I was thinking about my Fiero and other vehicles I have spent what I thought was big money but after reviewing my spending I came up with this.
My used vehicle ownership cost evaluation or justification.
I have spent a lot of money on my custom and modified vehicles over the years so I thought I would break it down and see if I was spending more or less compared to buying new cars every 5 years or so, below are my findings.
Even if you do not know what your used vehicle will cost to buy or what it will cost you per year to own you can do the math and get an approximate cost of ownership.
First let’s look at what the new car will cost per month and year before the warranty expires.
For example: Said new car payment is $300 per month, the insurance is $100 per month.
That is $400 per month so over the first year it will cost you $4,800 during the years you have the warranty in place. If you own the vehicle for 5 years that is $24,000 if you can even buy a new car for that much, but this is just an example so you will need to do the math on the new car you are thinking about getting.
So let’s see how this example breaks down, if the new car costs you $24,000 for 5 years, then what does a used one cost? Well that is unknown but you can see if the used car is worth it by seeing what you would need to spend to make it more expensive than the new car.
I will use a VehiCROSS as an example. Let’s say you buy a VX with 80K on it and pay $6,000 for it and your insurance is the same as a new car $100 per month and you break that down to the same 5 year time of ownership you will spend $6,000 in insurance for 5 years, so the total cost of purchase and insurance is $12,000 for 5 years, so in that 5 years of ownership you will need to spend another $12,000 in repairs and maintenance for the new car to be a better deal. http://www.wildtoys.com/vehicross/hype.asp
This is just an example and you will need to do the math based on the new car you are thinking about buying and the used car you are thinking about buying, the insurance cost and gas mileage if you drive long distances. If you do drive long distances the millage and warranty come into play you will have to include that in your evaluation of the cost effectiveness of the new to used comparison.
Another factor is down time for repairs, this is something that should be considered when deciding to go with new or used. The convenience of a new car at least until the warranty expires might be worth it to you or if you buy new every time the warranty expires a new car might be the way to go if you are ok with the extra cost for convenience.
I found that I can own 2 older cars or trucks for the same price or less of one new car or truck and if one breaks down or gets crashed I have another one and do not need rental car insurance or need to get rides or rent a car at all.
As many of you know, I have a super modified 87 Fiero GT and have spent about 60K in mods on it and thought it was a huge number but after doing the math I found that over the time I have owned it the cost was not that bad. I bought it for $2,800 in 1999, stripped it down and did a resto-mod in 2003, then over the years I spent about $60k and made it my dream car. The break down is, from 1999 to 2016 I spent about $60k, so that is 17 years of ownership divided by $60K works out to $3,530 per year not including insurance which is about $50 per month for full coverage. So the total cost of ownership for the GT with 17 years of insurance at $10,200 plus the $60,000 is $70,200. This is for 17 years and breaks down to $4,130 per year and $344 per month. Not as bad as I thought when you look at it this way. http://s920.photobucket.com...0Build?sort=3&page=1
If you buy old cars or trucks and fix them up spending lots of cash and then sell them right after doing so you will not come out ahead, but if you keep them and enjoy them for many years you could spend less overall and have the custom or modified vehicle you love and enjoy while spending less than buying new cars every time they get old and less convenient.
I did not factor in the resale value of the vehicles in this analogy because that varies so much I just used a ballpark ownership cost as the basis of this analogy.
Feel free to add your opinions and findings regarding this analogy, or corrections in my math, I am curious as to what you all find when you do the math on your vehicles.