Is It Cheaper To Buy A Car Or Fix A Car?

Recently, a good friend of ours decided to crunch the numbers to decide if buying a new car in the Wilmington area is more prudent than maintaining their 2005 Chevy Malibu. Take a moment to read his unusual results.

New Car Purchase versus Repairing and Maintaining An Older Car – Mark Hambaum.

With the rising cost of gas, I suspect at least some of your customers are thinking about buying (or perhaps leasing) a new fuel efficient vehicle. But will that really save them any money? Are you helping them crunch the numbers? Here’s an excerpt from a recent newsletter article with some numbers crunched.

A paid for 2005 Chevy Malibu gets an estimated 23-mpg combined city & highway. At 15,000 miles annually, with 45% highway driving and 55% city driving, with gas at $3.57 per gallon, the annual fuel cost would be $2,329. In contrast the annual fuel cost with a 2011 Toyota Prius, which gets an estimated 50-mpg combined city & highway, would be $1,056. That’s an annual savings of $1,273.

BUT… the price tag on that new Prius (on average) is about $24,985. The typical buyer puts 10% down ($2,499) and will finance the balance. So already with just the down payment that first year’s gas savings is gone PLUS an additional $1,226.

Next there’s interest. After subtracting the $2,499 down payment; that leaves $22,486 to be financed. At 5% interest that comes to $1,151.47 in interest charges for the first year alone!

Let’s not forget our favorite silent partner in all of this, the government. Depending on your state they’ll take 5, 6, 7% or more (at 6% that’s $1,500).

Also there’s insurance. Rates vary depending on location and several other factors, but the Prius will cost several hundred more to insure than the 05 Malibu.

Oh, and we can’t leave out depreciation. The 2005 Malibu will depreciate about $1,020 over one year, whereas the Prius will drop in value by about $5,747 in the first year of ownership.

Now someone is sure to ask about repair and maintenance costs on that old Chevy. Go ahead and factor $1,800 for one year of repair/maintenance for the Chevy and zero for the Prius. The numbers still overwhelming favor the Chevy somewhere to the tune of $11,000 plus. – Mark Hambaum, MDH Automotive Services

That’s some pretty amazing numbers, isn’t it? So, if you’re not sure how you would fall into the category of New vs. Repair/maintain, take the time to crunch your numbers. We can give your car care budget and projections, you can supply your insurance costs along with your fuel bill. As vehicles become increasingly reliable well over the 100,000 mile mark, the average age of ownership is steadily increasing. Currently, it hovers around 10 years for the average motorist.

Proper maintenance is always the key. So is driving habits and environment. Buckley’s Auto Care promotes good car care maintenance and our NAPA Vehicle Health Check Program is a great tool to help you maintain and manage your vehicle along with your budget.

You can call us anytime at 302-999-8285 or for your convenience, make your online appointment by clicking here.