Upgrade Car or Not?

M

magic

Hi,

I was wondering if I should upgrade my car or not.

I currently drive a mid-90s Corolla that needs 4 new tires (would last max another six months) and in six months time I have the rego and insurance. Initially was thinking of upgrading to a Camry in 1-2 years time, but because I need to change the tyres, might be better to bring it forward and put the money towards the next car? The Corolla is worth about $2000.

4 new tyres $400
CTP $443
Rego $266
Property, Fire, Theft Insurance $509
Inspection + Oil and filter $150
Total: $1768

Or change to a $7000 - $13,000 Camry:
CTP $469
Rego $321
Comprehensive Insurance $947
Inspection + Oil and filter $150
Total: $1887 + cost of car

Is it a waste to put money on the old car? Which option is better decision from a financial perspective? I am half way to saving up for a 10% deposit for an IP.

Thanks
 
Any car has maintenance and registration costs, so "putting the money to towards a new car" is a fallacy, you are just deferring the rego and maintenance cost forwards and will incur them regardless in the next 12 months.

If the car is otherwise sound then just get some new tyres and go about your way.
 
Agree with DaveM. A sound car is all you require, then I wouldnt be upgrading for the sake of upgrading. The costs you listed are basically only the new car extra. Dont see the point, unless of course the new car is a colour you just have to die for?


pinkboy
 
magic said:
Property, Fire, Theft Insurance $509
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On a $2000 car? That premium could buy your car every four years, never mind the excess you would pay too if it was burnt out or stolen :eek:

Save yourself some dosh and reduce coverage to third party property only. Should be < $200.
 
HomePage said:
On a $2000 car? That premium could buy your car every four years, never mind the excess you would pay too if it was burnt out or stolen :eek:

Save yourself some dosh and reduce coverage to third party property only. Should be < $200.
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That was my thoughts too. No point in insuring the car for damage/theft. Just get third party property insurance (last time I had it, it was about $100).

All the expenses you mention you will have on any car, so buying a new one won't save you any money.

Use the $300-$400 saving on the change of insurance to buy a bike. It will save you that much more in a couple of months. Not to mention the fitness benefits ;)

Blacky
 
I generally drive cars until they absolutely no longer work or are uneconomical to fix. I always invest money on a good set of tyres because they are the most important part IMO. My insurance is third party, so if that BMW slams its brakes on for some reason and I rear end it, it won't bankrupt me replacing it. I don't mind being the only one at work with an old vehicle while everyone has expensive cars. My way of thinking, the cash to purchase their car to me is the deposit and purchase costs for another IP.
 
citystar said:
I generally drive cars until they absolutely no longer work or are uneconomical to fix. I always invest money on a good set of tyres because they are the most important part IMO. My insurance is third party, so if that BMW slams its brakes on for some reason and I rear end it, it won't bankrupt me replacing it. I don't mind being the only one at work with an old vehicle while everyone has expensive cars. My way of thinking, the cash to purchase their car to me is the deposit and purchase costs for another IP.
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This is sensible. Unless your car is unsafe or about to expire, keep it and keep saving.
 
magic said:
A bigger (heavier) car is usually safer in the event of an accident.
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It's not that clear cut:

If a large, heavy car and a small, light car both receive the same ANCAP safety rating, is the large car safer for the occupants than the small one?

ANCAP safety ratings are used to compare vehicles within the same vehicle category (i.e. small car vs. small car, SUV vs. SUV etc.). It is not appropriate to compare ANCAP safety ratings across vehicle categories, particularly if there is a large weight difference. As such, there is not an ANCAP crash test which compares the crash performance of larger cars against smaller cars.

While mass may play a part where two cars with widely differing masses are involved in a crash, there are still a number of large cars which have a poor level safety performance. Some small cars do remarkably well in crashes with larger vehicles as they have very strong passenger compartments and advanced occupant restraint systems and these features can help mitigate the risk of the mass disadvantage. A large vehicle is by no means a guarantee of safety. In fact, in single vehicle crashes, such as with a solid fixed object like a tree or utility pole, the extra mass may work against you. In Australia, 45% of fatal crashes are single vehicle crashes.

Reference: http://www.ancap.com.au/frequently-asked-questions
 
Magic, the car you drive says everything about who you are.

A mid 90's corolla? I'd say your work mates ridicule you behind your back.

Get yourself a late 90's commodore, preferably a V8. You don't need to worry about tyres either as everyone you look at has smoothies. And the hand brake pulls them up real quick.

A VT commands respect, the car of choice in the Druitt (VNs are too long in the tooth now).

Get a VT, work colleagues' jaws will drop when you park it in the morning and when you plant it on exit in the arvo.
 
citystar said:
I generally drive cars until they absolutely no longer work or are uneconomical to fix. I always invest money on a good set of tyres because they are the most important part IMO. My insurance is third party, so if that BMW slams its brakes on for some reason and I rear end it, it won't bankrupt me replacing it. I don't mind being the only one at work with an old vehicle while everyone has expensive cars. My way of thinking, the cash to purchase their car to me is the deposit and purchase costs for another IP.
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I used to have that thought process.

Till seechange clued me up about possible surviveability and head injuries from a MV Incident, thanks seech !

Purchase the best your $ can perform on a safety basis.


ta
rolf
 
I wonder if a $7K car will be safer than a $2K car?

I agree to buy the safest car you can but don't upgrade unless you upgrade the safety IMO. We chose our recent vehicle upgrade on this basis, and only looked at safe cars.
 
Since you have stated "from a financial perspective", the Corolla makes more sense. You are comparing a cost of $400 to $7-$13,000. The Camry will also have higher running costs. You've listed CTP, rego and insurance but you'll also need to factor in servicing and maintenance costs.

You should ask yourself:
1. What is likely to fail on the corolla next and how much will it cost?
2. Are you only going to hold the corolla for another year then upgrade or hold it longer?
3. How will purchasing a car affect you buying an IP? Will it delay you? If so, by how much? Essentially, do you want that property faster than you want a new car?

Also, why are your tyres only lasting 6 months? Doing lots of kms?
 
I agree with Rolf on the safety issue. We used to drive a VN, which was an awesome car in its day, until it cost more than it's market value for tyres and rego one year. It was 14 years old, and my tyres last four years per set. We were in a sound financial position and upgraded to a three year old car with all the latest and greatest safety features.

I don't see any point driving any mid 1990s car these days when we have advanced so far with safety and fuel efficiency technologies. The camry you mention - how old will it be? Once a car gets to about 100K or ten years old, you will have maintenance costs. These are not insurmountable, but still a consideration. You then have to start over considering the financial implications. Please get the newest car you can possibly afford.

Life wont stop for you if you buy a car this year and don't get your next IP until next year.
 
SK Investments said:
Yep, a work colleague recently wrote off his recently purchased $800 'one owner grandpa model' corolla. Insurance paid out over $2500.
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ok but I don't think insurance manipulation is an indication of market value. Other than collectors cars I don't think anything over 20 years should even be allowed on the roads. When cars are so cheap new it is hard to understand why someone would pay anything near to this. If I had to buy such a car I would give you the value of the unexpired rego and possibly an allowance for remaining tyre value, tho in reality even they are probably time expired
 
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