I am currently driving a 2006 Lexus RX330. I paid cash for it and it has been a good solid driver for 14 months. Long story short I bought it for $4200 to replace a newer car that I had a bank loan on and a $420/mo payment (got inspired by Mr Money Mustache and Dave Ramsey and the like). Anyway, I sold my 2017 for more than I owed (and I'd put nothing down when I bought it), so I was able to pay off the loan and live with no car payment for a while. A year has gone by so I've passed the breakeven point and what's more, the Lexus is worth quite a bit more now than what I paid for it (pandemic combined with me getting a good deal on it).

Now, while it generally runs well, the Lexus needs some work so I'm debating the merits of keeping it vs replacing it with something newer albeit cheaper than my previous car. I should add that I'm a pretty capable DIY mechanic. However I've already spent about $700 and many hours of my own time working on a few things that needed addressing when I bought the car. I'm also concerned that the more I dig into things, the more problems I will find and so on and so forth. That's what happens as cars get older, and this one has lived its entire life in the Northeast so the undercarriage is pretty crusty (rusted tie rods are actually what are prompting this work plus a few other things). Also my fiance and I just bought a house that we are working on and after it's done we want to have the time to go out in the post-COVID world and enjoy life - not spend time fixing old crusty cars! Lastly, and I know this shouldn't and doesn't lead my decision making, but after driving this old car I am sort of yearning for the creak- and groan-free cabin of a new car with all the modern niceties like bluetooth, auto cruise....etc.

So that brings me finally to the point of this post. There is a new car model that I have my eyes on, which I can lease for $250/mo or less with $0 out of pocket. It's an electric car, which fits my lifestyle, and would also represent at least $150/mo in fuel savings over the Lexus.

Being in a financial role at work, I whipped up a quick NPV model to compare the six-year cost of ownership of the Lexus (and its replacement in I figure 2 years max before I can't stand it anymore) with the new, leased car and its replacement in 3 years. Surprisingly, the new car actually represents an NPV savings of $800 over the Lexus. Obviously there are certain assumptions I had to make, such as an ongoing $500/year in maintenance cost for the Lexus and its eventual replacement. I also calculated the difference in insurance (having to fully insure a new car with collision) and property taxes on top of the aforementioned fuel.

Clearly $800 is in the margins really. But, what I'm thinking is, if there's no effective financial impact aside from a monthly cash flow effect, why wouldn't I go ahead and do the deal? Does anyone have any reasons I haven't thought of? The reason I ask this on this forum is because I have, shall we say, a bit of a history with cars and talking myself into making certain deals (14 cars in 10 years of driving - some have been fiscal slaps to the face and others haven't but I've learned a lot of lessons and a lot about myself along the way). I have gotten most of that out of my system for sure, but I still want to make sure I'm making a rational decision. Thanks!