3 Reasons I Drive My Cars Into the Ground

I do not buy new cars very often. In fact, I kept my last car for close to 20 years, and I'm planning to keep my current three-year-old vehicle until my two-year-old child goes off to college (at least).

My cars remain around for decades because I drive them into the ground. I won't buy a new one until it makes absolutely no sense not to because the repairs on my old one cost more than the car is worth.

There are three big reasons why I've made the choice to do that -- and they are such good reasons that I'm hoping they'll convince others to drive their cars forever, too.

1. I don't want a car payment

The single biggest reason why I drive my cars forever is because I do not want a car payment. For most people, sending money to an auto lender out of their checking account is a fact of life and something they do pretty much continuously throughout their lives.

In fact, on average, the longest period of time most Americans have kept a car is eight years. Since the vast majority (64%) of car loans are for 67 to 84 months, this means that most people will end up getting rid of their car soon after their loan has been paid off. Usually, this will mean they need to get another loan.

I don't want to constantly get stuck with a monthly car payment, though. And driving my car into the ground makes it possible not to. See, after I paid off my first car three years into owning it (since I took a short-term loan), I kept making the car payments, but I made those payments to myself. At the time, I was paying about $350 a month, so here's what happened:

• After five years of making $350 a month in car payments, I had $25,200 in a savings account earmarked for car repairs or for the purchase of a new vehicle.
• I'd owned my car for eight years by then and I kept it for another 12. For that entire 12 years, I had $350 extra a month to invest in a brokerage account. Figuring a 10% average rate of return, that turned into close to $90,000. (Since the money went into an account with other investments, I don't know the exact specifics.)
• While I had to tap into my repair/new car account a few times, I earned interest on the money over those 12 years, so I ended up with about $30,000 to buy a new car when the time came -- with no payments.

Driving my old car, in other words, left me with over $100,000 in extra money for a new vehicle and other future financial goals. If you can keep your car forever and divert to making your car payments to yourself, you can perhaps have the same great outcome.

2. It's less expensive to insure an older car

There's another way I'm able to save by driving my car into the ground. It's cheaper to buy auto insurance for an older car than for a newer one. For example, from one big-name insurer, the cost to insure a new Nissan Rogue for a 40-year-old female driver living in Pennsylvania comes in at $774 for six months, while the same coverage is $364 for a 2013 Nissan Rogue.

Paying car insurance premiums isn't my favorite thing to do with my money, so I'm much happier to have an older, cheaper car to insure.

3. Car buying is a horrible process

Finally, the last big reason I drive my cars into the ground is I hate the process of buying cars. It's a huge hassle, I don't enjoy searching for one, test driving, or negotiating with the dealer.

Now, you may love to have a fancy new car, and if that's the case -- and you can accomplish your other personal finance goals while doing it -- then more power to you. But unless it's worth giving up a lot of money over time, you may want to drive your cars into the ground just like I do. An old car gets you to all the same places as a new one, but you'll have a lot more money when you get there.