Should I keep my old car and fix it up, or buy a new car?

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 TrueCar 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 make a move sooner rather than later.

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Independent Used-Car Dealers – Independent used-car lots are a potential source of affordable cheap second hand cars. Many lots have older vehicles that can be real bargains, but might require a little work. You should take care to determine if the price is fair and that the vehicle has no hidden problems. Most used cars are sold “as-is” and come without any kind of warranty or return policy. Check out local used-car lots in your area but also consider large national or regional used-car dealers such as CarMax.

New-Car Dealer Used Car Lots - Many new-car dealers also sell pre-owned cars. Most new-car dealers only offer relatively late model used vehicles that have been taken in trade or are off-lease, and are in good condition — and are relatively expensive. But bargains can be found. Therefore, it doesn’t hurt to check out local new-car dealers but also look at other sources listed below. Some new-car dealers sell “certified” used cars — at a higher price. These cars have been inspected thoroughly and come with a short guarantee.

Buy-Here-Pay-Here (BHPH) Dealers – BHPH dealers are a different kind of used-car dealer that provides in-house financing, usually with no credit check. Most BHPH dealers are local and can be recognized by their “we finance anyone” or “no credit check” banners. Be aware that interest rates are usually very high and payment terms are strict. See “Should I Buy From a Buy-Here-Pay-Dealer Car Dealer” for more details.

Special Promtional Deals on New Cars- Don’t overlook this year’s (or last year’s) brand new cars as a potential source of good bargains. There are currently tons of heavy rebates and other incentives being offered by car manufacturers, especially on American brands, and especially on last year’s models, that can often make certain new cars less expensive than used cars of the same make and model. See New Car Rebates and Incentives.

Used Cars Online – Although the Internet is a good potential way to find cheap cars, take extra caution due to the possibility of getting scammed. If a deal seems to be too good to be true, it probably is. Craigslist and Autotrader are particularly frequented by scam artists. We recommend sticking with sites such eBay Motors, which has a buyer protection program (only for cars puurchased through the eBay site) and UsedCars.com, the Internet’s largest used car buying service, with over a half a million used car listings.

Lease a New Car – If your goal is simply to get low monthly car payments, leasing a new car can be 30% to 60% less expensive than buying the same car with a loan – cut your payments in half. This allows you to drive a brand new car for the same or less money than you might spend on a late model used car. However, be sure to read the free Lease Guide before you make a decision to lease. It’s cheap but may not right for everyone.         

Take Over a Car Lease - Take over a cheap car lease from someone who needs to get out of their lease early. Online services such as Swapalease offer car lease takeovers at bargain prices. These are almost-new cars being offered by sellers who are often desperate to get out of their leases. These can be excellent deals. It is the cheapest way to drive a almost-new car.

Government Car Auctions – This is an often overlooked source of cheap cars and trucks. Local, state, and federal government and law enforcement agencies frequently auction surplus and seized vehicles. Outstanding bargains are possible. To participate, you have to know where and when the auctions take place, and how to bid. See Government Auto Auctions for more details.

Damaged and Salvage Cars – Cars that have been damaged or salvaged can be a good source of cheap cars. See Damaged Cars for Sale for more details.  Salvage Auctions and Repossessed Car Auctions are other possible sources of cheap cars and project cars for sale. Obviously, a lot of caution must be taken to make sure you know exactly what you’re buying but, if done correctly, some great deals can be had this way.

Police Seized Property and Surplus Auctions – Law enforcement agencies seize and impound vehicles from law-breakers and sell them at public Police Impound Auctions, for bargain prices. Many are high-end late-model luxury vehicles in perfect condition. These agencies also sell Surplus Vehicles that are being replaced with newer vehicles. These auctions are conducted regularly and are open to the public.

Rebuildable Wrecked Cars – If you have mechanical skills, Buying and Rebuilding a Wrecked Car can be a way to a cheap ride. Cars that have been declared total losses by insurance companies can often be purchased as salvage vehicles and project cars for almost nothing. Many of these vehicles have little damage and can be rebuilt and restored to good running order for little money.

Unclaimed and Abandoned Car Auctions – Cities and towing companies pick up unclaimed abandoned vehicles every day from the sides of streets, highways, and parking lots. They try to find the owners, but if they can’t, the cars are sold at auction, often for almost nothing. The cars can range from junkers to almost-new vehicles. See our article, How to Find and Buy Unclaimed Cars.

If you are looking for a good cheap car, start with the suggestions above and remember to take extra caution to make sure you don’t get scammed and that you get what you pay for. Used cars are sold “as-is” which means that you have no right to get your money back once the sale has been made. It’s always a good idea to have your car inspected by a qualified mechanic before you make the purchase.

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