Why It Pays More Now to Drive Your Car Until the Wheels Fall Off
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Here's your money briefing for Wednesday, May 1st. I'm Arianna Aspuru for The Wall Street Journal, filling in for J.R. Whelan. If the wheels haven't fallen off yet, it might not be the right time to buy that new car. Rising prices mean that people are holding on to what they already have. And they're finding that the math can be in their favor if they keep fixing their beat-up old cars.
Costs of car ownership in general have just been increasing a lot, as the cost of maintenance and repairs have risen too. It was common for a car to be near the end of its life at 100,000 miles, but now it's pretty common to go well above that.
Wall Street Journal reporter Joe Pinsker joins me after the break.
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With rising prices, people are clinging on to their old cars to save some money. Wall Street Journal reporter Joe Pinsker joins me. Joe, lots of people try to drive their cars until they're out of commission. Why is this paying off more now?
Yeah, this is something that people have always done and in a way almost enjoyed doing.
Why are U.S. cars staying on the road longer than before?
But at this particular moment, one of the things that's changed, which will be no surprise to anybody who's shopped for Accor lately, is that the price of cars has increased and the price to borrow money has increased. The costs of car ownership in general have just been increasing a lot as the cost of maintenance and repairs have risen too. And so it's gotten people thinking about how they might be able to hold on to their own car for a bit longer. Something that's working in the background in their favor is that today's old cars are aging more gracefully than the ones that people had maybe a couple of decades ago. It was common for a car to be near the end of its life at 100,000 miles. But now it's pretty common to go well above that.
And so clinging to your current one and trying to squeeze more life out of it just has a bigger payoff than it usually does.
How long are people holding on to their cars for?
The latest data shows that as of last year, on average, the age of a vehicle in the U.S. was 12 and a half years. That was increasing for the sixth straight year. Of course, averages are a nationwide figure and capture a whole lot of variation. And I talked to a guy in Idaho who is definitely bringing up that number. He's driving a 24-year-old Toyota Tacoma pickup truck that he bought last new a long time ago and has put more than 300,000 miles on. He thinks he'll probably still have another 100,000 to go on it.
But does the math check out? How can it be cheaper to keep repairing your old car over and over again versus getting a newer one?
A lot of these things are definitely going to vary from case to case, and some cars definitely are money pits. But the way that one repair shop owner put it to me was that he said that last year the average repair at his shop was about $700. A one-time payment of $700 is a lot for a repair to put into an aging car, but at the same time, It's a lot less than paying $700 every month. So it's often this tradeoff. Clearly, he said, if your repairs work out to $700 a month, get rid of that car. But there's kind of a balance that you can end up striking where this ends up making sense.
Yeah, that seems like a shift from how it used to be.
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