Yeah, I’m mulling over my travel patterns to the nth degree again. This week’s question: When to replace a car?
Josh pointed me to a discussion about when one should dump an old car and buy a new (or less-old) one. The short answer appears to be: it varies (obviously). Factors include the costs involved in ongoing repairs vs a new car, how much you value being in a new car for the sake of it (me: not at all, since my ’93 Magna meets my requirements for safety and comfort), and your value of reliability (high).
One factor for me is my driving patterns now and into the future, which are likely to change.
As a rough estimate, in a “typical” week, my “typical” travel includes driving to/from Marita’s each weekend, driving the kids to school and catching the train to work. By my calculations it comes in at about 100km of driving, and 120km of train travel, each week.
For the purposes of simplicity, I’m not going to try and estimate the amount of walking I do. And of course it varies a bit according to differing weekend activities, which might sometimes bump the driving and/or train travel up a bit. Most shopping and so on is done on foot from home, or during other trips. Long drives in the countryside and elsewhere don’t happen particularly frequently. Nor do holidays, alas.
Hey, this means I’m personally meeting (and exceeding) the 20% by 2020 on PT goal… even if the government has abandoned it.
The financial cost? Using the ATO’s claimable amount of 62 cents per km for a medium-sized car, it comes out for me at $62.00 in total costs per week (petrol, rego, insurance, maintenance). I have an older car, so the real cost might be lower, though recent petrol price rises would need to be taken into account (no, I can’t be bothered working it out). The train travel is costing me $18.41 per week based on a yearly zone 1 ticket via PTUA’s Commuter Club deal, equal to just 15 cents per kilometre. (The cost per km drops the more PT I use, provided it’s in zone 1 on weekdays, unless I take the kids along with me.)
But once the kids are walking themselves to high school (scheduled for 2009), assuming no other changes in my life, the car would most likely remain in the driveway on weekdays, and the driving distance would drop by half. The total figures would come out at 48km of driving, and 153km of train travel.
Car cost (in 2006 dollars) would fall to a total of $29.76 per week, but I’d expect that to rise as petrol prices are expected to continue to climb well beyond the rate of inflation. PT cost would remain the same (in real terms), assuming the new ticket system doesn’t change the fare system and the government promise of CPI rises is kept.
Significantly, car maintenance (which is a significant part of the cost of running the old beast) would drop with the reduced usage. Currently it takes me almost two years to clock up the 10,000km between scheduled services. This would become almost four years, though that seems impractical, given some maintenance such as oil changes would be needed more often, and besides four years is almost meaningless when predicting ahead for something like this. My car might fall apart, petrol might be restricted, or my mother might move to Leongatha or something.
The conclusion? Keep my car / upgrade / get rid of it altogether? I don’t know, I’m more confused than ever. I’ll just keep it for now.
Update lunchtime: The car is a 4 cylinder 2.6 litre manual sedan, now apparently worth about $2000, so Roger (see comments) is right — the ATO’s 62 cents per km figure would be much less, because depreciation is virtually down to zero. The value is not much more than I spent recently on it in repairs, but to my mind you have to compare the repair price to the replacement cost — the current value of the car isn’t really relevant except when calculating the impact of trade-in on the replacement.