Expressed another way, the question is this: Is it smarter, more practical, and more economical for me to keep and fix my old car than to buy another car, new or used?
This is always a tough one to answer. Generally, it’s going to be better to fix up an old car than buy a new car every five years or so.
However, the real answer depends on your particular circumstances. Here are some tips that will help you make a decision
How old is your vehicle?
Older, high-mileage vehicles are more likely than newer vehicles to have problems. There are exceptions, of course. Older vehicles also tend to have more serious problems, such as engine and transmission failures, that are expensive to repair.
Is your old car breaking down frequently?
If your car is generally unreliable and is causing you inconvenience and unexpected costs, you may want a newer car that is more dependable and predictable. If your car has a long history of problems, it is not likely to end soon. You may find greater peace-of-mind and fewer suprise repair expenses with another car.
Does your old car need repairs now?
If so, how much is it going to cost to make the repairs? Will the repairs really fix the problems, or will they just temporarily patch the problems? Is it likely that these will be the only repairs needed for a while? Can you afford the cost? If you were to sell or trade the vehicle, could you recover the cost?
How safe is your old car?
Older cars have fewer safety features than new cars. There’s always the chance that an older car’s safety equipment doesn’t work properly. Do the airbags still work? Is the ABS still protecting you? Has your car been structurally damaged in an accident? A newer car may bring fewer worries about safety.
Can you afford to buy a newer vehicle?
Can you pay cash? Would you need a loan? Do you want a new loan and monthly payments? How much can you afford in monthly payments? Can you afford to buy a car that is substantially newer and better than your old car? Can you afford possible higher insurance rates and taxes? Does your old car have enough resale or trade value to help with the cost of a newer car?
Do you want a new vehicle?
Most people would answer yes to this question — but many don’t want new car payments, or a depleted savings account either. The stronger “want” wins. If you decide you need (want) a brand new car, be sure to check with Edmunds.com for pre-discounted prices at local dealers.
What are you really looking for?
What’s most important to you in making your fix-versus-buy decision? Lowest cost solution? Easiest solution? More dependable transportation? More peace-of-mind? Fewer surprise breakdowns and costs? Do you have an emotional attachment to the old car? Or are you simply trying to squeeze the last remaining value out of your old car before discarding it?
Reasons to keep and fix your old car
You are frugal and don’t like being wasteful
Your car is less than 10 years old and has less than 150,000 miles
Your car has only minor problems that are not expensive to repair
Your car has been generally reliable and problem-free
You have always liked your old car
You can’t reasonably afford a newer car
You don’t like the idea of a new loan and monthly payments
Reasons to replace your old car
Your car is more than 10 years old and has more than 150,000 miles
The cost to repair your old car exceeds its value
You would like fewer unexpected breakdowns and repair costs
You want updated safety equipment and electronics
You don’t like your old car
You can reasonably afford a newer car
Make a decision – or not
Fix or replace or your old car? One decision you can make is……..to not make a decision. At least, not now. You can simply stick with your old car until it finally dies a natural death, at which point you’ll be forced to make a decision. It might be better to wait and make a move later rather than sooner.