Across America, there are quite a few people who are still holding to the same cars they’ve been driving for nearly a quarter of a century. For some people, holding onto their old rides means they’re saving quite a bit of money, especially since the cost of new cars and repairs are going through the roof. Let’s look at why so many people are keeping their old cars for a little longer.
A Financial Burden
Car expenses take up a huge chunk of people’s monthly budget, and Americans, on average, spend around 20% of their income on their vehicles. This has forced some people to take on second jobs just so they can afford their cars. Unfortunately, in some cities, owning a car is a must because public transportation is so limited.
Getting Older
Cars are hitting record ages in America, with the average car being around 12 and a half years old. As repair and insurance costs keep going up, it makes sense that so many people are choosing to keep the cars they’ve got. After all, why ditch a perfectly good ride for a more expensive one?
New Car Prices
Most new cars are more expensive than ever, and the prices keep increasing. In 2019, the average cost of a new car was $36,824, but in 2021, it rose to $47,077. So, it’s no surprise that so many people are choosing to hold onto their old cars, as buying new is just becoming way too pricey.
More Expensive Borrowing
Even getting a car on payments is becoming more difficult, as the Federal Reserve previously raised interest rates to avoid inflation. Although they’ve recently decided to keep interest rates the same, getting a loan for a new car has become a lot harder. Higher interest rates mean higher monthly payments, so many people would rather stick to what they have.
Longer Loans
If you extend a car loan to seven years, you’re unlikely to trade it in anytime soon, so many people would rather wait for the loan term to end before getting a new one. After all, more car payments could stretch their budgets even more. For these people, it’s just smarter to stick to what they have.
Lasting a While
It used to be rare for a car to reach 200,000 miles, but now, it’s much more common. Cars last a long time nowadays, which is good news for mechanics. More people are bringing in their old cars to be fixed rather than buying a new set of wheels, and that means more money for these repair shops.
Repair Costs
Unfortunately, thanks to all the technology in new cars, repairing your car has also become more expensive, although not as much as buying a car outright. Even a small fix can cost quite a bit, which is making people think twice about giving up on their old cars. But new technology does mean that, with the right car, cars are running smoothly for longer.
DIY Maintenance
Because of these rising repair costs, some people are choosing to fix their cars themselves, although this does come with some risk. Doing it yourself could affect your car’s reliability and safety. If you don’t fix it correctly, these short-term savings could actually cost you quite a bit in the long run.
Older than Ever
Today, almost half of all cars on the road are ten years or older, which is quite different from how things were in the past. Holding onto your car has become pretty normal because it’s much better for your budget than buying a new one. Plus, you just can’t put a price on the feel of a car that you know and trust.
Long-Lasting Brands
In some cases, it’s the brand of car that makes a difference, as old Toyotas and Lexuses, for example, are built to last. These brands usually have fewer problems in the first few years, which means fewer financial issues later down the line. Anyone who owns these cars usually sticks to them because they’re so reliable.
Electric Cars
Although many people think of electric cars as the future, they come with their own sets of issues, especially in terms of their battery life. And if that new technology stops working, good look, because fixing it is a hassle. Many drivers don’t want to make the switch to electric vehicles because they’re worried about these costs.
When to Upgrade
Choosing when to upgrade can be a difficult decision, and you’ve got to think about the timing and costs. Sometimes, it just makes more sense to fix what you’ve got instead of buying new. If repairs cost less than ongoing payments on a new car, then stay with the old one. It’s a simple math problem, really.
A Good Fix
It might be a little bit extra, but spending more money on a major repair can make your car last for longer and be worth more than you think. This way, you’ll keep your car running without having to pay the high price of a new one. It’s a short-term cost that could mean many more years of driving.
No Payment, No Problem
Similarly, sticking to your old car means you won’t have to spend money on making car payments each month. Studies show that most Americans are living paycheck to paycheck, so not having an $800 monthly payment is a big relief. This gives people a little more flexibility with their budgets.
Feeling Familiar
In some cases, it’s not just the cost but also the familiarity that’s making people stick to their old cars. After all, once you’ve had your car for a few years, you know how it handles and can manage all its quirks, which makes driving less of a chore. People enjoy the predictability of an old car, but some of them aren’t ready to give it all up for a new one.
Time to Say Goodbye
But no matter the cost, if you can’t trust your car to get you what you need to, then it’s better for you to move on. Your car needs to be reliable, and when it’s not, you’re just wasting your own time and money. Of course, making this decision isn’t easy, especially when you’ve become attached to your old ride.
The Impact of Inflation
Inflation affects the price of everything, and that includes new cars. As the cost of living goes up, so does the cost of new cars, which encourages people to stay with what they have. Every dollar counts, especially when you need them to stretch further. Why spend them on a new vehicle when you’ve got one that works perfectly?
More Trade-Ins
Of course, not everyone’s sticking to their old cars. Since fewer cars were made during the pandemic, there have been fewer used cars going into the market. This means that trade-in values have increased, and some people are getting more money from selling their old cars than they would’ve done previously.
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