Regular readers of my former column in GT Porsche magazine will know about the psychological struggle with my Honda CR-V. How can it be that, after more than thirty years of buying and selling cars and with several beautifully engineered German classics in the fleet, my daily driver is a grey Honda CR-V? Wrong as that feels, thoughts of selling it feel even worse.

My first experience of Honda ownership was a silver Ballade that I took as a trade-in back in the mid-1990s. While it had all the appeal of beige nylon trousers, my daily driver at the time was a Renault 21 Turbo with an engine that had been balanced and blueprinted by a friend who built McLaren F1 engines for a living. It was a great car to drive, but, if one started the car and attempted to move it before the oil was fully up to temperature, the cold oil pressure was so extreme that it would bend the filter body and eject the engine oil out through the remote filter housing.

This would invariably occur when I was leaving for work. I would then be an idiot car salesman in a Jermyn Street suit, replacing a bent oil filter on the side of the road with the soles of my smart shoes immersed in used Mobil 1.

The arrival of the boxy but reliable Honda Ballade was a revelation. After ten years of running Renaults – mainly because they were a bit quirky and I had served my apprenticeship with the Régie – the Honda’s ability to deliver a life entirely free from mechanical breakdown was so transformative that I could not bear to part with it. When I left London, the 21 Turbo was sold to help raise my house deposit and the Honda came with me to Northants. Only when someone offered a crazy amount to buy the Ballade did I eventually part with it, but it left a big impact. I have maintained a bland but bulletproof Japanese backup car ever since.

The CRV is the latest of those machines. Bought as a one-owner car with front end damage, I repaired the bodywork and converted it to run on LPG. I change the oil more often than I wash it, but it has never failed an MOT. Even when it does need some attention, the parts are affordable and it is fairly easy to work on.

Recently the reliable Honda has started to cut out when cold. I’ve checked the obvious things and there are no fault codes yet, but it may be oil that is slightly too thick for the VTC solenoid, or maybe the timing chain has stretched, causing the timing to drop out when the engine wants a lot of advance during warmup. While changing the timing chain is not impossible, adding it to other things on the Honda’s current to-do list means I have a few quid to spend, as well as several weekends in the garage.

Deciding whether to spend the money and sort the Honda, or stick it on eBay and sell it in in favour of a newer CR-V involves an internal dialogue. If the car was newer and I was anything like most people, it might be time for a trade in. Manufacturers are currently offering thousands of pounds for cars like this in part exchange against a brand new car, but I as would never spend my own money on a new car, that is a complete non-starter for me.

A friend is selling a very smart 2010 CR-V diesel that might make a nice upgrade, but a Honda mechanic tells me to steer clear of diesels as the engines are prone to detonation and the steering gives trouble. Buying a later petrol would need another grand spent on an LPG conversion and the engines are low on torque vs the diesel. My friend’s 2010 car is up for £6k, but I’ve found a couple of later 2012 models with better spec and in fairly good colours up for closer to £5k. Styling/spec/presentability is not a concern: the decision is all about cost.

Let’s say that buying a later diesel with 100k miles is going to cost £5k plus £300 road tax up front. I’d budget £100 for a small service on purchase and £700 for a clutch and flywheel early next year. I would expect the car to cost roughly the same to run over two years as my current CR-V and for the value to lose maybe £2.5k over that time, as I take it to 150k miles and the later models get cheaper to buy.

Keeping my current known-quantity 150k-mile CR-V and preparing it to a level comparable to the other car is perhaps going to cost me five days in the garage (call it £1500 in time that I could spend doing client work) and maybe £600 in parts and paint. I end up with a car that will probably need nothing more done for three years, but would likely be ready to scrap at that stage. Value now is maybe £1500 cleaned up and sold in an eBay auction. The maths therefore look like this:

So: it will cost me £1500 to keep the old CR-V, as I could get that now if I sold it. Adding £1500 in time plus £600 in bits is another £2100. So to keep that car and prep it for three more years is £3600.

Buying a newer CR-V at £5k and spending, say, £1100 in time and parts in the next few months on sorting the reasons why the current owner is selling means £6100 up front. If we assume that the newer one will have a likely value of £2500 in three years, we see that it has cost £3600 over that time.

With running costs of both likely to be fairly identical and the cost over three years apparently exactly the same, all of this suggests that I should probably sell the old one and take the benefits of a newer car with better spec and lower miles, as it will cost me nothing extra to drive that for the next three years.

However, as David McRaney’s book “You Are Not So Smart” points out, this analysis does not account for the fact that humans make flawed decisions based on biased logic, sunk costs, the ‘Availability Heuristic’ and more. Part of me wants keeping what I already own to make more sense than changing it, to preserve my sense of wellbeing at having bought wisely in the past.

Man Maths arrives

Before I start the analysis, I already know I will probably persist with the old car as although it might have a bit of work to do, it has been reliable to date, it has good memories and I have invested some money in it (sunk costs) with the LPG conversion, towbar fitment, set of spare winter tyres and Apple Carplay head unit. So, when the numbers come out looking identical, I move them around to suit my earlier presumptions. This process of moving numbers around to confirm a presupposed narrative is often referred to as “Man Maths”.

Removing the cost of my time, as I try to convince myself that five days is unlikely and it will probably take one lunch break to sort this CRV, it now costs £2100 to keep the car vs £3600 for the new car. I also convince myself that I dodged a bullet with the later car’s alleged reputation for exploded diesel engines and the running costs of dearer diesel versus the LPG the older car burns, plus I get to keep £5k in the bank. A change to the status quo stands no chance against all of these tools.

When Loss Aversion meets Porsche 996/997 bore scoring

Decisions made around Porsche 996/997 engine bore scoring issues can also show man maths at work. Several of the Porsche 996 and 997s I value for insurance have had their engines rebuilt due to bore scoring and some of these cars now stand their owners close to £30k, while the cars are worth maybe two-thirds of that.

I admire people who choose to repair their cars, but part of me feels the pain of the money they have lost by sticking with them. Owners may react by saying that the failure rate of these engines is very low and only unlucky people get caught by the problem, but I don’t know anyone that spends a lot of time around the water-cooled cars who feels the risk is low enough to take the plunge into 996 or 997 ownership.

The 996 C4S is one of my favourite 911s and I’ve considered a purchase several times, but the risk is too great for me. It would hurt to spend £18k on a 996 and then have another £8-10k to spend on an engine rebuild somewhere down the road. This is a classic example of how humans allow the perception of risk to deny the potential rewards.

In his book “The Creative Negotiator”, Steven Kozicki points out that many (if not most) of us are ruled by loss aversion, where avoiding a loss is more preferable than making a gain. When loss averse people consider the purchase of a Porsche 996 or early 997, the risk of potential engine failure and the subsequent financial loss outweighs all other aspects: we gloss over the joy we might get from driving a beautiful, affordable 911.

It’s a magnified version of what is seen on the Honda: I lean towards maintaining the old one (i.e. risking £1500) than putting £5k into buying a newer one, even though they are likely to cost the same to run over three years and I will end up with a lower-mileage, higher-spec daily driver that needs no work at all. When one considers what those benefits might be worth in pound notes, the decision not to risk does not entirely add up.

Loss Aversion in Litigation

Most of the court cases I work on involve a perceived financial loss. All of them go through mediation to try and find a settlement, and those sessions are always very interesting. Even when there is a strong case that will likely result in a strong judgement in their favour, people will often settle well below the potential court award if continuing is felt to involve even a modest loss.

The video below illustrates our innate tendencies for loss aversion. Even when the expected value of a risk (a bet in this case) is a return of £500 with the odds against success of a mere 1 in 2,300, most people will refuse to take the risk.

Those who have been on the fence regarding the purchase of a Porsche 996 or 997 should watch out for man maths and the power of our hardwired aversion to loss. We’re only here once and it’s important for our mental wellbeing to take a risk now and then. As Goethe said: “boldness has genius, power and magic in it”. I may go and see that new CR-V after all.

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