Running into the ground together...

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Recession or not, the economy is limping, many folks are feeling the pinch. So what can we do with what is usually the second largest purchase in most people’s lives -- that wonderful, useful money pit known as the car? Internet surfers who have recently clicked on to The Motley Fool (the website that dispenses nuggets of useful financial info) might have noticed one article recommending that, instead of swapping our vehicles every three years, we should run them into the ground.

The logic behind this is sound. As soon as a new car is driven off the lot, it loses a large chunk of its value. And according to Kelley Blue Book, 65% of an average car’s worth is lost in its first five years. Even cars with the strongest resale performances, like the Honda Civic and the Toyota Corolla, are likely to shed half their value. But, with proper maintenance, modern cars can run to over 100,000 miles, or about 10 years of duty. Some will last much, much longer. So if the owner has already taken the biggest financial hit, why get a new car and do it all over again?

Yes, older cars break down more often, spending more time on the lift than on the road. The Motley Fool argues that, over a driving lifetime, cash spent on repairs and extra maintenance will add up to less than money lost in depreciation. What it doesn’t go into, however, is the inconvenience of having increasingly unreliable transport. And most of us are willing to pay extra to avoid being at the mercy of unscrupulous shops -- the ones that say the engine needs replacing when all that’s required are four new spark plugs. Still, it’s food for thought. And with less potential buyers walking into showrooms, the deals could be sweeter.

-- Colin Ryan