If you're living a thrifty lifestyle now with an eye to building up a comfortable cash cushion or saving for an anticipated expense, and your ego doesn't have to live in the driveway waiting for another wash & wax session, an older car can help you reach that goal.
The Financial Advantages of Older Cars
There are many different ways that older cars cost much less than newer models do. Here are just a few of those different reasons as to why having an older car can play to your advantage:
- The insurance payments are much lower, since you're insuring a smaller investment, even with the same coverage.
- Interest on a $3,000 auto loan is quite a bit less than the interest on a $30,000 auto loan.
- Older cars are simpler and easier to work on yourself.
- Liability insurance is a tempting option because you've got less to lose if you do total the car.
- People driving a Ferrari are projecting an image, and that's expensive to live up to. People driving a '97 Toyota don't feel the same pressure to spend.
If you picked your care carefully, it's entirely possible to keep it running until you retire, and maintenance on it, even when you replace an engine, will cost you much less than loan or lease payments will.
Careful model selection is much easier with older cars. They have a history that can be checked online. It's a good sign if they have an avid fan club 20 years later.
The Downsides of Older Cars
The worst thing to ever happen to an old-car enthusiast was the Cash For Clunkers program in the late 2000s. A huge majority of the older cars that were running fine disappeared off of the market forever.
Finding replacement parts can be tricky. You'll have to shop around for some of the rarer parts. If you can't find a part that you need anywhere, try the junkyards.
Call around to check availability. Some junkyards will insist on pulling the part themselves, but others have a 'U Pull & Pay' policy that will save you even more money.
If you're lucky enough to find a model older than 2000, you can learn to do much of the repair and maintenance yourself, saving even more money.
Shop manuals for the older models can be found in thrift stores, libraries, and sometimes even online. It doesn't have to be pretty to get you into a Classic Cars Club, and the other members will have valuable advice for you.