With a slowly recovering economy, more and more people are opting to keep their vehicles for a longer period of time as a way to reduce their monthly expenses and ride-share costs.
According to AAA, a new study found that owning a car, even if it is older, is more cost-efficient than using ride-sharing as a source of transportation. Residents of small and rural towns pay approximately $20,118 annually to ride-share companies. That is twice the cost of owning a car, that is including gas, insurance and parking costs.
People are able to keep their cars longer because they are also more durable than they have ever been. According to the IHS Market study, the average age of a vehicle on the road is a record 11.6 years old. The average length of ownership is at almost seven years.
If a person is not able to pay cash for a new vehicle, not having to make a monthly car payment means big savings. This opens up the opportunity to save for a new one and pay off the full amount in cash or be able to give a substantial down payment. A newer car also means your auto insurance policy will go up to match the higher value. Registrations fees may also be higher depending on the state a person resides in.
However, more mileage also means more problems are likely to arise. Parts start to wear out as cars accumulate more miles. For example, rust can weaken parts and cause electrical failures if enough water is retained. More mileage can also affect the car’s suspension and affect the driver’s ability to control the car. Old headlights can also reduce visibility, especially at night.
Making simple repairs like these on an older car is far more affordable than purchasing a new one.
The Automotive Aftermarket Suppliers Association says, “the key to keeping a vehicle going after reaching a high mileage is maintenance and inspection” because the factory-recommended service intervals cease to exist after 100,000 miles.”
There are some risks that come with owning an older vehicle. Owning an older vehicle more than likely means that the car is not equipped with the safety features that are standard in newer models.
Until the cost of repairs is more than the value of the car, it is a good idea to keep up with proper maintenance and use the vehicle for as long as possible. Remember, cars are not investments and depreciate in value as soon as they leave the dealership.