Are you spending more money than your car is worth to fix it? There are many important factors to consider when you decide to repair your car or trade it in. Is your vehicle worth it?
To repair, or not to repair: that is the question. Sometimes when our car breaks or has issues we can be tempted to dump it then and there, but we know this isn’t the best decision.
Yet it is essential to never let a totaled car make the decision for you. There are many things to think about when deciding whether to fix a car or trade it in for a newer one. You need to be fast, efficient, and informed. Check out these 8 important factors to consider when deciding whether or not to repair your car.
First let’s start out with a term not heard of frequently: “Planned Obsolescence”. When auto manufacturers make a car they all shoot for the “total lifetime” value of what they are making. Since cars require parts as they get older, the manufacturer tries to have you buy ones made by them and not off-market parts. Dealerships are frequently required to use original parts. The manufacturers try to convince you on TV commercials to get “original parts” (and for good reason). So, the planning of things breaking down is based on the lifetime value. Here is an example:
“Manufacturer” makes a car and “under engineer” parts of it to wear out. They do that a lot. The cheaper the car, the more parts are planned to go obsolete way before the lifetime of the car (let’s just call that beyond all repairs). Car sells for $20,000 when new. Add all the parts over its lifetime. It goes into the used market and has several owners over 20 years. More repairs. More parts and that number might end up being collectively $50,000. Add the two together till its life is over and the value of that car is REALLY $70,000 to the manufacturer.
Some manufacturers do NOT plan for things to break down. They over engineer the car from the start. They charge high dollars for this when the car first sells. Let’s say $60,000. I guess you can see where this is going huh? Less future parts and less future owners. In the end they only get a small amount of money off of future parts. Let’s say $10,000. What was the lifetime value? $70,000! The SAME as the low-end car!
But not everyone can afford the high-end car when they first get a loan even though they are buying it over time and not enjoying it ALL the time.
So you MUST look at the manufacturer first and ask this question, “When this car was made, was it a high-end car?” If yes, then you may only be making minor repairs going forward. If it is not… money pit!
Here are more ways to find this out:
1. How old is your car?
Look at the age of your car. Older cars tend to have basic issues that were addressed in later models, so your car might be having a problem that would never happen in a newer version.
Usually when we think of old cars we have a Victorian era carriage in mind. But, according to CarsDirect, cars are considered “classic” when they are 25 years old, and “antique” when they are 50 years old. If your car is from 1992 or earlier, you could be driving around a car that is considered a “classic” and not even realize it. This is especially true if you bought your car used because your vehicle was already aged when it was new to you.
If your car is getting on the elderly side, consider upgrading to a newer model. You can potentially save hundreds or even thousands of dollars on issues that were resolved in a later model.
2. What kind of car do you have?
It’s nice to own a fancy car, no doubt about that. But what isn’t so great are the costs of repairing these vehicles. If you have a rare car, or a higher end car, you are going to pay more to fix it when things go awry. You need to ask yourself: is this worth it?
A 2014 study by Consumer Reports stated that the most expensive car to own was the BMW 750Li: this car was estimated to cost around $106,200 in things like maintenance and repairs, every 5 years. What a considerable difference from the least expensive car on this list, the Toyota Prius C Two; this car only cost an estimated $24,600 to own for 5 years. I’ll do the math for you, that’s a $81,600 difference.
If you own a more expensive car and are having trouble keeping up with it, consider trading it in for a less pricey model. Come on, as long as it gets you from point A to point B you’re pretty much set.
3. What kinds of problems is your car having?
Is your car radio a little fuzzy or is there a screeching *CLANK* noise that happens every time you turn left? One of these is a simple fix and the other is a major issue. Decide if your car’s problem will be a straightforward repair, or if it is a potentially dangerous issue that will take extensive work to fix.
In the long run, it might be less of a strain on your wallet to sell or trade in your car. By getting a newer car with no issues instead of fixing yours, you could potentially save yourself a small fortune.
If you want to put up a little fight, consider if you can make any of the repairs yourself. When you work on your own car all you must pay for are parts, which might be less expensive than taking you vehicle to a mechanic.
4. Does your car always have issues?
If your car is constantly having problems, you need to seriously consider repairing it again. Why do you keep fixing your car only to have new issues pop up time and time again?
If your car is having minor but consistent problems, contemplate selling or trading it in to someone more willing to make larger repairs. You might end up getting more money by doing this, which you can use to by a newer, more efficient car.
5. Are you paying more than your car is worth?
Think about the extent and the consistency with which your car usually requires repairing. If you are making major or constant repairs, you might be ultimately paying more money than your car is even worth.
Look up your car in the Kelley Blue Book to find out how much your specific make and model is worth. Are you paying more than the market value of your car in trips to the mechanic? If you are, stop! Sell or trade in your car before it sucks away any more of your hard-earned money.
6. Have you replaced any major components in your car?
Have you replaced anything large-scale in your car like an engine or transmission? If you took the time and money to put in these important repairs, heavily consider the pros and cons of selling or trading your vehicle. You may want to give keeping it another shot.
You could also get more money for a car with newer primary parts such as a new engine. You could then use this cash to get a better car that also has new components.
Getting rid of your car is a big decision to make, it could either make or cost you a substantial amount of money depending on the quality of the car you trade in versus the quality of the car you obtained by selling yours.
7. How important is a regular vehicle to your lifestyle?
Do you drive to work every day? If you do, is it possible to take public transportation, or even walk? If you can get by without having a vehicle, I highly recommend you do so. If you completely dump your vehicle all together by selling, you can make thousands of dollars that would be completely at your disposal.
Also, by not driving your own car you are one less air pollutant on the road every day. This means you will reduce your individual carbon footprint. More money in your wallet and friendly to the environment, everybody wins!
8. Can you afford a car payment?
Before you jump the gun and get rid of your car, think about your budget. Yes, costly repairs are a nuisance, but they usually only come up every once and a while. If you get a new car you will most likely have a monthly car payment. Are you able to be responsible for another bill and payment every month?
Deciding whether to repair or dump your car is perhaps one of the hardest decisions you will ever have to make for your vehicle. There are many ways to sell your things, but think long and hard not only before you get rid of your car but before you purchase a new one as well.
Save yourself from this difficult decision and take care of your car straight from the beginning. Regular maintenance, and safe driving now could prevent giant issues later.