New cars are nice. That’s not exactly a controversial statement; it’s just the way it is. Automakers work hard to improve each new model over its predecessor, which means that even vehicles that aren’t the best in their class are still much better than their previous versions. In fact, you’d be hard pressed to find more than a few features available on 15-year-old luxury cars that aren’t currently available on midsize family sedans.
As a result, seeing or reading about new cars that are coming out can make it tempting to grab your checkbook and head down to your local dealership for an upgrade. As long as you can reasonably afford it, there’s really nothing wrong with buying a car you want because you have the money and think it will make you happy. If you’re not necessarily in that situation though, figuring out when it makes sense to get rid of your old car can be difficult.
Ever the voice of logic and reason in the car world, Consumer Reports says that making the decision to buy a new car should come down to money, safety, and features.
Money is probably the biggest factor when it comes to trading in an old car for a new one. With the exception of a handful of extremely collectible models, automobiles aren’t an investment. They depreciate quickly, and the $30,000 you spend today will probably only net you $10,000 if you sell it in five years. Not all cars depreciate at the same rate, but you have to look at the value the new car provides and weigh whether or not it’s worth the money you’ll lose to depreciation.
One advantage of a new car is improved gas mileage, especially since engine technology has improved so dramatically in the last few years. A new pickup truck will be just as fuel efficient as some older family sedans, and 40 miles per gallon is no longer a number reserved exclusively for tiny diesels or hybrids. Lower gas prices have limited how much money a more fuel efficient car can save you, but if your current car averages 22 miles per gallon, and you move to a new car that averages 32 miles per gallon, that’s probably going to reduce your yearly fuel spending by $375.
While buying a new car might not save you huge amounts of money on fuel, maintenance and repairs are where you stand the best chance of saving money. As cars get older, keeping them running costs significantly more, and there comes a point where it’s no longer worth it to keep fixing what’s going wrong on an unreliable car. If your yearly repair costs are exceeding a year of car payments, it’s probably time to start shopping for another car.
Your own safety is definitely more important than a little bit of cash, and driving a safer car can certainly save you money in avoided accidents and hospital bills. All cars should have anti-lock brakes, traction control, stability control, and curtain airbags. If your daily driver doesn’t have these features, continuing to drive it is pretty risky, and you should seriously consider buying one that does.
Other safety features you may want to consider looking for are forward collision warning, blind spot monitoring, lane departure warning, a backup camera, and a “Good” score in the IIHS small overlap test. Luxury cars are the most likely used vehicles to offer all these features, and while that may be more affordable than buying new, maintenance and repairs will be more expensive. Ultimately, though, you should try to make sure you’re in the safest car you can afford.
Finally, new cars offer a lot of features that will make your driving experience more enjoyable. Depending on where you live and what kind of driving you do, certain features will be more valuable than others, but that’s up to you to determine. Smartphone integration is certainly convenient, as are heated and ventilated seats. Neither feature is a necessity, but it’s certainly nice not to have to spend a freezing winter morning sitting on cold leather seats.
Most modern car features can be installed on your current car, but once you start adding more than one or two, it can start to get costly. A mount that allows you to use the navigation app on your phone while driving, for example, won’t cost a lot of money, but fully integrating an aftermarket infotainment system into your dash is going to be pretty pricey.
If you look at your car overall, and it has the basic safety features, gets generally good gas mileage, and doesn’t run up costly repairs, and especially if you’re underwater on your loan, it probably makes more sense to add some aftermarket features to your current car or do without for a while. Then again, if your car is paid off, and you have major concerns over repair costs and safety, go ahead and buy a new or recent-model car that will probably also offer better gas mileage and more features. In that case, it just makes sense.