Why it Makes Sense to Keep the Same Car for 15 Years

Owning a vehicle has become much more than a utilitarian activity for Americans. Instead of just having a reliable car that gets us places, we place a lot of focus on energy in making sure we have a stylish car that will impress our friends, family members, and individuals of the opposite sex. When we move from just wanting a car that works to having a vehicle that's stylish and has sex appear, we often make financially irrational decisions when it comes to buying cars. It might not be sexy, but buying a car and keeping it for 15 years will save you tens of thousands of dollars.

Cars tend to depreciate very fast right away and then hold their value for the most part after that. During the first three years of ownership, a typical car will lose 50% of its value. After this period, the loss ratio will drop off substantially. Most owners only keep their cars for three to five years, and take quite the hit if they keep buying newer cars, letting them depreciate, and then getting another newer car which will also depreciate. When you keep a vehicle for a long period of time, you're going to see depreciation, but it won't be nearly the rate if you were to keep buying newer cars, trading them in, and then letting them depreciate.

Consumer reports actually did a study on how much you can save by keeping a vehicle for a long period of time and they found that owners who buy a new car and keep it for 15 years or 225,000 miles of driving will save you on average $31,000 versus trading your vehicle in every few years.

They also identified ten models of vehicles that are reliable enough to last you the full 15 years without killing you in repairs, and oddly enough, they're all Japanese! Some of the vehicles listed included the Honda Civic, the Honda CRV, the Honda Element, the Toyota Forerunner, the Toyota Landcruiser, and the Toyota Highlander. In the study, Consumer Reports also recommended against buying many European cars, including some models of BMW's, Infiniti's, Jaguar's, Mercedes' and Volkswagen' because they depreciate at a quicker rate and will lead you to having a higher repair bills.

There are a number of other benefits to keeping a car for a long period of time. You don't have to worry about the hassle of buying a newer car and making sure that you're getting a good deal and not buying a lemon. You don't have to worry about trying to sell your older car, and you know the exact vehicle history of the car that you're driving.

Buying a car and keeping it for a decade and a half just makes sense financially. It won't have a lot of sex appeal after the first few years, but it will save you thousands of dollars in the long run.