Holding onto a car that is in need of repairs might make sense for someone who doesn’t have the time or resources to search for a new car. But there are definitely times where you should consider skipping the maintenance and moving on to purchasing a new or used vehicle.
When to Repair or Replace
Repairing your car is almost always an available option, but not always the best one. There may be times when repair is more cost-effective, like when:
- You only need minor repairs or maintenance every year or so. If your repairs are very minor, you might waste more time searching for a car than you would waiting for your car to be fixed.
- Your major repairs cost less than half of the vehicle’s worth. For example, if your car is worth $5,000, you shouldn’t be paying more than $2,500 in repairs over the course of a year. This only works if the major repairs are not recurring. If you’re paying for half the value of your car once a year, the costs add up quickly.
- You’re still making car payments (and still owe around half of the loan). Trying to secure a loan on a new or used car while still making payments on your current vehicle is more difficult. This can put you in a position where you’re paying for both your new and old car at the same time through one extra large loan.
You should replace your car, not spend money on repairs, when:
- The major repair you are about to complete will only extend the life of your car for a relatively short amount of time. For example, putting $4,000 of repairs into a car to extend its life another six months is not a wise investment.
- Your car is in the shop every few months. Your peace of mind (and the ability to have reliable transportation) is worth a lot, and having a car in the shop all the time only adds stress to your life. There’s no point in having a car when it’s in the shop 2 out of 4 weeks in the shop.
Ultimately, you should make the decision about whether or not to replace your vehicle. Consult a professional mechanic to help you understand what repairs need to be made, how much they will cost you and if it they’re worth making in the long run! Good luck!