- Holding onto my old car has saved me a lot of money over the years, especially with auto insurance.
- I hope to use these savings to avoid auto loans for the rest of my life.
It's not flashy, but it has some hidden benefits I wouldn't trade for anything.
I bought my first car -- a used 2010 Mazda CX-7 -- at 21. Over the last decade, it's accumulated a few dents and scratches and traveled tens of thousands of miles. It's not much to look at anymore, but I wouldn't trade it for any sports car you can name.
I don't say that out of sentimentality, but rather practicality. The truth is, I've saved a lot of money by holding onto this old car. Here are three reasons why.
1. I own it outright
When I first bought the car, I had an auto loan, but I paid that off years ago, so now it's mine free and clear. That means I get to keep the $400 I'd been paying toward my auto loan every month and apply it toward other things I enjoy.
If I'd bought a new car as soon as I'd paid my old one off, I probably would've had to take out another loan because I wouldn't have had any money saved up for a new car apart from whatever I'd get as a trade-in.
I realize that by waiting, my car isn't going to be worth much when I eventually decide to sell it. But because I don't have to worry about a car payment, I have some wiggle room in my budget. I can set aside some of this cash toward a new car over time and hopefully buy the next one outright.
2. Insuring it is a lot cheaper
Insuring older cars is typically cheaper than insuring newer cars. The exception is classic or collector cars because the cost of repairs and replacement parts for these vehicles is so high. But for a typical older car like mine, that's not an issue.
Cars usually lose value over time, and this means that in the event of an accident, the insurance company won't have to pay as much to repair an older car as they would for a new car. As a result, collision and comprehensive coverage are often much cheaper.
Exact auto insurance costs depend on the vehicle make and model as well as the address where it's kept, the driver's record, and other factors. But for many drivers, hanging onto an older car could lower their insurance costs a little. For me, that's even more money I can save each month to put toward my eventual new car.
3. Repairs are often cheaper than buying new
Obviously, when you've had a car for over a decade, you can expect to need some repairs and I have had some costly ones. But even when I had to spend a few thousand dollars at a time, it was still cheaper than buying a new car. It helped that my husband went to school to be an auto technician, so I rarely had to pay labor costs.
Taking care of the repairs promptly has helped me keep my car in pretty good condition over the years, despite its age. I'm hoping to prolong its life as long as possible before buying a new one and then do the same with my next car, so I can reduce the number of vehicles I have to buy over my lifetime.
I know eventually I'll need a new car, and I'm already preparing for that. I have quite a bit of cash set aside, thanks to the savings I've accumulated by holding onto this vehicle for so long. But for now, I think I'll stick with my old Mazda. Maybe if we're lucky, we can make it another decade before I have to worry about finding a new ride.
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