but these days you really can't afford to do that. If you want to continue to trade up, keep the car current and be able to get parts at a reasonable price, the economic sense is to trade in every 2-3 years. ie I bought a $7k car, held it for 5 years and sold it for $6k (granted there was a significant amount of work into it at the start, so overall lost about $4k on it). Took that $6k and my savings and spent $32k. In another 2 + bit years, I've got $49k + $26k that the car is now worth. I can now look at something I want (RX-8, HSV Clubsport). The 2006 model has been supersceeded now by a 2.5l 4cyc engine with some extras, so when the 2008/09 models start hitting the 2nd hand market in about 18 months, my $24k will drop not only due to the age, but that there will be latest model 2nd hand on the market. It will make is significantly harder to buy another similar car as the interest rate on the savings / investments is not going to even nearly match what I lose in value.