Ok, so, if you’re reading this post I’m guessing you had this experience before: you’re standing on the roadside with your car’s hood up and a confused expression on your face. You’re thinking hard about repairing your old car vs buying a new one, trying to figure out what that repair bill will be like and can’t really decide whether it’s time to cash in for a brand-new car or maybe you’ll be better off with minor/major repairs here and there (at least for a couple of years, until the kids grow up, you get a raise at your job, the aliens lend a helping hand, et cetera, et cetera). Well, don’t you worry, my friend, because the following tips and tricks will help you understand how to make the best decision based on your circumstances. I’ve got all kinds of expert opinions from mechanics and financial folks, so, everything you read further is legit and useful – as usual.
Scenario #1 – Spending Money On Repairs Is The Right Thing To Do
Generally, it’s less expensive to fix your vehicle then go for a brand-new car, and in most cases the financial part of the question of repairing your old car vs buying a new one is the most important. In addition, there are other significant reasons as to why you should go with repairs and not pick a new ride:
1 – First things first, the registration fees and/or insurance on a new car will be much higher.
2 – Admit it: you love your old piece-of-junk-of-a-car. Right, this is not the place (nor the time) to get sentimental, but it is what it is. And in this case considering going for extended warranty might be a smart thing to do. The majority of experts in the field of car finances claim that you can easily purchase lots of service contracts even if you’ve been driving the car for several years in a row, and that can drop the price on the most expensive repairs. Many extended service contracts like that can be financed at no additional cost at all, meaning you can have a permanent (consistent, rather) monthly expense.
3 – If your vehicle is a durable and reliable one and right now you’re at the 90K-120K mile range you shouldn’t really think about spending money on a new car. True, right about this time your vehicle will need a few solid fixes, for example you might have to spend some bucks on tear- and wear-related fixes. You’ll most certainly need new brake rotors and will have to replace dry and cracked hoses and belts; some electrical elements might stop working as well. The dealerships usually recommend going for a major check-up and service at 100K miles to replace the timing belt, the water pumping system, and some other stuff. Don’t worry, all that won’t cost you more than 500-1000K. And that’s a lot less than what you’ll have to pay for a new car. And sometimes a nicely fixed ride is better than a new one.
4 – So, yeah, that 100K mile range is a bit heavy on the wallet, but many brands can run nice and smoothly for at least another 100K miles, or even more. The good thing is we’re living in the age or reliability and durability, as the majors in the automobile industry are trying their best to deliver the toughest and the longest-living cars to the customers (that’s us). According to several financial advisors and experts in maintenance, about 3 decades ago those 100K miles meant the end of the life-line for a car. However, I’m happy to say that today models from Honda, General Motors, Ford and Toyota (probably the best in the field) can often sneak through the 200-400K range without causing the owner any serious problems.
Scenario #2 – Purchasing A New Car Is The Right Answer
On the other hand, if you feel like you car is gonna “explode” at any moment, I’d strongly recommend letting go of it before it puts you in harm’s way. This is actually a smart financial move, as a car that’s still running and solid on the road will have a lot more value and you’ll be able to get some extra money from it on the used cars market by selling it or maybe even trading it.
So, here’s why you should to choose the second option in the question of a repairing your old car vs buying a new one:
1 – If you wanna feel in control on the road and also want peace of mind, a new car is your best bet. And older steel horse can cause troubles any time of the day, even if you spend some bucks on all kinds of pricey repairs. You can’t really predict and old car’s behavior. And the great thing about new vehicles is they come with at least a 3-year warranty. Some of the latest models also come with standard maintenance. So, at the end of the day you should consider the total cost of owning a certain car, and the big advantage of purchasing a reliable high-quality, low-mileage car with a good warranty on it means you’ll actually pay less in the long run. That’s the first thing you gotta understand about new cars and old cars.
2 – If you want a safe trip down the block, a new ride is always the better pick. Nowadays we’ve got all kinds of equipment, including multiple airbags, (electronic) stability control, backup cameras, blind-spot monitoring, lane-keeping assist, cross-traffic alert, collision warning, et cetera, et cetera. And most of those features come standard in new cars. Besides, it’s obvious that the longer a car is in use, the bigger the chances of a major issue. An old car can cause you frustration and/or inconvenience at the very least and even put you and your loved ones in danger because of a mechanical problem like old brakes, bad suspension or wearied tires. The last thing you want to do is get stranded somewhere on the roadside.
3 – And finally let’s talk about economy: if you want decent fuel-efficiency from your car, an old horse won’t really be able to provide that. For example, the (Toyota) Corolla Eco returns 36 miles per gallon in combined driving. On the other hand, a Corolla 2000 is lagging far behind and is only good for 25MPG of combined driving. So, by using a special economy calculator I can tell you that you’ll be saving more than 2K if you drive 15K miles per year for 5 straight years (that’s if a gallon costs you 2.23 dollars).
Repairing Your Old Car Vs Buying A New One: Figuring Out Your Budget
Alright, with everything said and done, the most important thing to do is to figure out whether you can really afford a new car on not. A quick and easy way to do that is by using math. Or, rather, listen to this: ditch or trade-in your car only when the fix/repair bill is higher than the current book value of the vehicle. Get it? Another great way to survey the situation, so to speak, is to see if the cost of a repair is bigger than monthly payments for a whole year. If it is, that means you have to at least think about buying a new ride. That’s a pretty good rule of thumb. And remember: you perfect car is waiting for you somewhere out there, you just gotta find it. And don’t rush it – make the purchase during the summer and/or year-end sales – that will help you save a few bucks along the way. Mr. William S. Matthews, a financial counselor from Houston and the author of a few pretty awesome books says that the best time to go shopping for a new (or used) car is mid-year. True, there may not be a plentitude of choice, but you might be able to save as much as 3.5 to 5 thousand dollars on the deal.
Ok, ladies and gentleman, that’s it for today. As you can see, the process of figuring out repairing your old car vs buying a new one is a pretty straightforward thing. You need to use your head and never get too emotional. Consider your options, consult with a few good pros/experts you know and don’t rush it. Your vehicle is your best friend on the road, and so you can’t be greedy, lazy or, let alone, stupid about it. Think twice before you skip a repair or two and don’t wait for too long if you know for sure that you need a new vehicle. Because a car in a bad condition could very well turn your whole life upside down – in a horrible way.
See this video: Repair Your Car or Buy New? – Pam Oakes