Automobiles: Repair or Replace your Car
When the new models are out, its hard not to want to replace "Old Faithful" in your driveway with one of the sleeker, shinier cars. Even though your current car is paid for and may only need some fresh paint, some new tires, and a new transmission…
When an older car needs repairs, often the fastest solution lies in a new car. Often, though, if just the amount needed for down payment were spent on your old car, it would be serviceable for another year or two. Statistically, more owners are fixing up and driving their old cars and the average car age is now about 9 years.
If the cost of the combined repairs far exceeds the value of your old car, chances are you should simply buy a new version of your current car, if not trade up.
Arguments for fixing up you car:
- Your old car will be in better shape for future trade.
- No car payments, so you can save better for a future new car purchase.
- Lower sales taxes
- Lower insurance premiums.
- You know your old car's problems and quirks
- A new car loses an average of 25% of its value when it leaves the lot; 40% of its value in four years, a downside you don't have with your current car
Arguments for replacing.
- Tour life-style (family size, business, recreational interests) has changed and your old car no longer fit your needs?
- Long-neglected maintenance and repairs may need major mechanical work. If the cost of a major overhaul exceeds the value of your car, it's probably time for a new (or newer) vehicle.
- The body and/or interior fix-up work is expensive, even if the mechanical systems are okay
- You may want state-of-the-art safety (i.e. airbags) and fuel economy features of a newer vehicle
- A new vehicle may be a key component of your personal image
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