The odometer on my 1993 Eclipse recently ticked past the 200,000 mile mark while driving back from Las Vegas.
Well, I guess “recently” is a subjective term. That was in 2006. Since then, I’ve piled on another 30,000 miles.
Everyone teases me about how long I’ve had the vehicle (it was purchased new for just over $10,000), but I’ve never cared enough about automobiles to spend the time or money on a new one every few years. So I just laugh along with them, knowing that many people spend more on their car payment than I do on my mortgage. It doesn’t hurt that I get to bypass an exasperating dealership experience.
Speaking of mortgages, the subprime meltdown has led to a dramatic change in the content of many financial rags. Instead of “Top Ten Exotic Vacations”, we find things like this tome from CNN:
NEW YORK (CNNMoney.com) — By keeping your car for 15 years, or 225,000 miles of driving, you could save nearly $31,000, according to Consumer Reports magazine. That’s compared to the cost of buying an identical model every five years, which is roughly the rate at which most car owners trade in their vehicles.
Calculating the costs involved in buying a new Honda Civic EX every five years for 15 years – including depreciation, taxes, fees and insurance – the magazine estimated it would cost $20,500 more than it would have cost to simply maintain one car for the same period.
Added to that, the magazine factored in $10,300 in interest that could have been earned on that money, assuming a five percent interest rate and a three percent inflation rate, over that time.
If you were to stash that $20,500 in a Roth IRA and never add another cent to it, in 30 years you’d have $357,712 (assuming an annualized return of 10%). That’s from driving one car for 15 years. Do it twice and you’d end up with more than half a million dollars in 30 years.
And that’s from driving a Honda Civic. If you’re thinking about a Lexus — even an entry level model like an IS250 — you could easily double the savings. The depreciation alone on the cheapest Lexus is estimated at $13,000 over five years. A Mercedes C-class has a five year ownership cost of more than $46,000!
Hey, if you’ve got the money to burn, fantastic. But there are so many people around Orange County who are stressed about paying their mortgage while they drive around in a late model Benz. The first time an expensive repair comes along which will cost “more than the car is worth”, they dump it in favor of a new ride. Talk about false economy — what they should really be comparing it to is the cost of a new car. The true cost of a new car.
Enough about that. My Eclipse won’t last forever… I think. I basically stopped doing any maintenance on it a few years ago, yet it continues to run. I attribute that longevity to the car’s extreme simplicity. No power steering, power brakes, power seats, power windows, or power doors. Unless the engine blows up, there’s really not much that can go wrong with it. ¡Viva la Eclipse!.
I’ve been debating what to replace it with when the time comes. Despite my happy experience with the Mitsubishi Eclipse, I’m not considering another one. The car was a major bargain when I bought it in 1993, but the prices have ballooned since that time, and I don’t really care for the styling of the new models. They lack the impressive cargo capacity of my current Eclipse.
An even larger issue is longevity of the brand. Many of the Mitsubishi dealers in Orange County seem to have closed their doors over the past few years.
The Consumer Reports story mirrors something I’ve noticed: there aren’t that many American cars from the early-mid 90s on the roads anymore. But there are plenty of old Japanese cars. I’m thinking something like a Honda LX coupe might be just the ticket. The styling of the 2008s isn’t as impressive as I’d hoped. The original concept car Honda shopped around to all the major auto shows last year was far more exotic than the final product.
When I spent the night in Midland, TX recently, I noticed that virtually every car on the road sported an American badge. I’m sure some of you might wonder why I wouldn’t support domestic auto production by “buying American”. My philosophy has always been that the very best thing I can do for our auto industry is to buy the vehicle I truly feel is best for me. If that turns out to be a Japanese or German model, then so be it.
Buying American for its own sake is penny wise and pound foolish. If American companies are not making the best cars, I am actually helping them by not buying it. Sales will be lower. If they’re smart, they’ll ask why, seek out the market leaders and make changes to their own product line. If they’re not smart, then they’ll fall by the wayside and leave market share to those who can produce a superior vehicle.
I’m not even sure what qualifies as “domestic” anymore. Take the Honda Accord: it’s assembled in the U.S. by Americans, many of the parts are from the U.S., and Honda stock is held by countless mutual funds, institutions, and individuals in this country.