Happy Wednesday,

Angelo here! Welcome to New Money, where we go over weekly tips to help you build your wealth, one dollar at a time.

Today’s edition:

• The “car expiration date” myth

• How to decide when to keep or replace your car

• Oil tensions, a $300B refinery plan, and more…

Read time: 3 min 10 seconds

🍎Wealth Tip of the Week

If you’ve ever owned a car for more than a few years, chances are you’ve faced the same question:

“Is it time to replace this car?”

The moment repairs start appearing, people start thinking about upgrading.

I’ve heard this dozens of times: "I don’t want to keep putting money into this car."

But here’s the surprising truth most people miss:

Replacing your car too early is often far more expensive than repairing it.

New vehicles lose about 20% of their value the moment you drive them off the lot. After five years, they're worth less than half what you paid.

The real cost of owning a car isn’t maintenance. It’s depreciation. 

So today I want to show you practical ways to decide whether to keep your car or replace it.

1. The Real Cost of a Car

Most people think repairs are the expensive part of owning a car. But the real cost is depreciation. It simply means the loss in value of your car over time. And cars lose value very quickly, especially in the first few years.

On average:

• About 15% of the car’s value disappears in the first year
• Around 35–40% is gone by year three
• By about five years, many cars are worth roughly half of what you originally paid

Let’s put that into perspective. So imagine you buy a car for $45,000. A few years later, it might only be worth about $20,000.

You didn’t physically write a check for that $25,000. But economically, that value is gone. That’s the hidden cost most people overlook when thinking about car ownership.

And when you trade in your car early, you reset that depreciation clock all over again.

2. The Car Expiration Myth

There’s an unspoken belief that cars should be replaced every 3–5 years.

But this idea mostly comes from marketing and leasing cycles, not financial logic.

You see it everywhere: new model releases, lease cycles, and dealership trade-in offers. These create the impression that cars have an expiration date.

In reality, modern cars are built to last much longer.

A typical gas-powered vehicle can reach 200,000 miles or more with proper maintenance, and many hybrid vehicles have also proven capable of lasting well beyond that point.

If you drive the average number of miles each year, that means a typical car could last around 14 years.

And the longer you keep a car, the more you spread out the cost of owning it, which dramatically lowers how much it costs you each year.

For example, imagine you buy a car for $50,000.

• 1 year → it costs about $50,000 per year

• 3 years → about $16,000 per year

• 5 years → about $10,000 per year

• 10 years → about $5,000 per year

So if your car is six or seven years old, it probably isn’t near the end of its life.

3. When You Should Replace Your Car

Keeping a car longer usually saves money, but that doesn’t mean you should keep it forever.

There are a few situations where replacing your car actually makes sense.

Here are the three most common ones.

1. Repairs exceed the car’s value. If a repair costs more than the car itself is worth, replacing it may be the smarter move. For example, a $5,000 repair on a $2,000 car usually doesn’t make financial sense.

2. Reliability becomes a real problem. If your car constantly breaks down and starts interfering with work, family responsibilities, or daily life, the hidden cost of lost time and stress can outweigh the cost of replacing it.

3. Safety becomes a concern. If the vehicle has structural damage, serious mechanical issues, or safety problems that can’t be fixed affordably, replacing it may be the safer option.

Outside of these situations, replacing a car early is often a lifestyle upgrade rather than a financial necessity.

And understanding that difference can save you thousands over time.

4. A Simple Action Plan You Can Use Today

Even if you keep your car longer, you can still reduce the cost of owning it.

Start with one simple step: know what your car is worth.

Look up your car’s current value using tools like Kelley Blue Book or Edmunds.

Knowing the real value of your car gives you a clearer starting point when deciding whether repairs make sense or if replacement might eventually be the better option.

Once you know the value, the next goal is lowering the ongoing cost of ownership.

Most car expenses fall into three categories:

• Depreciation

• Insurance

• Maintenance

Depreciation is largely unavoidable once the car is purchased. But the other two costs are things you can actively control.

For example, many people overpay for insurance without realizing it. Insurance companies often raise premiums over time, especially if customers never compare other options.

Simply checking whether you’re paying a competitive rate can sometimes lower your yearly car expenses.

Maintenance is the other area where small habits can save you a lot of money over time.

If you want your car to last longer, focus on these simple practices:

These small maintenance habits may seem simple, but they can significantly extend the life of your vehicle.

And the longer your car lasts, the more you spread out the cost of owning it, which is exactly what keeps car ownership affordable.

Your car will eventually need another repair. That’s guaranteed.

The real question is: Will you upgrade… or keep driving it?

How long have you kept your current car? Hit reply!

I read every response :)

💬Quote of the Week

📉 Market Recap

Check out some of the biggest stories shaking up money, markets, and momentum this week.

• Iran continues exporting oil to China through the Strait of Hormuz despite the war

• Trump announces the U.S. will build its first new oil refinery in 50 years

• Netflix could spend up to $600 million to acquire Ben Affleck’s AI startup

• Meta buys Moltbook, the viral social network where AI agents talk to each other

👀 In Case You Missed It

I built a $719,470 net worth by 24. In this video, I’ll share the 7 biggest mistakes I made along the way.

 🌱3 more ways I can help build your wealth

See y’all next week 🫡

Angelo Castillo

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