When is the right time to sell your old car and buy a new one?
When to Upgrade a Car?
pollambo on 25/01/2023 - 21:40
Poll Options
- 171 year
- 22 years
- 83 years
- 34 years
- 765 years
- 36 years
- 27 years
- 18 years
- 39 years
- 13310 years
- 111 years
- 112 years
- 013 years
- 214 years
- 315 years
- 335Until it fails
Comments
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When the warranty runs out. /s
My brother does this!
I find it ridiculous though. The money most people spend on repairs for the 5 years past warranty is probably less than what you lose by selling and buying new.
Does he claim the car on his taxes? In that case it would make financial sense
how to claim car on taxes? via novated lease?
@OzFrugie: Thats the most straightforward way, as all the expenses including maintenance are rolled into the lease.
You can also just buy it yourself and sell it in 5 years. The amount you save in tax will be roughly the same as the value lost, so you get a free upgrade
@greatlamp: sounds like novated lease is good then? but why people here say buying outright is better than novated lease?
how does novated lease work with EV since maintenance will be minimal and no fuel expense (perhaps infrequent charging cost in public but will also be much less than fuel) ?
Does it still make sense financially to do novated lease for EV ?@OzFrugie: You always pay more with a lease, otherwise they wouldn't make money. It's just more convenient.
If you are in the kind of job where buying a car as a tax write off makes sense, you probably run your own business and make 150k +. Making an extra 10k isn't worth dealing with the BS of selling a car and dealing with idiots and timewasters on carsales
@greatlamp: I see.
You cannot normally write off car fully as business, but need to depreciate over x number of years, right?@OzFrugie: Not currently, but the scheme will end at some stage.
https://www.ato.gov.au/business/depreciation-and-capital-exp…
Basically from what I gather you need to "take ownership" of the vehicle in order for this to work. You can not use conventional finance, however a chattel mortgage works around this by the car essentially being yours and the bank / lender having a mortgage / interest in it. That terminology is probably completely wrong, but you get the idea.
Paying in full is also fine of course.
@greatlamp: +1 regarding the financial aspect surrounding buying a car, particularly with the immediate write off as a sole trader / company (I think it applies to companies also anyway). You actually end up ahead in the first financial year due to paying considerably less tax.
Of course then you're stuck with principal repayments that going forward come out of your post tax income essentially, since you've already claimed. Interest is of course tax deductible.
I'm upgrading when I didn't really need to, old car was running just fine and wasn't that old.
I ordered a musso for my "work car" and while almost all of this is going to off the <120k tax bracket, when I factor in hecs (not that I should here, but in terms of liquidity) it's almost a 40% deduction in the cost of the vehicle. Even when you factor in the tax deductible interest on a chattel mortgage, it's still a pretty nice proposition.
Yes I'd have had more cash if I didn't buy the car so you still lose out, but I have a finite timeframe in this business and I'm making the most of it.
sounds like novated lease is good then
Very very subjective. I tried doing this and found the total cost of ownership was a lot more than if i were to finance / pay my own comprehensive insurance. The breakdown revealed their finance rate and insurance costs were ridiculously high. (e.g. comprehensive insurance if i managed it would be around 1200, theirs was around 3000, my finance rate was 4%, theirs was about 11%).
ymmv. so do your own calculations and find if it’s beneficial for you.@kaleidoscope: You can get your own insurance with novated lease. At least with Smart Lease.
And they will reimburse for it.
The first year, I opted for their nominated insurance even though I could choose my own but the difference was small. Second year, they wanted to increase my premium by $400. They sent me an email about the increase and even mentioned I could find another provider if I wanted.@Ridiculous Panda: But would you settle for a 7% difference in finance with novated lease though (if there was such difference)
@kaleidoscope: Every time I've done the numbers I would be better off just getting a cash-out refinance on my home loan to buy the car.
EV's being exempt from FBT makes it tempting though.
@kaleidoscope: New rules for novated lease for an EV make it attractive if you are buying an EV. For an ICE - not so much.
@OzFrugie: Good news .. all pure EVs and plug ins hybrids under $84916 of durable value are exempt from fringe benefits tax
If your employer does salary sacrificing, good thing you can do the EV 100% before tax. Plus you get the GST back on everything you spend on it
@OzFrugie: I worked out for myself that if you are taking a loan to buy a car (with interest repayments of course) a novated lease works out better generally speaking. If you have the cash to buy outright, this is the cheaper option as you avoid interest repayments on loans. As long as you don't need the cash liquid right there and then as it always is tied up in the value of the vehicle until you sell.
Does he claim the car on his taxes?
One car he does, as that's used for his business activities - a driving instructor.
The other is the family car with a much lower claim, as the wife claims some travel expenses.
Of course you pay more, but you also get a new car!
If you like shiny new things, but also want to get some value, this makes the most sense.
I find it ridiculous though. The money most people spend on repairs for the 5 years past warranty is probably less than what you lose by selling and buying new.
Does it still cost less if the higher premium on insurance is taken into account compare to older car model? Will the repair cost still more if driving a Toyota corolla as an example?
In NSW you don’t need to pay or get a rego check done in the first 5 years.
@Pinchy: I forgot you also save from rego check, not to mention the time saved from visiting the mechanic, so probably it does cost less if upgrade to a new car once every 3 to 5 years.
Keeps the used car market going.
When it costs more to fix than it's worth (or within some margin of).
This.
Unless there is some kind of tax advantage in replacing it earlier according to your income situation?How about 10k in repairs on a car that is worth 20k?
I’d fix it then sell it.
Depends what it is and what it's worth unrepaired.
You either repair it or sell it and buy a car that is worth $10k (which is still a pretty good car TBH).
That said, in that circumstance some people will think it's a sign to get a $40k car loan. Go figure.
Every year on your birthday.
Are you adopting?
When cars you can afford to upgrade to offer significant safety improvements.
Unsure why you got a neg. As much as we all like a bargain, my family's safety is pretty damned important
"If only I'd spent an extra $x for that safer car" is something I never ever want to think
Your family's safety will be impacted more by your driving ability than it ever will be on the car you drive.
That's why these people that roll around in SUV's thinking they're safer are idiots.
Too true!
There's definitely a limit to that. Cars in the last 10 years? Sure, safe enough.
Cars from the 90s with one airbag and no ABS? Your driving ability doesn't mean much when your brakes have locked up because someone's pulled out in front of you on the highway.
I prefer my car that has ABS, AEB, 8+ airbags, proper side pillar design (Lexus IS anyone?) and even the pre-tensioning seatbelts.
@DreadPirateRoberts: This over and over again.
Meanwhile there are people that delete their ABS and driver's side airbag because they reckon they can brake faster and stop faster using their foot.
Sure it's a "race car" but how often does it actually get raced on a circuit?
Going to get neged for this comment by all the experts.
I prefer my car that has ABS, AEB, 8+ airbags, proper side pillar design (Lexus IS anyone?) and even the pre-tensioning seatbelts.
I get all those on my 2002 Mercedes. Best of both worlds, cheap to repair (I DIY), and a good quality vehicle thats built to last. This is important for DIY, because of all that time and effort you put in to learn the intricacies of a certain car is not wasted since you keep the car for so damn long.
It's not one or the other, it's both. And at the end of the day unavoidable accidents happen even to the safest of drivers.
@nigel deborah: This is exactly it
BuT i'M bEsTeSt DrIvEr So No AcCiDeNtS fOr Me is a terrible justification for driving an old/unsafe car.
Afterall, the road is full of other drivers, like
people that roll around in SUV's thinking they're safer
You're conflating issues here. Your safety on the road comes from 2 places:
1) how good of a driver you are, and
2) how safe your car is if you can't avoid someone else crashing into youThat's why these people that roll around in SUV's thinking they're safer are idiots.
This is exactly why you need a safer car because someone like this will hit you, no matter how good of a driver you are
Not really. My 2020 Civic negates a lot of other bad driver behaviour. Even if I did dumb sht in it, there are correction measures.
It's only going to get better too. New cars are very impressive and once I saw people selling their 2008 cars for close to the amount I paid for a new one it was an easy decision.
It's not time based, it's mechanical condition based. Stupid poll.
I know some people who do it based on time, it's either for warranty running out or they dont like getting pink slips in NSW, so they sell it before it needs one.
But agree, stupid poll is stupid.
aint the rule is sell european cars before 10 years
i sold my saab at 9.5 years. think it broke down soon after lol
I used to buy Euro's at around 10 yo as that is when I could afford them. Bought good quality ones and maintained them well. Some of the best cars I've owned. You'd have people proudly talk about some gadget their new car had and you'd smile and say wow so amazing. Knowing your 10+ yo car had that long ago.
Exactly, I replaced a car worth 20k because it required close to 10k in repairs (Stupid dct clutches alone are near 5k)
how much did you sell it for? and cost of new car?
Still got the old one, I've been hitting wreckers to get the parts required to fix it on the cheap. New car was 47k.
Some people do it time based for tax purposes. For every other tom dick and harry, I’d say its around the time where your warranty goes out.
I've never held a car long enough to have mechanical issues, so not everyone thinks that way.
Whenever money allows…
I'm driving a 21-year-old Holden Astra with over 180,000 KMs, that I bought 13 years ago as a second-hand car. It's way overdue to send it to the scrapyard as it's starting to fall apart (both the timing belt and tyres are past their expiry dates too), but will drive it until it kicks the bucket since car prices are still too high.
The time to sell an Astra is always today.
I doubt anyone will buy that shitebox. I might have to pay someone to take it off my hands. 😆
Just wrap it round a power pole while its raining, It looks like thats what all the p platers do with them.
Lol!
180,000?
Still a baby..
How you going to dispose of the car when it kicks the bucket?
Timing belt and Tyres aren’t too expensive to replace. Unless it’s a major engine/transmission or a head gasket issue, I’d just keep maintaining the car; however, it’s a personal choice.
73 torana in 90
83 commodore in 96
96 statesman in 04
12 commodore in 16so
17 yo used for 6
13 yo used for 8
8 yo used for 12
4 yo (due to sell after 20 so in 2036)
currently its only got 117k km on it and I do perhaps 7k km a year.so i guess i'm getting a brand new 2036 model and im guessing it will be electric. and not a holden.
2nd para is confusing at 3am
When the wiper blades need replacing.
when it need fuel time for a new car.
i aint got time to go to a petrol station to fill it upEV lol
Before it gets to the point of expensive repairs out of warranty ;)
When it breaks down for good, when it will cost more to keep running/repairing it in the long run, or when you have money to spare on a better one.
When someone else writes off your old car in my case 🫠
I try keep mine for at least a decade
Pre-COVID I would have said 10 years. With the cost increases on new cars, and the second hand market going absurd, I now think "until it fails" is the most sensible option.
My daily car is now 10 years old/210,000km milage and I'm hoping to keep it going for another 3 years/until it reaches 240,000km.
Euros are timeless
And high yield
I keep my cars until they are not worth fixing. That might be a major mechanical failure, or it could just be cosmetic, but would cost more than the value added.
Trying to anticipate when a car will cost you more than it is worth, is like trying to predict the stock market.You've summerised it perfectly.
Where do you draw the line of fixing it or not fixing it? If you have 10x minor parts that need fixing that cost $200 each over 12 months, would you fix each one and keep driving or sell it? Or if your clutch needs to be replaced that cost $2000, would you replace it and keep driving or sell it?Generally keep the car if it’s repairing minor items or a wear and tear item like a clutch. Requiring a new clutch isn’t an indicator of the reliability of a vehicle. Plus, if you’ve made the decision to do a major repair it’s often worth keeping the car longer because you won’t get the value of the repair money if you sell it.
There is no right time, I know someone who is still driving a 1980s Mercedes-Benz, and I also know someone else who literally drives a new car every few months.
Whenever the ashtray gets full!!!
Of coins?
.That takes ages when you don’t smoke.
I smoke HN affilliates, they grow faster than mildew?
I had a car for one day! That has to be a record surely!
I owned a hyundai getz for 45 minutes, Bought it at auction for $300 and immediately drove it to wreckers and scrapped it for $750 lol. Before anyone asks, the transmission sounded like this https://www.youtube.com/watch?v=tLC-Rhs-UzU when i picked it up (They wouldn't let me test drive it before the auction)
You have the ‘record’ then! I have been outplayed!
I will do it every 5 years now that I have new cars.
We only got new cars, because the two we had were failing and costing us $x,xxx almost every 12 months. We had done that for a few years, but it was time to bite the bullet and just get rid of them whilst they were still running and worth something.
Now you only lose $xx,xxx in depreciation, bargain.
When your situation changes and you need a different style vehicle, or when the old one becomes uneconomical to maintain.
Eg ‘new’ car when you need extra space or want 4wd or downsize.
Or perhaps when opportunity presents itself like a financial windfall or a relative selling a car cheap.
When to Upgrade a Car?
Depends, when you say buy a new one, is that new to you or brand new?
For me, brand new cards get replaced at around 8-12 years of age, depending on requirements.
Where is the "this is a dumbarse way to ask this question" option?
Ideally if you can you would sell right after your 90K service as its it one of the major services. That way it's yet to reach the mythical 100K point at which buyers are turned off, and you have had everything inspected and repaired if need be. Should also still be under warranty that way.
What if the 90k service is a regular one and the 100k service is major?
You’d be better to get the value form the service by driving until the next minor service or selling it prior to the major service. Sell it prior enough that it will be 6-12 months before the new buyer needs to think about the major service.
I have a regular mechanic so it was easy to basically use the service as a roadworthy. Also it gives you added marketing clout to say things on it are new and assurance you are not selling a dud.
I upgrade my Toyota every 25 years.
That’s my plan. I’m still on my first one.
But then you spend 10 years with a car of 15 years or older :(
Life's too short for that.
When to Upgrade a Car?
When you feel like it.
My accountant told me that the road to wealth is to buy and sell cars based on feelings.
Depends a lot on the individual. For me I’m happy to drive my car into the ground. My next car will definitely be a bit nicer and something more fun to drive and performance focused and I don’t look forward to spending at least $10k on it (depending on the condition and age).
whilst it is still relatively 'safe' i think cars that would be deem Zero on the Ancap rating shouldnt be on the road
the rating changes all the time so cars should be re-rated every 5 or so years
if a car is rated a zero there should be a time limit to how long until it either needs to be 'upgraded' to be safe or taken off the road
obvious exceptions for vintage cars etc but the amount of KM should be club reg only
otherwise the ANCAP rating should be from -5 o 5 in which once a car is deemed a -4 or something it should be de-registered off the road - perhaps the government could even have some kind of a 'buy-back' scheme for old unsafe cars that are unsafe on the road
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When the warranty runs out. /s
There's no set answer to this. Depends on many many different factors and variables.