The experts were right

I recently sold my basic but first hand Honda Accord. The experts were right - buying a new car only makes sense if you are planning to run it into the ground. Yet, there is more to this than just the numbers as you will read later. First though, let us run the numbers.

My car depreciated from about $26200 to a little less than $11000 in 4.5 years. My car insurance costs every year were roughly $1000/yr. My annual fuel costs were about $1500. My annual maintenance cost including the most recent $1200 shocker where I had to get the 60,000 mile package including transmission fluid replacement was about $500.

So, each year, my car was costing me about $6500 with depreciation accounting for 2/3rds of the cost. I could have left that money in the bank and spent say 5-600$/month on car share services to break even.

Alternatively, I could have bought an old beater for say $10,000 and sold it for, say, $2500 thereby saving nearly $8000 in depreciation costs ($15250-7500 = $7750.)

In addition, my insurance would have been less, say, $700/yr. Over 4.5 years, this would have saved me (1000-700)x4.5 = $1350

My fuel and vehicle maintenance costs would have been higher - say $2000 and $800. Over 4.5 years, having a older car would have cost me $(500+300)x4.5 = $3600.

Over 4.5 years, buying and operating a second hand car would have saved me $7750 + $1350 - $3600 = $5500.

On the other hand, having a car allowed me to live in cities like Pittsburgh and Atlanta which were otherwise closed off to me. This means that going fully car-shared was not an option for me.

One interesting quirk of having the model of car I had was it came equipped with right blind spot camera standard which almost no car prior to 2013 had. While there is no way to quantify the impact of this feature on my life, here are two times when it proved indispensable.

• the weekend after I bought this car, I was driving up I-375 to Coraopolis at night when it started pouring. The torrential rain caused my right side mirror to fog up. If there is anything to be said about driving in the north, it's that northern drivers brought up on a diet of snow and black ice don't slow down for a bit of rain. So here I was, speeding on I-375, struggling to keep my car in lane with the rain pouring when I decided, quite reasonably, to move to right lane. As soon as I turned my indicator on to go right, I saw in the right blind spot camera a truck closing in to overtake me from the right. I waited the truck to pass and then merged right. Not terribly exciting perhaps but, in my view, the camera immediately paid for itself by saving my hide. An older car without a camera would have been far less safe for me.

• the second incident was more chronic. I partially destroyed my passenger side mirror exiting a narrow garage. This mirror, since it contained the camera assembly, could only be replaced with an entire unit and not just the actual glass. The dealer quoted $300 for the assembly including parts and labor. Not wanting to spend that money, I drove for months with the passenger side blind spot camera permanently on. I eventually bought a cheaper but perfectly adequate replacement from Amazon and fixed the mirror myself. This saved me labor costs of about $100 and I learnt how to take down car door panels and fix car mirrors. Having a camera let me stay safe and mobile while figuring out the logistics of buying spares and basic car fixes. Again, there's no number I can put on this but I'm happy to have had the opportunity.

So, purely numerically, a second hand car makes sense. Equally, I may have been hurt or killed on I-375 a week into driving a second hand car without a passenger side camera. No expert can factor that into their modeling.