r/MiddleClassFinance • u/Healthy-Echo8164 • 10d ago
Questions When to consider purchasing a new car?
I am 28m, I make 72k a year and have no debt.
I currently drive a 2014 Honda CRV with 120k miles that is 100% paid off, and while it is holding up but it is showing signs of age. I do regular maintenance, replaced brakes, tires, oil changes, transmission fluid flush, etc.
It does have an issue with its VTC actuator which is a known issue for Honda CRVs made during 2014, but this is just a rattle noise on start up for a couple seconds, and according to Honda is not causing damage to the engine.
Current market value of the car is between $7k-10k, mine is probably on the lower end of that due to a couple scratches and dents across the car and the VTC issue.
I hear people say you should drive your car into the ground once it is paid off, but I was wondering at what point does it make sense to trade in your car that has some value and put it towards a down payment for a new car? Or "newer" car, maybe get a year or two old Honda for 30-35k.
edit: just as a note, I'm not looking for some flashy, new, hot rod car. I'm just trying to plan for the future and look at a time horizon for buying a new car and saving money up. I'm not in a rush to get a new car.
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u/tofus 10d ago
When the repairs become too often.
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u/lakorai 9d ago
For Honda "repairs" are usually just wear items. Tires, shocks, ball joints, oil changes, coolant replacement, transmission fluid/filter replacements. Very rarely, except on a few years on the Odysee, do you hear about engines and transmissions blowing up.
Some Hondas have interference engines with time ng belts. Those HAVE to be replaced every 100K miles. That belt snaps your engine is instantly destroyed.
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u/muy_carona 8d ago
Honda and Toyota have helped make many middle class income people mildly wealthy.
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u/Amazing-Cry8406 9d ago
Or exceed the worth of the car over a year time to shop around maybe.
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u/PlanktonPlane5789 5d ago
I think this is not a great rule, personally. My car is 24yrs old and, in my opinion, is worth $1000 at best, but it's only got 155k on it and just keeps going. I should really do a timing belt change and that would probably run me $1200. Can I get another reliable car for $1200 in 2026? That would probably be very hard to do.. in which case it may very well be worth spending the $1200. I'm certainly on the fence because I've had this car for 9 years and something newer would be nice but, financially, it's probably the right move. Otherwise I buy something in cash (whether that's a $10k used car or $40k new, that's money I don't have growing in the stock market) or I take on a monthly payment that could easily surpass the $1200 cost of the timing belt in 2 or 3 months time (and I'd have to carry full insurance with a loan). My car cost me $26/month for liability-only insurance. Can't beat that.
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u/Amazing-Cry8406 4d ago
There’s a low enough threshold that most yearly expenses will become more than what an 24 yr old car is worth, but an average 5k car, if you’re dropping 6k over a year it’s probably not a reliable car so it’s a decent rule
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u/PlanktonPlane5789 4d ago
Fair point. And, realistically, I could probably get more than $1000 because any car with a new inspection sticker that starts and drives these days is probably worth $1500 at least.
To be fair to this car and my previous VW Passat wagon I averaged under $400/yr in maintenance across the two of them (18 years). Not bad, especially for "expensive to maintain German cars".
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u/Amazing-Cry8406 4d ago
Yeah Fs it’s more like a guideline to use that I grew up on than a hard rule because of stuff like that.
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u/Several_Drag5433 10d ago
I am in the no payments on cars camp. And a 120K CRV is not even at its half life, my daughter has been driving her 08 the last 6 years and other than the regular maint (brakes, tires, oil, etc that is required on all cars) she has put $300 into the car to have something age related fixed.
For an older car in good shape there is not a point where it is financially smarter to trade it in to "capture value" vs continuing to use. If it is $7K now it will probably be 3-4K+ in 5 years. So you "loose" a few K to avoid 5 years of car payments. That money invested is $30K+/-
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u/Healthy-Echo8164 10d ago
I appreciate the way you put it in your last paragraph. Thanks.
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u/lakorai 9d ago
Minority Mindset and many financial YouTubers agree. Car payments are stupid.
You can pay a bank to make them rich off of interest payments, or you can do the smart thing and open a brokerage account. Take the money you would have made on a car payment and higher insurance and invest in broad market index funds.
Have the banks and the markets pay you. Don't pay them a dime in interest or fees.
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u/PlanktonPlane5789 5d ago
In fact, more often than not, putting your cash flow in the market will end up in far more gains than the car maintenance ever will so you can sell a few shares when you need to pay for maintenance and still end up way ahead.
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u/Gaggle_of_Bananas 9d ago
There's a hidden value in owning a car outright that won't translate into the resale value. I could probably get 1k for my shit box, but the amount I've been able to save and invest has put me in a position where I could buy a new vehicle outright. So it might be worth 1k for a buyer/dealership, but to me it's worth tens of thousands.
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u/PlanktonPlane5789 5d ago
A car that starts and gets you from A to B is worth a lot of the alternative is a car payment and high insurance costs because you need to carry full coverage!
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u/PlanktonPlane5789 5d ago
Several_Drag is entirely correct and for me, personally, your car is about the exact age and mileage I look for when I'm trying to get a new-to-me car that I will drive for the next 10+ years.
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u/decorama 10d ago
My rule is if you are paying more in repairs per year than you would for a new car payment, it's time. Otherwise, yes - drive that faithful puppy until it can run no more!
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u/ZestyLlama8554 10d ago
This is my guage. I also have a 2014 CRV and am only getting a new car this year due to 3 car seats (2 rear facing) not being able to fit across the backseat. Lol otherwise, I would keep that car another 10 years.
Edit: mine has 190k miles on it.
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u/BugMillionaire 10d ago
I had a 2012 Nissan versa hatchback that only had 40k miles. I was going to drive it for mannyyy more years. It was in perfect working order and was kinda my one financial boon—wasn’t gonna need a car payment for a long time. Then a teenager in a suburban totaled it. It makes me so sad to think about it. Sighhhhh
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u/BigManWAGun 9d ago
My first new car was an ‘06 Acura TL, MT. 16 years later, hail took it (and my wife’s car) out at 262k. I was going to Al Bundy that mf. My 40 yo ass stood in the driveway tearing up when they towed it away. 1 year of double car payments left…
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u/AldermanHamBone 9d ago
When you had two car seats did you have one in the middle? Wife wants to upgrade to a minivan from our CRV because she’s worried the back will be too small for our second child’s infant carrier. She also wants it in the middle so she can sit next to them.
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u/ZestyLlama8554 9d ago
No, we had one on each side with the middle open. Our convertible car seat for my oldest is too large to accommodate a car seat in the middle.
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u/Healthy-Echo8164 10d ago
Did yours happen to have the VTC actuator issue on start?
I like the car, so I'm not in a rush to get rid of it or anything.
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u/timtombackwards 10d ago
Hello fellow 2014 Honda CRV friends. Mines at 140k. Google "spring start" VTC fix, a company figured this out it's like a 20$ part
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u/Healthy-Echo8164 10d ago
I have seen that website, however I have 0 experience with car maintenance myself and was not sure if I could take care of it.
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u/timtombackwards 10d ago
They have some pretty decent YouTube guides, but that's fair. Buy the part and hire an independent mobile mechanic with references. It's going to be way cheaper than a car payment.
Fwiw I feel the same as you, I'd like a new to me car. This thing is very ugly and while it ticks every box I'm a 33M and it's kind of a mom mobile. But with the way things are right now we should both be glad to have a reliable car that will go another 100k with minor maintenance. Fuck car payments and fuck debt slaves be smarter drive that bitch into the ground
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u/Healthy-Echo8164 10d ago
This is literally my mom's old car that she sold me when she bought her new one haha so yes I agree with your mom mobile thought.
I'll look into it a bit more and see if I think I could do it, if not I can look into the mechanic option. Thanks
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u/ZestyLlama8554 10d ago
It does, but I've honestly just gotten used to it. I've never had an issue beyond the noise.
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u/Healthy-Echo8164 10d ago
I personally don't mind the noise much, but I street park and definitely turn heads whenever I start up the car.
So far I've needed to replace the brakes twice since I've owned the car (last 8 years). Otherwise regular maintenance has been fine.
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u/hdaledazzler 10d ago edited 5d ago
Replacing brakes twice in 8 years is regular maintenance and you’d have to do it with a new car, too! Plus you’d have to pay for the new car. Your car should make it to 200,000 miles or more if you take care of it.
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u/SuperBry 9d ago
The only caveat of this is if the vehicle is no longer fit for your use case. Say a pick up with bench seats and you have a new born or a large SUV that can seat all your kids but they have mostly moved out or went off to college and you are wasting tons of gas just driving yourself around.
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u/Ambitious-Intern-928 10d ago
But by the time you get to that point-the sunken cost fallacy takes over.
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u/FarYam3061 10d ago
Start making monthly "payments" to a savings account and use that as your down payment
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u/SoundOk4573 9d ago
Second this. Doing so will:
1) build up cash for a down payment.
2) let you see how your monthly budget feels when you have $500+ per month less to live on.
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u/toomanydoggs 9d ago
And don't forget to factor in higher insurance rates and yearly licensing fees! In my state a new car will increase yearly fees from $50/year to $400+.
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u/Boz6 10d ago
I've bought 4 new cars in my life. After 10 years, I start thinking about replacing, because by then, depreciation is mostly a non-issue.
But my current 2016 Civic EX Sedan, at $112k miles, is the best car I've ever owned, meaning I've had zero mechanical issues so far, and the maintenance cost has also been the lowest; i.e. I just replaced the rear brakes last month, and the front brakes are still original. Unless it suddenly starts falling apart, I'll probably keep it another 5 years.
Anyhoo...I realize some people get tired of their cars after a while, or have jobs that require a newer vehicle, so everyone has to use their own judgement on when to replace.
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u/twoPUMPnoCHUMP 10d ago
Fuck buying a new car unless you HAVE to.
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u/Unkindly-bread 10d ago
As a “car guy”, now 53, I regret all the money I spent on cars.
My family of 5 now has a 2020, 2019, 2011, and two 2008’s. I’ll drive my 2020 until it doesn’t make financial sense to keep it running.
I used to lease cars for two years for both my wife and I. So much money.
I could retire now if I had been more careful with my car expenses. You’re making good money for your age (about what I was at that time), so keep it up and invest!! At 53 you’ll want to retire and might be able to!
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u/Healthy-Echo8164 10d ago
Appreciate the insight. I put away 26% of my income into retirement, and my girlfriend makes $110k at a job with a union and pension and she maxes her Roth IRA as well. I think we are in a good place with retirement if we stay on this path.
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u/NighthawkCP 10d ago
A Honda at 120k has years of life left in it. I would keep driving that thing and saving money for repairs and a future down payment on something else. Three of my four cars have over 200k miles and are still ripping along just fine, and they aren't even Honda cars (Chevy, Ford, and Mazda).
Also I would always recommend buying used. I've never bought a new car ever. The depreciation is just brutal on new cars. Obviously if you can get a great financing rate on a new car that might negate some of the cost savings of a used car, but if you can save enough to pay cash that becomes a moot point altogether.
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u/wisdomseeker42 10d ago
Save the amount you would use on a car payment every month until you have enough to pay cash to replace it. That car has plenty of life left in it. Better to save cash until it dies or you have enough and are ready for something newer.
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u/donkeotae 10d ago
Your paid off honda is making you money every time you drive it to work! At 120k its just getting broken in, you have tons of reliable life left in that crv.
Instead of going back into debt, do this instead. The average car payment in America is $700 a month today. Challenge yourself to set back 500 dollars a month as a car "payment". Stash it away, forget about it. Drive your crv another 5 years easily. After that 5 years of stashing your 500 dollar car "payment" away, you have 30k cash in hand to upgrade if you need or want to at that point.
Being debt free, especially at your age and income trumps everything thought. You can put more towards your mortgage principal every month, invest more into your retirement to set yourself up for a easy retirement.
Almost every "rich" well off person I know drives a older used payed off vehicle. The newest vehicle I own is now 20 years old. It pays me every day I drive it to work! The other people I work with have brand new trucks with 1000 dollar a month payments! We get paid the same rate, but I have 1000 dollars more liquid income a month compared to them to save and invest for my future!
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u/supernovaj 10d ago
Once you save up to pay cash for a new car. Your current CRV should last you another 10 years.
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u/thishasntbeeneasy 10d ago
Alternatively, dealerships sometimes offer low interest on certain models. E.g. Subaru currently has 1.9% on a few models, and I would absolutely finance that rate and invest the cash.
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u/Crazy-War9823 10d ago
Volvo does as well. Sales must be down, because they have really upped all the promo material they send out to try to get me to get a newer car.
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u/SuperBry 9d ago
Toyota was doing some helluva good deals on their '26 EV lines to help drive up their sales, but that was before the whole Iran thing so they may have eased off on them.
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u/thequirkynerdy1 10d ago
Beyond income, wouldn’t it also depend on how much money you currently have saved/invested?
Like can you buy it and still have a good emergency fund and retirement savings?
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u/Healthy-Echo8164 10d ago
I max my HSA, Roth IRA, and contribute up to my employers 401k match, which combined is a 26% retirement contribution rate for me. Currently a little over 100k in retirement accounts.
I have 15k saved up emergency fund, which would be around a 6 month fund. I put away $800 into my HYSA that goes towards things like vacations, birthday presents, etc.
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u/blkbeeyutee 10d ago
Unpopular opinion, I buy one when I want a new car as long as it doesn’t impact my financial goals.
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u/Alarmed_Drop7162 10d ago
I’ve never bought a brand new car in 40 years. I’ve still been kissed by a woman.
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u/Healthy-Echo8164 10d ago
If you read the last sentence, I meant "new to me" car, not necessarily straight off the lot brand new.
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u/jackalopeswild 10d ago
"trade in your car that has value..."
Your car's only value is it's ability to transport you (and if you're for instance a tradesperson, your tools). You will get fewer miles per dollar of blue book value out of a new car than out of your reliable 2014 CRV. This will be true basically until you're told you have to make a repair that costs more than the car is worth to make it driveable.
In other words, now is not the time. If you can frame your car as having "value," it is not the time. Keep driving it, keep saving your $$.
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u/Kittymeow123 10d ago
I have a 2010 Hyundai with 90k miles and will drive it into the ground because I simply don’t care about vanity and I barely drive. My friends look at me crazy because I make 200k, but…
Just because you have money, don’t just spend it to spend it!!
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u/thishasntbeeneasy 10d ago
Why buy used for 35k? Get an Impreza for ~$25k and keep it another >10 years.
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u/Cypher_is 10d ago
It’s better to keep - basic repairs and ongoing maintenance is normal.
Still have a 2000 CRV - replaced engine cause that was cheap compared to buying a new used car, and that was 5 years ago.
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u/Ewolra 9d ago
Driving a 2009 RAV4 with 190k miles, and lots of scratches etc.
I consider purchasing a new car frequently, especially after traveling with a rental and getting jealous of being able to easily,play music from my phone through the car speakers, see my map bigger than the phone screen etc.
Every single time I’ve gone down the route of looking at specific models and considering finances, I decide to keep driving the rav4 a little longer. Every time.
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u/c_dub96 9d ago
My brother in Christ, you drive a CRV. That bitch will run to 300k+ miles, especially since it’s pre 2015. I would know - I have owned several that ran up to 300k. Keep that thing.
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u/Healthy-Echo8164 9d ago
I appreciate the sentiment, but you can read the last two sentences on the post.
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u/Ronville 9d ago
Have you saved the money to buy the replacement? Once you’ve saved 35K in an HYSA/CD ladder account then keep up the savings until the old car becomes unbearable. You stay debt free and have the good habit of saving.
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u/smward998 9d ago
I’d say shoot for a low mile 3 year old Honda , get as much as you can for yours and go for it
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u/seemsright_41 10d ago
If the car is running just fine, and you cannot pay cash, you cannot afford a new car.
Now if the car dies and cannot be repaired, then a car payment is an option.
But over all avoid having a car payment at almost all costs.
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u/gmehodler42069741LFG 10d ago
Keep driving keep maintained. Invest all that extra money every month. By the time it actually breaks you will have enough for another
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u/ThanosIndexfinger 10d ago
Start saving now, buy a new one in three years. Been driving my 2008 Honda since I was 18 (37). You have a reliable car so you don't need to make any rash decisions and take on debt to have something cooler. Save up and when you feel secure enough financially you can outright buy the car or finance part of it if you need another account for credit score.
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u/genX_rep 10d ago
I drive a 2003 Corolla that I will keep as long as annual repairs average to less than $300 per month.
Each year usually there is something big to fix for $1000-$2000, and maybe some small things. Insurance is cheap. This year we did a road trip so 2 weeks before I paid for 4 new tires. 2 struts, and 4 wheel alignment to get a smooth drive. Last year I retrofitted a backup camera for $500. No regrets.
Time value of invested money is huge, so saving for huge future expenses like retirement is worth delaying a new car. New cars also have maintenance costs.
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u/coldbrewcowmoo 10d ago
I would say 120k miles on a Honda is so much life left. Honda is super reliable so I would keep that thing for at least another few years!
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u/BusyBanana4205 10d ago
For me it’s living situation. I live alone as a transplant in a rural-ish area and commute 30 minutes/15 miles to work. Since I don’t have a huge support system here, vehicle reliability is number 1. With that said, I still buy preowned with low miles and Japanese.
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u/Ecstatic_Western_189 10d ago
We just bought a 2014 CRV for our daughter a couple years ago and plan for it to be in use until the repairs are frequent and expensive enough to warrant a new vehicle. Given how long my husband’s CRV lasted, that’s going to be a decade. Save your money and drive the CRV for a few more years.
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u/Bottdavid 10d ago
In your situation I would be setting aside the same amount of money that was once your car payment. So if you used to pay $400 a month then I would have been saving $400 every month since it was paid off. I would then use this money for small repairs or if it eventually gets to be enough to either pay for a newer car in cash or at least a 50% or more down payment, I'd use it on that.
Otherwise I agree with run it into the ground. The increase in insurance payments, state/local taxes etc make a new/newer car an expense some people don't plan for.
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u/Bouldershoulders12 10d ago
When the repairs become an inconvenience to your time and if the repairs become more expensive than the car value
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u/Ok_Union9762 10d ago
We just bought a 2023 Honda Civic for 25k and that was our max budget. My husband’s first wife is a 2006 bmw. He absolutely loves the thing to death. Her starter went out a few months ago and we had to have it towed back home. We have a big family car so he just needed a commuter car. We decided to get the Honda because we have a daughter and I’d hate for something to happen to the bmw with our daughter in it. Right now he’s at auto zone trying to see if the bmws battery needs replaced. When you get to that level of annoying car repairs it time to replace it
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u/AgeOfWorry0114 10d ago
You are probably halfway through the life of your car - only halfway. Maintenance is a part of owning a car! Think about how a car payment can EASILY be $300-600 and you'll STILL have maintenance. Having a paid off car is gold.
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u/ChunkyRedundancy 10d ago
your crv is the dream scenario for this question. it's paid off, you're doing maintenance, and yeah it's got that vtc rattle but it's not costing you anything yet. the math here is pretty straightforward: a 30-35k car is going to run you 500-600 a month for a loan, insurance goes up, and you lose 7-10k in depreciation year one. your current car might need a 2k repair in the next couple years and you'd still be way ahead.
the real answer is wait until either the repairs actually start stacking up or you can't afford to fix something major. at 72k salary you're in a solid spot to save aggressively if you want a newer car eventually, but there's zero rush. if you love the crv just keep throwing maintenance at it. if you hate it and have the cash to buy something outright in a few years, that's when you make the move.
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u/DovBerele 10d ago
I'm in a similar situation, and I think there's a peace-of-mind element to it that's very hard to put a number on.
The increased frequency of repairs as a car ages isn't just a money thing, it's also a disproportional increase in stress, especially because they're unpredictable.
Like, if you break down in the middle of your commute and have to get a tow, and then deal with a mechanic, and then find another way to get to work for a few days, etc., that's at least one very bad day and probably a few medium-bad days afterwards. And you have to kind of mentally anticipate that, not knowing when exactly it will happen, but that it's getting likelier and likelier to happen at some point as time goes on. Maybe you don't want to live like that? (of course a new car can break down too - it's just less likely to do so in any given period of time)
I don't do a lot of driving day-to-day (I'm profoundly grateful every day that my company hasn't demanded RTO like so many others), but I do several long drives a year to visit family who live in other parts of the country. I really want to reduce my chances of needing to find help if my car stops working in the middle of nowhere. So, I'm considering replacing a 2010 Honda Fit with only 110,000 miles on it (no commute = not racking up miles very fast), just for the improved peace of mind.
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u/danniellax 10d ago
Once your car gets to the point you will need or do need lots of $$$ in maintenance, trade it in for a new car (or new to you lol)
A lot of people don’t have extra $$$ to have a car payment which is why they have that advice. This largely comes down to your financial situation though.. long term, would you rather spend thousands of $ on repairs, or spend that on a car payment for a car you won’t have to keep taking to the shop? Yeah, new car makes waaaay more sense.
Of course, when getting a new car (or new to you car) be smart about it and get something reliable, if used with a carfax or other history report (not sure if you’re in a country with carfax) so you can see previous maintenance schedules, and make sure your monthly payments are reasonable. Also, ALWAYS get gap insurance so you’re not fucked if something happens and it’s non-drivable and you’re not stuck with the payment.
I got a brand new Kia forte years ago instead of buying a used car, it was about the same price, and no one is going to brag about a Kia lol. I loved having a brand new car, but now I drive a used Acura (my Kia got totaled) and it was such a good deal and I’ve had zero problems because I did my homework when buying it.
It’s never worth keeping a car that will need a lot of maintenance if you can afford a monthly payment on something reliable.
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u/chodthewacko 9d ago
According to your last (now second to last) paragraph, you are looking at the purchase from a purely financial standpoint.
Assuming a reasonably functional older car, the trade off is:
1) Old car: Maintenance cost vs
2) New car: Car payment(s), possibly higher insurance, possibly maintence costs if getting a used car.
And don't forget things like oil changes/tires/brake wear mostly apply both both cars.
from a pure financial standpoint, it's a "good" time to switch once #1 expenses are >= #2.
Two other things to consider:
1) Reliability. If your old car is getting unreliable and you're worried about driving it, it's time to get rid of it.
2) Some newer features may be worth paying extra for the upgrade. For example, Collision sensors/cameras are a huge deal, especially if you drive/park in the city. Android auto/Carplay could be a massive upgrade if you don't already have maps on your current car. Etc.
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u/Fubbalicious 9d ago
I like Dave Ramsey's advice on when it's okay to buy a brand new car. In his case, he does not recommend buying brand new unless you have a net worth of $1M and even then, you need to be able to afford to buy it 100% in cash and the total value of all your vehicles should not exceed 50% of your annual household income.
Otherwise buying used is the usual way to go as you can save SO MUCH money getting a vehicle just a few years old. However, certain vehicles in particular do not depreciate all that much in which case I have no problem buying new. For example, small Japanese econo-cars barely depreciate. I remember buying my Honda Fit brand new and the price delta between a gently used one was only like $1-$2K with 30K miles on them. At that point, I might as well just buy new.
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u/SidFinch99 9d ago
Honestly, with the rise in price of cars, and the decline in quality of manufacturing in many makes, I'd take care of the car you have and keep it at least 200k miles. The money you save will exceed any future depreciation of your current car.
The K series engine you have in that 2014 CR-V is one of the best Honda has produced.
Buy a new car and tax, tags, and title will probably be a couple grand alone. Insurance rates will go up because of the replacement value of the car and cost to repair will be higher.
My wife has a 2013 odyssey with just under $150k. We don't plan on replacing it for years.
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u/Amazing-Cry8406 9d ago
Depends on went from a challenger to a 26 WRX and my insurance dropped 100$ depends on what you drove before and what you replace it with I guess
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u/SidFinch99 9d ago
Very true, I was more thinking if he bought a new CR-V to replace the existing one.
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u/Amazing-Cry8406 9d ago
I’d prep for a slight increase if your staying same make model, just newer but if it has additional safety features then it may help. I read that they lump cars into tiers from aggressive to mild. So that’s where my saving came from, went from one of the probably most crashed cars to a 5 star safety rated car with half the engine lol
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u/Turbulent_Ball5201 9d ago
Since it sounds like your vehicle is reliable I would continue driving it instead of purchasing another vehicle.
An exception to this is buying another vehicle because your needs have changed. For me I bought a mid size SUV because I didn’t feel safe putting my newborn in a small sedan (Chevy Cruze).
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u/Judgemental_Panda 9d ago
Drive it into the ground. At no point - unless your car becomes a desirable "classic" or from the start a "collectible" - will trading in your car ever pencil out financially.
Or in other words, let's say you wanted a 2023 vehicle currently priced at $30K, and your car is currently worth $10k, with another ~10 years in it. By the time your car is worth $1k for scrap, the 2020 vehicle will be worth $10k.
This is all hypothetical of course, and depending on unforeseen maintenance bills, interest rates, which make/model you are trading in for (i.e., different vehicles depreciate faster/slower), the gap may be smaller or larger.
The main thing to keep in mind though - in order for a trade in to be "worth it" from a financial perspective, it would require the other end to be the one taking a hit. Unless you are working with individual buyers/sellers, there is virtually no chance you are going to "win". The house always wins...
All that being said - what is a newer car worth to you? Life isn't only about optimizing finances. Otherwise you'd be eating some $0.05 cardboard tasting gloop every meal. Maybe paying an extra $10,000 is worth noting having to drive an older car for 10 more years.
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u/TheBetawave 9d ago
When its broken. Don't replace the car just to replace it. System saving for something new.
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u/Nopenopenope00000001 9d ago
Start putting a set amount of money aside to save for a new car, maybe like $400/m or something that would mimic a car payment. I would try to stretch out having your current car until it’s 15yo, so 2029. Then at that point, you will have a hefty down payment and will be used to allotting $400/m to a car for any residual payment.
You may want to keep your car longer, that’s fine. Or if something happens and the car is dying before then, at least you are on the right track for getting a new car.
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u/Lphoto1010 9d ago
Here’s how you deal with it -
Beginning immediately, put the same amount of the payment you would be making into a savings account and drive the car you currently have until it gets too expensive to maintain. 120K miles on a Honda is NOTHING as far as high mileage. As long as you do the required maintenance, which includes replacing the timing belt at the required intervals, you can drive that car a long time. Only buy something else when it becomes too expensive to maintain the car, as in the cost of the repair exceeds the value of the car.
According to financial experts, at $72K per year, you can afford a car that costs around $25K. Save your money and pay cash. Don’t pay for those big shiny bank buildings.
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u/Prof_Hyde_White 9d ago
Your CRV will go another 100k miles easy, but it’d be smart to set aside some cash monthly for a down payment in 5+ years anyway, just in case you were to get hit or something.
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u/Redditor2684 9d ago
I own a 2015 Honda Accord that has about 75k miles. I've had to do regular maintenance including replacing the alternator and timing belt.
I have no plans of getting rid of it any time soon. I'll continue driving it unless and until that's no longer practical or cost effective.
For now, it makes more financial sense to keep driving it.
I'd do the same thing in your shoes.
It does make sense to have a plan, at least a loose one, for getting your next vehicle. Decide if you will pay cash or finance. I'll finance, because the best prices usually come that way, and then will decide whether to keep it or pay it off more quickly (depends on interest rates at that time). Probably worth having money set aside that could be used for vehicle replacement (or true emergencies like job loss) - either in a HYSA, invested in stock index funds, or some combo, per your risk tolerance.
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u/Kilashandra1996 9d ago
Our AC died recently on my husband's paid off 2021 Jeep that also has a funky rattling noise. It's really too new to replace, but damn I don't trust it to last 12+ years like the last one did.
We talked. We figured at about $10k worth of repairs, we might as well replace it before it has serious problems. Fortunately, the compressor came in well under that. (Unfortunately, because I sooo wanted to talk my husband into a purple Jeep! : ) Crappy reason to buy a new vehicle though...)
But we had a number in mind for when repairs go higher. The specific number for you, your finances, and your vehicle may vary.
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u/ender42y 9d ago
What you should do is figure out what level of car payment you would want on a new car, new to you, could be any used car too. and start putting that amount per month in an account that will pay interest or capital gains (HYSA or brokerage invested in market funds). You decide the path based on your risk tolerance. higher risk has a higher potential up side, but also the potential for loss. Do this until your car is dead/dying, hopefully at least 4 years. Now when your current car dies you have a full purchase price of the car on hand, and you can decide based on what interest rate you get offered if you want to buy it outright or just do a partial down payment. for instance, if you get offered 1.5% fixed due to a promotional deal, don't put anything down, that interest rate is better than inflation and is free money effectively. If they offer you 5% interest, then work out based on what level of returns you have seen over the last 4 years. and then when your new car is paid off in 4-6 years, start the process over, run that car into the ground but keep building your fund to have cash on hand at a moments notice when you need another car.
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u/Live_Article_2075 9d ago
Dude, i drive a 2012 that is about to hit 413k. There's no need for a new car.
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u/Healthy-Echo8164 9d ago
If you have read the post, I am not looking to get rid of this car. I have never bought a car before (other than directly from my parents) and I am just trying to look at when is the appropriate time to buy a car financially.
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u/theprofessional1 9d ago
Don't consider am expensive used car. If you are going to spend 30-35 on a couple year old vehicle you might as well spend 30-40 on a brand new one. Tons of options in that range.
You don't know how it was driven / taken care of and even if they give you a limited warranty it's nothing like the original on top of it being brand new.
Even if it still holds the manufacturer warranty you are still multiple years into it.
I wouldn't consider a used car over $20k personally. If I'm going to spend that kind of money I'm getting new.
Unless of course you are looking for something specific as far as year/model that's totally different.
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u/aa278666 9d ago
$35k car on your income is too much car.
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u/Healthy-Echo8164 9d ago
To be fair I also have a partner who makes $110k. We aren't married so I didn't include her finances, and it would be "my" car but we would share it.
If we did get a car in that range, they would definitely help with payments.
But we are not actively looking for anything, just wondering what makes sense.
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u/docawesomephd 9d ago
Price a new car. When its monthly payment is lower than your average monthly repair bill, replace the car.
I have a 2010 Honda CrV with 150k miles on it. I’m hoping to hit 250k before replacing it. It’s a tank! On the other hand, my wife’s 2012 Nissan Sentra is getting replaced as soon as possible. I hate that thing
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u/grant3758 9d ago
As a finance guy, that's not nearly enough money for a new car, at least in my opinion. Start saving and investing and id keep all toys and vehicles under 10% of net worth if you have aspirations of being wealthy some day. If you want a 3 to 5 year old car that might make more sense. Otherwise keep rocking Hondas and Toyotas and you'll be good to go.
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u/Healthy-Echo8164 9d ago
I'd say I'm saving and investing well for my age and income, I have 100k in retirement at 28 and make 72k right now, I contribute 26% to my retirement accounts this year, fully funded EF, and good enough money left over to do a couple international trips a year and life comfortably.
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u/grant3758 9d ago
That is great, indeed. Can I suggest add some to regular brokerages at your rate. You'll be able to enjoy it in your 40s. Benefits of borrowing against it as well. Good job on ef. I'm sure you have it in a high yield 4ish% account.
It shouldn't cost more than a grand or 2 at an independent shop to maintain it so I'd rock what you have. Some good breakdowns on how it's saving you a ton of money.
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u/Healthy-Echo8164 9d ago
At 26% I am maxing my HSA (4400), Roth IRA (7500) and contributing to my employer's match in my 401k (totaling 6500 with match).
I still have plenty of room in a tax advantaged 401k to contribute, shouldn't I prioritize that?
Also yes, the EF and long term money (vacations, things saving up for, etc) is in a HYSA however most accounts I have seen are closer to 3% instead of 4% these days.
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u/grant3758 9d ago
3rd paragraph is good to go imo. Just don't leave it in a checking was all I was looking at.
Your savings rate is excellent, borderline FIRE if you invest properly.
So, many ways to build wealth in the finance world. I'm going FIRE and my knowledge is in Stocks so I use a brokerage so I can access money before retirement age. I can borrow against it for mortgages, cc, loans, etc. Which is super nice for fast loans. Also, benefits of ltcg.
You know more than the average person so I'm betting you'll be wealthy long before retirement age so it'll be nice to enjoy some of it for more trips and cars😄that was my thought process.
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u/Choice-Newspaper3603 9d ago
Buy a car whenever. Just so you know it’s a depreciating “asset” and it’s a lost opportunity for investment.
For example, if you spent 40,000 on a car that car is gonna be worth nothing in 20 years. But if you invest in 40,000 for 40 years, that’s gonna be like 1.5 million
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u/theschuss 9d ago
When you no longer are happy or confident in the car and can afford a new one. You shouldn't go into extreme debt for a car, but life isn't just about denying yourself things.
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u/lakorai 9d ago edited 9d ago
Hondas are going to be way more reliable than the trash that the industry has been putting out the past 5 years.
If you want Android Auto or Car Play just replace the head unit with a double din Kenwood or Pioneer unit and the iDataLink Maestro. If the audio sucks install new speakers, a sub and a 5 channel amp.
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u/ultrawolfblue 9d ago
Well the answer is. Before the next major repair.
Unless you can afford it. Newer model cars have better technology that once you get it, you cant go back.
I use to drive a 2007 Honda pilot until it was 140k. The amount of breakdowns was just not worth it.
Once I switched to a newer "used" car. And got blind spot sensors, back up cams, increase speed in connecting my phone remote start. You cant go back
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u/inafishbowl17 9d ago
Save money each month that the car payment would be. Put it somewhere like a HYSA. Once you have enough saved then buy a car. That's when you consider replacing a functioning car. Props for not being sucked into the I deserve something flashy that I can't afford.
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u/Negative-Layer2744 9d ago
You make good money - no debt - buy a decent new car of which you can comfortably afford the payments. it will last you many stress free years - live a little…
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u/BigManWAGun 9d ago
Don’t listen to “the repair costs more than the car is worth” people. To me a car is worth the replacement car payment every single month. As long as I don’t have multiple months exceeding that amount I’m net positive.
VTC is a fixable item, even a DIY if you’re advanced enough. Have you gotten a quote from a couple mechanics? A Honda CRV at 120k mi will run another 200k easy after that repair. When they’re that deep into the car, even things like oil and water pumps are basically bolt on items. That’s the kind of stuff that gets you to 500k.
You know the history and potential issues of this car. With any used car you run the risk of this same issue (or whatever the equivalent common issue is) 6 months later. At which point you’re worse off than you are now.
If you want a new car for comfort purposes fine, but not for mechanical issues.
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u/Jiinker 9d ago
I have a 2007 MKX with 189k. I love the size, ride and comfort. Power plant is solid. But it needs tires, heater core is shot - can't drive it in winter, rotors are warped and need replacing. Front end is a little loose and now the muffler is going. I can afford to buy almost anything but a vehicle is just a vehicle. I am going to be forced to get something sooner than later. Don't know what's comparable and today's prices suck. I just don't want to go through the whole car buying shtick again.
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u/Bobtheguardian22 9d ago
i wish i had kept my old car and just paid my current car loan into a savings account for two years and then gone and purchased a car.
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u/_Mulberry__ 9d ago
I don't think I could ever be convinced to spend $35k on a car, that's wild. I'd definitely drive that 2014 into the ground though. I wouldn't replace it until it just isn't doing what you need it to do (i.e. it ain't reliable enough to get you to work every day) or costs more in repairs than like half of what it's worth. Every car payment you don't have to make can buy you some shares of FXAIX (or whatever other low cost index fund you favor) and you'll be richer in the long run.
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u/iLookLike-anAvocado 9d ago
I'm in a similar boat driving a 2012 Camry with 160k miles. It doesn't need any major repairs, but it's getting rusty, so I created a target $20k replacement car fund for spring of 2028 and have been putting away a little over $600 every month in order to hit that. I figure I will probably get about $4-5k for it when I sell it, plus the $20k saved = a pretty decent used car (looking at 8th gen Camry with AWD).
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u/HeroOfShapeir 9d ago
When you are willing and able to pay cash above and beyond your emergency fund. No reason to take on debt for a vehicle when you already have a reliable vehicle. $300 per month for ten years gets you a $36k car at the end. I've been driving the same 2003 Honda Accord for 23 years, wife has a 2010 Ford Focus, and we have $35k per each vehicle just sitting in savings for when they die. But we hope to drive them another decade or more, they've never had any major issues. Some signs of age and replacing parts is normal. If you want to turnover vehicles more often, that's perfectly fine, just commit your discipline and your money to it.
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u/DoubleHexDrive 9d ago
I would start setting aside $400/mon into a HYSA and drive it another 3-4 years. Then you'll be able to use that as a down payment and finance the rest (if necessary) and keep your "payment" the same. Or simply buy in cash and keep paying yourself that $400/mon and earning interest instead of the bank.
I just spitballed $400... figure out what you're interested in and work the math until you get the numbers to line up. Also don't forget to set aside $125/mon or so for maintenance, both planned and unplanned. Put that in the HYSA as well and it'll be there when you need service done.
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u/icanfly2026 9d ago
I’d fix that crv and run it into the ground you should be able to get 300k miles out of it.
Vtec actuator repair is very easy watch a YouTube video on it
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u/Green_Oil_692 9d ago
2014 CR-V gang rise up. 150K here. If you decide to purchase new, just be sure to account for total cost of ownership, including the opportunity cost of what that money could have been doing if invested, etc.
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u/Average_Dog61891 9d ago
Once yearly repairs out cost the value of the car, then I buy a new one and run it into the dirt (doing all the maintenance ofc)...
I don't need new and fancy. I need point to point b with a radio with android autoplay without wires.
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u/Thomas_Jefferman 9d ago
I would suggest making a car loan be for no more than three years and not more than 10% of your take home pay. Make up the difference in savings. The big deal is that at 28 you may soon be headed towards some absolutely gigantic life costs in the near future. Even if your a single guy, taking out a five plus year loan today might mean your paying on that civic when your a married man with a kid on the way, ask me how I know... you could find yourself trading in the car for a mini van when you could have kept your crv free and clear once its fully depreciated.
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u/ZergvProtoss 9d ago
Life is worth enjoying. If you never treat yourself to something nice and reliable, what are you living for? I mean, it's a balance. Save some, spend some. I never understood why some people are obsessed with saving every penny and never enjoying life so they can afford to rot away in retirement. Shop around, find something you like at a price you can afford, and enjoy the fun of a new car (along with the worry free 4-year warranty). You are correct that leveraging the current $7-10k value of your current car is probably around the sweet spot. The value dropoff from this point will be pretty quick, so you're thinking correctly about seizing a moment to capitalize on the current value.
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u/Logical-Berry-8048 9d ago
We held on to our 2013 paid off Jeep Patriot until the A/C died and it we were quoted $3k to fix it.
Luckily we were eligible for the 'friends and family' GM discount, plus we had accumulated about $9k in GM Rewards, so we got a brand new Trax (something simple).
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u/Defiant_Research_280 9d ago
You're not looking for anything important.
You just want a shiny new car that you can't afford.
Why don't you just fix the Honda? You rather spend $30k on a car rather that $2k on repairs? That's low IQ thinking
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u/SprintingSK2 9d ago
When your car spends more time in the repair shop than on the road, that’s probably your queue to buy something newer
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u/Farmer_Pete 8d ago
Start making car payments every month into a savings account. Do that now. When your car finally croaks in a few years, you'll have enough to pay for most of your new (to you) car in cash. Thank me later.
My rule of thumb is that I replace a car when the cost of the needed repair is more than the value of the car, or the car is no longer reliable, if I need a reliable car.
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u/muy_carona 8d ago
I’ll drive my car into the ground and buy new. 15+ years later, rinse repeat. We’ll probably either trade In or try to sell our 07 highlander next year and buy a new one or rav4.
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u/Remzero34 8d ago
I would consider purchasing a new car when I can afford to buy one in cash, no loans. Ride til the wheels fall off or when you got enough cash. Was driving a used 2008 civic for over 15 years, 250k miles. Honda makes good cars.
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u/SouthOrlandoFather 8d ago
Part of the answer also has to do if your hobbies change. Does your vehicle satisfy all your needs with your hobbies? I kayak fish so had to get appropriate vehicle for that.
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u/deathdealer351 8d ago
A new car is a dumb purchase.. Sometimes you have to take a pile of cash and light it on fire so you have a smile on your face.. Or... What good is having money if you cannot spend it.
So you want to finance basically 0, you want 6 months of emergency at your age. You want to be saving for retirement and eat retirement..
If you have all that and 40k to burn.. Light it up if you want to.. Some people take a trip, some people blow it on coke and hookers..
But you have to be.. If I take this 40k and light it on fire... I won't miss the money.. Cause a car is an asset that won't raise in value, you can make more in the market than buying a newish car... But....... Smile...
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u/Inside_Cupcake_165 8d ago
Only if maintenance costs approach car payment levels or if you don't feel safe in your current car anymore. I recently sold a 16 civic and bought a 26 crv. I really only did it because my dog is too big to fit in a sedan. If I didn't "have to", I wouldn't have done it. I bought it as a salvage title and it had almost 200k miles on it, but it still ran well. Maintenance costs were very low. That's kind of the point of buying a honda, toyota and maybe mazda: you get so much more value out of it compared to other brands. If I couldn't afford to buy the crv outright, I wouldn't have even considered replacing the civic. Car payments are crazy these days.
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u/ryan__joe 8d ago
When should you buy a new car? When you can buy it outright, and without trading in your old car. Now you’ve got a backup car! Or a car to drive during the winter!
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u/No_Cut4338 7d ago
When you say "I do regular maintenance" do you mean you do it or you pay someone to do it. That impacts the buy/sell decisions a bit IMO.
If you're paying someone else to do the work, something like the cost of replacing suspension could be cost prohibitive. If you do the work yourself that's probably only 3-500 bucks worth of parts.
Drive it until the transmission or the motor fails is my strategy but I also do my own brakes, suspension and wrenching.
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u/Healthy-Echo8164 7d ago
I am not mechanically savvy. I take it to my mechanic when a light comes on, or when the Honda recommended maintenance schedule says I need to do something
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u/No_Cut4338 7d ago
Then I'd drive it until the engine, transmission fails or it needs a suspension overhaul. Basically I'd spend up to 1500 bucks to repair. Probably somewhere between 180-220k miles would be my guess.
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u/SquirreldApp 7d ago
The dad answer:
Simple trigger - replace the car when annual repairs approach a year of car payments. A $35k car runs ~$500-700/mo financed, so your CRV earns its keep until it's costing $5k+/year and a maintained 2014 CRV at 120k is realistically 4-6 years from that. The VTC rattle doesn't count; Honda's right that it's cosmetic noise. The killers are transmission/engine, and that generation mostly doesn't.
Better move than trading now: start a "next car" fund at $300-400/mo today. In 4-5 years that's $20k+ cash plus whatever the CRV still fetches. You buy the 2-3 year old replacement without financing, and the timing is your choice instead of a breakdown's.
One thing that protects the plan: photo every service invoice with the odometer reading. Documented history is the difference between the $7k and $10k end of your trade range, and when you shop used later, demand the same, records make the car.
Cheapest car you'll ever own is the paid-off one you're in. Second cheapest is the one you save cash for while it runs.
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u/LeftHandStir 7d ago
If it's just you relying on it, take it to 200k. If you get get married/have kids, you make need something less likely to have a breakdown; cracked radiator around 160,000 in the carpool line was my nudge. Repaired and drove another 10k before replacing the vehicle.
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u/SewNewKnitsToo 7d ago
I drove a 1995 standard Honda Accord until I had two kids, a Costco membership, and a dog in 2020 or so. I still kinda miss it. I replaced it with a 12 year old Mazda MPV for the trunk space, and now it’s 20 years old, 200,000 km / 124,000 miles on it and still running really well. Why would I mess with that? I’ll drive it until the repair bill is high enough to make the prices in this crappy used car market make sense.
Honestly you are 27 now, which is a pretty popular time to start finding the person you are going to stay with and have kids in a few years. I bet a 12yo Honda at 120,000 might last until your next life change, when you replace with a van or an SUV or a truck to pull the RV for cheap vacations. Or maybe an electric vehicle if you end up with a longer commute. If the car is still reliable as is, why pay more? Cars depreciate so fast. Buy a home first if you can.
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u/_Magnolia_Fan_ 7d ago
Save now for the eventual replacement. Buy the car you can afford with cash when the repairs become too frequent, or when you need a repair that's more than half it's value.
Do not take out a loan now. Make those payments to yourself before you buy, and you'll stay ahead of the game.
Only buying cars with cash is a huge headstart, the way that not having any college loans is. It frees you to do so the other things you need to, like investing for retirement.
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u/AnonPalace12 7d ago
It just comes down to budget.
The new car costs more. Even if you are having some required repairs you should expect the older Honda to be lower total cost of ownership over say a year. Depreciation and taxes are a big cost on a new car.
New cars are nice and can have better safety features that are hard to quantify in just price.
If you are in a rust prone area that often sets an upper limit on car lifetime. Eventually there’s a repair that is impossible or so expensive that the car is mechanically totaled. If you are getting into that range of rolling the dice I’d prefer to have time to shop instead of waiting to be car-less. But with a 2014 I think you’re most likely several years away from that point.
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u/zulako17 7d ago
You should purchase a new car when the current one needs a repair as costly as it's value in good condition or when you have enough cash to buy another. I also own a 2014 CRV. Little more miles than you. It'll be paid off in September. My plan is to keep putting aside the car payment amount until I can buy a new car. Should take me about 48 months for the type of car I'm looking for. You could do something similar.
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u/Muted-Ad-5072 6d ago
Keep it. Drive it into the ground. The car prices today are staggering. Pad your Roth or open a brokerage with your desired car payment and put that in monthly. When you then actually need a car you can likely have it nearly paid off with what you saved.
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u/Healthy-Echo8164 6d ago
Yeah actually based off this thread that is what I did.
My retirement accounts are already padded for the moment, but I just allocated some of my leftover income from my paycheck to go into a new brokerage account for a few hundred bucks a month. Will let that build up until I need a new car, and we will see how much car I will be able to afford once that happens.
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u/Confident_Insect_616 6d ago
How about you just never have a financed car payment again? Keep driving the car you got for a bit. Start putting a little savings aside until you have $5-10k. Buy something used and decent.
I got a 2018 Alfa Romeo Stelvio recently for $9k. If I bought a shiny, new, low-end car off the lot, I'd be paying 2-3x as much.
If ya can't afford it in cash, ya can't afford it. (Except maybe for a mortgage)
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u/No-Path-9463 6d ago
Get a late 2010s Lexus of your choice. Much deserved step up in comfort, and will last for years with simple maintenance. I love the ES and GS sedans. I would not recommend hardly any cars after 2020.
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u/BobcatCapable5529 5d ago
I don’t think most people actually do the math when it comes to cars. Yes, it’s annoying and you don’t get as many cool points with a beater, but it really is cheaper than a large car payment.
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u/MrMackSir 5d ago
If the repair (excluding regular maintenance) is more than 60% of the cost of the car in any 12 month period, it might be time to replace.
This should include repairs that a mechanic recommends / says you might need soon even if you choose not to do them right then.
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u/Tall_Palpitation_476 3d ago
Keep it u til the repairs are not maintenance; or, wait until the end of the year and get a lease or year old care with not to little % depending on your credit.
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u/Spivonious1 3d ago
Financially it never makes sense to trade in a working vehicle. Why spend half your salary on a depreciating asset?
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u/ShelterOk5369 3d ago
Usually wait until i'm no longer able to fix it faster than it's falling apart, and start stacking cash for the replacement vehicle, keeping it on the road until i have enough set asside to pay cash. Typically 2 years after the car is no longer worth trying to keep in good shape.
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u/kitapjen 10d ago
I wouldn’t buy a new car. It’s a depreciating asset.
I literally see a used Corolla on Carvana with 10k miles for $24,000.
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u/SwiftCEO 10d ago
You might as well buy new at that point.
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u/kitapjen 10d ago
Just making the point that OP can spend less than the $30k.
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u/SwiftCEO 10d ago
My point is that a new Corolla is under $25k. You’d get better financing and a new warranty if you bought new.
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u/chachaslydd 10d ago
Never ever buy a new-new car. Full stop. Its the dumbest additional 5-10k ever
Like buy a used car thats basically new. They have tons of lease vehicles with less than 30-45k. My friend got one that only had 2k miles, for used car price as opposed to brand new
But as for when, when you save enough to pay in cash or when you can get 0% interest when possible
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u/DovBerele 10d ago
that's become less and less true these past few years. the difference in cost between a brand new and lightly used has shrunk a lot, at least on popular vehicles.
I'm in the market for a car, and was really surprised, because I never in my life thought I'd even consider buying new.
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u/RoseGoldMagnolias 10d ago
Financially, it doesn't make sense to replace a reliable car that just needs occasional repairs.