By on June 13, 2012

Dave writes:

Sajeev,
I’m a sales rep for a corporate auto supplier in the Detroit area. I currently drive a 2008 Dodge Magnum SXT that I put around 5000 kms per month and currently has 165000kms. Bought it as a lease back with 30000kms in 2009 and it’s completely paid off.

My question is – Do I drive the Magnum for another year, putting the mileage up over 200000 and far reduce the residual value or do I trade it in on a low mileage Explorer, Flex, or Durango and start the process over again getting more cash value for the Mag. There’s no real reason to dump the Magnum – It’s in fantastic shape and aside from regular maintenance and some front end suspension work, hasn’t emptied my pockets.

Just looking for another point of view and some insight into what the residual value over time and mileage looks like for the situation.

Thanks,
Dave

Sajeev answers:

When a man (or woman) loves a car, that car must be driven. Losing several hundred dollars in value is no biggie, this prolongs the need to restart that monthly payment game. Given the condition of your Magnum and the (lack of) wear associated with lots of (implied) highway commuting in your career, I suspect you have no need to get back on the Debt Train for years! Plural.  Enjoy it!

I couldn’t care less about residual value. The Magnum will always have a buyer: this ride has a loyal wagon following, even if the cargo area is compromised from that roof line. More importantly, it has already passed the rough part of the depreciation curve.  If this Mopar was a late-model Audi–and you hated it–my tune changes accordingly.

Not losing hundreds in value is no reason to start the game all over again.  We need more reason than that.

Get the latest TTAC e-Newsletter!

24 Comments on “Piston Slap: Starting the Game All Over Again?...”


  • avatar
    graham

    First off, please reference http://en.wikipedia.org/wiki/United_States_customary_units. Secondly, as Sajeev correctly points out, I can’t imagine putting more miles on a Magnum is going to result in any significant net loss compared to the expense in purchasing, insuring and maintaing another vehicle, especially a SUV. Drive it!

    • 0 avatar
      Detroit-Iron

      I think he meant Windsor, not Detroit.

      • 0 avatar
        Philosophil

        I agree, it sounds like Windsor to me (for those unfamiliar with the area, it’s in Canada across the river from Detroit–hence in the Detroit area–where metric is standard).

        I also agree with the others. Keep the wagon.

    • 0 avatar

      I spent a year in Detroit, and Windsor is definitely part of “the Detroit area”. I have no problem with that comment.

    • 0 avatar
      Toad

      Put the $600 you would be spending on a new vehicle payment in your savings account every month and watch it grow. Your paid for car may start to look really good when you are growing a pile of cash.

      I’d like to get a new Grand Cherokee but cannot stomach getting back on the payment treadmill when my current vehicle is in great shape and is paid for. Plus the new car thrill wears off pretty quickly, but the payments go on for a long time.

      Get your current car expertly detailed and you may fall back in love with it.

  • avatar
    Detroit-Iron

    There is an admittedly small but fiercely loyal market for wagons. High 100s vs low 200s isn’t going to make much of a difference.

  • avatar
    invara

    I guess if you are the kind of chap who reads ttac, you will be subject to wobbly moments like this. Reconcile yourself to the sound and informed choice you made, riff on the escapist fantasy of the cars you could put under yourself in your own inner monologue and wait for your Magnum to die or become untrustworthy.

  • avatar
    GS650G

    The best car you own is one you paid off and own past the 8 year mark. You know it’s history, and it knows you.
    Take an amount equal to a monthly payment and put in the bank. After a year you should have enough for any major repair. Keep going to 3 years and you’ll have enough to repaint, rebuild, and even restore it.

    • 0 avatar
      DC Bruce

      Amen to that. For a person who needs a car, the relevant question is not “residual value.” The relevant question is “replacement value.” If you look at it that way, the choice becomes clear and the calculation simple. If a vehicle meets your needs, is not a PITA to own (i.e. unreliable or a money sink for repairs), then keep it and you will always be money ahead.

      And subject to correction by experts in the field such as Mr. Lang, as a car ages beyond say, 4, years, the “residual value” of a vehicle becomes increasingly individuated. It’s at that point that the effects of indifferent care and maintenance show up and affect the value of the car adversely. OTOH, if care and maintenance have been good, there will be a substantial positive difference in residual value as compared to the ordinary example.

      • 0 avatar
        Mark_Miata

        This calculation assumes that the new car is a similar product to the one you already own. Technology changes over time, and newer cars have safety and convenience features that older cars do not.

        For example, my wife puts less that 8,000 miles a year on her car. After 10 years it would still have a lot of potential life in it, but we will have sold it well before that because we want to take advantage of current technology. When one considers the cost of medical care, the cost of a new car is trivial in comparison and is well worth it for the peace of mind it brings us.

      • 0 avatar
        mnm4ever

        Its amazing any of us lived through the last 30+ years of rolling death traps without getting the latest safety features every couple of years. Not to mention the horror of not having the latest gadget.

      • 0 avatar
        tuffjuff

        @mnm4ever

        You remind me of my grandmother.

        She tried explaining how it would “be just as nice” to get a used 2011 Buick Lucerne than a current-gen LaCrosse or (my eventual pick) a Lexus ES350.

        “The Lucerne has leather and power windows, it’s so nice!”

        Sometimes, the idea of having an interior that doesn’t look like it’s from a 2001 Ford Taurus or things called “features” just escapes people.

      • 0 avatar
        mnm4ever

        Your grandma sounds like a smart lady, there is no difference between those cars. They all look pretty much alike, have pretty much the same features and they all suck. I would rather stab my eyeballs out than drive any one of them, especially the fancy Camry you paid too much for.

  • avatar
    Hoser Dave

    I meant Detroit. I’m based out of Windsor, but all my clients are in the Metro Detroit area, hence my usage of the better unit of measurement.

    I understand the savings of keeping the Magnum, it’s just that with the used car market being strong, I wanted opinions about the choice.

    I’m thinking I drive this until the Dart SRT gets released. I should get plenty of life out of it by then.

  • avatar
    jimboy

    Keep the maggie, it’s a great car, easily maintained, and you have a low volume year that is already becoming collectible. I have an ’05 RT that I love and will probably never sell, same as you, virtually no problems other than front end tie rod replacement and regular maintenance. BTW, the new Dart is looking pretty good, too. I love the Rallye with the 1.4 turbo. should be a hoot to drive.

  • avatar
    vwbora25

    Herman Musnster says keep the car

  • avatar
    rhears

    Sajeev, I’m new to the site, so apologies for redundancy. I share our communal car disorder (we need a good name for it). anyway, i’m at a life stage (60) where i want to start keeping them for the duration. i have a 2012 C4S (997) on lease and plan to keep it as my first “keeper”. I also want a luxury/sport sedan to keep and love the E63 (had a 2007) and working on a deal for a new 2011 (leary of the turbos for a long term car) but more than willing to buy an LS 460 sport model. If the mileage is going to be about 15k/year is there any pressing reason to choose the more reliable Japanese versions or should I just maintain a strong savings account and go German? I’m very impressed by the tech advisor for Roundel who very frankly advises against keeping any BMW long term and I assume that advice applies to Audi/Merc. Is there a reason you singled out Audi as an exception to your advice to this gentelman? OK, shutting up now, sorry but i could talk about this stuff all day.

  • avatar
    CompWizrd

    Sell SXT. Buy Magnum SRT8. Start giving me rides to work.

  • avatar

    “There’s no real reason to dump the Magnum – It’s in fantastic shape and aside from regular maintenance and some front end suspension work, hasn’t emptied my pockets.”

    This sentence completely answers your own question.

    Why the hell would you trade in a useable, good looking car for one of those boring SUV’s and have to start making payments again? Do you really want a car note right now?

  • avatar
    PantherLurv

    Sajeev,
    As a TTAC reader of 2 years running…
    1. What is your most stylistically satisfying vehicle under $40K…that fits a wife, two kids, and a large dog?
    2. If the answer to number 1 is like dividing by zero, then…what is the most stylistically satisfying vehicle (4 wheels required) under $25K that fits a commuter like a tomb? (methinks used lexus, but I could be convinced otherwise.)

    …ehem, I wear my username like a drunken sailor’s tattoo. I had a rough night, okay?

  • avatar

    Interest is the money you pay because you don’t have money. I consider it poison…you are literally working for nothing.

    I buy cars and run them into the ground. I don’t recall ever trading anything for fashion. Buy a car you’ll like for a while, and run till it becomes more to fix than keep…..

    Don’t play the trade in game unless you need the SUV for some reason. I’ve two cars with no payments and will happily cruise forums and replace parts-I can fix anything but an autobox.

    Easy payments >>> no such thing.

    Also, as far as safety goes, I don’t think a Magnum is “unsafe”, or the new ones would be significantly better. That argument would apply, say to a pre or early airbomb car, but the more modern stuff like the Magnum will be as safe as a new car.

    Fear not, I have the same thing. I drive new BMWs, and realize the only difference between the e40 and e90 is a turbo and better gadgets. (Compare to the 328i and its only gadgets.) The automotive aftermarket will always provide better gadgets sooner and cheaper. Have you considered new stereo speakers as a “pick me up” ? If handling is not what it used to be, a set of end links and sway bar bushings, stock parts, are not too expensive and can usually be installed in the driveway to immediate benefit.

    I’m not pulling a 20-50k note for better satnav.


Back to TopLeave a Reply

You must be logged in to post a comment.

Subscribe without commenting

Recent Comments

New Car Research

Get a Free Dealer Quote

Staff

  • Authors

  • Brendan McAleer, Canada
  • Marcelo De Vasconcellos, Brazil
  • Matthias Gasnier, Australia
  • Tycho de Feyter, China
  • W. Christian 'Mental' Ward, Abu Dhabi
  • Mark Stevenson, Canada
  • Faisal Ali Khan, India