Your aging vehicle is headed into the shop again. The first thought on most people’s minds is, “Is it time to get a new vehicle or should I continue to repair this one?”
Everyone seems to have a theory on when to repair a car and when to get a new one. But you know your needs and your car’s history better than anyone else, so someone else’s theory may not always apply to you.
Buying a new car might seem like the easy way out of a high repair bill, but depending on your circumstances, it may not be the best financial decision.
When to Repair
One rule of thumb is that if the repair is more than half the value of your vehicle, financially it probably doesn’t make sense to pour this much money into an older vehicle. It is smarter to take the money to be spent on repairs and use it as a down payment for a new car.
Reasons to Repair an Older Car, Van or SUV
- It is almost always less expensive to repair a car than buy a new one.
- Even in situations where the repair is several thousand dollars, it is often less expensive to repair it than to buy new. It can also be more difficult to trade or sell your older vehicle without fixing it first.
- Insurance and registration fees will be higher on a new car.
- A new car typically loses an estimated 22 percent of its value in the first year. Your car has already taken that depreciation hit. You can avoid this situation by buying a used car, but any used vehicle will come with its own set of issues.
- You have a sentimental attachment to your car. For some trading in their older car is like giving up an old friend. This may cost you more in the long run, but it is worth it.
When to Replace
Old cars can be unpredictable. Repairing a single problem with an older car doesn’t guarantee that another breakdown won’t happen. If you buy a new car, its warranty will cover you for 3-5 years before you have to worry about paying for any major repairs.
Reasons to Buy a New Vehicle
- The repairs are becoming more frequent, and the costs are hard to manage.
- The car leaves you stranded often, putting you in a potentially dangerous situation or making you late to work.
- A repair will cost more than half the value of the vehicle.
- You learn that you have an impending major repair on your old car. When selling the vehicle be upfront about any major issues with your vehicle.
Which Decision is Right For You?
There is no crystal ball that is going to tell you exactly when to sell or not sell your older vehicle. The tolerance for the amount of time spent on dealing with car problems differs for each of us. Just know whatever decision you make will be the right one for you.
127 Point Digital “Pre-Purchase Vehicle Inspection”
If you are considering purchasing a used vehicle, Beck’s Auto Center offers their 127 point digital “Pre-Purchase Vehicle Inspection.”
This service identifies current concerns that can be fixed before purchase or used to bargain for a better price. It also details future maintenance requirements of your vehicle, and most of all, gives you peace of mind when buying a used vehicle.