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| "Should I fix the old car or
buy a new one?" |
| It may be tempting to buy a new car instead
of spending more money repairing your old car. However, what would it
cost to keep that old car running for a few more years? That may
be a hard question to answer. So lets say that you budget 2,000
dollars each year for the next three years to spend for these repairs.
Using these dollars as a start point, lets see how this would figure
out for one example. Now we need the price of a new vehicle and
a leased vehicle. Just how much is that new car really going to cost
you? Below is a chart showing the difference between spending money
maintaining your current car versus buying or leasing a new vehicle.
|
|
Total
Expenses
over a
3 Year Period |
Keep 1996
Accord |
Purchase
2005
Accord |
Lease 2005
Accord |
| Down Payment |
0 |
$1,000 |
$1,000 |
| Sales Tax |
0 |
$1,125 |
$630 |
| License Plates |
$350 |
$1,050 |
$1,050 |
| Insurance |
$1,776 |
$2,750 |
$2,750 |
Maintenance
and Repairs |
$6,000 |
$1,000 |
$1,000 |
Interest
Expense |
0 |
$2,750 |
0 |
Lease
Payment |
0 |
0 |
$9,072 |
| Depreciation |
$2,250 |
$4,575 |
0 |
Total
Cash |
$10,376 |
$24,626 |
$15,502 |
Less Equity
at End |
$3,500 |
$5,250 |
0 |
Net
3 Year
Expense |
$6,876 |
$19,376 |
$15,502 |
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