Yeah, I’m mulling over my travel patterns to the nth degree again. This week’s question: When to replace a car?
Josh pointed me to a discussion about when one should dump an old car and buy a new (or less-old) one. The short answer appears to be: it varies (obviously). Factors include the costs involved in ongoing repairs vs a new car, how much you value being in a new car for the sake of it (me: not at all, since my ’93 Magna meets my requirements for safety and comfort), and your value of reliability (high).
One factor for me is my driving patterns now and into the future, which are likely to change.
As a rough estimate, in a “typical” week, my “typical” travel includes driving to/from Marita’s each weekend, driving the kids to school and catching the train to work. By my calculations it comes in at about 100km of driving, and 120km of train travel, each week.
For the purposes of simplicity, I’m not going to try and estimate the amount of walking I do. And of course it varies a bit according to differing weekend activities, which might sometimes bump the driving and/or train travel up a bit. Most shopping and so on is done on foot from home, or during other trips. Long drives in the countryside and elsewhere don’t happen particularly frequently. Nor do holidays, alas.
Hey, this means I’m personally meeting (and exceeding) the 20% by 2020 on PT goal… even if the government has abandoned it.
The financial cost? Using the ATO’s claimable amount of 62 cents per km for a medium-sized car, it comes out for me at $62.00 in total costs per week (petrol, rego, insurance, maintenance). I have an older car, so the real cost might be lower, though recent petrol price rises would need to be taken into account (no, I can’t be bothered working it out). The train travel is costing me $18.41 per week based on a yearly zone 1 ticket via PTUA’s Commuter Club deal, equal to just 15 cents per kilometre. (The cost per km drops the more PT I use, provided it’s in zone 1 on weekdays, unless I take the kids along with me.)
But once the kids are walking themselves to high school (scheduled for 2009), assuming no other changes in my life, the car would most likely remain in the driveway on weekdays, and the driving distance would drop by half. The total figures would come out at 48km of driving, and 153km of train travel.
Car cost (in 2006 dollars) would fall to a total of $29.76 per week, but I’d expect that to rise as petrol prices are expected to continue to climb well beyond the rate of inflation. PT cost would remain the same (in real terms), assuming the new ticket system doesn’t change the fare system and the government promise of CPI rises is kept.
Significantly, car maintenance (which is a significant part of the cost of running the old beast) would drop with the reduced usage. Currently it takes me almost two years to clock up the 10,000km between scheduled services. This would become almost four years, though that seems impractical, given some maintenance such as oil changes would be needed more often, and besides four years is almost meaningless when predicting ahead for something like this. My car might fall apart, petrol might be restricted, or my mother might move to Leongatha or something.
The conclusion? Keep my car / upgrade / get rid of it altogether? I don’t know, I’m more confused than ever. I’ll just keep it for now.
Update lunchtime: The car is a 4 cylinder 2.6 litre manual sedan, now apparently worth about $2000, so Roger (see comments) is right — the ATO’s 62 cents per km figure would be much less, because depreciation is virtually down to zero. The value is not much more than I spent recently on it in repairs, but to my mind you have to compare the repair price to the replacement cost — the current value of the car isn’t really relevant except when calculating the impact of trade-in on the replacement.
12 replies on “My travel patterns”
I suspect that the 62c per km includes a large depreciation component. Your car would not depreciate much since it’s relatively old.
Is the Magna 6 cylinder? If so, that’s an argument to buy another car – 4 cylinder (eg Camry – made in Melbourne, no less!).
I’m a member of a commuter club at work, so the $18 to $19 gets deducted out of my pay (post-tax unfortunately!).
I’ve no objection to targets, but they should have intermediate steps (eg X% in 2 years time, (X+3)% in 5 years time etc) so we can judge the success of a program in the medium term and take corrective action if it’s failing. 20 years out is too far to make judgements now.
Reasonable conclusion. Probably less than $50 a week to have it sit there. There will be occasions when you need to be somewhere in a short time and a couple of taxi fares will soon match the $50 per week saved. There is also paying for items to be delivered home that you would otherwise fit in the car and perhaps some other areas where it will cost a bit that could be done cheaply by car. The challengs as the car gets older, is to keep it road worthy with a minimum of maintenance.
The main downside to the age of your car is the maintenance. For someone like me, driving between 60 and 80kms per day, upkeeping an older car costs a lot. For you, at 100kms per week it really doesn’t seem to warrant getting a newer car. In your shoes, I’d stick with your Magna. You only had a new engine put in a short while ago. I reckon you could keep it going ok until 2009. Once the kids are walking to school, you could then look at dumping the car altogether, or getting something newer, smaller and “runabout” like.
I envy you on the time you are on the road! I am looking at changing primary schools for Phee next year, cutting my daily k’s to 60, and then depending on how things go, training in every now and then. I am so hating the drive in at the moment!
Am in the same think-zone as Daniel, but I’ve got the Camry already :-) Bits of it don’t seem to be falling off, and it starts when we want it to, so I think I’ll keep it for now. It’s been very handy for bringing big things home. It’s not used for commuting, so it’s not costing so much because it’s not travelling much. A tank of fuel lasts a couple of weeks, which is nice.
Which is the most popular car brand in Australia Daniel? Here in Peru Nissan and Toyota are the people’s choice.
You can’t skip the services just because you aren’t driving the car. It’s six months of 10,000 km, whichever comes first. Otherwise it will wear out quicker, make more pollution and run badly.
Get a new smaller car that you can use in a pinch when you need to get somewhere quick if you’re really worried about it, but I agree with Rae. The driving you do is just about negligible compared to the manbeast or even mine (regular trips to Ballarat and the Sth East). Keep your current car regularly serviced and in good nick and you should be fine.
Roby – Holden and Toyota seem to be the favs, but Mazda is catching up again.
The other interesting factor is where congestion will go. It’s possible it’ll improve significantly as people less wealthy than you are priced off the roads (or have to think hard about where they go and how they get there).
Consider getting a Prius.
In my current limited driving, congestion is barely a factor. Occasionally something busy on Kings Way on a Saturday afternoon, but apart from that it’s almost all free-flowing traffic.
The Prius is admirable, but “from $37K” new! There are a handful available secondhand, but it’s very slim pickings, and you’re looking at at least $17K. On my low kms, I doubt I could justify it, but it’ll be interesting to see how the price of this technology drops as petrol gets more expensive.
My husband uses the what he calls the ‘bathtub principle’. Imagine looking at a graph that looks like a bathtub – high on both left and right and low and straight in the middle.
The initial purchase cost is high and the running costs over time are usually reasonably low. The problem comes when the product (in this case a car) starts to get to the point where it need more looking after, and therefore back up the other end of the bathtub you go. Ultimatly, if you can ditch the car before you start on the up curve again, you’re on a winner.
And based on this, we bought a new fridge on the weekend to replace the 25-30 year old version!!
Daniel, I think you’re right to keep that car for now, but when the time comes to replace it, think about getting something bigger and more luxurious. You’ve more than earned it just from all that train travel you subject yourself to, ugh.
You could probably do very well in a Commodore, a Seventies CH Series Valiant, or even import a Ford Crown Victoria from America. Plush!
uhh right, a bigger car is just what I’ll need when petrol hits $5 or $10 per litre.
You may not like train travel, but most of the time I like it better than driving.