When should I buy a new car versus repairing a car?

Question

I have a 7 yr old car that is paid off, but needs about $2,000 worth of repairs, should i keep it or buy a new one?

Answer 1

I always look at it monthly. If monthly repairs are more than a montly payment then its time.

Answer 2

It may clang and bang, but your despised old car may be the best bargain around.

Let's divide the car-buying universe into two camps: those who keep a car until it drops, and those who think a new car will change their lives.

To the first, a round of applause. There's nothing short of the bus that's cheaper than keeping a car until it crumbles into a pile of rust. Almost any car can be nursed to 200,000 miles without endangering your life, and even a new engine is cheaper than all but the cheapest used cars.

To the second, another round of applause, because the 16 million or so new cars they buy every year instantly become used cars soon available at a considerable discount to those in Camp 1. And a moment of silence, because a new car will change their lives in ways they never foresaw on the dealer's lot.

If you're in a drive-until-the-muffler-is-dragging wannabe, read on. We'll look at ways to keep your car on the road longer and realistically weigh the costs of upgrading.

I'd love to keep my old car, but …

It no longer fits my life. You may have taken up gardening in a big way but still own a Corvette. You may feel nervous about taking your '78 Ford on a trip to Colorado. Your little Accord may be a tight squeeze when family comes to town. The answer to all: Rent. Why buy a gas-sucking pickup because you visit Home Depot twice a year or a $30,000 sport-utility because you take the kids skiing for a week at Easter? Even at $100 a weekend, renting is far cheaper than a car payment. Plus you get to drive the very latest without worrying about insurance, license tags, maintenance or depreciation. Or try swapping cars with a friend, returning it gassed-up and clean (with the oil changed, too, if the loan was more than a day or two. You want to be able to ask again next year.).

Those repair bills are really adding up. Then do the math. Does the cost of repairs exceed the cost of a new car? A typical new car is $21,000, about $350 a month for five years after 20% down. A rebuilt transmission might run $1,500, a huge outlay in one chunk, but far less than the $4,200 a year you'd spend on new-car payments alone. If you can't afford repairs twice a year, it's unlikely you can afford a new car payment every month. In any case, anybody with a car older than three years should be tucking aside $50 a month for repairs and maintenance. If the gods smile, you'll never use most of it and you'll have a tidy sum to blow on your next car.

I'm nervous driving an older car. Maybe little things are beginning to go: a new thermostat one month, a starter the next. You might simply spend $50 on a AAA membership and carry a cell phone, reminding yourself that even new cars aren't immune to mechanical failure. The upside of frequent breakdowns is that you'll get to know mechanics quite well. Find one you like. Flatter him. Pay your bills on time. And the next time he fixes your car, ask him to take a few minutes to see what else will need repair soon.

The repair costs more than the car is worth. A $1,500 engine rebuild that keeps your '83 Toyota on the road still makes good financial sense. It's at this point, however, that all but the flintiest drivers begin to think about upgrading.

Answer 3

That all depends on the condition of the rest of the car. If you feel that after the $2,000 repair the car will give you give service then stick with the car.

If you feel that you absolutely need a reliable car that starts EVERY time you turn your key, and have fixed cost (no hidden repair cost not covered by warranty), then the new car is the way to go (assuming you have the money).

Answer 4

All cars need repairs, $2000 and I bet its running like new, you get rid of a car when the repairs either build up real fast, happen very frequently, the car is falling apart, or it has reoccuring problems or stupid things keep happening to it.

Answer 5

put the $2000 in to it or buy a 2-3k car. Buying a new car (especially on credit) is a huge waste of money. The rate of value falling is almost $100 per week for the first 5 years.

Answer 6

I understand your problem. You have to way the pros and cons. what do you realy want. if you still like the car you drive then fix it. if you don't the cost for a new one will be more than 2,000. at least with this car you know what you got.

Answer 7

You failed to state the model, mileage, condition and, type of repair needed. Without that info I couldn't tell you.

Answer 8

If it's a domestic (Ford, Chevy, etc) or a VW/Audi, sell it.