Is it a good deal to trade-in every 2 or 3 years?

It is clearly a good deal for the dealership.

 

You'll loose money on almost all cars. The less time you own it, the more you will loose. Your dealer is smart, they're looking for low mileage, late model used cars for resell. Plus they're selling a new one at the same time, Win-win for them. Personally, I don't want to keep a car forever, but I don't want to take a bath when purchasing a car.

 

Let's assume you can get a new Prius for a $750 monthly payment, if your old Prius is costing you over $750 a month, you would be wise to trade it in.

If I owned a Gen 1 Prius I would be saving for a trade in, as over 10 years major stuff starts breaking. (And Gen 3 gets about 10 MPG better) I do not think I would be stressing with any Gen 2 Prius. (Gen 3 gets about 5 MPG better, so operating expenses would be lower)

From a different perspective, once your car quits reliably being able to get you where you need to be on time, it is time for a more reliable car.

 

I think 8 years and/or 100,000 miles is a good point to trade up to a new one.
The Prius should have no problems getting to that point without major problems.

 

Trade it is every 3-4 years. Just like a lease. Just budget that you will always have a car payment but no repairs. You may want to lease your cars if you drive low miles

 

Having a car payment for the majority of us is a fact of life.....so, if the interest rate is attractive and if the monthly payment can be kept the same, I would opt for the new and improved model!
Pros : New car with a full warranty plus Toyota care that covers oil changes for 2 years = peace of mind (invaluable).
Besides, you also benefit from better gas mileage and new technology and of course the experience of the new car smell!!!!I know some don't like the smell....I do.
Cons: None that will outweigh the pros in my opinion.....peace of mind trumps it all!

 

The major cost of owning a car is depreciation. The amount of yearly depreciation slows as a car ages.

Modern cars are so reliable that they seldom need major repairs inside of 10 years and 100k miles. So as long as the car satisfies your current and planned needs, the best thing from a cost standpoint is to keep it until you see it, in the future, costing you big money or it has become unreliable. For me, that means just before the 90k service or some similar "big service" mileage.

There are plenty of 250k miles Prius cars running around. They have excellent reliability reputations. Just follow the service guidelines in terms of changing fluids.

My last 3 cars were sold after they were 8+, 9+ and 11+ years old. I pay myself monthly so that I pay cash and have a simple transaction that I can understand when I buy a car and compare "deals". By doing this, the buying is not clouded by finance terms, trade ins or the like. I like paying interest to myself rather than to the car company. And I like having no car payments that I have to make.

Every time I buy a car I have to pay tax, the salesman, sales manger, dealership owner, etc. Why do it frequently?

 

The fact that dealers are sending letters offering good trade in value is good quality used cars are in demand

 

My 2006 Bummer I purchased it with the intent to keep it a long time. 7 years and 110,000 miles it was a money pit. When it got old or was difficult to sell. Would have been better off selling it after 3 years. That is the sweet spot.

 

Depreciation is greatest year one $5,200 than about $1,800 every year 2-5. The first year is the hardest hit for my 2012 Prius with depreciation and paying sales tax.

This chart may help.

 

Yep. The Prius has a very good reliability record in Consumer Reports so I wouldn't be concerned about repairs on an 08 unless it has a ton of miles. I bought my 06 new in January 06 and have a bit over 73K miles. I've spent very little (maybe $150) out of pocket on repairs/diagnostics. The rest was maintenance (e.g. oil changes, inspections, etc.) and wear items (e.g. tires and a 12 volt battery). A few things have been replaced for free due to TSBs, recalls and service campaigns. I'd imagine I'll need new shocks/struts in the somewhat near future along w/2 new tires.

I received a settlement check for the infamous HIDs (06-09 Prius HID class action settlement award letters | PriusChat). It was the for amount I paid for 2 Philips D4R bulbs from Amazon.

Yeah, I'd more/less agree w/the above. Assuming I still have my current Prius at the 10 year/150K mile mark (I'd probably hit 10 years way before 150K miles), I personally would look to sell/trade in, as the HV battery warranty is expired at that point.

Lifespan/Operating costs - Prius Wiki has some examples of Priuses w/a lot of miles. At Advanced Vehicle Testing Activity - Hybrid Electric Vehicles, one can look at the maintenance and repair records of the Prii there.

Trading in every 2 or 3 years is a VERY bad deal for the consumer. As others have pointed out, that's about where the steepest depreciation is. If you want to keep flushing $ down the drain, then by all means do it.

I sold my former 04 350Z in mid-2011 w/~53K miles, which I'd bought new on Labor Day weekend of 03. Other than maintenance and wear items (e.g. belts, brakes, tires and a 12 volt), I believe I paid $0 for repairs. Virtually everything that I had problems with either was fixed for free under warranty or wasn't worth spending the $ to fix (e.g. interior buzzes and gas gauge calibration seemingly off).

 

It is like anything you need to crunch the numbers. If you negotiated a 3K discount off list price your depreciation is only $2K per year the first 5 years. However if your reducing the principal on you car loan by 4K per year your building 2K equity per year . You roll that equity to lower the payment on your next car.

My 2008 Acura TSX I traded in 2013 and got a Check for $8,000. Rolled that into the down payment on the new ILX. They discounted the car the $3,500 which covered the sales tax. Payment on the new car is less than the old car. I have a new car. Well it's the gal's car she drives it.

The magic is crunch the numbers than decide. It's not for everyone. My parents used to buy cars and drives Em into the ground. They get large payments for 5 years than no car payments for 5 years but higher repair and maintenance bills, stigma driving a Clunker. I like low car payments and no headaches and new cars.

There is so much information at your finger tips. You can understand future value and loan balance and project out equity.

A lower car payment means you can put more money in your vacation budget.

 

Awesome chart!

 

If it's any consolation, I own a 1988 Toyota 4WD SR5 pickup with the famed 22-RE 4 cyl engine.
Although it only has 106k miles on it, it is 25 years old. never not started up for me, not left me stranded. It's needed repairs, but the biggest was only a head gasket replacement, about $800 five years ago. Beyond that just radiator, starter, other usual stuff.

I could sell this truck in one day for a good price. Several times people have left notes on windshield 'call i want to buy your truck'.

Says something about Toyota reliability. I'm not worried about Prius reliability.

and....

the others are totally right about depreciation being the biggest cost of a new car. Mine was about $25k OTD, I'd figure it's worth $15k in 5 years or 60k miles. That's 17 cents per mile.

Gas is 8 cents/mile, reg and insurance, 11 c / mile, maintenance maybe 2 to 4 cents / mile ?

figures are based on how much you pay / drive.

2nd question from car salesman is .... 'do you have a trade-in?' They want to 1) sell you a car and 2) get a car from you. double whammy.

 

It's all a matter of your car values. If you are the drive it for 30 year kind of person it is all a sham and sales people are not trusted advisors than buy and hold and hold and hold. For others cars are like disposable lighters, you buy them, drive em a few years, and get a new one.

 

FWIW, I've only had a car payment once. I normally pay cash. I took a loan out to buy a 350Z but I had more than enough cash to pay for it, if I wanted to. I put approx. the purchase price aside in a CD and calculated that the interest from that would roughly pay for the loan's interest.

At least w/Japanese cars w/a good reliability record, the repair bills are almost non-existent at the 5 year mark and usually inconsequential from the 5-10 year mark. Maintenance isn't too horrible either.

I definitely wouldn't keep cars for 30 years. Some do, but that's not me. FWIW, Number of the Week: Aging Fleet Could Boost Car Sales - Real Time Economics - WSJ and other stories mention the average age of light vehicles in the US is now 11 years. (If one can't read the entire story, Google for the headline and click thru from Google to get thru the pay wall.)