You’ve had your Silver Bullet since the college days. You’ve driven it cross-country, taxied your buddies around, and maybe even had a few back-seat smooches with your sweetheart. Through it all, your beloved ride has safely transported you where you need to be.
Lately, however, your trusty old ride is starting to drive like a rusty old ride. The transmission is sticky, the air conditioner is more like a heater, and there might be a problem with your front axle. So you take your car to the mechanic and discover that the repairs will total about $3,000. Ouch. But your car, now on its last legs, is only worth about $4,000.
Should you make the necessary repairs or bite the bullet and buy a new vehicle? Here are some tips to help you decide.
Do the math to see if you should repair or replace your old car
Needless to say, buying a new car will undoubtedly cost more than repairing an old one, but there are some instances when it might make more economic sense. To determine whether or not you should trade in Ol’ Silver, do the math.
- Determine your car’s worth. Check your car’s value on Kelley Blue Book, Edmunds, or NADA.
- Determine the cost of a new car. Figure out which car you’d possibly buy and compute how much your monthly payments will be. (This will help you figure out if you can afford a new vehicle.)
- Determine the cost of repairs and whether a new purchase is worth it. If your car only needs a spark plug , it’s probably not in your best financial interest to get a brand-new car. However, if your car needs a major overhaul, it might be time to buy another vehicle. Why? Even if your repairs will prolong the life of your car for another 6 months or year, chances are it’ll need additional and potentially costly repairs down the road. It doesn’t make sense to put thousands of dollars into a car that’s likely to break down again.
Consider reliability and safety
Though many modern vehicles can now surpass the 100,000-mile mark without breaking a sweat (or a headlamp), the older a car gets, the more likely it’ll lose its reliability.
If your car needs a jump to get it going most mornings, habitually overheats, or leaves you stranded on the side of the road, it’s probably time to invest in a new(er) automobile. After all, an unreliable car, aside from being a huge inconvenience, could cause an accident if it should suddenly break down while on the road.
Additionally, older cars lack essential safety features. While your Silver Bullet may have front air bags and seat belts, it only has front air bags and seat belts. Today’s new vehicles come with a bevy of life-saving safety features like electronic stability control (automatically maintains vehicle control); lane departure warning (warns you if you unintentionally drift out of your lane); advanced head restraints (reduces neck and head injuries); and more. Thanks to these advancements, buying a new car could make driving a much safer experience.
Do a cost-benefit analysis
Ultimately, it’s up to you to decide whether or not you should trade in your older vehicle for a new(er) one. Obviously, if the cost of repairs is minimal and your car is still relatively new, it’s in your financial interest to make the repairs and keep your car. Conversely, if your car’s on life support, pumping more money into it won’t give you a good return on your investment. It just might be time to pull the plug.