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Early Trade Ins Cost More

Consumer Reports Shows Early Trade Ins Cost
More Than Maintaining Older Vehciles

The U.S. Consumer Reports magazine says that
consumers who trade in vehicles early to avoid repair
costs are actually spending more. With proper care, many
of today's cars can last 200,000 miles or more, and owners
seeking to limit repair costs by trading in their vehicle every
three to five years may lose out on thousands of savings, says
Consumer Reports October issue. Consumer Reports 2007
Annual Auto Online Survey identified 6,769 readers with 200,000
miles or more on their vehicle odometers.

Here are some highlights:

Car Maintenance - Baby on Board

The report featured accounts that ran the gamut of make and model, including a ’95 Home Civic with 227,000 miles, a ’90 Lexus LS400 with 332,000 miles and a West Virginia familys 1994 Ford Ranger pickup with an impressive 488,000 miles.  When comparing the costs of buying and keeping a car for 225,000 miles over 15 years to buying and financing an identical model every five years, Consumer Reports found the savings could be more than the original purchase price of the vehicle -- and even greater if the savings were invested.

For example, Consumer Reports estimated the popular Honda Civic EX, with an automatic transmission, could potentially save its owner as much as $20,500 if properly maintained over 15 years -- $1,500 more than its purchase price.  In its analysis, CR calculated the costs of purchase price including destination fees, depreciation, maintenance and repairs, finance and interest, fees and taxes, and insurance for 15 years against the same factors for purchasing a new model every five years.  Factoring in three percent inflation and an annual five percent interest rate, Consumer Reports estimated an additional $10,300 in investment savings.  As a result, maintaining the Civic EX over 15 years would be approximately $30,800 less than the cost of buying a new Civic EX every five years.  Consumer Reports found similar savings with other models.  Not only will you save money over the long haul but you will have more cash available to invest in other more important things -- such as a college fund!

Article courtesy of Auto Service World, 8/31/2007.  Copyright 2007.  All rights reserved.

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