The new math of driving your car till the wheels fall off

livemint.com:

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.