Keeping Your Car Longer Can Put $5,557 Extra in the Bank Each Year
Written by
G. Brian Davis
Edited by
Rebekah Evans
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According to The Zebra, drivers own their cars for an average of around eight years. Two-thirds (65%) of Americans have owned their car for six years or less.
Drivers intuitively get it: driving your car longer saves you money, compared to swapping out your car for the latest model every few years. Find out exactly how much money can it save you.
Case Study: Subaru Outback
Subarus have a reputation for reliability, with Consumer Reports ranking them second best out of 26 brands. They often last 15 to 20 years or more and retain their value accordingly.
Imagine you bought a new Outback in 2020 and paid $28,895 for the Premium trim, per Carfax‘s data. On top of that, you pay sales tax (typically 5% to 9%) and dealer fees (typically 8% to 10% according to Mullinax Ford). If you pay a combined 15% for those, that comes to $4,200, with the total cost being $32,200.
If you borrowed $32,200 over a five-year loan at 6% interest, you’d have paid $37,351 in total principal and interest.
In 2026, you face a choice: trade in your 2020 Outback and buy a new one or keep driving it for another six or more years?
The Savings for Keeping Your Car
Maintenance and repair costs do of course rise as cars get older. CarEdge estimated that the first 12 years of Outback maintenance costs add up to $11,513. So if you keep driving the 2020 Outback’s for 12 years, the total purchase and maintenance costs add up to $48,864.
Instead, imagine you trade in your Outback Limited to the dealership for a new one in 2026. You get a trade-in of $14,790 per Kelley Blue Book (KBB) and negotiate the new price down to $41,000.
Including taxes and dealer fees, you pay a total of $32,180, which you again finance for five years at 6% interest. Between principal and interest, that adds up to $37,328. Add in the first six years of maintenance and repair costs ($3,762) and the second Outback costs you $41,090.
Now combine that with the cost of your first Outback ($37,351 plus $3,762 for the first six years of maintenance) and you have a total 12-year cost of $82,203. Compare that to $48,864 it would have cost to keep driving your 2020 Outback for 12 years. In other words, trading up to the newer model today costs you $33,339 or $5,557 a year for the next six years.
As a final thought, vehicle attorney Chad Watwood of LawBike Motorcycle Injury Lawyers pointed out that the cost calculation doesn’t even include the difference in insurance. “With older, paid-off vehicles, you can pay significantly less in insurance premiums,” Watwood added.
Overall, you end up saving when you avoid upgrading your car to a newer model.
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