model. I don’t really regret it, but I can objectively see how we might have done better.

    • Yeah, I know we talked about this at length, and you made the right move for your family. Sometimes you are stuck with a car that has issues, and the right move is to sell and move on. Personally, I’d have gotten a 2001-2002 Odyssey, but with your negotiating skills, your car is going to serve you well for a LONG time and won’t lose TOO much to depreciation.

  13. Last year we inherited my husband’s Grandmother’s silver, well-maintained, 1993 Ford Escort Wagon with 174K miles. Not bad for a 20-year-old car! It came at just the time our 2000 Ford Windstar Minivan finally bit the dust at 250K miles. We sold the Windstar and have been driving the Escort as our only vehicle. We would never have bought an Escort (and we’ll never buy a Windstar again either), but we are going to baby this thing and get as many miles as we can out of her. We have enough money saved up to buy a newer used car (Honda), but we see no point in buying another one until this one dies.

  14. I’m sitting on a 2k2 Dodge Intrepid that had roughly 60k miles when I bought it and today its rocking 170k miles. I recall making payments of $350+ a month trying to pay it off as quick as possible. The car has long been paid off but when the minor problems go wrong I think to myself what another car payment would be like so if a fuel line needs replacing at $50 I think about that $350 car payment.

  15. I can’t agree with you more on this Jacob. After making $500 payment on a new car for 5 years, I have decided NOT to ever buy a new car again. It’s such a waste of money. I just remember cringing every time I was making payment on it, it just felt like a waste. Plus, the insurance, it’s just plain dumb. Now, I”m all about buying used car from craigslist.

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  17. I’m currently going through the process of selling my car. I bought it second had in Dec 2009 and it’s lost half of it’s value since then, but I don’t really mind as once I divide the amount of money that I’ve lost by the number of years that I’ve owned it, the car costs me about $80 a week. Not bad when you think about it!

    My next car will certainly be a second-hand one again. Just get something that is in good condition with low mileage.

      • I fully agree with you that new cars burn money faster than you could drive.

        But what I don’t understand: How could you drive even a very relyable car for several years with only doing oil changes and some minor things. On all cars I had, I had to change some wear parts from time to time: break pads, break disks, exhaust or catalytic converter (if rusted through), alternator, water pump, shock absorber and/or springs. And then of course not only the oil needs to be changed frequently but also the several filters, break fluid, the liquid in the air conditioner must be filled up, …

        My experience is, that car maintenance is at least about 0,05 Euro/km (which is about 0,045 USD/mile). With some bad luck it is twice that value. And if you have a V6 engine (why?) it is even more, because the complete exhaust system is built in twice.

        Of course only some of these things need to be done and only every 10k to 30k miles. And of course it is still cheaper to have a used car because you do not have to pay the financing rates and insurance – and also new cars still need some maintenance. Maybe you just do not see this because you don’t drive much? We (my wife and I) are driving between 25k and 35k miles per year.

  18. I fully agree with your thoughts and advice on buying “older” well maintained cars that will do well even into high mileage. I recently referred to it in talking with someone urging me to buy a brand new car.
    You have said that you recommend Hondas and Toyotas specifically. Do you have any thoughts on, or know anything helpful about, a Toyota Matrix 2004-2006? I am in search of a fuel conscious hatchback-type car and I enjoyed test driving a 2005, base/xr automatic. I am told it’s the same as a Pontiac vibe (thought the vibe has a roof rack). I have found numerous sources and reviews saying that they live well over 200k miles and get 28-34mpg…. but at least one person in my life is urging that I avoid the model at all costs, citing unreliability.
    Can you offer additional wisdom?

    • Based on some basic research, the Matrix seems reliable (most Toyotas are, just look out for any recalls). As with any used car, get as much history as you can, and have a mechanic give it an inspection to ensure no costly repairs are coming up.

  19. I just brought a 2003 lincoln town car a year ago with only 68k miles on the clock for $4900 off my uncle(original owner), well maintained and loaded with luxury options. Should last me the next 10-15 years. I cannot see why people need new cars when you can buy seriously great used cars for only a few thousand and save yourself a lot of money

  20. Last year I bought a 2003 lincoln town car as my first car with only 68k on the clock, well maintained, fully loaded from my uncle(original owner) for $4900. I see no need to buy a new anytime soon, and I just don’t understand why people think they need new cars. The used car market provides so many quality cars for only a few thousand dollars, and buying cars between 10-20 years old is the smart thing to do for anybody, just look at the ridiculous depreciation of any car

  21. Good point Jacob, I myself own a 1994 lancer glxi, and i say it can keep up with the newer model cars + after 3-5 years, these “newer cars” get sold at the same price of my car right now, actually mine, is increasing in value since I’m keeping it in good shape and I have plans of turning it on a showcar. Very nice article, Shared it too! thanks!

  22. I currently drive a 1994 Honda civic I bought new only because I was working at the Honda plant and got a discount. It has 430,000 mms on it. I am shocked how stupid people are when they waste money on new vehicles, especially this trend to buy these huge inefficient subs costing more than 40000. It’s really sad.

  23. This article is hysterical, and completely true! I loved the thought process of new car buyers that you provided. It seems like that really is how they think. My husband and I have a philosophy that if we buy a used car, we are saving a ridiculous amount of money that we’ll be able to spend on more important things, like school tuition. It has never steered us wrong before!


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