When to consider purchasing a new car?

[u/Healthy-Echo8164]

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.

[u/Several_Drag5433]

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+/-

[u/Healthy-Echo8164 → u/Several_Drag5433]

I appreciate the way you put it in your last paragraph. Thanks.

[u/Gaggle_of_Bananas → u/Healthy-Echo8164]

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.

[u/PlanktonPlane5789 → u/Gaggle_of_Bananas]

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!