Should you Repair or Replace Your Junk Car?
Do you find yourself trouble shooting another issue or rushing to the auto repair shop a little too frequently these days? Are the repairs becoming too expensive? Are you getting stranded or missing work due to an unreliable vehicle? It may be time to ask yourself the dreaded question – should you invest in repairing your “junk car” or buy another vehicle altogether? It isn’t an easy decision to make.
Get a repair estimate before doing anything
Yes, the repair bill estimate might give you nightmares, but it is advisable not to make up your mind beforehand. Go to the neighborhood mechanic instead of the dealer, as dealorships tend to almost always charge more for repairs. Or try dropping by places like autozone to get input and perhaps a better idea of costs or simple fixes. If the estimate is extremely high, talk to your mechanic if there is a way to do it for less. For instance, can the transmission be rebuilt rather than replaced? Are salvaged parts good alternatives? Another point to talk to him about is if he can give you an idea of the pricey repairs required in future to keep the car running. Or work with that autozone team member to see if this is something you can take on yourself.
The inevitable costs of repairs
Even if you have taken excellent care of the car and treated it like a prized possession, some high-priced repairs are unavoidable. The car and its components undergo a lot of wear and tear over time. Rubber belts and hoses dry out and crack, metal on rotors warp or wear too thin and electrical parts stop working. Components eventually have to be replaced. For instance, the timing belt is quite a big-ticket item on high-mileage cars. On many cars, it has to be replaced after crossing 100,000 miles. Dealerships usually recommend replacing water pump and other drive belts in the car at this point, which can set you back anywhere between $600 and $1,000.
So why should you repair the junk car?
Here are a few reasons to get your car repaired rather than buy a newer car:
- It is generally less expensive to repair a car instead of purchasing a new vehicle.
- To help answer the question of fixing a car or buying a new one, do a cost-per-mile comparison with the “Fix-it or Trade-it” calculator created by the Automatic Transmission Rebuilders Association.
- Even if something as severe as a blown motor or a failed transmission will run you between $3,000 and $7,000 to replace at a dealership, such repairs still don’t cost as much as buying a new car. Yes, you might think that the same amount might make a good down payment, but you shouldn’t forget the monthly payments too. A used car is always an alternative for the same amount of money, but such cars come with its own set of problems. However, when you are pressed for money a gentle used vehicle could be a great option!
- Insurance and registration fees are much higher on a new car. Once again, consider a used car as these fees and monthly costs will be lower.
- Remember that your car depreciates by an approximate 22% of its value in the first year. You are hit immediately after leaving the new car lot with significant depreciation. To avoid this buy a used car. Though it may have some wear and not be the latest or greatest it will save you significantly vs a new car.
- You actually need the car to last a while longer. For example, let’s say you were planning on getting a new car in a year or two, but it broke down earlier than expected. Repairing it now helps you stay on the road and prevents a hasty new car purchase. It will also give you more time to save up and get your finances in order.
- Don’t count out sentimental attachment – it carries a lot of weight. Was this your very first car that you saved up to buy? Is this vehicle a gift from your father upon graduating? Buying a new car means saying goodbye to “an old friend”. Sentiment plays an integral role when it comes to getting a new car, even if it isn’t a logical argument.
Is buying a car a better option?
Buying a new car can be an intimidating aspect, but on the other hand those repairs on your junk car are getting too frequent and expensive. Take a look at why you may be better off purchasing a new or used car:
- No more fretting about future breakdowns. Old cars are unpredictable and anything can go wrong anytime. Even if you repair a single problem with a junk car, it doesn’t guarantee another breakdown won’t occur with the system or another part. If you buy a new car, it comes with a warranty, which means you have at least 3 years or maybe more before you have to bother about paying for any major repairs. A certified pre-owned vehicle is enough to bring back some peace of mind.
- Aren’t you tired of making frequent trips to the auto repair shop? Some things don’t get fixed the first time around, while others seem to need constant attention. These trips are costing too much and becoming a hindrance. If the repair bill is equivalent to the worth of your car, you might think of selling it off.
- It is time to buy a car that matches with your current position and status in life. If your car rattles like crazy, it can prove to be a source of embarrassment. Or maybe you have to bang on the air-conditioner to get it working. Evaluate your budget and make a thorough assessment regarding your financial situation. There are several online auto calculators to help you out.
- Safety is your top priority and the old junker is anything but safe. Newer cars come with modern, built-in safety features and equipment such as automatic emergency braking, backup cameras, and blind-spot monitoring, among others.
The junk car shouldn’t decide for you
The problem is that everyone is an expert and seems to have a theory when it comes to repairing a junk car or getting a new one. For instance, if your repair estimate is around $1200 and a fancy ad catches your eye where you get a new car with a monthly payment of only $450 a month. Your friends and colleagues might advise you to go ahead, ditch the old clunker, and get a new car instead. But considering a used car could be a good alternative when facing such a significant cost of repairs. Deciding to repair or replace that junk car consider more than just a friends opinion, gather the right facts.
But you know your needs and your junk car’s history better than anyone else, so use their tips and suggestions as a guide, but don’t let them make the decision for you. Buying a new car might seem like the easy way out of a high repair bill, but depending on your circumstances, it may not be the best financial decision.
On the other hand, if you consider the fact that your junk car is hovering on the edge of oblivion, the repair bills might have already robbed you of sleep. It is a tough decision, but it is much better to let go of the car in at least partly drivable condition than waiting for it to break down exactly at the wrong time. If you make the decision while the junk car still has some value, you can sell it or trade it in, turning the cash into a down payment on your next car. There are several incentives and rebates being offered on new cars, so you can take advantage of those – it can bring down the price of the car quite a bit.
What is the cost of buying a new(er) car?
Even if the repair cost is hurting your pocket, you have to seriously think about buying a new(er) car as it can be an extremely expensive proposition. You may have to shell out quite a bit for a reliable used car as well, or there is no point. For instance, if you pay $2000 for a used car including tax and registration fees, the same amount can be used to pay for several repairs instead (depending on severity of car problems).
What factor tips the scales?
Begin with the repair estimate. For example, is it a repair job that costs $1000? Or will it go up to $5000? Look up the current value of your junk car using an online pricing guide like Kelley Blue Book. Or check this cost-per-mile comparison with the “Fix-it or Trade-it” calculator. When repair costs begin to exceed the vehicle’s value (as mentioned above), or a year’s worth of monthly payments on a replacement, it is time to think about getting rid of the junk car. As an example, say you have already spent $1,500 on repairs and now need a new engine for $3,500, and instead you could get a new or more reliable used car for $400 a month ($4,800 a year). Doesn’t that seem more financially feasible? Deciding to repair or replace a junk car is not easy, but weighing out your options can make the choice much easier.
Apart from repair costs, you should also consider the savings from a new car with better fuel efficiency and the new car’s loss in value over time. Think about your existing junk car after repairs. Once you invest in costly fixes, how long will it be before you run back to the auto repair shop to get another part replaced? Will it continue to run reliably? If breakdowns become frequent and you feel unsafe on the road that is the time to replace it – there are no two ways about it!
So what can you do?
When the debate of selling off your old junk car and buying a new one, or investing more in repairing your car, is giving you sleepless nights, please remember, there are middle grounds too. Have a look:
- Get a new car that is less expensive. For instance, if you love a particular model like the Mazda6, you can get the Mazda3 instead, which has many of the same features but is cheaper.
- Buy a used vehicle in good condition with working parts.
- Set a target date for buying a new car. If you can afford the immediate repair, and can more or less manage with your old car for another year or two, that gives you the opportunity to save up for a sizable down payment. If your credit score is less than perfect, you can also spend the year paying down debt and working to improve your score, which helps while securing auto loans.
A final look at the pros and cons of both options:
Even with the cut and dried facts in front you, making the decision is anything but easy, so go ahead and consider the pros and cons. Should you repair or replace your junk car?
Repairing the junk car:
- It is often quicker and more convenient as compared to shopping for and buying a new vehicle.
- There is no change in terms of insurance costs.
- You are well aware of your junk car’s history.
- You don’t have to invest time, effort, and money in advertising and selling your junk car.
- Even if you repair the junk car, there is no guarantee it won’t need more repairs in future.
Replace the junk car with a new or used car:
- A new car purchase includes warranties and sometimes maintenance.
- Modern cars come with a host of advanced safety features.
- Newer cars are more reliable on the road.
- There won’t be any need to rush to the repair shop frequently, so you save big on those fixes.
- A new car loan is long-term financial commitment, so you have to be financially capable of paying if off, or you can be saddled with a lot of debt.
- A used car can be a great compromise, getting you a more reliable mode of transportation without significant monthly payments.
Have you decided to repair?
If you have your heart set on repairing your junk car, get a mechanic that you trust implicitly before moving forward with repairs of any kind. For example, the service department at a dealership might be frightening you with repair bills to get you to buy a new car. It could be in their interest to get you to sell off the junk car at the dealership. Once the car is up and running again, make sure you drive it long enough to make up for the cost of repairs. If you decide to sell later on, you can do it with more confidence as you know the problem areas and have already reaped the benefit of repairs.
Have you decided to sell?
Should I repair or replace that Junk Car? Not an easy decision by any means, but sometimes you have to face the facts and seek something else. But selling a car to a private buyer or to a dealership will prove to be difficult. They have standards for the condition and operability of the car. Likely you will have to get it running again, or the price you get for it while selling as-is will be far less. If possible, get the repairs done, and then repay yourself when the car is sold off. In case the car has issues, be honest about it at the time of sale. Get an estimate for repairs, show it to a prospective buyer, and then tell them you are willing to deduct that amount from the selling price of the car. Don’t try to hide any problems as it can become trouble for you later on.
Fortunately, there are other options such as Cash for Clunkers who pay cash for junk cars in ANY condition. Quote in 2 Mins – Free Tow – Get paid in 24-72 hours!