Used Cars: When to Replace or Repair
- THE FIFTY PERCENT RULE: Each year that you own a vehicle, the value goes down. For older vehicles, the price of repairing your automobile vs. the cost to replace it might end up being closer than you think. Once you get the estimate on your vehicle’s repairs, compare it to the value of your vehicle today and how much it has depreciated over time. If the costs of the repairs is hovering around 50% or more of the total value of the car, it is definitely time to replace your old vehicle.
- AGE IS A FACTOR: Regardless how well you maintain your vehicle, wear and tear happens. Once a vehicle hits certain milestones (e.g. 100k miles), things can start to go wrong. One minor repair can lead to another and another. When factoring in the cost of your total repairs needed, consider the mileage of the vehicle. The higher the mileage, the more likely this recent repair is one of many more to come.
- LIFESTYLE: A vehicle purchased even just a few years ago, may not fit your current lifestyle, and therefore may not be worth repairing. Children are an excellent example of this. That 2 door coupe may not be worth driving with a growing family that requires a 4 door sedan or a mini-van. Commutes can change as well. Where a 4 wheel drive truck was once a fun vehicle, the gas mileage simply doesn’t add up on a 60 minute commute. If you’re lifestyle has changed, a change of vehicle might just save you headaches down the road.
- COSMETICS: The condition of the vehicle’s interior and exterior can also affect the value of a car, and therefore affect the 50% rule. Cars that have a damaged appearance, whether it is inside or out, may not be worth repairing since the value of the vehicle is probably significantly lower than book value, based on appearance.