Please help me resolve a debate with my husband. I am a first time car owner. I bought a new Jeep in 8/04 for $23,600. I put $5K down on the purchase + my loan is for 60 mos. I would like to trade in the liberty before it gets too old + has too many miles on it. Does it make better sense to drive the car into the ground then buy another one or is it smarter to trade this one in for a new model, try to get the same payment + drive a new car instead of the Liberty which is going to continue to depreciate over time + give me maintenance problems in the process. My concern is that I already have 13,000 miles on my 16+ month old Liberty. My thoughts are to trade it in while it's still worth something + be able to drive something newer. I'm not concerned about having to have a new car, but I'm trying to be smart about car ownership + don't know what makes the best sense.
I figure, if I'm going to be making these payments for the next 4 years anyway and after that my car isn't going to be worth much and I'm going to be paying maintenance costs because of its age, isn't it better to trade it in soon and get something newer and make the same payments as I'm making on the Liberty (if that's even possible) and not have to deal with the maintenance issues down the road? At the end of my 5 yr loan, I'm probably going to need a new car anyway, and I'm back on that treadmill again of the same payment rollercoaster, only the payments will probably be even higher. My payments right now are $341 a month.
I would really appreciate some insight into this.

There are many factors here, and likely no answer right for everyone. The last car I traded off before it was 10 years old was a 1968 Chevelle. I have some definite preferences and mostly have custom ordered the car to get what I want. That means as few difficult, expensive to repair gadgets as possible. I also do most of my own maintenance. I do not itemize deductions. There are still some things on a new car that you may be able to deduct. Buy and keep has worked well for me.

You may also want to leave yourself a chance to dump the Jeep if gas prices go up too much.

Maintenance can eat you up, especially if you go beyond the owners' manual to make sure you avoid problems and it is reliable. If you or your husband aren't doing the maintenance, finding conscientious help can be hard. Reliability may not be quite as important as it used to be. You can get out of all sorts of jams if you have a cell phone and a credit card that isn't maxed out.

Put all the hard numbers and best guesses into a spread sheet. I think run it into the ground will be much cheaper. It will be more hassle too.

From what I've found lately, and listening to a well-known financial counselor on the radio, regularly seen on CBS "The Early Show", advises people to not only have no car payments, but be "debt free." It is something my family is working towards currently.

Ideally, the car you should be driving is a "paid for" car, whether you work towards paying it off early, or paying cash to begin with, (my next goal). We have two cars now, and put 25,000+ miles a year on each for commuting. If you have what you consider a "reliable" vehicle, it is best to keep it and pay it off. Then, by taking care of that vehicle, you can make payments to "yourself" after it is paid for until you have enough to buy your next vehicle, then no more payments, period!

If you trade now, chances are you will become upside down as a result of your current loan, heavily depreciating the car you buy, making it hard, maybe impossible to sell or trade again. I've seen this all too often, please take caution. It shouldn't be about the "payments", but about "no payments."

Here is an idea:

Don't buy, just rent.

In todays world, you nee a car with good gas millage.

But if you want to get a car every 2 years, then its much cheaper to rent then to buy.

Smart thing to do is buy a car and use it till you drop.

But as many have said, there are a million other factors to consider.

Of course at 13000 miles in over a year you basicly dont' drive that much.

For real money sense, you own a used car that is paid for, don't have any 300 dollar a month payments, and fix the small repair items tha may go wrong during the 10 to 12 years you own it. A 10 year old car with 130000 miles still has alot of life left in it.

Now if you are weathy and just want to drive new cars all the time, great, buy a new one each year.

If you are living paycheck to paycheck, get this car paid off, own it about 5 years after pay off and start saving some money.


If you were putting 100,000 miles a year on a car ( which is what I do) it may be different. But a well maintained car will drive well over 1000000 miles.
My Chev truck has around 300,000 on it and still starting on the first crank.