Many people have a hard time deciding when it’s time to dispose of an old car for a new one. This is understandable given the cost of buying a new car. However, old cars can be costly too if you have to do auto repairs often. So, how do you know if you should fix your old car or trade it up for a new one or a used one?
Here’s what you should consider to help you make a wise decision.
Cost of repairs
This is a very important factor to consider when you want to decide if you should fix your car or sell it and buy a new one. Like all other machines, cars need auto maintenance and repairs. Depending on the age of your vehicle it may need to be serviced more periodically than if it were a newer car. Your car may also need repairs. Although repairs are inevitable, they can become costly and hit your wallet more often. This is usually the case with old cars. As your car ages, servicing won’t be enough. Some parts may start to fail. Many cars above 100,000 miles require regular repairs which you should budget for. When repairs become too costly and never-ending, it may be time to sell your old car – especially if you are going to spend more on repairs than the resale value of the car. If you’re faced with a major repair bill that exceeds the cost of the car i.e. replacing a failed transmission, selling makes more sense.
When should you continue fixing?
It is important to note that it’s almost always cheaper to fix your car than to buy a new car. When you consider the cost of the car itself (including monthly payments and the total cost of the car at the end of your loan term), insurance, as well as registration fees, the cost can easily get out of hand. Furthermore, new cars lose approximately 19% of their value in just a year. That means if you buy a new car for $20,000 today it will be worth around $16,000 after its first year.
If the car in question is relatively new and just a few years old, you are better off fixing it than selling it. If you aren’t spending $200 to $400 per month on maintenance and repairs on the older car that you have now – whether it’s a 1 year old or 15 year old vehicle – it’s difficult to argue that having car payments of $200 to $400 per month is a financially good decision if you already have a reliable vehicle that gets you from point A to point B 99.9% of the time.
Keeping your old car is usually the best option if you are looking to save money in the short-term and long-term.
When should you trade-in or buy another car?
When your vehicle is hindering your ability to get to work on a regular basis, breaks down all the time, is in the service shop regular, and becoming unaffordable – it’s time to buy another car. But, that doesn’t mean you have to buy a new car. Used cars can be a great a deal also. Just make sure the vehicle has undergone and passed a 100+ inspection before buying it and you can reduce the risk of buying a junker considerably. Trading in your current vehicle is also a great option when you don’t have enough money to buy another car. Since you get money back when trading in your old car this reduces the amount of money you have to pay for an another one.
Used cars have plenty of benefits. A quality used car won’t need major repairs for years. Used cars only a few years old also tend to be safer and more advanced in every way from driving experience to performance. For more details visit Hogan & Sons Tire and Auto.
*Always check your owner’s manual for your vehicle model’s specific instructions before attempting any type of repair.
Hogan & Sons Tire and Auto provides automotive safety and auto repair information for the sole purpose of educating the community at large. “We believe an educated customer is a loyal customer.” 8 Locations throughout the Northern Virginia area including locations in Fairfax, Leesburg, Falls Church, Sterling, Herndon, Winchester, Purcellville, and South Riding. Hogan & Sons Tire and Auto: http://www.hoganandsonsinc.com
Copyright Hogan & Sons Tire and Auto November 2016
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