Repairing/Upgrading - Economics

[More Power]

More than the sum of its parts?
The Economics of Repairing/Upgrading/Customizing

For most people, once the cost of repair exceeds ½ the current value of that vehicle, the repair cannot be economically justified. It's time to trade. On the other hand we also know that there are considerations beyond economics, and that many GM diesel owners sometime spend more than what the economics alone would suggest is reasonable. Let's have a look at vehicle repair and upgrade costs, and from an enthusiast's point of view, illustrate some points you may not have considered. Now available to subscribers in the Member's Area (http://www.thedieselpage.com/password.htm#features).

[trbankii]

I think that the real answer is in the last line of the third to the last paragraph - "At the time, $20,000 wouldn't have purchased an alternative that performed as well or looked as good."

People are always giving me grief about putting money into older vehicles. But the alternative to a new or rebuilt engine, transmission, etc. for $4K to $6K is a new truck for $40K to $60K.

To me the only times it doesn't make sense to put substantial money into an older vehicle is if you are thinking about selling it, if it has been so poorly maintained that you're going to be putting substantial money into all the components one after another, or if (God forbid) something happens that involves insurance on the vehicle - either accident or theft.

[More Power]

I think that the real answer is in the last line of the third to the last paragraph - "At the time, $20,000 wouldn't have purchased an alternative that performed as well or looked as good."

People are always giving me grief about putting money into older vehicles. But the alternative to a new or rebuilt engine, transmission, etc. for $4K to $6K is a new truck for $40K to $60K.

To me the only times it doesn't make sense to put substantial money into an older vehicle is if you are thinking about selling it, if it has been so poorly maintained that you're going to be putting substantial money into all the components one after another, or if (God forbid) something happens that involves insurance on the vehicle - either accident or theft.

I agree... I talked to a Duramax owner a few days ago who's 2002 truck was recently totaled in an accident. He was looking for a replacement. He was a bit shocked to learn the 2011 Chevy he briefly considered (well-equipped 3500 crew cab) was a little over $60k. His call actually centered on potentially buying a 2005 LLY he found used.

So, keep up with the little things - like steering/suspension/cosmetic problems, and the big things have a way of being justified when the time comes, especially when the new truck costs are as high as they are. However, I've met quite a few people who derive pleasure from owning new - or being seen in new... That's OK too...

Jim

[trbankii]

No problem with those that derive pleasure in a new vehicle. But when they talk to me about bad economic thinking...

Consider that you lose 10~30% of the value of a new vehicle in the first year and have lost over half the value in five years, somehow keeping my older vehicles alive looks better and better.

[rustyk]

I readily dropped $12K and $5600 for a new Peninsular/AMG engine and Sun Coast Converters tranny in my motorhome. Gladly done, as it suits my needs perfectly, and, more importantly, there were only 4 of this version produced. Fuel economy has improved from the OEM 9.1 mpg to 11.7, to 10.5 with the new engine, to 11.7 with the new drivetrain.

But I wasn't concerned about resale, as this is one of the most ain't-for-salest vehicles in the US.

[trbankii]

What were we saying about the economics of upgrades?

$320,000 1400 hp Chevy Camaro Tuner (http://jalopnik.com/5594783/lunatic-spends-320000-tunes-chevy-camaro-up-to-1400-hp)

:eek: