Does a 21-year-old, 207,000-mile BMW 3 Series sound like a viable form of dependable transportation? If not, you might want to read this article and reconsider your approach for reliable, and affordable, transportation. For example, you should know that cars from the past 20-25 are far more durable than vehicles produced before, say, 1990. Everything from engine tolerances to anti-rust treatments have improved dramatically in that time, making the average used vehicle capable of lasting much longer without major mechanical or cosmetic failures. This is particularly true if the vehicle has been properly maintained and cared for, like the 2001 BMW 325ci convertible featured above.
Why is maintaining an older car so important now? Because the price for cars, new or used, is at levels never seen before. According to iSeeCars.com pricing data, the average new car currently costs over $44,000, and the average used car isn’t far behind at around $35,000. Both of those numbers are up substantially in the past 18 months, with slightly used cars now costing more than their new-car equivalent. This is taking the term “sticker shock” to a whole new level for car buyers entering the market for the first time in 2 or more years.
If you’ve recently started shopping for a new car, or a new-to-you used car, you’ve undoubtedly experienced the shock and awe of today’s vehicle pricing. Sure, you can still find a solid used car for under, say, $15,000, but you’ll have to go back 7 years and consider vehicles with relatively high odometer readings. Given those realities, if you haven’t yet surrendered your current car you still have one critically important and highly effective option to save money: keep your current car.
Of course nobody wants to be told they can’t, or shouldn’t, upgrade their vehicle. The joy of experiencing a new car is welcome at any time, and is particularly appealing given the events of the past few years. But these are not normal times. The pandemic shut downs, the microchip shortages, the cost of raw materials, government payouts, and global unrest have all conspired to drive car pricing to unprecedented levels.
And while keeping your car may feel like the least appealing option, it’s very likely your best choice at this moment, even if that choice requires spending money on your vehicle. Consider that in just the past year the average new car price has gone up 18.5% and used cars have gone up 36.9%. That translates to an additional $8,225 for new cars and $9,409 for used cars.
That’s a lot of money, leaving a lot of headroom for you to invest in your current car to address any issues it may be suffering. These could range from a brake job or cooling system repair to a new transmission, or even an engine rebuild. Several years ago the engine in my 2004 Chevrolet Malibu failed at 115,000 miles, and I had the normal initial reaction: get rid of it and buy something new. But when my local mechanic offered me a new engine, with a 3-year/100,000-mie warranty for $3,500, I realized that was far cheaper than replacing the car. The car now has 153,000 miles and is running fine.
And if your current vehicle has no mechanical issues, but maybe has an older audio system without the ability to stream music from your phone or connect using Apple CarPlay and Android Auto, consider upgrading your vehicle’s head unit to get those features. You can buy aftermarket head units for well under $500 with all of those features. Once again, far cheaper than buying a new or used car in today’s market.
The factors contributing to high prices for new and used cars aren’t going away any time soon. It will takes at least another year to upgrade our global microchip production to meet today’s vehicle demand. Add in the backlog of new-car shoppers still waiting for their vehicle, and even when car production reaches maximum capacity it will takes 6-12 months to clear that backlog. These factors will maintain the pricing pressure we’ve experienced for the past 2 years.
If you’ve got a viable form of personal transportation you can keep driving for another year or more, even if that means spending some money on it in the near term, that’s likely your best option.