Keep your Old Car or Replace it?
Would you be better off repairing your current car, or is it really time to buy another one? There’s no clear-cut answer to this question, but analyzing the pros and cons for each option will help you make a more informed decision.
First of all, decide if you really need a car. For today’s average family, owning at least one car is a necessity and two cars makes life much easier in many ways. But consider the possibility of using public transportation or carpooling to eliminate the need for one of the cars, which may result in significant savings.
Once you decide that a car is a necessity, it’s usually less costly to repair the existing car than to replace it with a newer model (unless your car is totally worn out with over 200,000 miles or more.)
The least expensive car is usually the one you are driving right now. Repairing it will keep you from making a hasty purchase you may regret in a few months. It will also give you more time to save up and get your finances in order before spending a lot of money on a replacement vehicle.
You may want to seriously consider replacing your car if you are running into one of the following scenarios.
- The repairs are becoming more frequent, and the costs are hard to keep up with.
- The car often leaves you stranded, putting you and your family in a potentially dangerous situation
- The repair in question will cost more than half the value of the vehicle.
- You had already planned on getting something new, but your mechanic clues you in on an impending major repair on your old car.
Even if you’ve taken good care of your car, some high-priced repairs are unavoidable, due to excessive wear or time itself. Rubber belts and hoses dry out and crack, metal on rotors warp or wear too thin, and electrical parts stop working. Wear-and-tear items such as axle boots, belts and brake rotors will eventually need to be replaced.
The timing belt has long been a big-ticket item on high-mileage cars. On many cars, it needs to be replaced at around 100,000 miles. Dealership service advisers will often recommend replacing the water pump and the other drive belts in the car at this point. This “timing belt package” can cost between $600 and $1,000. Repairs such as this begin to surface between 90,000 and 120,000 miles. Yearly repairs for the typical American car average about $1,200.
If your car isn’t paid off, do everything in your power to keep it until it is paid off. Otherwise, the current car debt is simply refinanced into the new car loan and it is easy to get upside down on your car loan where you owe more on the car than it is worth.
Here are a few reasons why buying a newer car might be in your best interest:
- You don’t want to fret about future breakdowns.
- Old cars can be unpredictable.
- The constant trips to the repair shop are disrupting daily activities like getting to work or taking the kids to school.
- Each time you repair one thing, something else breaks.
All these are reasons to move on.
If you are not yet faced with making the tough decision to fix up or trade in your vehicle, there are steps you can take to prevent or avoid costly repairs. Get your car maintained at its proper intervals to avoid problems and breakdowns. Use the maintenance guide to learn the recommended service intervals for your vehicle. We recommend finding a good, reliable local mechanic as a less expensive alternative to a service departments at the dealership.
If you’re experiencing issues with your car and don’t know whether things are likely to get worse, look for advice on message boards and forums for the make and model of your car. Other people have probably been down this road before you. You can get a preview from them of the problems associated with your vehicle as it ages.
Everyone seems to have a theory on when to repair a car and when to get a newer one. But you know your needs and your car’s history better than anyone else, so use these tips as a guide, not gospel.
Buying a newer car might seem like the easy way out of a high repair bill, but depending on your circumstances, it may plunge you into debt.
On the other hand, a car that’s teetering on the edge of oblivion can keep you awake at night. And it’s hard to put a price tag on the peace of mind that a newer vehicle can bring.
It’s better to part with that car on your own terms rather than waiting for it to break down at exactly the wrong time. If you make the decision while the car still has some value, you can sell it or trade it in, turning the cash into a down payment on your next car.
To avoid an emotional reaction, be sure to analyze your budget, and seek counsel so you will make a wise decision and be a good steward.
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