This article was written by Larry Jones, Pastor of Stewardship at First Baptist Church of Raytown, Missouri, and writes regularly for his own blog at RichChristianPoorChristian.com.
When should you ditch the beater?
If you’re seriously working a plan to get out of debt, there’s a good chance you own a beater. Wikipedia defines a beater as a vehicle, typically a car, that is in very poor condition, or that has been modified in a crude or ugly fashion, but remains in use.
The difficulty with owning a beater is that it usually takes a lot of TLC and regular repairs, and now with the government’s “Cash for Clunkers” incentive, more and more people are ditching their beaters for new cars.
When you start racking up too many repairs in a short amount of time, you begin to question whether or not you should dump your car for something (hopefully) better. I recently ran into this problem with my paid for 14-year old car, a 1995 Jeep Grand Cherokee Laredo. Last year, I really didn’t have very many problems with the car, but I had invested $400-500 in new tires which I rotate on a regular basis to make them last as long as possible. This year has been a whole different story altogether, and I have paid out over $3,000 in long-overdue routine maintenance and one major breakdown repair. The major breakdown repair is the one bill that I seriously began to question whether it was time to ditch my car.
A trip to Colorado
In the first week in June, I needed to take the Jeep to Colorado, so I sunk $1,000 into the car on some long-overdue maintenance. My Jeep has over 200,000 miles on it, and I’ve noticed my V8 engine has been running pretty rough over the last several months. Since the spark plugs had not been changed in a number of years, I guessed this to be the problem, which was confirmed by my mechanic. All the wiring to the plugs needed to be replaced as well (cha-ching!).
As I drove my Jeep up and down the mountains of Colorado, I discovered that my 4-wheel drive shifter liked to pop out of gear on occasion and a week after returning home, the darn thing would no longer engage the wheels. I had the car towed to my mechanic, and he confirmed that the vehicle needed a whole new transfer case: total cost $1,600 (cha-ching, cha-ching!!).
Once my mechanic gave me the estimated cost on repairs on the transfer case, here was my thought process and research on whether or not too ditch the beater:
- When my family finally got out of debt in June of 2007, I vowed never to have another car payment. I wasn’t about to start now
- Over the last 3-4 years, I have taken very good care of my car, performed all the routine maintenance, and have had very few irregular problems up until this point. The engine still runs strong, and my mechanic and I know my car inside and out.
- In the last 12 months, I have put $1,800 into the car for routine maintenance (tires, rotations, plugs, wires, oil, filter, etc.). The engine runs great right now.
- I can scrape together an additional $1,600 to repair the transfer case, but I had to use my emergency fund. I have no additional money to spend on vehicles. Period. If I do the repair, the new transfer case will have a lifetime warranty. This was incredibly reassuring.
- Before I said yes to the repair, I went on Craigslist to see how much car I could purchase for $1,600. The vehicles at this price were definitely beaters that would most likely need additional repairs, plus I would need to spend additional money with the Missouri Department of Motor Vehicles on tag/plate transfer and sales tax, and keep in mind that I couldn’t spare any money above $1,600 in my budget. Spending this money on another used vehicle would be taking a gamble on a car I don’t really know what kind of problems could be lurking under the hood. I wasn’t ready to take that kind of a chance.
- My Jeep was in much better shape than the Craigslist beaters.
- Click and Clack, the Tap-it brothers (Tom and Ray) from NPR’s Car Talk always say that in terms of economics, it’s almost always cheaper to fix up an old car. The real question is whether or not you still like the car. I trust Tom and Ray’s expert opinion. I still like my car enough to keep it on the road a little bit longer.
My Conclusion
I had no other choice but to repair the Jeep at $1,600, and then pray for no other major repairs in the short-term! I now realize after this major repair that I need to get serious about replacing my car with another dependable, used vehicle in the price range of $4,000-5,000, so I need to start aggressively saving now before another major repair bill puts my family’s finances into a tailspin.
{ 10 comments… read them below or add one }
Two different ways:
1. When the amount to fix it costs more than the car is worth and additional repairs are to follow soon.
2. When small repairs gradually eat up my money and time (let’s not forget how valuable that is!) and I risk being stranded somewhere with my little one because of the car breaking down.
Starting to save now is imperative.
I have a 1994 Nissan Sentra that I am ready to replace. I have had almost no repair bills, but inspection is due in October and I am ready to part ways. I know the CV joints are on their way out, but other than that the car runs well. Well, the muffler pipe broke a few days ago, but I can fix that for a few bucks.
I have about 4-5k saved and the 2 door manual just doesn’t fit my lifestyle with two children and a wife who doesn’t drive manual cars. I have had the car 8 years and I am ready to move on. Looking at a Volvo wagon or a Vibe.
With that said, if I didn’t have the money saved and had debt I would make due and fix rather than move on.
That is a decision I am figuring out now being I have an old car that most likely will need to be replaced sometime soon.
I can’t wait to have my car paid off so I can implement a modified version of Dave Ramsey’s “Drive Free – Retire Rich” plan. Basically I will start a “car” mutual fund. I don’t expect a 12% return, but if it does….even better!
Stewardship Services Foundation has a method called “2-4-Junk way”.
It is interesting…
Excellent post! Oh, how I wish I would have made the decision you have made. Keep going, brother, keep going! Make those adjustments and save for your next car! Similar story – I had a not so dependable VW Passat. We didn’t make the best decision when we bought, but managed to pay it off after a few years. Anyway, we just kept sinking money into it, but nothing like what you mentioned. We had less than 100k on it and decided to sell it. Long story short (not now) we have another used car payment we’re working to put behind us very soon. Good for you! Live debt free!
I just asked myself this same question yesterday when i had to have the ac repaired in my 2000 Civic (after having it repaired last year, luckily i had a warranty on the parts). Since paying my car off, every year I take it in to have a major inspection and have repairs made; until this year that usually ran about $1000 (I use tax refund money); this year the bill was $1500, then the brakes went out $600 and now the ac deal $400…ouch, but this is my theory…i keep going because i don’t want the car note and i know that at this stage of the game the repairs are necessary. if i take care of the repairs i can have this car for a long time. i didn’t have to put out this money until now and after checking around the repairs i am gettign done are in line with the age of the car…
i love not having a car note. i gaol is to save enough in the next two year to buy a “new” used car for cash…and i can still have this car as a back up…
I faced a similar decision last November. My car is 10 year old and needed $1800 in repair work to keep it going. You never know exactly what to do when you’re looking at a bill that large, but I went ahead with it, and there have been no other issues with it in the 9 months since.
If you have a car that’s more than five years old, you just have to assume that you’ll be paying $2000-$3000 per year to keep it running. There are no zero cost options with a car, period.
But compare $2-3k on an old car with a $450/mo ($5400/yr) payments on a brand new car. And that’s just for starters. You have to add a down payment, higher insurance, higher taxes and yes, at least some maintenance to the annual cost.
I think those NPR guys are right, it’s always cheaper to keep the old car. A couple of mechanics told me that you can actually keep a car running for 20 years or more, but of course you’ll have to pay for repairs and maintenance. Maybe the time to ditch it becomes when it’s so old that replacement parts get hard (and expensive) to find.
BTW, I’ve also switched to a less expensive mechanic, one of the old “backyard” variety. A regular shop can bleed you on an older car.
Great post! I have had to make the decision recently when my transmission died. Luckily I found a barter club where I made a trade for my timeshare (which I couldn’t use this year anyway). It was a great solution–
I priced many used minivans and for the price of what mine is worth, the cost of a monthly payment wasn’t worth getting a newer model. I will keep my minivan until another major repair comes along…
I can’t imagine having to use a mechanic! I worked on motorcycles for fun back in college and now I keep my cars going. My wife drives a paid off 02 explorer with 140k miles and I drive a 1971 F100. I rebuilt the motor and trans in the F100, installed AC, and painted it. It is now nicer than anything I could ever afford to buy off a car lot. I also do all the work on my wife explorer. Brake jobs are cheap when you are only buying parts. Same with any maintenance. I think most of you should take an auto shop class so you can do your own repairs. Even if you have to buy all your tools new, they will pay for themselves over the next coupe of years. I now have the tools where I can make my own AC lines. I also have all the tools required to assemble a motor or most simple transmissions. I can also build and tune carbs. This stuff isn’t rocket science. I think the best deal these days is an older car that has cheap replacement parts. If you have kids get an old 67 galaxie. Plenty of room and they still make tons of parts for them. I’m about to start work on a 78 bronco. It will have plenty of room for my kids and wife and will be a great back up truck for the explorer and my truck. So, take the “beater” thing one step farther and pick up a 60s car that you can work on yourself. Learn to do the work and save the cash. Plus cars that old only appreciate in value if they are maintained.
On the 71 I just finished, the paint cost me $100 (rustoleum), the new rubber stripping cost $100, carpet $100, misc $100 and now the wind noise is gone and it looks great. It takes a couple of years to get to this point of car knowledge, but once you get to this point, maintining an older car (60s/early 70s) is really cheap.
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