The Ideal Length Of Time To Own A Car Is Not Forever (2024)

In my 20s, I was a car fanatic. I'd trade cars every one or two years because it was fun. I loved to haggle with strangers to try and get the best deal possible. As I grew older and wealthier, my interest in cars waned. Today, I believe the ideal length of time to own a car is until the car turns about 10 years old.

If you drive a new car 10 years, you will have maximized its value while also minimized any safety risks that tend to appear due to age. I assume an average annual mileage of 12,000. Of course, if you don't drive much, you can easily extend your car ownership period.

If you buy a used car that is 3-5-years-old, drive it for at least 5-to-7 years before searching for a new one. If you buy used, you will skip the steepest portion of the depreciation curve. You can then turn around and sell the car for a reasonable price.

Just don't go look at new luxury car prices. They are outrageously priced at above $100,000. You'd do much better investing that money in stocks and real estate instead of a depreciating asset.

Forever Is Not The Ideal Length Of Time To Own A Car

In personal finance land, we always talk about about using things for as long as possible. This way, we get maximum utility from the product. We are then able to reinvest our savings for more passive income so we can one day be free.

For example, I own a bunch of tattered shirts I still wear to this day. Some friends at my tennis club make fun of me, threatening to report my “dress code violation.” But I don't care. I've got nobody to impress. If the hole in my t-shirt grows bigger, I'm not in any imminent danger.

But when it comes to cars, owning a car well past the 10-year mark should no longer be a badge of honor. Due to safety reasons, if you have the money, you should probably start looking for a new car after a decade.

I get the desire to save money and own a car until the wheels fall off. However, if the wheels actually do fall off while you're driving, you're screwed!

Roughly 38,000 people die in America from car accidents a year. Let's not be a penny wise and a pound foolish. The ideal length of time to own a car is when it's still operating safety and in great shape.

Older Cars Can Be More Dangerous And Less Reliable

In college, I used to own a 8-year-old, 1987 Toyota Corolla FX-16 hatchback with 150,000 miles. One day the manual transmission completely blew out, leaving me stuck on the side of the road.

Before the transmission went kaput, I was always afraid the timing belt would snap since it looked cracked at the 120,000 mark. It was only after I made enough money from summer jobs did I finally swap the belt out for new one.

When I was 28 years old, I bought a 1989 BMW 635 CSi classic for $3,500. It was my dream car from when I was in middle school. But one day, as I was crossing an intersection to go to Best Buy, my brakes suddenly stopped working! They locked up like bricks with no travel. Luckily, I managed to roll to a halt without injuring anybody.

Then another time, the BMW’s car engine just shut down after I got off a bridge ramp. While it was dumping rain, I had to call AAA to jump start my car.

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Two cars ago, I drove a Land Rover Discovery II for 10 years until it was 14-years old. It had so many dashboard warning lights on that I used black electrical tape to block them out.

Different Perspective About Car Safety As A Parent

As I look back upon my car-driving days, I've come to realize how the lack of money or being overly frugal caused me unnecessary risk.

Because my family was middle class and frugal when I was growing up, the only car we could buy before I went off to college was an $1,800 beater. While attending William & Mary, I drove my beater 155 miles each way from Northern Virginia to Williamsburg multiple times a year for four years.

As a parent today, there is no way I would ever let my kids drive an old hatchback with 120,000+ miles if they had to commute 3-hours each way to college. Maybe I'd let them drive a small car if they were zipping around the city. But if they had to regularly commute on the highway, I would buy them an under 10-year old SUV or used Cybertruck.

Recently, author Michael Lewis's 19-year-old daughter died in a car accident. I cannot imagine the pain he and his wife are going through. The other driver who was driving a semi-truck, walked away with minor injuries.

We would all give any amount of money to protect our kids from harm. And if we have enough money, then it's worth spending more money on a vehicle to minimize the chance of fatality.

Being Overly Frugal When Buying A Car

Because I wanted to follow my 1/10th rule for car buying, I bought Moose, my old 2000 Land Rover Discovery II for $8,000 back in 2005. I drove him for 12 years until he was worth just $3,000 when I finally traded him in in 2014.

As a personal finance writer, it was almost like a game to see how long I could drive Moose until he fell apart. A part of me wanted to prove to all the naysayers of my 1/10th rule that there's no need to ever buy a new car. If a guy could happily drive a car worth much less than 1/10th of his gross income, why couldn't everyone else too?

My frugal attitude changed in 2016 once I found out my wife was pregnant. At the time, we were driving a compact car, a Honda Fit we called Rhino. Rhino cost about $20,000 out the door after I traded in Moose in 2014. For about four months, I was worried about driving anywhere in Rhino with my pregnant wife.

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Finally, in December 2016, five months before her due date, I opened up my wallet and bought a 2015 Range Rover Sport for $58,000, which I still drive to this day. I named him Moosey in memory of his retired older brother.

Except for needing to change the cooling fan, Moosey has given me no problems. No longer am I getting bullied on the road as I did many times with my Honda Fit. I feel more confident driving three or four other people around.

Finally, Moosey has been a blast to drive. Owning a Range Rover was also one of my childhood dream cars. In Malaysia, where I grew up for middle school, a Range Rover Sport HSE today would cost over $200,000.

Keeping Up On Maintenance As An Old Car Owner

There is a chicken or the egg dilemma when it comes to car ownership and saving money.

The people who own cars for a long time tend to be more frugal. However, to safely own a car for longer than 10 years requires regular maintenance. And over time, such maintenance usually gets more costly without an extended warranty. Therefore, we must find a crossover point where the cost to maintain is no longer worth it and sell beforehand.

Things Tend To Wear Down Or Break Over Time In A Car

Here are some car parts that tend to not work over time. If you don't replace or service the parts, you may be putting yourself at risk.

Airbags – Airbags used to require getting replaced every 10-15 years. Supposedly, modern technology says there's no longer a need. But how can you be sure your airbag will deploy in an accident 10+ years from now if you don't own a modern car? There was a massive Takata airbag recall recently because it was found some of them didn't deploy.

Transmission – The modern automatic transmission is a hydraulic system comprised of several seals, gaskets, and lines. They can become damaged, clogged with debris, or leak. When this happens, you might experience transmission slip, which could ultimately end up in total transmission failure like I experienced. After about 100,000 miles, the risk of transmission slip goes up. After about 200,000 miles the risk of total transmission failure goes up. Hopefully, you will have ample warnings before complete failure. However, you just never know.

Brakes – Don't take your brakes for granted! Like any other moving part on your car, the brake system is intended to wear out over a designated period of time. When they display any symptoms of issues,like squealing, squeaking or a soft brake pedal they should be inspected by a professional mechanic as soon as possible. But, sometimes there is an electrical fault that causes your power braking to fail like it did with me.

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Alternator failure – The alternator is the part on your vehicle that keeps all electrical systems running once the car starts. It’s also responsible for supplying a charge to your battery to keep it in peak condition. One of the things that bummed me out about my Honda Fit was that I couldn't start the car on multiple occasions due to an alternator failure. I had to take the car in to fix it. And even after I fixed it under warranty, the problem still persisted.

Flat tires – I've had too many flat tires to count. Did you know it is recommended you walk around and check your tires every time before you go for a drive? Nobody does that regularly. However, it's a good idea to check and see if your tires have any types of punctures and if your tires are properly inflated. I once had a tire blow out while driving across the Bay Bridge. Generally, rotating tires every 5,000 miles (or when you change your engine oil) is good advice to extend the lifetime of the tires.

Dead battery – If you have a good alternator, mostcar batteries should lastabout three-to-six years or 50,000 miles. A dead battery is usually caused by reduced amps – or electrical currents – which naturally decrease as the battery loses its ability to maintain a charge. A damaged alternator, battery temperature sensor, or other charging system component can expedite this issue. It’s best to replace your car battery every 50,000 miles or five years, even if it’s not showing signs of damage. I replaced mine in 2024 for $420.

Timing belt or chain – The timing belt or chain controls the camshaft and the valves to let fuel and air in and out. If the timing belt or chain breaks, your engine could experience major damage. Newer vehicles equipped with timing belts can go up to 100,000 miles before requiring replacement. Older vehicles, on the contrary, should be replaced sooner, around 60,000 miles. Thankfully, modern cars now mostly use timing chains, which last longer.

The list of things that could go wrong with a combustible engine car goes on. Once you start getting past the 10-year mark, unless the previous owner was super diligent in maintaining his car, your car may have increasing safety risks. Therefore, if you are buying a second-hand car, make sure the owner has all maintenance records.

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It's Time To Focus On Car Safety

The safest cars and SUVs tend to be heavier with more safety features. Car engineers and designers are always trying to make their cars better to keep up with the competition. Otherwise, there would never be any progress in automobile safety. Car manufacturers would just keep on producing the same old car over and over again.

But just like how mobile phone technology grows by leaps and bounds after 10 years, so does car technology. Here are some of the most popular safety features in cars.

What I Plan To Do With My Car

I plan to own my car until at least mid-2025 (10-years old) and then consider getting an all-electric SUV. Moosey only has about 52,500 miles today given we only drive about 6,000 miles a year. By 2025, the safety features and electric car technology should be even better.

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When it comes time to sell Moosey, he should only have about 58,500 miles. I'll have all the service records and he'll be in great shape. As a result, I should be able to get about $20,000 for him. That comes out to a usage cost of $3,900 a year. Not bad.

By the time my kids are eligible to drive, I'm not sure if I will let them. In 12+ years, I hope there will be dependable self-driving technology. If so, inexperienced teenagers who are always checking their phones while driving can be put on ice. Distracted driving is a fatal epidemic!

As a driver with 25 years of experience, I encounter close calls on the road all the time. I have my doubts young adults with less experience will fare as well.

Instead, I'd rather have an experienced Uber driver or autonomous vehicle drive my kids around until they have at least 100 hours of supervised training. Driving a car is too important of a responsibility to be taken lightly.

The ideal number of years to own a car is when you no longer feel the car is safe. Safety is priceless!

Invest In Real Estate Instead Of Nice Cars

Cars are a money pits that make you poorer, not richer. Therefore, everyone should consider owning the cheapest, most reliable car they can and invest the rest of their money in real estate and stocks. For financial freedom seekers and car nuts, check out myHouse-to-Car Ratioto help you be more fiscally responsible.

To invest in private real estate, take a look atFundrise, my favorite private real estate investing platform. Fundrise was founded in 2012 and manages over $3.3 billion with over 500,000 investors. The firm focuses on residential properties in the Sunbelt, where valuations are lower and cap rates are higher. For most investors, investing in a diversified private real estate fund makes the most sense.

Another great private real estate investing platform isCrowdstreet. Crowdstreet offers accredited investors individual deals run by sponsors that have been pre-vetted for strong track records. Many of their deals are in 18-hour cities where there is potentially greater upside. Crowdstreet is a solution where you can build your own select real estate portfolio.

Personally, I've invested $954,000 in private real estate since 2016 to diversify my exposure and earn more passive income. Both Fundrise and CrowdStreet are affiliate partners of Financial Samurai, and Financial Samurai is currently invested in Fundrise.

For more nuanced personal finance content, join 60,000 others and sign up for the free Financial Samurai newsletter. I've been writing about personal finance since 2009.