The 200,000km Barrier - To Trade or Not to Trade

Submitted: Monday, Jun 04, 2012 at 13:34
ThreadID: 96012 Views:2449 Replies:10 FollowUps:6
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Greetings

My 2003 3-litre Patrol has done 190,000km trouble-free but the bean counters have told me I should trade it. All the usual stuff about depreciation rah rah rah (I note they change their Audi over every 3 years...)

I have the old bus just where I want it with all the gear I need and this would all have to be changed over into a new model (like the 50th Simpson Anniversary model which looks the goods) I do 20,000km a year.

Do you guys think 200,000 is the psychological barrier the accountants think it is?

What do you think about changing all the gear over (drawers,dual batts, 2" lift etc)
Is it worth the effort?

And what's so bad about a fourbie with 300,000km on the clock?

And if any Toyota owners reply with hand grenade comments, I'll stick my fingers in my ears.

Michael O





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Reply By: Robin Miller - Monday, Jun 04, 2012 at 15:11

Monday, Jun 04, 2012 at 15:11
Michael , I think its time.

I just about cried when I sold my second 4800 GU , I am still not happy with the auto 4800 I have now.

But looking back I think the base reason I sold it was sound.

That was that after 250,000km on the other one everything gets a bit loose, every hose is years old etc etc and a new car is just more reliable and tighter everywhere.

Its a pain changing all the bits , espically when so many specials can't be directly switched.

I have just tossed out the rear airconditioner in my new Patrol - takes a bit of courage to cut up a new car , but it has to be done if you want the best you can get for years to come.

Just do it.
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Follow Up By: Member - Michael O (NSW) - Monday, Jun 04, 2012 at 18:15

Monday, Jun 04, 2012 at 18:15
Thanks Robin

It's a shame we blokes get "emotionally attached" to our hunks of metal...
Makes trading them in so much harder.

My first car was a Subaru wagon that did 300,000km and I DID cry when I sold it.

Thankfully most of the good bits fit on the new Patrol.
The suspension is probably past its prime so it could stay on.

Interesting that the trade-in figure was the same with or without the goodies.
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Reply By: pmacks - Monday, Jun 04, 2012 at 15:12

Monday, Jun 04, 2012 at 15:12
Hello michael,
as some one who leases their vehicle for work it is much better for taxation reasons to trade in the vehicle as with the age of your vehicle there is no more that can be written off and your car will actually cost you money to keep. My last car was a patrol and i loved it so i compromised and got a new car for work and kept the patrol for weekends and holidays and only traded it in a short while ago with 360,000 ks on the clock. got the grand sum of $5,000 :-) but i did get about 3k for all the accessories sold seperatly on Ebay
so for my 2 bobs worth i would sell

Peter...
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Follow Up By: Member - Michael O (NSW) - Monday, Jun 04, 2012 at 18:17

Monday, Jun 04, 2012 at 18:17
Thanks pmacks

Keeping the car for weekends did cross my mind (wife has a CX-9 for when we stay on the bitmumen...)

Your point about reaching the end of the depreciation deduction is a valid one and one the accountants push hard.
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Reply By: Ron N - Monday, Jun 04, 2012 at 16:25

Monday, Jun 04, 2012 at 16:25
Michael - The Yanks have the most succinct determination of when to quit a vehicle.

That point comes when your maintenance costs exceed your depreciation costs.

If your maintenance bill is still very low, then hang onto it. If your vehicle depreciation losses are very low, then it's highly likely your maintenance bill will soon exceed it. In which case it's time to quit it.

There's another school of thought that goes - "It's worth more to me than anyone else at this point in time".
My missus' 10 yr old Camry is in that position, it's only done 115K kms, and it's in top shape. It's worth under $5,000 according to my insurance co.
In which case, I'm happy for us to hang onto it until it looks like it going to cost us something serious in repairs, or does actually cost something serious in repairs. Then, it'll get the boot. I'm waiting for the new Forester with the CVT, anyway ... [;-)

The greatest serious repair cost potential of most modern vehicles is either electronics or the cooling system.
I've always made sure electronics don't get abused, and I keep cooling systems scrupuously clean, and do regular coolant changes.
It's always worked for me, and I've never had a "surprise" major cost in the last 30 years.

Cheers - Ron.
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Follow Up By: Member - Michael O (NSW) - Monday, Jun 04, 2012 at 18:19

Monday, Jun 04, 2012 at 18:19
Thanks Ron

You're right. I like the American logic.

Car is written down to almost zip and the bills will start soon enough.
Needs new tyres in the next month or so.
New bushes and shocks before too long.

Perhaps it's time to talk to the dealer again.....
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Reply By: AlbyNSW - Monday, Jun 04, 2012 at 18:46

Monday, Jun 04, 2012 at 18:46
The tax benefits is only part of the equation IMHO
I don't know your tax situation but I would have thought your maintenance and repair bills would continue to be covered in the same manor as they were before???

Getting a new vehicle with taxable benefits is still more expensive than existing ownership just a discounted way of owning a new vehicle. The accountants don't have the emotional attachment to the vehicle so unless you want a new vehicle or that the existing one is about to cost big $$$ to keep going I don't see the urgency to change

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Reply By: Michael ( Moss Vale NSW) - Monday, Jun 04, 2012 at 19:18

Monday, Jun 04, 2012 at 19:18
WoW!! 190,000ks and the original 3 litre motor!! It must be hanging by a thread. What a lucky guy, i would say to get rid of it before the engine needs $10,000 spending on it!! The resale will be very low with the original motor with those ks on it, but i guess it wouldn't owe you anything! Michael



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Follow Up By: Member - Michael O (NSW) - Tuesday, Jun 05, 2012 at 12:43

Tuesday, Jun 05, 2012 at 12:43
Thanks Michael
Typical 4.2 owner (insert smileyface here)

Dealer offered me $16000 trade.
But of course the new one is still a 3 litre.

Michael O
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Follow Up By: Michael ( Moss Vale NSW) - Tuesday, Jun 05, 2012 at 17:53

Tuesday, Jun 05, 2012 at 17:53
Hi Michael, You might get a few more grand selling it privately, but seriously its probably time with a 3 litre in that model.. I think the new ones are well sorted these days!! Enjoy your new vehicle whatever you decide on !!! Michael
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Reply By: Bushranger1 - Monday, Jun 04, 2012 at 19:41

Monday, Jun 04, 2012 at 19:41
G'Day Michael,

Well someone practically said the G word! I knew it was only a matter of time.

My Falcon is used as my work car & I get an allowance & I can write off the running costs against my tax.
I bought it new in 2004 & it's done 330,000 km but cost me little to keep on the road. Sure I have to pay tax on the car allowance that I don't write off but I still end up with money in my pocket. All the other guys at my workplace replace their cars every 3 years & complain that the allowance is not enough & they are out of pocket.

So having an older RELIABLE car works for me.

Cheers
Stu
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Reply By: Member - Mark (Tamworth NSW) - Monday, Jun 04, 2012 at 20:22

Monday, Jun 04, 2012 at 20:22
I don't claim to understand Taxation. Accountants seem to have a way (mindset?) of letting Tax run your business, which to me is arse about. To me tax is a casualty of a successful business.

One thing I am sure of is that unless you are doing an high amount of kms, depreciation is the biggest COST in running most vehicles under 5-10 years of age.
I have had 2 novated lease vehicles. When I get to the end of the lease I realise there are darn good reason you are allowed a depreciation schedule, that is because depreciation does cost you when it comes time to sell it!

Having said all that, I don't know how you put a price on reliability and confidence that the vehicle won't let you down, which comes with a newer vehicle.
I have a 5 year old 220 000km vehicle and plan to keep it for another couple of years. I don't go to places that people like Robin Miller do though.
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Follow Up By: Member - Michael O (NSW) - Tuesday, Jun 05, 2012 at 12:46

Tuesday, Jun 05, 2012 at 12:46
Spot on Mark.

We did the Simpson last year and I must admit to a few nerves whenever the gauges weren't perfect......

Amazing how much technology changes in 10 years
Bluetooth
Cruise
Reverse Camera
SatNav

All these are on the new one.



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Reply By: putrol - Monday, Jun 04, 2012 at 20:46

Monday, Jun 04, 2012 at 20:46
you should sell it to a museum a 3ltr gu that hasnt blown up yet
would make a good centre piece lol
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Reply By: Member - Michael O (NSW) - Tuesday, Jun 05, 2012 at 18:19

Tuesday, Jun 05, 2012 at 18:19
FYI

Traded the Patrol today on a new one.

First time I've ever bought a new car at the end of the financial year but judging by how keen the dealer was to shift one, I'll be buying ALL my cars in June from now on............
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Reply By: Member - Jason B (NSW) - Tuesday, Jun 05, 2012 at 22:23

Tuesday, Jun 05, 2012 at 22:23
I have a a 1997 model 80 series cruiser, and reckon its only getting better with age, like fine wine. Still worth reasonable money in this condition and KM's as well.

The decision is a tough one. But consider this, if you have been offered 16k for it, than that is as far as it can depreciate. And in 5 years it will probably still be worth 1/2 of that.

Your new purchase whatever it is, will depreciate 16k in its first year of ownership. Don't worry about what bean counters tell you to do, they get rich of giving advice and then step to the left when that advice goes pear shaped. You can only claim a % of the depreciation and they are encouraging you to spend 50K for the privilege.

Do what suits you.
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