Newer Car Decision Part I — Fix, Sell, or Buy, the Well-used Car Dilemma

What car must go? Or do we even need two cars? Common questions and often difficult decisions when in the early stages of retirement!

We retired at the start of 2019 and although it hasn’t been a ‘full’ retirement (Dan has picked up consulting work) we are living on or below our targeted retirement income level. So we feel the serious weight of fixed income living and the long-term impact of how many, if any, cars we keep at this stage of our retirement?

If we lived in a metro area the choice to give up a car might be much easier. We live a few miles outside a small rural town. We could go without a car in good weather but the midwest winters would require alternative transportation options. So we’ve concluded we do need at least one car. But do we need two? Both of our cars are…well…old. At least one is in need of replacement in the near future.

When is used, too well-used and abused? It’s a question most baby boomers face around retirement. And the decision has a major impact on our retirement savings and monthly operating budget. Either way. Eliminate, keep or replace? Here’s our decision.

Cheap Car Fanatics

We’re passionate cheap car fanatics.

Fanatic but not insane. Our used cars are part of our secret to middle-class wealth-building. We buy used, maintain them well, but drive them into the ground with time and distance. We often put the old iron horses out to pasture with a relative or friend needing a fully depreciated car. It’s time to make that choice again. Fix the current stablemates or maybe buy a newer used car? Or maybe reduce to a one-car household?

Car replacement rules?

What rules do you use when you get to the “buy or hold” decision? How do you know when to replace a well-used car? When to get rid of a car? What car must go? Here’s our story. In four parts:

  1. Whether to replace and which?
  2. Utility vs. efficiency?
  3. Timing the used car market?
  4. Our choice revealed.

Still a two-car household

We decided to keep two cars, for the time being, because we both have separate and distant travel obligations, often on the same day. Lori may be care-giving in Minnesota for her Mother on days that Dan is working with clients or teaching a class in Iowa. But that still leaves the problem of two aging cars facing rising maintenance costs. Which to keep for sure? Which to consider fixing-up or replacing? What car must go?

In the title fight — Minivan vs. SUV

For the last several years our two used-car steads persevered through Iowa winters and long-distance summers. The 2006 Chrysler Town & Country has 235,000 miles. The 2008 Cadillac SRX AWD (all-wheel drive) has 183,000 miles. How far can they go? Do we want to be there when we find the limits of a major engine or transmission failure?

Two well-used car contenders vie for survival, our 2008 Cadillac SRX AWD Luxury SUV in black cherry versus a 2006 Chrysler Town &  Country Touring minivan in silver.
Fending off snow and ice this last winter. Our silver minivan and black cherry SUV, the title contenders vying in the elimination round.

Well, actually, we were there. The Cadillac required an expensive transmission rebuild at 125,000 miles. One of the hazards of AWD is more moving parts to fail. Dan loves the ride and confident all-season handling of the Cadillac. Lori has a long memory of the prior unexpected repair cost. Once bitten, twice shy. One strike against the SRX, despite the snow friendly AWD. Or maybe because of it.

Notice how Lori’s vote counts a little more? Turns out women are more often the final decisionmakers in car purchase decisions than men. Dan may recommend, but Lori can confirm or veto.

One major breakdown away

But the Town & Country minivan is probably more at risk for an expensive transmission failure. At 235K miles, the torque converter (the mechanical connection between the engine and the automatic transmission) shows signs of wear and slippage. The torque converter or any transmission repair is challenging on a Front Wheel Drive (FWD) vehicle like our minivan. It requires a lot of disassembly of other parts to get at the transmission.

Once upon a time, I could fix it myself

The once conventional Rear Wheel Drive (RWD) vehicles of our youth were easier in this regard. During college, I rebuilt a 5-speed manual transmission and clutch on my old 1976 Toyota Corolla SR-5 Liftback. Yes. Bought used. And probably abused as a 19-year old. But it lasted through law school.

1976 Toyota Corolla SR-5 Liftback, a classic RWD economy car from college days.
1977 Toyota Corolla SR-5 Liftback from Dan’s wrench-turning college days.

I liked the SR-5 Liftback because it was a poor man’s copy of a Volvo p1800 wagon. I’m not up to doing major automotive surgery myself anymore. I don’t have the tools or the time or the expertise. The transmission of a V6 minivan is bigger and heavier than the relatively small aluminum bell housing and transmission case of that old RWD Corolla. Another strike against the Town & Country, we’ve got to pay someone else to fix it when the transmission lets go.

Accumulated wear and tear

But the FWD minivan has always gotten through the ice and snow of our northern climes. Though this time of year the weather peril is rain and hail. Last night hail hammered a sister-in-law’s new car to the tune of $8,000 in damage. It was our turn under Mother Nature’s temper last year. Both our cars got hit by heavy hail. The T&C wasn’t insured for other than liability. The minor insurance settlement on the SRX’s dimpled hood went into the new car kitty. We’ve driven them since with their cosmetic imperfections. We’re not proud. They wear their scars with honor. But the body damage is a strike shared by both when it comes to resale value and whether either is worth investing expensive repairs into.

Back to winter hazards. This Spring, road salt finally conquered steel and paint on the lower door edges and rocker panel of the Town & Country. This is a common cancer for its peers. Ours seemed to last longer due to some salt-free years in Phoenix, Arizona. Another strike against the Town & Country.

2006 Chrysler Town & Country Touring minivan before the wear and tear of road salt and rust.
A young, rust-free 2006 Chrysler Town & Country Touring minivan, warm and happy in Arizona.

The minivan is down against the SUV.

Hard to say goodbye

But we love the Chrysler minivan. It’s been a faithful companion with many virtues. Dog-friendly and home-improvement handy. It’s how we haul the lawnmower around. The Stow’n Go seating is unique to Chrysler (and Dodge sisters) and is practical and flexible. Stow’n Go drops both second and third-row seats into the floor making a perfectly flat load floor. And room for 4’x8’ plywood sheets. It transforms back to a seven-passenger van with little fuss.

Stow’n Go seats — the killer feature of Chrysler minivans that makes all other minivans cry with envy.

Well, except you have to move both front seats fully forward to perform the magic trick. Oh, and the front passenger seat is stuck on its track. An expensive repair for which the factory part is no longer available. So Stow’n Go may be an argument for a new minivan but is currently another strike against the old Town & Country. The middle right captain’s seat can’t drop into the floor anymore because the front seat won’t move forward to get out of the way. Definitely a strike. Isn’t that three?

Maintenance backlog justifies when to get rid of a car

Other regular wear items on the Chrysler minivan are simultaneously maturing into needed service. It needs new tires, brake rotors, pads (and at least one brake caliper), and a tune-up. Tie-rod end bushings are worn. Most of these are just consumables in car terms. But added up they are a couple of thousand dollars of upcoming needs. We normally don’t hesitate to invest in regular maintenance. So, if this was all, the T&C would be safely headed to our favorite mechanic.

But that transmission looms as a big expensive repair. And there may be wildcard needs we haven’t detected.

Replacement Rule: Upper Limit for Repairs = Replacement Value

We could replace our Town & Country minivan with a like model with about half the miles but the same number of years for about $4,500. That sets something of an upper limit on what makes sense for repairs. This is a major part of our formula for when to get rid of a car. We’ve talked about maybe preserving it as a family classic. Cost be damned. But the salt exposure argues against ours as the best base for long-term preservation.

Finding another car to love

Things are looking grim for the Town & Country minivan. If this was baseball, the T&C is headed to the dugout. Think it’s time to get rid of a car. What car must go? Looks like the old faithful minivan.

We like cars, but we’ve always found another car to love. We’re flexible. We find what’s adorable in each of our cars. We tend to drive our cars to over 200,000 or more. A couple didn’t make it that far mechanically. Most have. A few left because our needs changed. We love the minivan’s utility. But it’s time for a change.

That begs the question. Have our needs changed? Do we still need two relatively large V6 hatchback cars with cargo floors? Find out the answer in part 2 of our fix, sell, or buy car decision. What car must go? Next, we balance utility versus efficiency. Another minivan or something else? And the answer must be within our car replacement savings and monthly retirement budget.

Money always matters

This is what makes the car replacement decision a retirement calculation at our age. It takes money out of savings and costs more money down the road for fuel, maintenance, registration, and insurance. These are part of the monthly retirement operating budget. We do have a sinking fund (savings bucket) for a replacement car. We’ll pay cash. But we don’t want to break the monthly budget. Money drives the decision of what car must go. And the replacement.