The New Math of Driving Your Car Till the Wheels Fall Off

Jeremy Morris is used to friends making fun of the Toyota Tacoma he has driven for 24 years. He still insists it was one of the best money decisions of his life.

The 45-year-old financial adviser in Coeur d’Alene, Idaho, estimates he saved more than $100,000 by never replacing the pickup. His ballpark figure factors in what he would have spent on a new car every five years, minus the roughly $20,000 he paid for repairs and upkeep over 300,000 miles.

There have always been people who relish driving cars till the wheels fall off, but the case for this frugal personal-finance move has grown stronger as the costs of car ownership have ballooned.

The average transaction price on a new vehicle was $46,660 in March, compared with $39,950 three years earlier, according to Edmunds, an online car-shopping guide. Repair and maintenance costs are up 8.2% year-over-year, and insurance costs are up 22.2%, Labor Department data show.

The increase in car costs is one of the many developments that have led to higher inflation. The Federal Reserve, which is wrapping up a two-day policy meeting Wednesday, has attempted to address stubborn inflation by raising interest rates. That has also made auto loans more expensive.

To cope, many owners are squeezing more life out of their current ride. U.S. vehicles’ average age hit a record 12.5 years in 2023, increasing for the sixth straight year, according to S&P Global Mobility.

Higher auto prices, in combination with longer vehicle lifespans and new technology, are changing the math on the optimal amount of time to keep a car. For Morris, the peeling black paint on his truck only makes him fonder of it.

“My long-term plan with the truck is never getting rid of it,” he said.

Better with age

Tom Piippo once put up pictures of customers and their vehicles on the wall of his repair shop in Rudyard, Mich., after odometers reached 200,000 miles. The tradition stopped years ago after the milestone became commonplace.

“I ran out of wall,” said Piippo, whose Tri-County Motors regularly sees vehicles in the 200k club.

In the 1990s, cars with 100,000 miles on them were nearing their end, but now they are aging more gracefully. Rising vehicle prices also have led customers to hang on to old cars longer, Piippo said. He said he hears the same from other mechanics in the Automotive Service Association, a trade group. Many drivers come into his shop with cars from the late 1990s and early 2000s.

The average age of Americans’ vehicles has risen significantly over the past 50 years, according to data from the Federal Highway Administration. The share of cars that are 10 or more years old climbed from 16.9% in 1977 to 44.2% in 2022.

There are other reasons drivers are holding on to their cars. Newer models have become more expensive to repair. Seemingly simple fixes can run up large bills when damage affects sensors, screens and other new technology that has become more standard.

And more owners have taken out longer loans that can stretch out to six or seven years. “People have that mentality of, I won’t trade in my car as long as I’m still making payments,” said Ivan Drury, director of insights at Edmunds.

Your mileage may vary

The economics of long-term car ownership work better with some makes than others. Lexus and Toyota were the two with the fewest problems reported by owners in the first three years after buying them new, according to the latest dependability study by research firm J.D. Power.

Electric vehicles had some of the highest rates of problems reported in the study, in part because of their batteries and that they tend to come with more technology built in.

Low inventories and high prices in recent years have further complicated the math on car purchases, leading some drivers to rethink the inflection point at which it no longer makes sense to hold on to a vehicle.

Steven and Kristen Newton of Silver Spring, Md., once replaced their cars roughly every eight years.

When Kristen’s 2017 Ford Escape needed a new transmission last year, that normally would have been the couple’s cue to sell. But buying a comparable car was so expensive that they decided to put $6,500 into fixing theirs up.

“I’m so glad not to have a car payment right now, especially not an $800 car payment,” said Steven Newton, a 56-year-old federal contractor.

Newton added that their time owning the Ford might only be halfway over.

Owners typically consider unloading their vehicle when they learn of a repair that will cost 10% or more of what they would pay for a new one, said Drury of Edmunds. He cautions that people tend to underrate the value of paying for a major fix.

“Some people think if it’s got a new engine or a rebuilt transmission, it’s not worth much, and that’s not correct,” he said.

But he said the reason drivers typically give up on a car is something more intuitive. It is when they lose trust in it.

‘A giant vanilla ice-cream bar on wheels’

Liz Nickles is proudly bringing up the nation’s average vehicle age with her white 2004 Cadillac DeVille nicknamed “The Pearl.”

“It’s like driving a giant vanilla ice-cream bar on wheels through New York City,” said Nickles, a baby boomer who is a writer and marketer. “It’s smooth. It glides.”

Seeing today’s car prices makes her cling more tightly to The Pearl. Finances aside, Nickles says the sedan feels sturdy and practically indestructible.

“The wheels are never going to fall off of that thing,” she said. “My wheels are falling off before its wheels, that’s for sure.”

Write to Joe Pinsker at [email protected]