cost of ownership.....long

[Roger M. Woodbury]

Having had many, many cars of various types over the forty plus years that I
have been driving, I have a lot of opinions on the cost of ownership.

To begin with, buying or leasing a new car is NEVER, NEVER, repeat, NEVER
cheaper than buying a used car and maintaining it.  The depreciation,
interest costs, increased insurance and registration costs more than make up
for whatever you might spend on a comparable used car in reasonable
condition that is maintained that way.  You said that you needed the second
car because your wife was going to have to drive to work, and that you
wanted something more comfortable than the neat, high performance, but loud
and somewhat crude VW.  Fine.  That tells me that zero of your automotive
expenses are tax deductible, so every dollar that you spend on buying and
maintaining a car is "after tax" dollars.

That totally lets out the value of leasing a car, as you not only pay all of
the depreciation, but you also pay the carrying charges, 100% with money tha
you have paid taxes on.  Multiply the cost of the lease and whatever
maintenance costs you will have to bear, plus insurance, excise taxes,
registration fees , and multiply that times the rate of your Federal income
tax bracket, and you will see what a "new" car will be.

Now, you have said that the '88 Audi is in quite good condition, and that
you understand the basics of the automobile.  While at 141,000 miles, the
car still probably has a lot of good miles left in it, and presuming that
you own the car outright, then probably keeping it for another sixty
thousand miles will prove the be the least expensive thing to do, REGARDLESS
of how much it costs to keep it running properly.

The only real figure to use to compare costs of ownership is cost per mile
of operation.  After the first three years of age, the age of a vehicle
really has nothing to do with the cost of ownership.  The most serious
depreciation occurs in the first fifteen minutes of ownership, and after
three years, while the vehicle still retains a whole LOT of usable value,
the market value has gone down sufficiently to make the car a good buy for
long term use, but a lousy chance to resell it.  Obviously, I advocate
keeping a car in service as long as possible.

So, let's look at your cars.  The VW GTI may be fun and all that, but from
what you have written, I see it as a toy that perhaps is not really serving
much purpose, given your marital state,a nd actual vehicular needs.

Frankly, the Audi is pretty old.  A complicated and sophisticated machine
when new, Audis do tend to develop some cranky attritubes once they
accumulate age and mileage.  Thus the cost of repairing them will have to be
a factor in your decision making.

Here is how I approached the same issue, and continue to approach the same
issue.

My first Audi Quattro was an '87 5000 CSQuattro wagon.  That car had 121,000
miles on it when I bought it.  It had lived its life in Massachusetts and
had a good service record for the first 60,000 miles....no records
thereafter, even though it was only a one owner car.  I paid $7500 for it.

It proved to be fairly reliable, but actually needed quite a lot in the way
of "important" repairs, that had I known more about to begin with, would
have discouraged me from buying that particular car.  The key to that one
was that the service history was little to non-existent for the LAST 60,000
miles of its life, and this lack of maintenance came home to roost after I
bought the car.

I ended up having it painted, and it looked pretty good throughout its life,
but I finally got the local dealer that I knew well, to appraise the market
value of the car ($5500), and with 215,000 miles on it, I donated it to a
charity and took the deduction on my tax return.

But I wanted another one, and found a 1989 Audi 200 TQ wagon at a giant
dealership in Minneapolis.  Now, I am in Maine which is about 1600 miles
away, and based on my conversation with that dealer, I bought the car sight
unseen, flew out and drove it back.  That was in 1997.  The car had had one
owner, been sold in Minneapolis, and used by people who had shortly after
buying the car, inherited a LOT of money.  They kept the car in Minneapolis
and only drove it in the summer time, as they lived in Florida most of the
year.  The mileage history, as evidenced by the service records that came
from the dealer with the car, proved the story.   That car had 61,000 miles
when I bought it for $11,000, and of course, it was nine years old.

My new wife does not drive a stick, so, sadly, with 125,000 miles on it, I
sold it for $5500 to someone who should have a great history with the car
for many many miles, IF he follows the Audi servicing rules, uses the right
stuff in the hydraulic resevoir, and so on.

I had 100% of the work done on that car by an Audi trained, independent
mechanic, and did whatever he said I should do to maintain it.  Over the
nearly 70,000 miles that I drove that car, through all sorts of foul, Maine
winter weather, and...trust me....the car was really used hard, although
maintained carefully, the worst thing that I had to do to the car was to
have the transmission overhauled at around 110,000 miles......one of the
shift forks or gear selectors just simply failed, and rendered the car
motionless.  otherwise, the usual problems....rear brakes, front brake pads,
and that is about all.  Overall cost per mile of use?  ELEVEN CENTS,
including the transmission overhaul.

No, I have not included taxes, insurance, tires or gasoline as I would have
those expenses for ANY car.  But as far as service cost is concerned, that
Audi was the least expensive of any vehicle that I have ever owned, period.

Now, that car has been replaced (last August), with a 1994 Audi 100 CSQ
wagon, that is an automatic.  That car had 39,000 miles with one owner, and
I went to Kansas City to buy that from a huge BMW dealer out there.  I have
the original service records fro the Audi dealer, and the car was very
carefully maintained.  Obviously, it was eight years old, nearly, when I
bought it.  I paid about $14,000 for it, and I am financing it.

So far, in fourteen thousand miles, including the trip to Maine from KC,
plus a trip to Florida and back last November, the total cost of repairs has
been $400, which was the replacement of a hydraulic line...most of which was
labor, plus one window switch.  I also put in a new radio head and two new
speakers, as the stupid, worthless, overrated Bose system in the car was
failing.

But as far as the CAR is concerned, it isn't particularly stimulating, but
is very, very smooth, quiet and fairly economical in the kind of driving
that we do here in rural Maine.  I think that the overall cost per mile on
this car will prove to be quite low over time.  My wife loves it, and it
really is HER car.  I expect to keep it through at least 100,000 miles more,
which will probably be seven or eight more years.

To me, from your description, you have an Audi that is comfortable and a
"known item".  Yes, it has some problems, but they are typical, and once
fixed will likely not fail again in the next, say fifty or sixty thousand
miles.

If you repair the clutch, the air conditioning and the "couple of other
things", you might well spend as much as $3,000 to make the car tip top.
The question then becomes, what can you buy for $3000?  If you spend $3000
on your Audi, will you then expect to have a safe, reliable car, or not?

And you know the answer to that question already, I think.  Does the car use
ANY oil between changes?  Is the exhaust one of those "little things" that
you suspect might be going?  Brakes?

And now the big issue:  do you want to keep the fourteen year old car in
service, or do you really just want something newer and nicer?  Finally, can
you afford to buy/lease something newer and nicer?  If you buy something
newer and nicer and it results in a pretty solid car payment every month,
will that car payment put stress and strain on your household budget, or
your marriage, for that matter?

In my lifetime, I have used every rationale in the book to justify the
"next" car.  None of them is of any value, if having the car produced one
iota of stress on your marriage, or your feeling of safety, knowing that you
are living within your means.  I would suggest that you should never use the
suspicion that "something might go wrong" to justify buying something new.
You have said that you know your car, and can diagnose it, so you know if it
will be "made whole" or not and if you can get a reasonable amount of
service out of it.

If I were you, I would fix the '88 Audi.  If it REALLY needs a clutch, then
I would do that first, although you mgiht well really need air conditioning
where you live.  Do those things, and see how it goes.  My mechanic used to
say that a car like that should cost around $1200-1500 per year in
maintenance costs, and anything more than that would indicate that the car
was simply too old and should be replaced.  I would agree with that, if your
service is normal, and you drive only around ten to twelve thousand miles
per year.\

Good luck.  I know that this is a whole lot of information that perhaps you
don't want or need.  But my experience is that an older car in the driveway
that is ready to do what is needed, with a positive check book balance, is a
whole lot better than a nice, shiney, fun to drive, NEW car in the driveway,
and not enough money to make the next installment payment.

Roger