Looking through my car repair/TCO excel file, I average to about 60 Euros per month in maintenance and repairs (that includes stuff like new tires every once in a while). Over the average lifetime of my cars (which is 5 years), that's 3600 Euros in repairs and maintenance. I regularly sell the cars for 500 Euros, so that's a TCO of ((2000-500)+3600) = 5100 Euros per vehicle, or about 1020 Euros per year.
The initial, 6-month manufacturer-suggested service for a new car alone is upwards of 2000 Euros, for a car that should not have and trouble. Most cars are nowadays impossible to repair yourself, or repair cheaply (new headlight bulb was 3 Euros before, now you have to change the whole 1300 Euro unit). But let's assume I'll have 150 Euros in maintenance per month... that's 9000 Euros. Depreciation over 5 years easily is a third of the vehicle's value, let's say 10000 Euros overall, on top of maintenance and repairs. Together, I get to a TCO per year of 3800 Euros, or a whopping 2780 Euros more!
Now, fuel efficiency. I drive about 25000 km/year. My clunkers consume - on average - 7.5 liters per 100 km - that's about 31.4 MPG. For something comparable, the manufacturer (if we want to believe them) currently lists about 5.8 liters per 100 km, or 40.6 MPG. This means that I could save 475 liters of fuel with a new car. A liter right now costs about 1.80 Euros, meaning I am leaving savings of 855 Euros on the table.
So ... I pay 2780 Euros more to save 855 Euros - BEFORE the extra cost of a loan to buy a new car ... NOT a good deal.
Now, cars are insanely taxes in Denmark, near 300%, and they lose about half their value the first year of ownership.
Every 2 years, there is a mandatory inspection of the car.
I buy a car with the following requirements: 1. My strong intuition that it can survive for 2 years with zero maintenance. 2. After 2 years, my TCO will be less than if I rented a new car. 3. It's freshly inspected so I don't need to worry about that for the next 2 years.
Sure, I get to drive old cars, but I bear zero risk, if I crash it, or someone drives into it, or I chose to use it as a ladder while wearing muddy boots (has happned) to reach something up high, I can do it, I can treat it as trash, it does not matter, it's not losing any value because I already wrote it off. A rental car, you can't destroy.. I feel having a car that I can destroy is worth more than driving a new car.
If, after 2 years, it looks like it can pass inspection, I try, and if it's cheap to fix, I fix what needs fixing, and drive another 2 years. This is a super-win situation, because then my yearly COO becomes about half of what it costs to rent. If it can't pass inspection, I toss it, and buy a new one and I have "broken even" compared to renting.
I get the "don't worry about maintenance" perk of renting combined with "not getting in trouble if it's pretty beaten up when I'm done with it" perk of owning.
Sure, it means that I run a risk of a sudden breakdown, in that case, I'll get it towed (to junk or home to fix) and I'll have to take the bus, work from home or arrange a day off for fixing it, but it's been my experience that it almost never happens that a freshly inspected car fails randomly within the two years until next inspection.
Yeah, but you have the knowledge and skills that you can determine if a beater car is worth the effort. Most people, however, do not have either of these... they get shafted by car salespeople who just want to push cars off their lot and fleece people later-on for repairs.
And the problem just gets worse with more modern cars - I can fix up something like a Volkswagen T4 van or probably, if it comes around, a lot of shit on any 90s era car. But for anything more modern, particularly stuff where you need specialized diagnostic toolkits, 2000ish Renaults where you have to plan three to four hours for a headlight replacement [1] or built out of aluminium or worse, composite material? Fuck that, I'm out. Modern car construction has completely sacrificed repairability in favour of crash resistance, lighter weight and/or cheaper assembly.
[1] https://www.ehow.co.uk/how_6471814_replace-headlight-renault...
There are a few outliers such as some older Fords that were over engineered but, generally speaking, observe the 4 points above and you won't go far wrong.
You might be subject to lesser risks, especially in a country like Denmark, but many people have at least some of the following risks of a car breaking down in the middle of the road:
1) collision. Simply being on a high speed road outside of your vehicle is one of the riskier things you can do in many parts of the world.
2) not being able to work and/or getting terminated from job
3) being stranded with young children
4) needing to be somewhere to take care of your dependents
5) woman being stranded by herself
6) being stranded in too hot or too cold weather
Even though you describe the number of yours that have died on the highway as "some".
The sweet spot in TCO for cars is generally (look at Edmunds numbers) a new compact in base trim. TCO will go up with a more expensive or "higher quality" car. If you are in the position between choosing to finance a new compact at low/reasonable interest rates or pay outright for a beater, the new car will be the better deal. A used compact is actually an OK compromise if you don't have money up front or want lower payments - a 5-year-old Corolla has slightly higher TCO than a new one, but not by that much.
Being able to pay on time for a compact car requires some basic financial stability but that's not "rich".
Yes, it does, but it's worse for everyone:
- those who make the shoes because the conditions under which clothing in general is made are horrible (see e.g. the numerous instances of fires in Bangladeshi factories)
- the environment because these cheap boots are made out of fossil resources, they have to be shipped around, and at the end of their life time they can't be recycled so they either end up in landfills or, worse, trash incinerators
- for the end user since shopping boots consumes time and effort
For cars, hell for virtually all mass produced items, the same principle applies. And it's only "cheaper" because a lot of the problematic factors involved are costs that are externalized.
Look up charts for wage development and minimum wage on one side, and charts for CEO pay and gini coefficients (wealth distribution) on the other, over the last 50 years. There you have the answer why a working class person can only afford crap shoes and beater cars.
The boot theory is nonsense that at best only applies at a pretty narrow range of consumer goods - stuff that is barely fit for purpose vs stuff that is.
Cars are a great example because you pretty much can't save money spending more up front on one new car than on another new car, and there isn't even that big a difference in TCO between a new car and a comparable five-year-old car.
Working class people in the USA buy beater trucks to save over buying a new truck, which is a different trade, mostly because trucks are a working class Veblen good. They don't want to be seen in a Corolla.
You're ignoring the "boots theory" [1]. A new or somewhat-recent used car is like the pair of boots of the story - the poor person that buys a trash barely roadworthy 2000$ car each year pays at least 20000$ over ten years plus whatever the extra cost of maintaining a trash car each year is, higher insurance rates, more fuel and has more trouble with unreliability and the followup costs (i.e. unplanned uber/whatever fees to get to work because the car broke down).
In contrast, the rich person who either buys a decent new/recent-used car or finances it pays roughly the same amount of money if he sells the car after these ten years, paid less for maintenance, insurance and fuel, had less issues getting to and from work and a higher quality of life.
The real problem is that a full time employed person in most Western countries can no longer afford a new Western-made car without going into serious amounts of debt. Cars have gotten too expensive and wages (especially after tax, rent and basic costs of life) have gotten too low - a complete turnaround from the Ford era whose principle it was that a worker should be able to afford the product he makes in a reasonable time!
[1] https://en.wikipedia.org/wiki/Boots_theory