One of my firm’s youngest employees gave me a lift the other day from an auto repair shop to our Fort Lauderdale office. As he waited next to his shiny new Mazda, the first car he ever bought with his own earnings, he was a little surprised to see his company president pull up in a 12-year-old minivan.
But I’m happy to drive the 2000 Toyota Sienna that my kids nicknamed the Magic School Bus, after the beloved series of science-oriented children’s books and cartoons. It’s the car that hauled the girls and their friends to movies and softball games. My older daughter got her Florida learner’s permit with it at age 15. After she took it around a parking lot a few times, we set out on a 100-mile journey over back roads to the Orlando area, where we celebrated our intact arrival with dinner at Walt Disney World.
I like nice cars as much as the next guy, but they aren’t fashion statements or business advertisements to me. I try to buy a good car, maintain it well and then drive it until the wheels fall off. Having multiple kids and multiple homes provides a lot of opportunity for keeping cars in the fleet.
I passed my old sedans off to my daughters. It felt good to know that the cars were equipped with sophisticated safety technology like anti-skid systems that were not yet common when they were new. My wife drove the Magic School Bus as her everyday car in New York for the first five years we owned it. Then she got a newer van, and the MSB retired to Florida. It doesn’t get used too often there, but it does come in handy for big shopping trips, or when we have to carry four or five people with a lot of luggage on the 300-mile drive between South Florida and the St. Augustine area, where we often spend weekends and vacations.
Eventually, however, all owners of old cars face a dilemma. What should you do if the car needs major repairs that might cost more than the car is worth in working condition? And when do you draw the line, since components on an aging vehicle are likely to fail in a drawn-out series of breakdowns?
The Magic School Bus and I have faced three of these critical decisions.
Two of them came about five or six years ago, when the MSB was just middle-aged, rather than in her golden years. The transmission began grinding and whining. It was a known issue with the 2000 Sienna, to the point that the automaker extended the transmission’s warranty coverage in an unadvertised program. A dealer in New York claimed my car would not qualify for this coverage, but another in Florida said it would. The car moved south and got its transmission replaced.
Around the same time, the anti-lock brake actuator failed. A new part cost more than $1,000, and the New York dealer quoted a price nearly double that with installation. But the Florida dealer said he could find a used part and install it for $900 total. I have not set foot in that New York dealership since.
So at around 80,000 miles, the old Sienna started its new life as a Florida retiree. It now has nearly 150,000 miles. Last weekend, we discovered it was leaking oil.
The mechanics at a Goodyear store gave it a thorough check-out and discovered that most of the leak was coming from the rear crankshaft seal. This would not be a big deal, except that the transmission needed to be removed to make the repair, which meant going to a dealer or to a transmission shop. I opted to take it to an AAMCO franchise. I learned that fixing the bad seal and some gaskets that were also leaking small amounts of oil would cost more than $900. When I got the quote, I stopped to give the situation a little thought.
A Kelly Blue Book online calculator estimated the vehicle is worth around $5,000 in a private sale in South Florida, so at least I would not be spending more than the car is worth. On the other hand, I would be putting nearly $1,000 into a car whose engine and transmission are of an advanced age and might fail at any time. I could be starting down a slippery slope.
No matter how much money I spend on repairs, I’ll also still have a 12-year-old car that lacks modern features and amenities. No fold-flat rear seats. No navigation system. No anti-skid system beyond the antilock brakes. No side air bags. No video screen or satellite radio for those long drives to St. Augustine. I could get some of these things for the car in the aftermarket, but on newer cars, I like to have them built in.
The bottom line, though, is that this car is handy and, all told, very cheap to own. It costs little to insure. It doesn’t burn much gas for its size. I can carry a lot of people or a lot of luggage in it, in reasonable comfort. It would cost a lot of money to rent a vehicle this useful every time I needed it. Finally, by the time a car is this old, it is depreciating at a very slow rate. A replacement vehicle will be an upgrade, because I’ll get something new and fully equipped, but it’s going to be an expensive upgrade. Considering that I drive this car less than 10,000 miles a year, I can wait before spending all that money.
So the Magic School Bus got her repairs, and our partnership continues. Who knows how long it will last. But as long as I can keep her healthy with reasonable cost and effort, I plan to enjoy the ride.
Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book,
The High Achiever’s Guide To Wealth. His contributions include Chapter 1, “Anyone Can Achieve Wealth,” and Chapter 19, “Assisting Aging Parents.” Larry was also among the authors of the firm’s previous book
Looking Ahead: Life, Family, Wealth and Business After 55.
Posted by Larry M. Elkin, CPA, CFP®
One of my firm’s youngest employees gave me a lift the other day from an auto repair shop to our Fort Lauderdale office. As he waited next to his shiny new Mazda, the first car he ever bought with his own earnings, he was a little surprised to see his company president pull up in a 12-year-old minivan.
But I’m happy to drive the 2000 Toyota Sienna that my kids nicknamed the Magic School Bus, after the beloved series of science-oriented children’s books and cartoons. It’s the car that hauled the girls and their friends to movies and softball games. My older daughter got her Florida learner’s permit with it at age 15. After she took it around a parking lot a few times, we set out on a 100-mile journey over back roads to the Orlando area, where we celebrated our intact arrival with dinner at Walt Disney World.
I like nice cars as much as the next guy, but they aren’t fashion statements or business advertisements to me. I try to buy a good car, maintain it well and then drive it until the wheels fall off. Having multiple kids and multiple homes provides a lot of opportunity for keeping cars in the fleet.
I passed my old sedans off to my daughters. It felt good to know that the cars were equipped with sophisticated safety technology like anti-skid systems that were not yet common when they were new. My wife drove the Magic School Bus as her everyday car in New York for the first five years we owned it. Then she got a newer van, and the MSB retired to Florida. It doesn’t get used too often there, but it does come in handy for big shopping trips, or when we have to carry four or five people with a lot of luggage on the 300-mile drive between South Florida and the St. Augustine area, where we often spend weekends and vacations.
Eventually, however, all owners of old cars face a dilemma. What should you do if the car needs major repairs that might cost more than the car is worth in working condition? And when do you draw the line, since components on an aging vehicle are likely to fail in a drawn-out series of breakdowns?
The Magic School Bus and I have faced three of these critical decisions.
Two of them came about five or six years ago, when the MSB was just middle-aged, rather than in her golden years. The transmission began grinding and whining. It was a known issue with the 2000 Sienna, to the point that the automaker extended the transmission’s warranty coverage in an unadvertised program. A dealer in New York claimed my car would not qualify for this coverage, but another in Florida said it would. The car moved south and got its transmission replaced.
Around the same time, the anti-lock brake actuator failed. A new part cost more than $1,000, and the New York dealer quoted a price nearly double that with installation. But the Florida dealer said he could find a used part and install it for $900 total. I have not set foot in that New York dealership since.
So at around 80,000 miles, the old Sienna started its new life as a Florida retiree. It now has nearly 150,000 miles. Last weekend, we discovered it was leaking oil.
The mechanics at a Goodyear store gave it a thorough check-out and discovered that most of the leak was coming from the rear crankshaft seal. This would not be a big deal, except that the transmission needed to be removed to make the repair, which meant going to a dealer or to a transmission shop. I opted to take it to an AAMCO franchise. I learned that fixing the bad seal and some gaskets that were also leaking small amounts of oil would cost more than $900. When I got the quote, I stopped to give the situation a little thought.
A Kelly Blue Book online calculator estimated the vehicle is worth around $5,000 in a private sale in South Florida, so at least I would not be spending more than the car is worth. On the other hand, I would be putting nearly $1,000 into a car whose engine and transmission are of an advanced age and might fail at any time. I could be starting down a slippery slope.
No matter how much money I spend on repairs, I’ll also still have a 12-year-old car that lacks modern features and amenities. No fold-flat rear seats. No navigation system. No anti-skid system beyond the antilock brakes. No side air bags. No video screen or satellite radio for those long drives to St. Augustine. I could get some of these things for the car in the aftermarket, but on newer cars, I like to have them built in.
The bottom line, though, is that this car is handy and, all told, very cheap to own. It costs little to insure. It doesn’t burn much gas for its size. I can carry a lot of people or a lot of luggage in it, in reasonable comfort. It would cost a lot of money to rent a vehicle this useful every time I needed it. Finally, by the time a car is this old, it is depreciating at a very slow rate. A replacement vehicle will be an upgrade, because I’ll get something new and fully equipped, but it’s going to be an expensive upgrade. Considering that I drive this car less than 10,000 miles a year, I can wait before spending all that money.
So the Magic School Bus got her repairs, and our partnership continues. Who knows how long it will last. But as long as I can keep her healthy with reasonable cost and effort, I plan to enjoy the ride.
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