One of life’s simple pleasures is not having to make a car payment every month. Your trusty ride is paid off, only costing you for gas, insurance and repairs.
But eventually, those repairs start adding up, with even routine maintenance inching up into the hundreds-of-dollars realm. Your ride doesn’t seem as trusty as it once was. Is it time to retire your ride and buy a new car, or stick it out for the long haul?
It can seem like a fine line between when your old, well-loved car is costing you more money than a new one would, but it’s not difficult to make the call here. Part of it is math, and part of it is just taking a good look at your personal situation. In the end, both factors should determine whether a new (or new to you) car is in your future, or you should stick with your tried-and-true ride until the wheels fall off.
How much are you paying for maintenance?
The first, and perhaps biggest question you should ask is how much are you paying in repairs? Even a couple hundred dollars in regular maintenance every several months is less than any new (or used!) car payment would be.
If you’re looking to save some cash on regular maintenance, the best way is to start doing some of it yourself. Simple things you probably pay a dealer or a mechanic to do, like changing your oil, checking your fluids (and adding more when levels are low), changing spark plugs and replacing air filters are all things you can easily do yourself with a little research.
Search for how-to videos for your car’s make, model and year, or check out your vehicle’s Haynes manual for a wealth of information on how to do your own repairs. Odds are, someone online has detailed instructions on how to do the work you need done, and some things—like changing oil or replacing an air filter—are so simple you’ll be surprised you’ve been paying someone else to do them for you.
How much do you pay for repairs?
Of course, bigger issues that you’re not comfortable handing on your own (or that you don’t think are worth your time versus your money) should be handled by a mechanic that you trust.
Beyond regular maintenance, here are some things to consider before agreeing to undergo major repairs.
Is the repair less than a few months’ car payment on a new vehicle?
If the repair costs less than a single month and your vehicle is paid off, it’s a no-brainer. If it’s less than a couple of months and you think that you’ll be able to go a while without additional repairs or maintenance costs, it makes sense to go ahead and get the repairs done.
Where you start running into trouble is when you start to have more months when your car requires repairs than months when it doesn’t. “If the repair costs are regularly looking like car payments, it may be time to move on,” Tom McParland of car-buying service Automatch Consulting (and a writer at Jalopnik) said.
Is the repair less than half of the car’s market value?
If the answer is yes, then you’re better off doing the repair. For more sporadic repairs or maintenance you may have neglected, if you take your car to a mechanic and they quote you $1,500 on a vehicle that’s worth $4,000, you’re probably still better off getting the work done. If you know your vehicle is only worth about $2,000 however, it probably doesn’t make much sense unless you can spread those repairs out over a period of time that makes it worthwhile and financially feasible for you.
Investing in the repairs could increase the trade-in or sale value of your used car, too. If you’re not sure of the market value of your car and aren’t sure whether you’re driving a genuine clunker, check Edmunds’ used car appraisal tool or its Kelley Blue Book value.
If you’re still weighing the issue, AGCO Auto has a detailed calculator on its site that can help you weigh the costs of keeping your car versus buying a new one.
How much is your peace of mind worth?
Of course, there are no guarantees that a new (or newer) vehicle won’t break down or have the same repair costs that your current one has, but odds are it won’t. You do have to consider some of those “softer” costs and benefits that come with owning a newer car.
You’ll ideally eliminate the back-and-forth to the mechanic that comes with high-mileage cars, and you’ll probably get a safer, more fuel-efficient vehicle by getting something new. Dependability and reliability are worth a lot.
At the same time, though, if you have a good, honest mechanic, and the repairs you elect to do add years of life to your current car, your current ride can be just as reliable and dependable as a new one. The average age of a car in the United States is over 10 years now, higher than it’s ever been. With the right care and maintenance, yours can easily last as long or longer.
Consider your budget
Finally, think about your budget. Even new cars sometimes have unexpected repair costs, and there’s a big difference between a $500 car payment every month and a $500 out-of-the-blue repair.
McParland advised figuring out whether you can afford a solid replacement before giving up on your old car. “If the budget doesn’t allow for a more reliable and higher quality car, sometimes the devil you know is better than the devil you don’t,” he said.
One thing we’ll reiterate though: Don’t let a broken down car make the decision for you. You should try to make the call to get a newer vehicle before your old one gives out completely. Sure, a catastrophic breakdown will make the decision for you, but ideally you shouldn’t have to wait for that to happen to plan for the future.
This story was originally published on 4/29/13 and was updated on 10/23/19 to provide more thorough and current information.