Something goes wrong with your car and you’re faced with a high repair bill. It would be nice to get a new car, but is that the smartest decision? Would you be better off fixing your current ride, or is it really time to buy a new one? The answers to these questions will vary, so let me give you some information that might help you make a more informed decision.
Reasons to fix your current vehicle
If you aren’t sure if fixing it is the right thing to do, here are a few reasons why it is a good idea to bite the bullet and get the repairs done.
- It is almost always less expensive to repair a car than buy a new one.
- Although something as severe as a blown motor or failed transmission will run you in the thousands of dollars to replace, it still isn’t enough to buy a new car. (It would certainly make a nice down payment, but then there are the monthly payments to consider.)
- Insurance and registration fees will go up with a new car.
- A new car typically loses an estimated 20 percent of its value the moment you drive it off the dealer lot. Your existing car has already taken that depreciation hit
- Repairing it now will keep you on the road and give you more time to save up and get your finances in order.
- You have a sentimental attachment to your car. Maybe it was your first car, a gift from a loved one, or a dream car you finally were able to purchase. For you, buying a new car means giving up an old friend.
Reasons to buy a new car
There are times when it’s time to buy that new vehicle. Here are some reasons for it:
- You don’t want to worry constantly about future breakdowns. Your mechanic told you to expect more things to go wrong with your vehicle.
- You’re tired of the back-and-forth to the repair shop. Some things are fixed the first time around, while others seem to need constant attention or do not get fixed right the first time. Either way, trips to the mechanic are costing you too much time away from work or family, in addition to money.
- You’re tired of your old car. Perhaps it embarrasses you, it rattles like crazy or you have to bang on the A/C to get it working. Every morning when you walk outside and see the neighbor’s car, you long for something new. That’s perfectly normal. Just take a good look at your budget and make an honest assessment of your financial situation.
- You want something safer. Your car is old enough where it’s simply not safe to drive.
When is it time to buy another car?
A good rule of thumb to estimate when it’s time to throw in the towel, is if the cost of repairs is greater than either the value of the vehicle or one year’s worth of monthly payments and increased insurance payments.
Get an honest estimate
The only way to make an accurate decision, is to know what to expect. Ask your mechanic to fully inspect the vehicle and let you know what it really needs to run like new.
By Matt Stewart