Should You Repair or Replace Your Car
repair
If you’ve ever owned a car, it’s likely that you came to that inevitable crossroads.
That is, you wondered if you should repair your old car or just get a new one.
It’s a simple question, but the answer to it isn’t always as simple as the question implies.
Therefore, the purpose of this short blog post is to give you some guidelines to look at when it comes time to make the repair-or-replace decision.
Cosmetic Vs. Internal
Right now, you might be thinking about replacing your old car because it’s starting to look old and worn out.
However, unless the car also has very severe, nearly unfixable, or very expensive problems under the hood, it might be best to hold onto your old clunker for a bit longer, particularly if you have no car payment.
Keeping your old car frees up your income for other things, including saving up for a new car that you can pay for outright.
Depreciation
Although automotive repair can cost a good deal of money, depending on the issue, most of the time it costs less than what you “pay” in depreciation.
Most cars depreciate by 22% in just the first year of ownership. If a car costs $25K brand new, then that means it will lose over $5K in value in the first year.
In other words, if the car repairs you need to make are less than the cost of depreciation, you may just want to pay for the necessary repairs.
The Likelihood of Future Breakdowns
There comes a point in every car’s life where it’s a case of diminishing returns.
That is, you may not have a car payment, but it’s getting so old that the cost of continuing repairs equals what you’d pay in car payments over the year.
Aside from this, breakdowns cost you something more than money. They cost you your time.
If it is getting to the point where your old car is costing you more in money and time than it’s worth, it might be time to replace it.
Your Career Demands a Nicer Car
Careers like real estate often require people to use their cars for business.
(This includes having people ride in the car with them when they go from home to home.)
This may be one time where your old but paid-for car can work against you.
In this case, replacing your car may represent an important career move, making the cost related to buying a new car worth it in the end.
If you’re reading this article, chances are, you’re thinking about replacing your car.
While there are many arguments for keeping it just a bit longer, there are also arguments for replacing it.
The guidelines put forth in this article, as well as your own research should help you to ultimately decide how to move forward with the repair-versus-replace question.
Category: Car Purchase
