An inherited car can have major sentimental value, especially if it’s a classic model and the deceased was a collector or weekend tinkerer. It’s easy to look at Dad’s beloved two-tone 1955 Chevy Bel Air, recalling those fun family drives, and want to hang on to it. But that’s not always the smartest financial choice.
Inherited Car Expenses
Listing cost factors on a spreadsheet will help you cut through the nostalgia and make a pragmatic decision. You may still decide you want Dad’s Chevy, but at least you’ll know the costs.
Is the inherited car in good, working order or is has it been sitting in the driveway for years? If it’s the latter, someone must fix it. Have a mechanic look over the vehicle and provide you with an estimate of how much it will cost to get the car road ready.
Planning to fix it yourself? In our experience, it’ll never happen. With hopes of restoring his dad’s 1981 BMW 320i, one client wound up paying 15 years’ worth of storage fees (that is, around $30,000) before finally deciding to sell.
The more “classic” your inherited car, the more expensive the repairs. Antique parts are often not available stock from the factory, and specialty aftermarket replacements—not to mention salvaged originals—can be costly. Meanwhile, expertise doesn’t come cheap. Specialty mechanics’ rates can be more than double that of their everyday counterparts.
It’s possible the car’s owner kept repair records. If so, dig through a few months’ worth to calculate an average monthly maintenance cost. If not, ask the mechanic who evaluates the car for repairs to provide an estimate. And if Dad did repairs himself, double any estimate you come up with. Let’s guess that for our Chevy, that number is $120/month, or $1,440 per year.
Tag, safety inspection, and registration
To regularly drive the car, you’ll have some ongoing fees. For example, 17 states require annual safety inspections prior to issuing a registration, the rest don’t. So check with your local vehicle licensing agency or Department of Motor Vehicles for specific information on regulations and costs. Let’s say our Chevy is in Virginia and costs $170 per year for registration, tags and inspection.
Beyond the up-front costs, you’ll need to consider annual personal-property taxes. In most states, the rate for vehicles is around 5 percent. For collectible classic cars, this can be a substantial expense, although most states offer exemptions for collector cars with registered antique or vintage plates. As tax policies vary by location, phone your local commissioner of revenue, explain your situation, and ask for the effective tax rate for the vehicle. Also, many states offer car tax relief, so be sure to ask about that as well. In our example, Dad’s car is mint, and worth about $48,000, so annual taxes will be about $2,400.
No matter how spotless your driving record may be, insuring an additional vehicle is going to cost something. Fortunately, insuring a collector car may be less expensive than a daily driver, since the insurance companies assume you won’t drive it as frequently. Call your current insurance company and ask for an estimate. Let’s say our insurance costs $1,200 annually to add the Chevy.
Do you have a garage? Will you park your newly inherited car in the driveway under a cover? Or will you need to pay to have it stored? No matter what, you’ll need an additional parking space. If you’ll pay for that, add it in. Let’s just assume we’ll cover ours in the driveway, and the cover costs $170.
With steel bodies and frames, and an engine big enough to get it all moving, classic cars are notorious gas guzzlers.
If you estimate you’ll drive your antique car 15 miles each week (minus vacations), multiply that by 48 for about 720 miles a year. Divide that by how many miles per gallon your car burns (13 mpg for our Chevy), to get 55 gallons burned each year. Then multiply that by gas costs in your area, say $2/gallon, for $110 in annual fuel costs.
Total Driving Costs
Armed with these numbers, you’ll need to calculate the actual cost of driving before you decide to keep or sell the car. Add up all those annual costs – our sample car totals – and you’ll get $5,320 for each year.
Determine the number of days you plan to drive the car each week (subtracting vacation weeks). Say 48 weeks, driving the car once each weekend: 48 annual driving days.
Then, divide the annual costs by the number of driving days, and you’ll see that Dad’s Chevy will cost you $111 each time you take it out for a spin. That doesn’t include any up-front repair costs if the car isn’t yet drivable (or the cost of the cover). You may still decide it’s worth it to keep, not sell, that inherited car, but at least you can rest easy knowing you’ve made an informed decision.