Rethinking Retirement Car Ownership

I have seen the same planned retirement right of passage many times. People securing their magic carpet by following the Retirement Car Ownership tradition. Buying a new or late-model car before ditching the rat race.

Having all the time in the world for road trips means needing a reliable and new car to jump in. It should last forever without the commuting to work and is the smart retirement move to make.

Or is it?

Here’s Why I’m Rethinking Retirement Car Ownership

I fell for this same thinking. Not by buying a new car but we did get a year-old manufacture/dealer certified used car a year before I retired early. Paid cash and thought this is it, we are all set.

I really believed that with proper maintenance and mostly light duty highway driving that it would last a very long time.

Rethinking Retirement Car OwnershipThere was some method to my madness, I didn’t just blindly follow the herd with our thinking. I have a 1981 Toyota truck that I have been able to drive for well over 2 decades so this retirement logic seemed sound. I am a car-nut and consider my automotive hobby as important to my retirement. It’s part of what I retired to. I find a car I like and it’s till death do us part which has worked for me over my life’s decades.

But I am beginning to understand the NEW reality about retirement car ownership

I was right in one aspect of my retirement car ownership thinking. In these 7 years of my early retirement we have taken many road trip adventures in that retirement ride. We have plans for many more too. But there is a huge flaw in my and what I believe is the common retirement car ownership thinking.

These newer cars aren’t made to last long.

It has nothing to do with the engines. They are marvels of engineering compared to the old stuff and there is no questioning their higher fuel efficiency and their safety. In a collision my old truck is barely safer than a motorcycle.

Our retirement ride is now 10 years old and has 145,000 miles on it. It runs beautifully. All of the dutiful fluid changes have paid off. But that isn’t the problem with modern-day autos and yes, I do consider a 10-year-old car a modern-day car.

The retirement car ownership logic’s flaw is the tech.

All of the sensors, computers, electronic controls, and everything else that makes modern cars function becomes quickly obsolete and failure prone. That is what we are starting to experience. Some tech failures do more than annoy us with a Check Engine light to warn us to get something serviced. They can shut the car down.

The problem is when there is a tech failure it almost always comes without warning. No amount of regular car maintenance is going to keep someone from experiencing most automotive tech failures either. It will happen when it happens and it would certainly bite if it happened in the middle of nowhere hundreds of miles from anywhere. We see a lot of no cell service on our open road travels too.

Before all the tech lovers decide I am crazy just ask yourself how many people you know are rocking a 10-year-old laptop? How about even one that’s 6 or 7 years old? Modern cars are controlled by a computer of some sort.

Just do a web search on the Year, Make, and Model of car you are interested in followed by the word “problems” and see where most of the failures are.

My New Retirement Car Ownership Plan

I had set aside $20,000 to replace our magic carpet retirement ride at some point in our retirement.

But I now plan on using that money for another purpose. Instead of buying another vacationing ride I will just rent them. Problem solved. A new car for road trip vacations and keep my older cars for the other 90% of my life within 50 miles of home and within cell service.

I just had to start questioning my retirement car ownership thinking and ask, why pay for a newer car for the purpose of vacationing? A new car with more tech than ever. One that I know will have tech issues within 10 years regardless of my dutiful servicing and easy driving miles.

My justifying financial thinking went like this: We average 27 days of road trip related travel a year. The car rental rates for a full-size car on the Costco Travel site is just under $30 a day. That’s with an in-town pick-up/drop-off and with unlimited miles. If we travel as we have been then for $810 plus taxes we will be road-tripping in a new car.

My brain always insists on my doing a little Pros vs Cons analysis
Pros
  • We will always travel in a late-model car with the latest safety features.
  • The comfort of having that “Reliability” factor settled.
  • Lower Cost. I will have lower car insurance cost by keeping our older rides. They also have lower licensing fees and taxes.
  • That depreciation thing. New cars lose value fast. My cars are already at rock bottom.
  • The money I have set aside for travel car replacement could easily pay the rental car costs for many years.
Cons
  • I can’t be as spontaneous. We will have to always plan ahead to reserve a rental car.
  • There is the whole pick-up and drop-off hassles. But it just needs coordination with the bride or someone friendly.
  • There is the possible insurance hassles due to any damage to the rental car. Between my credit card car rental benefits and my personal $500 deductible auto insurance I should be covered. But it will be more work to get done than my personal car would take.
  • Not all full size cars are created equal. I could get an uncomfortable car for our long road trip.

Wrapping Up

I believe the Pros far out way the Cons. I think the swing away from the traditional retirement car ownership logic is all about the new tech and where things are headed. Aside from the above, it’s amazing how quickly technical advances are moving. From e-cars  to autonomous cars

I am convinced at some point combustible engines will be obsolete.

There is also the current jokes (I hope they are jokes) that soon steering wheels will be outlawed.

I am also fully aware that as I age the road trips will likely decrease. That is what I saw happen with our relatives over the years.

As our current old rides need more money than they are worth to repair we will just donate them. At some point I may be down to just my trusty old truck of 24 years and our bicycles.

Uber and Lyft drivers are now in our town and that too may be a new retirement car ownership shift to consider.

Obviously if I had a giant budget I could just buy a new car every 3 to 5 years and not have to worry about failing tech laden cars. But this early retiree doesn’t have a giant retirement budget to spend like that. Even if I did have that kind of budget I doubt I would do that. It would go against my frugal living values.

Do you see any flaws in my new retirement car ownership thinking? Have you already come to the same conclusion?


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6 thoughts on “Rethinking Retirement Car Ownership

  1. Nice little truck T. I didn’t realize car rental was so cheap at Costco. It gives me something to consider between my OLD car and truck. Even though they both have low mils for their age I sometimes worry about a long trip. If a rental craps out they bring you a new one. We rented a nice Chrysler New Yorker in Philly once. A nice comfortable ride and when I turned it in they never knew we had at one point a large tub of live crabs and crab traps in the trunk.

    1. Thanks for the comment Ralph. Anything happens and getting another rental car is a nice added perk to this mindset. Your comment about the crabs has me think about not having to scrub off all the highway bugs from the car once home is another for the Pros list for this decision.
      Tommy

  2. Nice job on the analysis. I usually try to do the same thing for situations like this. It can help to give you a better perspective then you can consider both the financial and personal aspects and decide which is best for you. Depending on the size of you nest egg, buying a new car for 20K or less and keeping it for 10 years might not have much of an impact. But even so, 20k is still a big chunk if you arent going to fully utilize the car or dont care all that much about it. Sounds like renting is the better way to go for you. I bought my first new car a few years ago at 45. Prior, I had driven many used cars and kept them going for many years, replaced engines etc. I was good at getting parts cheap and knew people who would fix them pretty cheap or I did some things myself. Im sure overall I’ve saved a small fortune vs what most people shell out for car ownership. After multiple breakdowns and days off work dealing with it, I treated myself a little and went new as I was driving a lot for my commute to work. I considered used, but the cost savings for something with some mileage and possibly hidden problems wasnt quite worth it to me. I really like it and dont regret my purchase. In the future when its time for another car, I’ll see what my situation is at that time and go from there.

    1. Thanks for the comment Arrgo. I think you are taking the smart approach. See where things are in the future. The funny thing I have found is we change as much as our situations do as time goes on. In some ways unimaginable. That is certainly where I find myself now. As far as retirement car ownership I may change even more as this new plan of mine plays out. That’s the fun of FI and this early retirement adventure. Having options and being able to choose the path to take.
      Tommy

  3. You’re not the only one worried about over engineered techno razzle-dazzle, which accounts for significant part of the cost of a new car. So I’m keeping my 25 year old beater, which I’m hardly driving anymore. So rent a car as needed for longer road trips (or maybe take my chances with the beater, like I did in college days). The computer died around the 20 year mark without warning of course. But otherwise has held up pretty well. Some folks told me they got 250000 miles out of theirs.

    If replacement happens, might buy another older car, or a really stripped down new one with as few gizmos as possible. Perhaps plugin electric?

    1. Thanks for the comment Steve. We made one of those last minute “take a chance” trips in my 145K mile used car this month and it went fine, but… I did preemptively replace the 5 year old still functional battery before leaving and babied it over the Rockies. But I worried a few times that I was working it too hard for too long when it wouldn’t downshift out of OD and the cruise would kick off when speed dropped too far. An upcoming trip already has the car rental reservation through Costco Travel. The tech has been the first to go in my newer cars. Tire pressure sensors that I don’t care about, etc. They only want $300 to get them working again. I will pass and do what I always do. Check the pressure myself. I do have to annoyingly hit the clear button to remove the Display warning. PITA tech!
      Tommy

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