April 17, 2014 • 43 mins
How do you know when to stop pouring money into repairs on your tried-and-true daily driver? At what point is it better to chuck your old ride and buy something else? Tune in to learn more.
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Episode Transcript
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Speaker 1 (00:02):
Behind the wheel, under the hood and beyond with car
Stuff from house Stuff Works dot com. Everybody, welcome to
car Stuff. I'm Scott and I'm Ben bolan Been. Today's
topic is another question of the day, and it is
a topic that should not be taken lightly by anybody.
Oh no, this is an impulse decision. You're doing it
(00:22):
row definitely. Yeah, there's a big question out there. When
you get to the end of your car's life, I guess,
or when you think you've gotten to the end of
your car, is it time to replace that car? You know,
should you buy a new car? Should you buy a
new to you use car? You know? What should you do?
Or should you hang onto that old car? Is it
Is it worth it to hang onto the old car
just to save some more money in the meantime? Right,
(00:42):
And there's a great question here that a lot of
people don't consider all the angles too when they first
start grappling with it, because consider, we've all been there,
or we at least all know somebody who's been at
the point with a car that they've owned for several
years where they say, you know, now, it's like every
time I get something fixed, something else breaks, you know,
(01:04):
and even if you work on your car yourself, you uh,
you're going to incur increasing costs for a car where
everything is just starting to fail, you know exactly. We're
gonna get to all of this, I promise, and I
do want to stay say state that rather that we
are not going to really talk specific numbers because it's
very so greatly for everybody. Right, Yeah, you're able to
(01:26):
afford what your vehicle's worth, what the new vehicle cost,
the mileage and all that. You know, everything is is
very specific to you. But we will talk some general
numbers and as far as like national averages and things
like that. So you know, we'll try to make some
sense out of all this as we go through and
and tell you how to make a reasonably informed decision
about this, because you know, eventually it will come down
(01:46):
to really her desire, whatever you really want to do.
I mean, when we get to the very end of
it will be kind of up to you. But we
can maybe try to guide you along the way here, right,
we can give you some principles for sure. So one
of the first biggest questions when you're sitting there with
your car that has been a pretty good car, but
(02:06):
let's say you've you know, you've been driving in an
average number of times and stuff, and now you now
you're at the point where it seems like you're doing
a number of repairs every month. So you've got average
mileage's got average mileage, but you've owned it for many,
many years and it's above a hundred thousand miles past. Yeah,
a lot of people see that as like the cell point.
(02:27):
I've heard that from many people that, you know, before
it gets to one hundred thousand, I'm gonna sell this
car and get another one. That's maybe not the best strategy,
as we'll find out. So yeah, there's there's a lot
of people that are hanging onto cars right now that
they're putting a fair amount of money into it each
month for repairs, and they're wondering, is that what I
should be doing? Well, maybe they should look at, you know,
kind of what the general older car costs would be.
(02:50):
I guess if you want to look at it that
and then maybe we can compare that with what some
of the general new car costs are. Because people don't
seem to think about new car costs other than the
initial payment or the initial purpose price. And I don't
think that's the right way to look at this. So
you know, when we look at older car costs, you're
thinking mainly three things. Because you've paid it off, right,
it's it's right, it's yours. We're assuming that you know,
(03:11):
you're beyond the part where you know you're you're making
the monthly payment and it's and it's your vehicle. You
own the car you're paying for. You know, when the
brakes go bad, you're buying that. Whenever the you know,
the belt gets thrown off of there, you're paying for
the new belt repair, or you're paying for insurance, but
your insurance is likely going to be cheaper due to
the age of the car exactly. That's one of the
three things. So you've basically got fuel costs, you've basically
(03:32):
got insurance costs, and maintenance costs, and those three things
are what you're pretty much paying for a used car
all the time or a US carr, I should say
used car, your old car all the time, so you know,
you hang onto it past the point where you're paying
for it each month, and that's what you're paying now.
You know, roughly, I guess these are roughly the same
for a new car to the fuel and insurance costs.
(03:54):
Um insurance costs, as you mentioned, Ben, they go up
a little bit for a new car. For an older car,
as your car are depreciates a bit, you know, in value,
the insurance company realizes that and they say, well, you know,
you should be paying each month for that as much
as you were for it when it was newer, even
one year newer. So every year you'll see an incremental
drop to a point, I think, and then they kind
of halt that. But maintenance costs, now that's the main
(04:16):
factor I think to consider when you're talking about an
older car, like what we're considering here, so an older car,
the main factor would be, you know, like monthly repairs
versus a new monthly car payment, and that brings us
to a brand new vehicle, which you know, you've got
to look at that monthly payment of course, unless you're
you know, I guess, in a position where you can
pay cash for a car, and we'll we'll get to
(04:37):
that as well. But but um, not a whole lot
of people do that. Well, some do, But okay, I
love that you did this, uh, that that you introduced
this comparison that has to be made and this is
one of the most crucial factors in determining whether you
should continue repairing your current car or buy a new
or um what do they call it? Certified pre owned?
(04:59):
Certified p oh yeah, new to you used car right
to certified pre O. That's a that's a whole different
ball game. I want, you know, what should we just
tell him right now? What that is? Certified pre owned
vehicle is one that will often come with a warranty,
which is a pretty good deal really, yep. And that's
what sets that apart from just a pre owned vehicle
that you might find a lot where it's like as is,
you know, you drive up the lot and it's your responsibility. Right,
(05:19):
Certified pre own comes with a certain guarantee for the
quality of the vehicle, manufacturers guaranteed, which is a big deal.
Not crazy Eddie on Second Avenue used cars exactly. So
those certified pre owned commercials that we're seeing everywhere from
like BMW and stuff, they actually have some kind of
meaning behind them. There's some backing there, if you want
to think about it that way. So I'm sorry, I
(05:39):
mean that's a great point. So, um so, what I'd
like to do right now are two things if you're
okay with it. First, something that we should have said
in the beginning, Buddy, and I can't believe we missed it.
What's that We have a great podcast on the cost
of ownership, and it's an old one. It's a deep cut.
But if you are if you are considering buying new
(06:00):
car repairing your current car now, then you really should
check out that podcast because it has it has some um,
reassuring news and some ugly truth. Yeah that's true. I think,
uh oh yeah, the ugly truth part about that. I
think I know what you're talking about. You know that
the time tables. Yeah, okay, yeah, so we were, I
think we were on new car costs, right, new car costs.
(06:21):
We talked about old car costs, you know, keep I
guess keeping your old car versus new car costs and
new car costs. Now, a lot of people think of
just the initial you know, I'm going to the dealership
and I gotta put a down payment on this thing,
and I've got to uh, you know, pay this monthly
fee and you know, we'll talk about monthly fees in
just a minute, rather charges. But um, you're gonna have
less maintenance to deal with. You're gonna have a little
(06:41):
bit more insurance to deal with and potentially less fuel costs,
but you gotta remember that along with that purchase costs,
you're also gonna have taxes, title licensing fees, things like that,
um and possibly loan interest if you do have to
take a take a loan after this vehicle. I'm so
glad you said that. I read this great article by
these guys called the Motley Fools, who work with different
(07:04):
different micro economic or individual economic decisions, and they had
this great look at whether you should buy buy a
new car or maintain your old one. And if it's okay,
I just want to walk through their example real quick. Sure, Okay.
So they looked at a place called Comerica Bank, and
that's the creator of the auto Affordability Index. Okay, so
(07:27):
what's that? Okay? So the auto affordability Index is something
where you can find the average prices of all types
of different makes vehicles, years of vehicles, and it's broken
down by multiple categories. Uh So, looking at this at
the number they found, just to pick an example out
of the air, the average cost of a light vehicle
(07:48):
would be like ending five point five. Yeah, but that's
you know, that's an older number is an older number,
and I'll update that in just a minute, but go
ahead with your example. I'm setting you up for this
because this is now day in number just for this example.
So let's say you had to finance that because you
couldn't pay for the car with cash, which will mention later,
(08:08):
right Uh, So you had to have some interest and
let's say your interest was just a little over six
and a half percent, which is not too bad, but
that would cost you six hundred and five dollars and
forty four cents a month. All right. Now, if you're
driving a vehicle that's costing you two d a month
to repair, then it's still saving you money. That's clear
(08:32):
easy choice there, and you make those repairs, you're saving
four hundred dollars every month potentially by holding onto that
old car. Right now, Also, there's going to be a
cost to you in time and convenience because you have
to work on this car every month. And I guess
you can extrapolate that to if you know, one month
you go without a two repair, and then the next
(08:53):
month you go without another two dollar pair, and then
the next month it's six That happens occasionally, but you know,
you got to look at it. It you had two
months off there, and that's the way you gotta look
at this. And you've got to look at it, you know,
the math of the whole thing. And that's that's where
you know, a lot of this comes in, like are
you are you saving money versus what you would pay
for a new car, because you've gotta have a new
car in mind when you when you start working out
(09:15):
the math on this, because I mean, it can range
anywhere from and you may buy a new vehicle new
to you use vehicle that's twelve thousand dollars or ten
thousand dollars, or you may want to get a used
vehicle that is, you know, thirty five thousand dollars, and
or you might get want to get a brand new
vehicle that's fifty dollars, you know, And then you've got
to figure out all these different formulas and what works
best for you and what you're paying for that old
(09:36):
used car each month, and that's where it becomes critical
like should you hang onto it? But there's more to
it than just that. I mean, you people buy new
cars for a lot of different reasons. They they buy
them for for comfort, for style, image, safety, convenience, reliability,
things like that. Oh yeah, One of the examples that
you and I talked about, um, where we've talked about
a couple of times off air, would concern some of
(10:00):
our friends who are realtors, you know, or who are attorneys.
And we're not gonna name names because I'm not sure
some if some of my buddies might be listening to
this episode. But you and I have friends who say that,
because of their job, they need to always have a
really nice, new looking car. And it doesn't matter if
(10:22):
it's a well maintained car from you know, or two
thousand three, because what they need to have to maintain
their appearance is a car from at least two thousand eleven.
And see, now that makes sense to me in that case,
because if you're driving clients all over town to show
them new homes or property or whatever it happens to be,
you definitely do have to have you have to portray
(10:43):
that image. You have to have that professional image, that
successful image. You know, what what is this guy doing.
He's trying to sell me a million dollar piece of
property in the middle of Atlanta and he's driving around
in a five thousand dollar used you know, I don't know, Toyota,
Tacoma or something. You like, what's going on with this?
We're we're having to sit on each other's laps get
to the property. That's not right. But if he's in
the least escalated, which again I still think is a
(11:04):
terrible idea, yeah, we'll see that. It's it's all about
the image or a new Mercedes, you know, something like that. Definitely,
it all plays into that that big shot persona that
they want to have that they actually kind of need
to have in order to make the deal go through.
And and for some you know, for some people, I
think that's really really important. It's a good idea. And
there's another thing that is a non quantifiable or non
(11:28):
numerical interests that I would add here, but I'm gonna
wait till the end to drop it. Is that cool?
That's fine? And you know we mentioned paying cash for cars, right, yes,
And and I don't know if a lot of people
really have ever done this really, I mean, and in
our audience, I know a lot of people claim to
have done this and say like, well, I just paid
cash to the car, but buying a brand new car
now and the average price of a new car is
(11:49):
something like and this is a relatively new number, so
you've mentioned before a few years back. Well, it actually
wasn't that far back, because in one year, I believe
this price has gone up something like five thousand dollars
and in one I think it's one year. Let me
let me double check that. Um, oh, I'm sorry, five
thousand dollars in the last ten years. So, um, it's
gone up, yeah, five grand, because in two thousand three
(12:10):
the number was like twenty six three seventy four for
a brand new vehicle. Now, the average new car price
thirty one thousand, two hundred and fifty two dollars, which
is uh, that comes from three different places. That comes
from USA today, True car dot com, and then a
place called the cost of Living dot com. Now, who
knows where they're getting information. Maybe it's all come from
the same place. But that's the average price of a
(12:32):
new car in the United States as of August two.
And that's pretty much the general accepted number. I've heard
about thirty And who carries that much money around in cash?
Well most people, Now, you don't, you don't typically have
that kind of money sitting in a savings account to
just be able to say, you know, handed over and
that's the average price. So there's something a little more,
(12:53):
something a little less. Of course, I understand that, and
I do know that it happens. It happens, but not
as frequently as I think. I hear it happen. Use
use cars. I can understand like they Let's say maybe
you saved up money from your previous car, and you know,
when you're done paying for it, you you you, as
you should do, put the money that you would normally
put it for that payment into a separate account of
(13:13):
savings account, because that's this is supposedly what you're supposed
to do every month. Then when you finish paying off
your car, you set up a savings account and you
put that money from your your payment, your former payment
directly into a savings account. And then when it's time
to buy another vehicle in three years or whenever you're
your current car breaks down, you'll have a nice hefty
down payment, or you could you're able to pay cash
(13:34):
for probably a decent used vehicle and something to get
your on town. Yeah that's again, Yeah, I hear you
emphasizing supposed to do. I mean, how many people really
do that? Do you know? Do you know anybody that
does it? Because I think once you're free of that
car payment, then you say, well, that money is freed
up for I'm gonna put this money away, but I'm
gonna put it away for vacations. I'll be honest. Yeah,
(13:54):
I know I know some people who do that. Ask
for somebody who intentionally earmarks the money just for a
new car. I know only only two people who have
done that. One of them, I don't know if if
she's still doing it or if she just had one
stellar moment of behavior. Yeah, set up the account and
(14:17):
then it's, you know, got stagnant around five bucks. It's
like it's just it's it's good housekeeping. It's just like
how you're supposed to walk around your car and give
it an ocular assessment every time before you start it.
I imagine that well over what would you say, Scott, Well,
over eight of car drivers never do that. I'm going
(14:38):
to go higher than that. I mean, people may look
to see if they have four flat tires. Maybe yeah, maybe,
And that's about it. I mean, and I don't think
many people do that, but uh yeah, I think it
would be generous to say. But yeah, anyways, that's what
you're supposed to do with that money. You're supposed to
put it away and supposedly all avoid all that, you know,
that stress when it's time to really you know, go
out there and search for a new US vehicle or
(15:00):
our brand new vehicle. But most people are having to
resort to either use cars or finance financing exactly right.
So I went to bank rate dot com, which is
they have an auto calculator, and you can find these online.
You can find a lot of different things. You can find, um,
well you know what I'm talking about calculators right after this,
but I want to tell you about this one example.
And I went to bank rate dot com and then
(15:20):
found their auto calculator and I put in a couple
of different numbers. Now, I used the the average uh
you know, average price of a car here in the
two and just to start now. And I did it
with no money down at all, all the money financed,
you know, so complete finance of the full amount for
forty eight months, which just pretty typical. And I think
the current rate was something like four point one four percent,
(15:42):
which is you've got good credit. Yeah, I guess, oh yeah,
oh that's another thing, your credit rating, and you get
a lower rate that way. But a lot of a
lot of new college graduates are learning that for the
first time. Yeah, they end up having to go with
the eight or nine percent, right, you know, instead of
the four point four percent or four point one. So anyways,
the full finance for forty eight months comes out to
a whopping seven hundred and seven dollars and sixty cents
(16:05):
a month. And that's the average car ben and four years.
That seems like that's about an average term for for
a car payment as well. If you want to back
that down to thirty six months, so make it even faster.
At four percent, the price is still nine hundred and
twenty three dollars a month for the average car you're
talking about, just like the typical family sedan. Yes, so
(16:28):
this is like a minivan for something like this. I mean,
when you thirty one, I can I can do this
all the time. Like I can look through the paper
and I can see something that's you know about thirty one,
I think, well maybe that's manageable, you know, with my
trade in and you know that's uh yeah, I'll put
a little bit of money down with whatever I trade
my vehicle in for and then um, you know what
it was my monthly payment going to be. Well, you know,
(16:51):
you think thirty one not a huge deal, but when
you look at a number like seven hundred dollars or
nine hundred dollars a month, it's four or you know,
three or four years. So then here's the other part
of this. You go to like one of these calculators
are a tool rather that will tell you what your
vehicle is worth, a true market value of your people
to go to Edmonds or you know, the Kelly Blue
(17:12):
Book or something like that, and uh, you're punching the
numbers or you punching the information for your vehicle. And
I did this for my car recently, and the numbers
were depressing. It came back like a super low number.
It's like it's worth like less than five thousand dollars
been my car. And I was thinking all along like okay,
well I'll trade myke vehicle and for ten thousand dollars
and then my payment will be this and oh no,
(17:33):
it's like five thousand dollars is what the cars were.
So I'm gonna have to you know, Pony up another
five thousand dollars on the top of that to get
to these numbers that I found right here. So the
same same information, all that you know, the the the
percentages and everything are the same. Ten thousand trade in
and down combined thousand down. And this was just before
I knew that mine's only worth five. So with ten
(17:54):
thousand downs, you're financing one thousand, two or fifty dollars.
Your payment for four four years is still four hundred
and eighty one dollars a month. And if you go
to a thirty six months, which I would prefer to
do because who wouldn't want to get it on? You
don't want to walk around with a debt chain. Now,
six hundred and twenty seven dollars a month is what
I'm looking at for a for an average vehicle with
(18:15):
ten thousand dollar down dollars down for three or for
three years. Yeah, but think about all the money you
could save if you're paying nine hundred dollars a month
because you won't be buying gas so great good points
right in the train is gonna be eating a lot less. Yeah,
this is okay. So these numbers can seem daunting, and
(18:37):
they underlie they underline the thing that we were talking
about earlier. We're um, you know when we said the
bottom line is ultimately as annoying as it can be
to repair a car, um it can be much more
economically feasible to pay two hundred or even three hundred
(18:59):
dollars a month average in repairs versus nine dollar a month,
not average nine d real dollars a month. Isn't that scary?
I mean I've been kind of well, I've never ever
bought a brand new car, not brand new from the factory,
you know, not nothing like that. I've always been used,
you know, a couple of years used, which seems to
be a sweet spot there, like maybe two to three
(19:20):
years used vehicles returned either from a lease or its
return just because you know, somebody got tired of driving
it after three years. Yeah, after about three years, people
are tired of it. So you know, you strip yourself
with a with a four year loan or a five
year loan or I saw, ben, I saw something that
went up to eighty four months online that you're able
to get an eighty four month lease. That to me
(19:41):
seems like a bad deal for at lease. Yeah, I'm sorry,
not a lease, I'm sorry for a purchase. Yeah, at
least would be Yeah. That's so there's some important points
to remember that we're talking about a lot of We're
talking about a lot of numbers, and the numbers can
be kind of played around with in a lot of
different ways. And the thing that you gotta remember is
that you know, you gotta think, is that the same
(20:03):
price as your monthly car payment would be for each one.
So we talked about that example, like if you have
a three month car payment. We just talked about that.
That doesn't sound possible anymore. It's it's tough and thats
like a different time, not really, but I mean they're
saying like, if if you have a three month car
payment versus a repair that happens every four months, which,
oh my gosh, that sounds well. I had an Audie
(20:26):
that did that to me. In one year, I had
this car, this Audie that it was a four. In
one year, I had three three thousand dollar repairs on
the thing. The maintenance killed me. And by the time
I got out of that hole, just barely out of
that hole, I did nothing. I wanted nothing more than
to trade it and get rid of it. So I
(20:47):
traded it in for less than I probably should have.
But I got the car that I have now, and
I've had it for a long time, so it ended
up okay. But it was a huge financial hole and
it probably ruined me from ever getting another Audi again,
because not because I don't want one, because I loved Yeah,
I loved it when I had. It was a great
car when it was working until that final year. But
there's no way in my life my wife will even
(21:09):
let me get near an Audie dealership at this point.
But you know what, Scott, it was a learning experience.
And speaking of learning experience, learning experience, learning experiences. Speaking
of learning experiences, it reminds me of something that my
dad used to say to me, Um, when I had
when I really really just found myself int a boondoggle,
(21:31):
he would say, well, that's the price of an education,
and then, normally, depend on what had happened, I would say, uh,
you should have told me something like this before, um,
which usually he did. Why don't you pass along your wisdom,
old man, now, he said, because that wouldn't get you
very far, I don't think. As we returned here, Scott,
when last we left, we were talking about some other
(21:54):
things that we had yet to add to this equation.
But we're still talking about numbers. And you know, we
talked about a couple of different points here. Now. We
we said, you know, if the repair is less than
a few months car payment on a new vehicle, then
you know that there's a decision to make there now,
which would be, you know, if it's lower than the
cost of a few months, then of course you would
do it. And of course if it's lower than one month,
obviously you would do it. Now if the repair is
(22:16):
here's another one. Then this is another tricky one, a
single big repair. So if the repair is less than
half the car's market value, which is huge, so you know,
I mentioned mine's worth roughly five thousand dollars at this
point in my use car. So if you add a repair,
and there's a lot of back and forth with you know,
the the industry experts on this, you know that say
that you know, I don't know, should you make a
(22:38):
repair that's worth more than half of the vehicle and
you know the the vehicle's overall trade in value. Some
people would say, well, it's a it's an emotional decision
on my part because I'm familiar with this vehicle. I
know once I make this, it's going to keep it
going for another year, because I know that everything else
is solid. I'm gonna make this one repair that is pricey,
but I feel that it's going to keep me going
(22:59):
for another all another solid twelve months. Right, Then it
becomes is it then you have to go back to
is it worth twelve months? Uh? You know, based on
monthly payments? Right? And so then I'm so glad you
said that. So one of the examples, just to take
the example that we made of your car. If we
say it's worth five grand and it has a repair costs,
(23:20):
let's just say hundred for the sake of argument, right,
and uh, you know that that repair, whatever, whatever ungodly
massive repair that is has to um isn't doesn't take much. Yeah,
it'll delay, it'll delay the purchase of a different vehicle
or another repair for as you said, twelve months. You
(23:42):
average two hundred out over those twelve months, and it's
still less than a car payment once you add insurance
and gas who hundred bucks a month and it seems like,
well that's gonna be far less than a new car
payment would be. So you gotta play all these different
math games. He's you gotta go through just a lot
of I don't know, math acrobatics, I guess, in order
to figure out what's what's it worth to you? Really?
(24:02):
And you've got also when and when with uh, you know,
is it? Are other things falling apart of it? You know,
can I expect that after I make this payment, I'm
gonna also have to do this and this and how
much are those going to cost? And I know that
it's tough to foresee, you know, any kind of maintenance
that's coming up. You know, there's there's general maintenance, like
you know you monthly stuff or you know, stuff that's
based on mileage, But what about the stuff that breaks?
(24:23):
You know, in older cars, things are going to break
and it just goes Yeah, it just happens, I mean,
and you know there's other unexpected things that you just
don't know. You're gonna get a rock through the radiator
at some point because you're gonna be on the highway
a lot, and you know, things like that that you
know may cost you a few hundred here if you
under there, but when you add them on to that
big repair that you just made, then it becomes you know, well,
if I had known this was gonna happen, I would
(24:45):
have just traded it in, you know, I would have
made a smart decision and and started, you know, start
over fresh with a new used vehicle or a brand
new view. I always, personally, I always go for used
vehicles to gently used a couple of year is old.
I've never bought a brand new vehicle just because I
don't care for the depreciation. It feels like I'm just
(25:06):
in addition to buying a car, it feels like I
would also be handing someone, you know, five thousand dollars. Well,
that's the thing. You got to think about depreciation as well.
I mean, there's a lot of a lot of points
to think about when you buy a new car, and
depreciation is one upkeep. There's you know, the length of ownership,
I guess, interest costs and insurance rates and and of
course there's a purchase price of course, and the monthly
(25:27):
payments and all that. But you also have to consider, um,
you know, once you make this repair, how long is
that going to get you know, how long is that
going to preserve the life of the vehicle, How long
you be able to keep that car on you know,
on life supporting. I hope it's well. You know, in
some cases it feels like that, you know, in some
cases it does. Some people are hanging onto a car
that has like mine, it has a hundred and fifties
(25:49):
seven thousand or something like that, and it feels like
every time and make a little repair on it, I'm
keeping it on life support. You know, how long is
it gonna last? Me? Like, well, it's it's kind of
rough condition, and I can expect that soon this is
going to break it. It's still a lot cheaper than
a six hundred new car payment for just an average
new car. My my car has got a hundred and
sixty four thousand on it, and uh, I still like it.
(26:10):
I love it as a matter of fact. Uh, I
know though the car and I have an open secret
that one day that transmission is just gonna head out
and and then at that point I'll have to make
that calculation. You know, how how worthwhile is it to
uh to get a new vehicle, which you know might
(26:32):
still be a Monte Carlo to uh, you know, and
as opposed to repairing and transmission on a car that
old that high of a mile and then do you
take the bargain basement way where you go to some
you know guy in a in a barn somewhere and
he's gotta he's got a used one that you're not
quite sure about the condition. But it's only five hundred
bucks to have the thing put in, installed and done,
(26:53):
you know, And he says, hey, I don't have the title,
but exactly it's a little shady deal maybe, but you know,
is that worth it? Then? You know, you know, you
go to a place where you don't maybe trust the
parts as much as if you go to the dealership
and have the transmission rebuilt by a certified which would
cost a lot of money, I understand, but think how
long that thing would last. It probably would be like
new again. Oh there's all these different things just away.
(27:15):
It's another one on here. Um. One of the calculations there.
I'm sure some people have already thought about this as
you guys were listening to us. But one of the
calculations that we haven't hit on yet is the problem
of liquidity. So for so here's how a lot of
people with the best of intentions, especially and I know
(27:37):
it sound like an old kajar when I say it.
Especially younger people get caught in car payments that they
can't afford over time, just because they don't have the
liquidity maybe to pay for let's say, a nine hundred
or even repair that would keep their existing car going
for a year or more. Since they don't have that
(27:59):
lump of calves. Then they're saying, okay, um, I'll go
in and I'll get a car, and I'll be able
to afford it because I'll just be paying three hundred
dollars a month, which is less. And then of course
they get pushed up to four in the negotiation process
and they say, okay, four is a hundred more than
I wanted to pay per month, but that's doable, and
(28:20):
it's still easier than all at once. And what that
means is in the course of three months, Scott, they
already start paying more money. And you know, I guess
there's a way around this. Maybe. You know, if you
talk to um, you know, a shop owner, you're having
a big repair like that done, there's a possibility, not always,
(28:41):
but there's a possibility that they may finance that repair
for you. Yeah, but you have to know them. That's
an option to look at. I mean, I guess if
you're in that position. If you're in that case, because
when you're looking at a completely getting rid of your
vehicle and going to something new, whether it's a new,
used or new new vehicle, that's a that's a different
bridge to jump off. Just a lot a lot of
people get pretty messed up over the liquidity problems. So yeah,
(29:05):
I would I think that's an excellent point, Scott. We
should recommend trying to put I hate to say it
this way, but see if you can put a repair
on layaway, and I don't I don't recommend that if
by any means, you should be able to have something
in reserve for something like that, because if you're if
you're just going month to month, you know, just able
to make your bills, and then something like this hits,
that's a terrible position to Yeah, and I mean I
(29:26):
could speak from experience. I'm now a saver. I save
a lot of money, you know, as much as I
can for things like this, and it's paid off many,
many times. So if I can just offer a little
tiny bit of advice, save as much as you can
for stuff like this, the unexpected things. It doesn't even
have to be your car because what if something comes
up with you know, the house. Let's say the air
conditioner goes out on the house. Yeah, the three thou dollars,
(29:49):
you know, and then it's like, well, great, now I
don't have the money for the car payment that I
thought I had, Remember that four hundred dollar car payment
because I was on that month to month because I
had just enough to make the four dollar car payment. So,
you know, life gets in the way. Then there's a
lot of different things that come up. So just a
tiny bit of advice. We won't do that too much.
But I don't I don't mean to preach. Oh yeah, no, no,
I think it's I think it's invaluable advice. Uh. And
(30:13):
I wish I had heard it earlier, honestly, in a
couple of respects. But one thing that I naturally go
to when when you bring this up, which is again
a very good point, you said, life gets in the way,
and that's something that we should mention when we talked
about non quantifiable or not yeah, non quantifiable reasons for
(30:33):
people buying a new car, like what what happens when
you have that kid? You know, what happens when your
family situation changes, What happens when you have a divorce
and all of a sudden, you know, the car that
you and your spouse shared only goes to one of you.
So this can affect the decision as well. Exactly. Yeah,
(30:54):
there's so many different factors that come into play here.
But you know, and and a lot of this now
you mentioned change life. Now I can't speak to divorce
stuff or any of that. When you when you have
to sell your vehicle in order to get half of
the price out of it to give to the other person, evolve,
but um a position where your life changes in some way,
like you have a kid. This is what happened with
my car. I sold my Honda CRX, which had two seats,
(31:16):
to get the Audie, which had four doors and four seats.
You know, four seats are seating for five, I guess,
and um, you know it's a great decision and it
and it lasted me for many many years past, you know,
when I was making a car payment, but then it
got very very expensive you know for me, And you know,
I understand it was a good decision to make at
the time, but you know, there's a lot of things
you have to do it and you make make decisions
(31:36):
like that. You make it based on your your life
at that moment. So there's also another thing. Then there's
a kind of a peace of mind that you have
to that goes along with this. And when you have
a kid, you think, well, it's my car reliable because
I'm gonna be driving the kid back and forth to
daycare or to school, grandparents house, and I'm gonna be
making long trips to uh, you know, to the coast,
(31:57):
I guess, because we're gonna take family vacations on the
beach or whatever. And I sure don't want to have
my family in the car somewhere in the middle of
Florida and have the thing breakdown because you know, I
don't I don't know any mechanics in the area obviously,
and and likelihood that you can't repair it on the
side of the road usually, yeah, exactly. So you know,
you think, I want something reliable, I want something safe
for my family that you make. You make decisions based
(32:17):
on things like that as well, and that peace of
mind or that just that comfort of knowing that you
can get in the car and started every time that
you turn the key, that has something to do with
it as well, because I've had cars before where it's
a fifty fifty shot if it's going to start in
the morning, or you know, if I'm gonna make it
across town to get to to my job. But you know,
you need that job in order to make the money
to make the car payments. So I don't know, it's
(32:41):
it was about like that. I'm talking about, like, you
know some of the older dodgier cars, you know that
uh you're quite you know, kind of unsure about them.
You know some that always left you stranded. You know,
you just knew that, you know, you better have a
phone with you if you go out, or at least
the name of a good tow truck company. Gosh, okay,
so um, let's go ahead and recap. I think that's
(33:02):
most of what we got. You got anything else, well, yeah,
I guess, um, maybe some final advice maybe just so
if that's all right, Yeah, absolutely all right. So I
guess the last advice. I guess the best thing to
do is if you search new car versus old car online,
you'll find a lot of different interesting things. And and
one thing is that we've got a uh we've got
a quiz on our site. We do I'm so glad
you mentioned this. It's kind of is it should I
(33:22):
repair replace my car or something like that, and that's
I think, Oh, here it is digit fix it or
digit is it time to replace your ride? And there's
a quiz. It's like a twenty question quiz. But you know,
and it's funny you think that, well, it's a quiz
going to tell me, But there's some good insight in
this quiz because our writers put a lot of effort
into it, into writing this stuff. And uh and Kristen
Kristen is the writer of this, Kristen hall Geisler, and
(33:45):
she put a lot of effort into this. And there's
some good good points here, some things that you may
not consider, you know, in the form of questions. Yeah,
it's not it's not fluffy. No, it's not. It's it's fun,
but it's also not fluffy. You're right. It has some
good solid advice. And also you can go online and
look at calculators and these are very able. I think
two people and um, I don't know if ben if
I'm stepping over something. Calculators online or maybe one of
(34:07):
the best ways to figure all this out, because they were,
but they do require a lot of details. You've got
to know a lot about the vehicle that you're intending
to purchase and the vehicle that you have now. And
think we're talking about things like UM, you know, current
current values and mileage numbers, and loan rates and UM
down payment info, UM licensing fees, taxes. You need to
know all that information up front, so you gotta look
(34:28):
into it ahead of time. But once you do, it
will give you a clear picture of whether it's worth
it to hang on your old car or buy a
brand new vehicle. And then there's also we mentioned the
quiz type, you know, the quiz that we have, but
there are quiz programs that will give you a kind
of a yes no, like, you know, you answer ten
or twelve questions and it will say, well, here's our
recommendation for you because you answered this way. What's the
(34:51):
year of your car, what's the model, what's the mile
is and it'll say it'll ask you more about your
situation and your and your expectations out of your vehicle,
and it will say, well, we think you should hang
onto your car and make the repairs or or we
recommend for you a new used vehicle or a new
new vehicle for you because you know these are these
are the things that you want. You know, it's based
on your monthly budget or your average miles or you know,
(35:14):
the options that you require, which is kind of funny
to me require options, but you know if you have
to have, um, you know, the heated and cooled seats
or whatever, you know that kind of thing. So, um,
I know it's kind of funny. But there's also lots
of advice columns. Now you're listening to us about you know,
we're not really trying to give you advice. Maybe we're
just observations. Observation is a good way, But there are
(35:36):
advice columns out there that will tell you specifics and
and you'll find that if you read through these, you'll
find a lot of people have exactly the same thing
going on as you do. So you can kind of
match up with with certain you know, writers or people
with questions that say, well, you know, I've got this
vehicle and it's kind of doing this now is it
worth of me to invest in a new vehicle or
used vehicle? Or should I just repair it? And you'll
(35:57):
find that you know, somebody has gone through what you
have gone through. Invariably, there's always a good example out there.
So you know those three things, the calculators, the quiz
type programs, and advice columns are maybe the best places
to go. And too add all of that up under
one burning highlighted point. If you remember nothing else from
(36:19):
this podcast, just remember this. Consider your your decision carefully.
Don't just jump in. Okay, I know car commercials are
astonishing and really cool, even when cars involved are kind
of ugly. I know that there's so many people out
there stuck driving Honda Odysse's um But the point is
(36:42):
that these decisions um in terms of finances are are
fairly close to tattoos. They have permanence in your life. Second,
isn't like the second largest purchase in your life. There's
the house, and the car is the second largest decision
that you'll make of monetarily. So you know, you gotta
just you gotta side is this the right time for me?
And I know it's a very emotional thing for people
(37:03):
a lot of times, but it should be more math driven.
It should be something that you really really sit down
and figure out and make sure that it's the right
decision for you. And with that, I think Scott, I
propose that we in this podcast with a little bit
of math. In our listener mail, let's do it, okay,
Scott Logan writes in, uh, and I know you've probably
(37:26):
read this one. To Logan writes in, to talk about
the mid grade, low grade, high grade gasoline? Oh boy,
And he said, he said, it's all in perspective. And
he said, let me explain why. I would say. It's
an arguable point and it should be left up to
the consumer. So Logan saying that there's something that goes
down to somebody's personal choice, right, he said. Number one,
(37:48):
density of eighty seven grade is generally significantly less than
nine three octane gas and is therefore lesson in g
dents to the octane on eighty seven grade gasoline is
generally need two nine two or eighty RM value, giving
you the eight seven R plus M divided by two
value at the pump, and ninety three octane gas is
(38:08):
generally eighty seven point five or ninety eight point five um,
yielding something like ninety three R plus M over two.
So assuming the gasoline blends linearly at the pump, you're
mixing roughly six eighty seven grade with three gate get
gas to give you approximately eighty nine r m over
(38:30):
to value and says, the thing is gasoline and reference.
The octane number doesn't blend linearly. So since octane is
a measure of the physical property resistance the detonation upon compression,
all these other factors play into this and therefore it
tends not to blend linearly. Since most gas stations are
afraid that the gas won't blend this way, or at
(38:52):
least the major companies are, they tend to blend above
these specifications at the pump since both streams tend to
be wide into each other for mid grade. So as
he's saying, we get what we pay for at the pump,
or we don't get what we paid for at the pump,
Here's here's what he's Here's what he's saying. It's just
great because this is a part of his letter where
he goes, So where am I going with this? Uh?
(39:13):
He says, depending on the price point, UH, the three
increase in price will yield a denser gasoline with better
knocking characteristics, generally allowing the ECU to advance timing and
decrease the injector load table. Now he's writing to US
from Houston. So in Houston the price is UM eight
(39:34):
for eighty seven is around three dollars and thirty cents,
and mid grades around three dollars and forty. So you know,
that's somewhat comparable to Atlanta to h So he says,
in the long run, this gives you better fuel economy
over the eighty seven octane gas, but it might not
be noticeable. So for his he was driving a Hondai
(39:54):
Accent and he got three miles per gallon better going
from regular all the way a's premium. And uh, the
when you think about the mileage savings, it's thirty six
at thirty nine. So if you want to do this yourself,
and he said, of course, every car might be different,
so it might not be as much for cut and
(40:17):
drive benefit as it's being advertised. And he um, well,
this kind of goes against a few things that we've learned, right,
I mean I thought we I thought we had said that,
you know, if a car is rated at eighty seven octane,
that's what you should put in there because that's what
the manufacturer recommends, right, But if you go to jump
up to ninety three, I thought that the idea was
that it doesn't quite burn as as easily. And we've
(40:38):
also had a few people right in and say that's
not true. Because of this, they send in a lot
of you know, another huge you know email with a
lot of chemistry involved in it and a lot of
numbers that there's no way I can recall it right now.
But um, I don't know. It seems like we've always
just kind of narrowed it down to, uh, the eighty
seven octane stuff burns a little bit easier than octane
(40:59):
stuff is a little bit offered to burn, requires higher compression,
and that's typically the ones that benefit from it. Now
you can put it in there and it may have
adverse effects, it may not have adverse effects, but typically
the higher octane is for higher compression engines, right, typically, yeah, typically,
And so uh, we've got It's interesting because we've triggered
(41:19):
a lot of listener attention to this this idea. Yeah,
it seems like everybody in our audience weighs in on
this at some point, you know, whether it's just an
add on to the end of an email or or
a complete email about just that topic. But yeah, everybody
has an opinion about uh, the octane rate in a fuel, right,
and so we wanted to give as many perspectives as
(41:40):
we could on this. Uh No, Logan wrote us a
fantastic email. Unfortunately we don't have time to read all
of it, but Scott, I will read the last line.
I think you're gonna like. Okay, anyways, take it easy, guys. Also,
anniversary trans am, that is a good idea, not a
bad idea at all, because uh yeah, the eighty nine
was that was a year I graduated, so that one,
(42:02):
of course, that's one that I paid attention to because
that was the cool car at the time, right Yeah,
And uh yeah, that's a that's a good idea. I
like that idea. Well, ransams and all that. I mean, yeah,
the whole line up, the Firebird, Camaro, we should do
something about all of them, all of them. Yeah, we
should do a whole trans am because we've done uh
specific things, but we haven't just done a trans am. Now,
I don't think we have good idea. Logan, thank you
(42:25):
so much for writing in, and thank you everybody else
for listening. Let us know how your last repair or
replace dilemma went. We're interested in the answer. You can
hit us up on Facebook. You can find us on Twitter.
We have our very own website, car Stuff Show dot com,
and you can always send us an email directly. Our
email address is our Stuff and Discovery dot com. For
(42:49):
more on this and thousands of other topics, this is
how stuff works dot com. Let us know what you think.
Send an email to podcast at how stuff works dot com.
Four
Behind the wheel, under the hood and beyond with car
Stuff from house Stuff Works dot com. Everybody, welcome to
car Stuff. I'm Scott and I'm Ben bolan Been. Today's
topic is another question of the day, and it is
a topic that should not be taken lightly by anybody.
Oh no, this is an impulse decision. You're doing it
(00:22):
row definitely. Yeah, there's a big question out there. When
you get to the end of your car's life, I guess,
or when you think you've gotten to the end of
your car, is it time to replace that car? You know,
should you buy a new car? Should you buy a
new to you use car? You know? What should you do?
Or should you hang onto that old car? Is it
Is it worth it to hang onto the old car
just to save some more money in the meantime? Right,
(00:42):
And there's a great question here that a lot of
people don't consider all the angles too when they first
start grappling with it, because consider, we've all been there,
or we at least all know somebody who's been at
the point with a car that they've owned for several
years where they say, you know, now, it's like every
time I get something fixed, something else breaks, you know,
(01:04):
and even if you work on your car yourself, you uh,
you're going to incur increasing costs for a car where
everything is just starting to fail, you know exactly. We're
gonna get to all of this, I promise, and I
do want to stay say state that rather that we
are not going to really talk specific numbers because it's
very so greatly for everybody. Right, Yeah, you're able to
(01:26):
afford what your vehicle's worth, what the new vehicle cost,
the mileage and all that. You know, everything is is
very specific to you. But we will talk some general
numbers and as far as like national averages and things
like that. So you know, we'll try to make some
sense out of all this as we go through and
and tell you how to make a reasonably informed decision
about this, because you know, eventually it will come down
(01:46):
to really her desire, whatever you really want to do.
I mean, when we get to the very end of
it will be kind of up to you. But we
can maybe try to guide you along the way here, right,
we can give you some principles for sure. So one
of the first biggest questions when you're sitting there with
your car that has been a pretty good car, but
(02:06):
let's say you've you know, you've been driving in an
average number of times and stuff, and now you now
you're at the point where it seems like you're doing
a number of repairs every month. So you've got average
mileage's got average mileage, but you've owned it for many,
many years and it's above a hundred thousand miles past. Yeah,
a lot of people see that as like the cell point.
(02:27):
I've heard that from many people that, you know, before
it gets to one hundred thousand, I'm gonna sell this
car and get another one. That's maybe not the best strategy,
as we'll find out. So yeah, there's there's a lot
of people that are hanging onto cars right now that
they're putting a fair amount of money into it each
month for repairs, and they're wondering, is that what I
should be doing? Well, maybe they should look at, you know,
kind of what the general older car costs would be.
(02:50):
I guess if you want to look at it that
and then maybe we can compare that with what some
of the general new car costs are. Because people don't
seem to think about new car costs other than the
initial payment or the initial purpose price. And I don't
think that's the right way to look at this. So
you know, when we look at older car costs, you're
thinking mainly three things. Because you've paid it off, right,
it's it's right, it's yours. We're assuming that you know,
(03:11):
you're beyond the part where you know you're you're making
the monthly payment and it's and it's your vehicle. You
own the car you're paying for. You know, when the
brakes go bad, you're buying that. Whenever the you know,
the belt gets thrown off of there, you're paying for
the new belt repair, or you're paying for insurance, but
your insurance is likely going to be cheaper due to
the age of the car exactly. That's one of the
three things. So you've basically got fuel costs, you've basically
(03:32):
got insurance costs, and maintenance costs, and those three things
are what you're pretty much paying for a used car
all the time or a US carr, I should say
used car, your old car all the time, so you know,
you hang onto it past the point where you're paying
for it each month, and that's what you're paying now.
You know, roughly, I guess these are roughly the same
for a new car to the fuel and insurance costs.
(03:54):
Um insurance costs, as you mentioned, Ben, they go up
a little bit for a new car. For an older car,
as your car are depreciates a bit, you know, in value,
the insurance company realizes that and they say, well, you know,
you should be paying each month for that as much
as you were for it when it was newer, even
one year newer. So every year you'll see an incremental
drop to a point, I think, and then they kind
of halt that. But maintenance costs, now that's the main
(04:16):
factor I think to consider when you're talking about an
older car, like what we're considering here, so an older car,
the main factor would be, you know, like monthly repairs
versus a new monthly car payment, and that brings us
to a brand new vehicle, which you know, you've got
to look at that monthly payment of course, unless you're
you know, I guess, in a position where you can
pay cash for a car, and we'll we'll get to
(04:37):
that as well. But but um, not a whole lot
of people do that. Well, some do, But okay, I
love that you did this, uh, that that you introduced
this comparison that has to be made and this is
one of the most crucial factors in determining whether you
should continue repairing your current car or buy a new
or um what do they call it? Certified pre owned?
(04:59):
Certified p oh yeah, new to you used car right
to certified pre O. That's a that's a whole different
ball game. I want, you know, what should we just
tell him right now? What that is? Certified pre owned
vehicle is one that will often come with a warranty,
which is a pretty good deal really, yep. And that's
what sets that apart from just a pre owned vehicle
that you might find a lot where it's like as is,
you know, you drive up the lot and it's your responsibility. Right,
(05:19):
Certified pre own comes with a certain guarantee for the
quality of the vehicle, manufacturers guaranteed, which is a big deal.
Not crazy Eddie on Second Avenue used cars exactly. So
those certified pre owned commercials that we're seeing everywhere from
like BMW and stuff, they actually have some kind of
meaning behind them. There's some backing there, if you want
to think about it that way. So I'm sorry, I
(05:39):
mean that's a great point. So, um so, what I'd
like to do right now are two things if you're
okay with it. First, something that we should have said
in the beginning, Buddy, and I can't believe we missed it.
What's that We have a great podcast on the cost
of ownership, and it's an old one. It's a deep cut.
But if you are if you are considering buying new
(06:00):
car repairing your current car now, then you really should
check out that podcast because it has it has some um,
reassuring news and some ugly truth. Yeah that's true. I think,
uh oh yeah, the ugly truth part about that. I
think I know what you're talking about. You know that
the time tables. Yeah, okay, yeah, so we were, I
think we were on new car costs, right, new car costs.
(06:21):
We talked about old car costs, you know, keep I
guess keeping your old car versus new car costs and
new car costs. Now, a lot of people think of
just the initial you know, I'm going to the dealership
and I gotta put a down payment on this thing,
and I've got to uh, you know, pay this monthly
fee and you know, we'll talk about monthly fees in
just a minute, rather charges. But um, you're gonna have
less maintenance to deal with. You're gonna have a little
(06:41):
bit more insurance to deal with and potentially less fuel costs,
but you gotta remember that along with that purchase costs,
you're also gonna have taxes, title licensing fees, things like that,
um and possibly loan interest if you do have to
take a take a loan after this vehicle. I'm so
glad you said that. I read this great article by
these guys called the Motley Fools, who work with different
(07:04):
different micro economic or individual economic decisions, and they had
this great look at whether you should buy buy a
new car or maintain your old one. And if it's okay,
I just want to walk through their example real quick. Sure, Okay.
So they looked at a place called Comerica Bank, and
that's the creator of the auto Affordability Index. Okay, so
(07:27):
what's that? Okay? So the auto affordability Index is something
where you can find the average prices of all types
of different makes vehicles, years of vehicles, and it's broken
down by multiple categories. Uh So, looking at this at
the number they found, just to pick an example out
of the air, the average cost of a light vehicle
(07:48):
would be like ending five point five. Yeah, but that's
you know, that's an older number is an older number,
and I'll update that in just a minute, but go
ahead with your example. I'm setting you up for this
because this is now day in number just for this example.
So let's say you had to finance that because you
couldn't pay for the car with cash, which will mention later,
(08:08):
right Uh, So you had to have some interest and
let's say your interest was just a little over six
and a half percent, which is not too bad, but
that would cost you six hundred and five dollars and
forty four cents a month. All right. Now, if you're
driving a vehicle that's costing you two d a month
to repair, then it's still saving you money. That's clear
(08:32):
easy choice there, and you make those repairs, you're saving
four hundred dollars every month potentially by holding onto that
old car. Right now, Also, there's going to be a
cost to you in time and convenience because you have
to work on this car every month. And I guess
you can extrapolate that to if you know, one month
you go without a two repair, and then the next
(08:53):
month you go without another two dollar pair, and then
the next month it's six That happens occasionally, but you know,
you got to look at it. It you had two
months off there, and that's the way you gotta look
at this. And you've got to look at it, you know,
the math of the whole thing. And that's that's where
you know, a lot of this comes in, like are
you are you saving money versus what you would pay
for a new car, because you've gotta have a new
car in mind when you when you start working out
(09:15):
the math on this, because I mean, it can range
anywhere from and you may buy a new vehicle new
to you use vehicle that's twelve thousand dollars or ten
thousand dollars, or you may want to get a used
vehicle that is, you know, thirty five thousand dollars, and
or you might get want to get a brand new
vehicle that's fifty dollars, you know, And then you've got
to figure out all these different formulas and what works
best for you and what you're paying for that old
(09:36):
used car each month, and that's where it becomes critical
like should you hang onto it? But there's more to
it than just that. I mean, you people buy new
cars for a lot of different reasons. They they buy
them for for comfort, for style, image, safety, convenience, reliability,
things like that. Oh yeah, One of the examples that
you and I talked about, um, where we've talked about
a couple of times off air, would concern some of
(10:00):
our friends who are realtors, you know, or who are attorneys.
And we're not gonna name names because I'm not sure
some if some of my buddies might be listening to
this episode. But you and I have friends who say that,
because of their job, they need to always have a
really nice, new looking car. And it doesn't matter if
(10:22):
it's a well maintained car from you know, or two
thousand three, because what they need to have to maintain
their appearance is a car from at least two thousand eleven.
And see, now that makes sense to me in that case,
because if you're driving clients all over town to show
them new homes or property or whatever it happens to be,
you definitely do have to have you have to portray
(10:43):
that image. You have to have that professional image, that
successful image. You know, what what is this guy doing.
He's trying to sell me a million dollar piece of
property in the middle of Atlanta and he's driving around
in a five thousand dollar used you know, I don't know, Toyota,
Tacoma or something. You like, what's going on with this?
We're we're having to sit on each other's laps get
to the property. That's not right. But if he's in
the least escalated, which again I still think is a
(11:04):
terrible idea, yeah, we'll see that. It's it's all about
the image or a new Mercedes, you know, something like that. Definitely,
it all plays into that that big shot persona that
they want to have that they actually kind of need
to have in order to make the deal go through.
And and for some you know, for some people, I
think that's really really important. It's a good idea. And
there's another thing that is a non quantifiable or non
(11:28):
numerical interests that I would add here, but I'm gonna
wait till the end to drop it. Is that cool?
That's fine? And you know we mentioned paying cash for cars, right, yes,
And and I don't know if a lot of people
really have ever done this really, I mean, and in
our audience, I know a lot of people claim to
have done this and say like, well, I just paid
cash to the car, but buying a brand new car
now and the average price of a new car is
(11:49):
something like and this is a relatively new number, so
you've mentioned before a few years back. Well, it actually
wasn't that far back, because in one year, I believe
this price has gone up something like five thousand dollars
and in one I think it's one year. Let me
let me double check that. Um, oh, I'm sorry, five
thousand dollars in the last ten years. So, um, it's
gone up, yeah, five grand, because in two thousand three
(12:10):
the number was like twenty six three seventy four for
a brand new vehicle. Now, the average new car price
thirty one thousand, two hundred and fifty two dollars, which
is uh, that comes from three different places. That comes
from USA today, True car dot com, and then a
place called the cost of Living dot com. Now, who
knows where they're getting information. Maybe it's all come from
the same place. But that's the average price of a
(12:32):
new car in the United States as of August two.
And that's pretty much the general accepted number. I've heard
about thirty And who carries that much money around in cash?
Well most people, Now, you don't, you don't typically have
that kind of money sitting in a savings account to
just be able to say, you know, handed over and
that's the average price. So there's something a little more,
(12:53):
something a little less. Of course, I understand that, and
I do know that it happens. It happens, but not
as frequently as I think. I hear it happen. Use
use cars. I can understand like they Let's say maybe
you saved up money from your previous car, and you know,
when you're done paying for it, you you you, as
you should do, put the money that you would normally
put it for that payment into a separate account of
(13:13):
savings account, because that's this is supposedly what you're supposed
to do every month. Then when you finish paying off
your car, you set up a savings account and you
put that money from your your payment, your former payment
directly into a savings account. And then when it's time
to buy another vehicle in three years or whenever you're
your current car breaks down, you'll have a nice hefty
down payment, or you could you're able to pay cash
(13:34):
for probably a decent used vehicle and something to get
your on town. Yeah that's again, Yeah, I hear you
emphasizing supposed to do. I mean, how many people really
do that? Do you know? Do you know anybody that
does it? Because I think once you're free of that
car payment, then you say, well, that money is freed
up for I'm gonna put this money away, but I'm
gonna put it away for vacations. I'll be honest. Yeah,
(13:54):
I know I know some people who do that. Ask
for somebody who intentionally earmarks the money just for a
new car. I know only only two people who have
done that. One of them, I don't know if if
she's still doing it or if she just had one
stellar moment of behavior. Yeah, set up the account and
(14:17):
then it's, you know, got stagnant around five bucks. It's
like it's just it's it's good housekeeping. It's just like
how you're supposed to walk around your car and give
it an ocular assessment every time before you start it.
I imagine that well over what would you say, Scott, Well,
over eight of car drivers never do that. I'm going
(14:38):
to go higher than that. I mean, people may look
to see if they have four flat tires. Maybe yeah, maybe,
And that's about it. I mean, and I don't think
many people do that, but uh yeah, I think it
would be generous to say. But yeah, anyways, that's what
you're supposed to do with that money. You're supposed to
put it away and supposedly all avoid all that, you know,
that stress when it's time to really you know, go
out there and search for a new US vehicle or
(15:00):
our brand new vehicle. But most people are having to
resort to either use cars or finance financing exactly right.
So I went to bank rate dot com, which is
they have an auto calculator, and you can find these online.
You can find a lot of different things. You can find, um,
well you know what I'm talking about calculators right after this,
but I want to tell you about this one example.
And I went to bank rate dot com and then
(15:20):
found their auto calculator and I put in a couple
of different numbers. Now, I used the the average uh
you know, average price of a car here in the
two and just to start now. And I did it
with no money down at all, all the money financed,
you know, so complete finance of the full amount for
forty eight months, which just pretty typical. And I think
the current rate was something like four point one four percent,
(15:42):
which is you've got good credit. Yeah, I guess, oh yeah,
oh that's another thing, your credit rating, and you get
a lower rate that way. But a lot of a
lot of new college graduates are learning that for the
first time. Yeah, they end up having to go with
the eight or nine percent, right, you know, instead of
the four point four percent or four point one. So anyways,
the full finance for forty eight months comes out to
a whopping seven hundred and seven dollars and sixty cents
(16:05):
a month. And that's the average car ben and four years.
That seems like that's about an average term for for
a car payment as well. If you want to back
that down to thirty six months, so make it even faster.
At four percent, the price is still nine hundred and
twenty three dollars a month for the average car you're
talking about, just like the typical family sedan. Yes, so
(16:28):
this is like a minivan for something like this. I mean,
when you thirty one, I can I can do this
all the time. Like I can look through the paper
and I can see something that's you know about thirty one,
I think, well maybe that's manageable, you know, with my
trade in and you know that's uh yeah, I'll put
a little bit of money down with whatever I trade
my vehicle in for and then um, you know what
it was my monthly payment going to be. Well, you know,
(16:51):
you think thirty one not a huge deal, but when
you look at a number like seven hundred dollars or
nine hundred dollars a month, it's four or you know,
three or four years. So then here's the other part
of this. You go to like one of these calculators
are a tool rather that will tell you what your
vehicle is worth, a true market value of your people
to go to Edmonds or you know, the Kelly Blue
(17:12):
Book or something like that, and uh, you're punching the
numbers or you punching the information for your vehicle. And
I did this for my car recently, and the numbers
were depressing. It came back like a super low number.
It's like it's worth like less than five thousand dollars
been my car. And I was thinking all along like okay,
well I'll trade myke vehicle and for ten thousand dollars
and then my payment will be this and oh no,
(17:33):
it's like five thousand dollars is what the cars were.
So I'm gonna have to you know, Pony up another
five thousand dollars on the top of that to get
to these numbers that I found right here. So the
same same information, all that you know, the the the
percentages and everything are the same. Ten thousand trade in
and down combined thousand down. And this was just before
I knew that mine's only worth five. So with ten
(17:54):
thousand downs, you're financing one thousand, two or fifty dollars.
Your payment for four four years is still four hundred
and eighty one dollars a month. And if you go
to a thirty six months, which I would prefer to
do because who wouldn't want to get it on? You
don't want to walk around with a debt chain. Now,
six hundred and twenty seven dollars a month is what
I'm looking at for a for an average vehicle with
(18:15):
ten thousand dollar down dollars down for three or for
three years. Yeah, but think about all the money you
could save if you're paying nine hundred dollars a month
because you won't be buying gas so great good points
right in the train is gonna be eating a lot less. Yeah,
this is okay. So these numbers can seem daunting, and
(18:37):
they underlie they underline the thing that we were talking
about earlier. We're um, you know when we said the
bottom line is ultimately as annoying as it can be
to repair a car, um it can be much more
economically feasible to pay two hundred or even three hundred
(18:59):
dollars a month average in repairs versus nine dollar a month,
not average nine d real dollars a month. Isn't that scary?
I mean I've been kind of well, I've never ever
bought a brand new car, not brand new from the factory,
you know, not nothing like that. I've always been used,
you know, a couple of years used, which seems to
be a sweet spot there, like maybe two to three
(19:20):
years used vehicles returned either from a lease or its
return just because you know, somebody got tired of driving
it after three years. Yeah, after about three years, people
are tired of it. So you know, you strip yourself
with a with a four year loan or a five
year loan or I saw, ben, I saw something that
went up to eighty four months online that you're able
to get an eighty four month lease. That to me
(19:41):
seems like a bad deal for at lease. Yeah, I'm sorry,
not a lease, I'm sorry for a purchase. Yeah, at
least would be Yeah. That's so there's some important points
to remember that we're talking about a lot of We're
talking about a lot of numbers, and the numbers can
be kind of played around with in a lot of
different ways. And the thing that you gotta remember is
that you know, you gotta think, is that the same
(20:03):
price as your monthly car payment would be for each one.
So we talked about that example, like if you have
a three month car payment. We just talked about that.
That doesn't sound possible anymore. It's it's tough and thats
like a different time, not really, but I mean they're
saying like, if if you have a three month car
payment versus a repair that happens every four months, which,
oh my gosh, that sounds well. I had an Audie
(20:26):
that did that to me. In one year, I had
this car, this Audie that it was a four. In
one year, I had three three thousand dollar repairs on
the thing. The maintenance killed me. And by the time
I got out of that hole, just barely out of
that hole, I did nothing. I wanted nothing more than
to trade it and get rid of it. So I
(20:47):
traded it in for less than I probably should have.
But I got the car that I have now, and
I've had it for a long time, so it ended
up okay. But it was a huge financial hole and
it probably ruined me from ever getting another Audi again,
because not because I don't want one, because I loved Yeah,
I loved it when I had. It was a great
car when it was working until that final year. But
there's no way in my life my wife will even
(21:09):
let me get near an Audie dealership at this point.
But you know what, Scott, it was a learning experience.
And speaking of learning experience, learning experience, learning experiences. Speaking
of learning experiences, it reminds me of something that my
dad used to say to me, Um, when I had
when I really really just found myself int a boondoggle,
(21:31):
he would say, well, that's the price of an education,
and then, normally, depend on what had happened, I would say, uh,
you should have told me something like this before, um,
which usually he did. Why don't you pass along your wisdom,
old man, now, he said, because that wouldn't get you
very far, I don't think. As we returned here, Scott,
when last we left, we were talking about some other
(21:54):
things that we had yet to add to this equation.
But we're still talking about numbers. And you know, we
talked about a couple of different points here. Now. We
we said, you know, if the repair is less than
a few months car payment on a new vehicle, then
you know that there's a decision to make there now,
which would be, you know, if it's lower than the
cost of a few months, then of course you would
do it. And of course if it's lower than one month,
obviously you would do it. Now if the repair is
(22:16):
here's another one. Then this is another tricky one, a
single big repair. So if the repair is less than
half the car's market value, which is huge, so you know,
I mentioned mine's worth roughly five thousand dollars at this
point in my use car. So if you add a repair,
and there's a lot of back and forth with you know,
the the industry experts on this, you know that say
that you know, I don't know, should you make a
(22:38):
repair that's worth more than half of the vehicle and
you know the the vehicle's overall trade in value. Some
people would say, well, it's a it's an emotional decision
on my part because I'm familiar with this vehicle. I
know once I make this, it's going to keep it
going for another year, because I know that everything else
is solid. I'm gonna make this one repair that is pricey,
but I feel that it's going to keep me going
(22:59):
for another all another solid twelve months. Right, Then it
becomes is it then you have to go back to
is it worth twelve months? Uh? You know, based on
monthly payments? Right? And so then I'm so glad you
said that. So one of the examples, just to take
the example that we made of your car. If we
say it's worth five grand and it has a repair costs,
(23:20):
let's just say hundred for the sake of argument, right,
and uh, you know that that repair, whatever, whatever ungodly
massive repair that is has to um isn't doesn't take much. Yeah,
it'll delay, it'll delay the purchase of a different vehicle
or another repair for as you said, twelve months. You
(23:42):
average two hundred out over those twelve months, and it's
still less than a car payment once you add insurance
and gas who hundred bucks a month and it seems like,
well that's gonna be far less than a new car
payment would be. So you gotta play all these different
math games. He's you gotta go through just a lot
of I don't know, math acrobatics, I guess, in order
to figure out what's what's it worth to you? Really?
(24:02):
And you've got also when and when with uh, you know,
is it? Are other things falling apart of it? You know,
can I expect that after I make this payment, I'm
gonna also have to do this and this and how
much are those going to cost? And I know that
it's tough to foresee, you know, any kind of maintenance
that's coming up. You know, there's there's general maintenance, like
you know you monthly stuff or you know, stuff that's
based on mileage, But what about the stuff that breaks?
(24:23):
You know, in older cars, things are going to break
and it just goes Yeah, it just happens, I mean,
and you know there's other unexpected things that you just
don't know. You're gonna get a rock through the radiator
at some point because you're gonna be on the highway
a lot, and you know, things like that that you
know may cost you a few hundred here if you
under there, but when you add them on to that
big repair that you just made, then it becomes you know, well,
if I had known this was gonna happen, I would
(24:45):
have just traded it in, you know, I would have
made a smart decision and and started, you know, start
over fresh with a new used vehicle or a brand
new view. I always, personally, I always go for used
vehicles to gently used a couple of year is old.
I've never bought a brand new vehicle just because I
don't care for the depreciation. It feels like I'm just
(25:06):
in addition to buying a car, it feels like I
would also be handing someone, you know, five thousand dollars. Well,
that's the thing. You got to think about depreciation as well.
I mean, there's a lot of a lot of points
to think about when you buy a new car, and
depreciation is one upkeep. There's you know, the length of ownership,
I guess, interest costs and insurance rates and and of
course there's a purchase price of course, and the monthly
(25:27):
payments and all that. But you also have to consider, um,
you know, once you make this repair, how long is
that going to get you know, how long is that
going to preserve the life of the vehicle, How long
you be able to keep that car on you know,
on life supporting. I hope it's well. You know, in
some cases it feels like that, you know, in some
cases it does. Some people are hanging onto a car
that has like mine, it has a hundred and fifties
(25:49):
seven thousand or something like that, and it feels like
every time and make a little repair on it, I'm
keeping it on life support. You know, how long is
it gonna last? Me? Like, well, it's it's kind of
rough condition, and I can expect that soon this is
going to break it. It's still a lot cheaper than
a six hundred new car payment for just an average
new car. My my car has got a hundred and
sixty four thousand on it, and uh, I still like it.
(26:10):
I love it as a matter of fact. Uh, I
know though the car and I have an open secret
that one day that transmission is just gonna head out
and and then at that point I'll have to make
that calculation. You know, how how worthwhile is it to
uh to get a new vehicle, which you know might
(26:32):
still be a Monte Carlo to uh, you know, and
as opposed to repairing and transmission on a car that
old that high of a mile and then do you
take the bargain basement way where you go to some
you know guy in a in a barn somewhere and
he's gotta he's got a used one that you're not
quite sure about the condition. But it's only five hundred
bucks to have the thing put in, installed and done,
(26:53):
you know, And he says, hey, I don't have the title,
but exactly it's a little shady deal maybe, but you know,
is that worth it? Then? You know, you know, you
go to a place where you don't maybe trust the
parts as much as if you go to the dealership
and have the transmission rebuilt by a certified which would
cost a lot of money, I understand, but think how
long that thing would last. It probably would be like
new again. Oh there's all these different things just away.
(27:15):
It's another one on here. Um. One of the calculations there.
I'm sure some people have already thought about this as
you guys were listening to us. But one of the
calculations that we haven't hit on yet is the problem
of liquidity. So for so here's how a lot of
people with the best of intentions, especially and I know
(27:37):
it sound like an old kajar when I say it.
Especially younger people get caught in car payments that they
can't afford over time, just because they don't have the
liquidity maybe to pay for let's say, a nine hundred
or even repair that would keep their existing car going
for a year or more. Since they don't have that
(27:59):
lump of calves. Then they're saying, okay, um, I'll go
in and I'll get a car, and I'll be able
to afford it because I'll just be paying three hundred
dollars a month, which is less. And then of course
they get pushed up to four in the negotiation process
and they say, okay, four is a hundred more than
I wanted to pay per month, but that's doable, and
(28:20):
it's still easier than all at once. And what that
means is in the course of three months, Scott, they
already start paying more money. And you know, I guess
there's a way around this. Maybe. You know, if you
talk to um, you know, a shop owner, you're having
a big repair like that done, there's a possibility, not always,
(28:41):
but there's a possibility that they may finance that repair
for you. Yeah, but you have to know them. That's
an option to look at. I mean, I guess if
you're in that position. If you're in that case, because
when you're looking at a completely getting rid of your
vehicle and going to something new, whether it's a new,
used or new new vehicle, that's a that's a different
bridge to jump off. Just a lot a lot of
people get pretty messed up over the liquidity problems. So yeah,
(29:05):
I would I think that's an excellent point, Scott. We
should recommend trying to put I hate to say it
this way, but see if you can put a repair
on layaway, and I don't I don't recommend that if
by any means, you should be able to have something
in reserve for something like that, because if you're if
you're just going month to month, you know, just able
to make your bills, and then something like this hits,
that's a terrible position to Yeah, and I mean I
(29:26):
could speak from experience. I'm now a saver. I save
a lot of money, you know, as much as I
can for things like this, and it's paid off many,
many times. So if I can just offer a little
tiny bit of advice, save as much as you can
for stuff like this, the unexpected things. It doesn't even
have to be your car because what if something comes
up with you know, the house. Let's say the air
conditioner goes out on the house. Yeah, the three thou dollars,
(29:49):
you know, and then it's like, well, great, now I
don't have the money for the car payment that I
thought I had, Remember that four hundred dollar car payment
because I was on that month to month because I
had just enough to make the four dollar car payment. So,
you know, life gets in the way. Then there's a
lot of different things that come up. So just a
tiny bit of advice. We won't do that too much.
But I don't I don't mean to preach. Oh yeah, no, no,
I think it's I think it's invaluable advice. Uh. And
(30:13):
I wish I had heard it earlier, honestly, in a
couple of respects. But one thing that I naturally go
to when when you bring this up, which is again
a very good point, you said, life gets in the way,
and that's something that we should mention when we talked
about non quantifiable or not yeah, non quantifiable reasons for
(30:33):
people buying a new car, like what what happens when
you have that kid? You know, what happens when your
family situation changes, What happens when you have a divorce
and all of a sudden, you know, the car that
you and your spouse shared only goes to one of you.
So this can affect the decision as well. Exactly. Yeah,
(30:54):
there's so many different factors that come into play here.
But you know, and and a lot of this now
you mentioned change life. Now I can't speak to divorce
stuff or any of that. When you when you have
to sell your vehicle in order to get half of
the price out of it to give to the other person, evolve,
but um a position where your life changes in some way,
like you have a kid. This is what happened with
my car. I sold my Honda CRX, which had two seats,
(31:16):
to get the Audie, which had four doors and four seats.
You know, four seats are seating for five, I guess,
and um, you know it's a great decision and it
and it lasted me for many many years past, you know,
when I was making a car payment, but then it
got very very expensive you know for me, And you know,
I understand it was a good decision to make at
the time, but you know, there's a lot of things
you have to do it and you make make decisions
(31:36):
like that. You make it based on your your life
at that moment. So there's also another thing. Then there's
a kind of a peace of mind that you have
to that goes along with this. And when you have
a kid, you think, well, it's my car reliable because
I'm gonna be driving the kid back and forth to
daycare or to school, grandparents house, and I'm gonna be
making long trips to uh, you know, to the coast,
(31:57):
I guess, because we're gonna take family vacations on the
beach or whatever. And I sure don't want to have
my family in the car somewhere in the middle of
Florida and have the thing breakdown because you know, I
don't I don't know any mechanics in the area obviously,
and and likelihood that you can't repair it on the
side of the road usually, yeah, exactly. So you know,
you think, I want something reliable, I want something safe
for my family that you make. You make decisions based
(32:17):
on things like that as well, and that peace of
mind or that just that comfort of knowing that you
can get in the car and started every time that
you turn the key, that has something to do with
it as well, because I've had cars before where it's
a fifty fifty shot if it's going to start in
the morning, or you know, if I'm gonna make it
across town to get to to my job. But you know,
you need that job in order to make the money
to make the car payments. So I don't know, it's
(32:41):
it was about like that. I'm talking about, like, you
know some of the older dodgier cars, you know that
uh you're quite you know, kind of unsure about them.
You know some that always left you stranded. You know,
you just knew that, you know, you better have a
phone with you if you go out, or at least
the name of a good tow truck company. Gosh, okay,
so um, let's go ahead and recap. I think that's
(33:02):
most of what we got. You got anything else, well, yeah,
I guess, um, maybe some final advice maybe just so
if that's all right, Yeah, absolutely all right. So I
guess the last advice. I guess the best thing to
do is if you search new car versus old car online,
you'll find a lot of different interesting things. And and
one thing is that we've got a uh we've got
a quiz on our site. We do I'm so glad
you mentioned this. It's kind of is it should I
(33:22):
repair replace my car or something like that, and that's
I think, Oh, here it is digit fix it or
digit is it time to replace your ride? And there's
a quiz. It's like a twenty question quiz. But you know,
and it's funny you think that, well, it's a quiz
going to tell me, But there's some good insight in
this quiz because our writers put a lot of effort
into it, into writing this stuff. And uh and Kristen
Kristen is the writer of this, Kristen hall Geisler, and
(33:45):
she put a lot of effort into this. And there's
some good good points here, some things that you may
not consider, you know, in the form of questions. Yeah,
it's not it's not fluffy. No, it's not. It's it's fun,
but it's also not fluffy. You're right. It has some
good solid advice. And also you can go online and
look at calculators and these are very able. I think
two people and um, I don't know if ben if
I'm stepping over something. Calculators online or maybe one of
(34:07):
the best ways to figure all this out, because they were,
but they do require a lot of details. You've got
to know a lot about the vehicle that you're intending
to purchase and the vehicle that you have now. And
think we're talking about things like UM, you know, current
current values and mileage numbers, and loan rates and UM
down payment info, UM licensing fees, taxes. You need to
know all that information up front, so you gotta look
(34:28):
into it ahead of time. But once you do, it
will give you a clear picture of whether it's worth
it to hang on your old car or buy a
brand new vehicle. And then there's also we mentioned the
quiz type, you know, the quiz that we have, but
there are quiz programs that will give you a kind
of a yes no, like, you know, you answer ten
or twelve questions and it will say, well, here's our
recommendation for you because you answered this way. What's the
(34:51):
year of your car, what's the model, what's the mile
is and it'll say it'll ask you more about your
situation and your and your expectations out of your vehicle,
and it will say, well, we think you should hang
onto your car and make the repairs or or we
recommend for you a new used vehicle or a new
new vehicle for you because you know these are these
are the things that you want. You know, it's based
on your monthly budget or your average miles or you know,
(35:14):
the options that you require, which is kind of funny
to me require options, but you know if you have
to have, um, you know, the heated and cooled seats
or whatever, you know that kind of thing. So, um,
I know it's kind of funny. But there's also lots
of advice columns. Now you're listening to us about you know,
we're not really trying to give you advice. Maybe we're
just observations. Observation is a good way, But there are
(35:36):
advice columns out there that will tell you specifics and
and you'll find that if you read through these, you'll
find a lot of people have exactly the same thing
going on as you do. So you can kind of
match up with with certain you know, writers or people
with questions that say, well, you know, I've got this
vehicle and it's kind of doing this now is it
worth of me to invest in a new vehicle or
used vehicle? Or should I just repair it? And you'll
(35:57):
find that you know, somebody has gone through what you
have gone through. Invariably, there's always a good example out there.
So you know those three things, the calculators, the quiz
type programs, and advice columns are maybe the best places
to go. And too add all of that up under
one burning highlighted point. If you remember nothing else from
(36:19):
this podcast, just remember this. Consider your your decision carefully.
Don't just jump in. Okay, I know car commercials are
astonishing and really cool, even when cars involved are kind
of ugly. I know that there's so many people out
there stuck driving Honda Odysse's um But the point is
(36:42):
that these decisions um in terms of finances are are
fairly close to tattoos. They have permanence in your life. Second,
isn't like the second largest purchase in your life. There's
the house, and the car is the second largest decision
that you'll make of monetarily. So you know, you gotta
just you gotta side is this the right time for me?
And I know it's a very emotional thing for people
(37:03):
a lot of times, but it should be more math driven.
It should be something that you really really sit down
and figure out and make sure that it's the right
decision for you. And with that, I think Scott, I
propose that we in this podcast with a little bit
of math. In our listener mail, let's do it, okay,
Scott Logan writes in, uh, and I know you've probably
(37:26):
read this one. To Logan writes in, to talk about
the mid grade, low grade, high grade gasoline? Oh boy,
And he said, he said, it's all in perspective. And
he said, let me explain why. I would say. It's
an arguable point and it should be left up to
the consumer. So Logan saying that there's something that goes
down to somebody's personal choice, right, he said. Number one,
(37:48):
density of eighty seven grade is generally significantly less than
nine three octane gas and is therefore lesson in g
dents to the octane on eighty seven grade gasoline is
generally need two nine two or eighty RM value, giving
you the eight seven R plus M divided by two
value at the pump, and ninety three octane gas is
(38:08):
generally eighty seven point five or ninety eight point five um,
yielding something like ninety three R plus M over two.
So assuming the gasoline blends linearly at the pump, you're
mixing roughly six eighty seven grade with three gate get
gas to give you approximately eighty nine r m over
(38:30):
to value and says, the thing is gasoline and reference.
The octane number doesn't blend linearly. So since octane is
a measure of the physical property resistance the detonation upon compression,
all these other factors play into this and therefore it
tends not to blend linearly. Since most gas stations are
afraid that the gas won't blend this way, or at
(38:52):
least the major companies are, they tend to blend above
these specifications at the pump since both streams tend to
be wide into each other for mid grade. So as
he's saying, we get what we pay for at the pump,
or we don't get what we paid for at the pump,
Here's here's what he's Here's what he's saying. It's just
great because this is a part of his letter where
he goes, So where am I going with this? Uh?
(39:13):
He says, depending on the price point, UH, the three
increase in price will yield a denser gasoline with better
knocking characteristics, generally allowing the ECU to advance timing and
decrease the injector load table. Now he's writing to US
from Houston. So in Houston the price is UM eight
(39:34):
for eighty seven is around three dollars and thirty cents,
and mid grades around three dollars and forty. So you know,
that's somewhat comparable to Atlanta to h So he says,
in the long run, this gives you better fuel economy
over the eighty seven octane gas, but it might not
be noticeable. So for his he was driving a Hondai
(39:54):
Accent and he got three miles per gallon better going
from regular all the way a's premium. And uh, the
when you think about the mileage savings, it's thirty six
at thirty nine. So if you want to do this yourself,
and he said, of course, every car might be different,
so it might not be as much for cut and
(40:17):
drive benefit as it's being advertised. And he um, well,
this kind of goes against a few things that we've learned, right,
I mean I thought we I thought we had said that,
you know, if a car is rated at eighty seven octane,
that's what you should put in there because that's what
the manufacturer recommends, right, But if you go to jump
up to ninety three, I thought that the idea was
that it doesn't quite burn as as easily. And we've
(40:38):
also had a few people right in and say that's
not true. Because of this, they send in a lot
of you know, another huge you know email with a
lot of chemistry involved in it and a lot of
numbers that there's no way I can recall it right now.
But um, I don't know. It seems like we've always
just kind of narrowed it down to, uh, the eighty
seven octane stuff burns a little bit easier than octane
(40:59):
stuff is a little bit offered to burn, requires higher compression,
and that's typically the ones that benefit from it. Now
you can put it in there and it may have
adverse effects, it may not have adverse effects, but typically
the higher octane is for higher compression engines, right, typically, yeah, typically,
And so uh, we've got It's interesting because we've triggered
(41:19):
a lot of listener attention to this this idea. Yeah,
it seems like everybody in our audience weighs in on
this at some point, you know, whether it's just an
add on to the end of an email or or
a complete email about just that topic. But yeah, everybody
has an opinion about uh, the octane rate in a fuel, right,
and so we wanted to give as many perspectives as
(41:40):
we could on this. Uh No, Logan wrote us a
fantastic email. Unfortunately we don't have time to read all
of it, but Scott, I will read the last line.
I think you're gonna like. Okay, anyways, take it easy, guys. Also,
anniversary trans am, that is a good idea, not a
bad idea at all, because uh yeah, the eighty nine
was that was a year I graduated, so that one,
(42:02):
of course, that's one that I paid attention to because
that was the cool car at the time, right Yeah,
And uh yeah, that's a that's a good idea. I
like that idea. Well, ransams and all that. I mean, yeah,
the whole line up, the Firebird, Camaro, we should do
something about all of them, all of them. Yeah, we
should do a whole trans am because we've done uh
specific things, but we haven't just done a trans am. Now,
I don't think we have good idea. Logan, thank you
(42:25):
so much for writing in, and thank you everybody else
for listening. Let us know how your last repair or
replace dilemma went. We're interested in the answer. You can
hit us up on Facebook. You can find us on Twitter.
We have our very own website, car Stuff Show dot com,
and you can always send us an email directly. Our
email address is our Stuff and Discovery dot com. For
(42:49):
more on this and thousands of other topics, this is
how stuff works dot com. Let us know what you think.
Send an email to podcast at how stuff works dot com.
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CarStuff News
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Scott Benjamin
Ben Bowlin
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