Repair or Replace Your Old Vehicle?

Posted on February 17th, 2009 by Warranty Direct

repair or replace car This is a question that many people and families ponder.

After all, the cost of obtaining a new or pre-owned vehicle is a huge investment.

The fact that the average vehicle is nine years with one owner is amazing, but part of that fact is due to the decline in our economy all around.

What you need to do is look at your vehicle situation, the repairs it needs, how much it’s worth, and what sort of long-term reputation it has.

Consumer’s Digest (you can read them for free at any public library) has lists of every single manufacturer’s make and model and what their repair history is. If you find you are spending quite the bucks on repairs and your car is on the list—maybe it’s time for a new one.

Good Old Betsy Is Breaking Down

So how do you determine what to do? First, how much is your car worth? You can get a wholesale and retail value on any vehicle at Kelly Blue Book.

Say your vehicle is an older model and its value is around $5,000. If the repairs you are going to need are anywhere from half of the value or more than the value of the vehicle, you might want to seek out a new or pre-owned option.

Even if you feel that the vehicle has performed well for you, in the long run, you need to decide that, if you spend $2500 to put in a new transmission, you then need to commit to keeping that vehicle and any future repairs that might come from normal good old wear and tear.

On the other hand, some people feel safer that a repair bill is much more affordable than a monthly vehicle payment—you have to look at your lifestyle and be honest about what you can afford to do.

Is the Cost of Repairs Too High?

That, my friend, depends. A plumber friend of mine told me he was working on an older home and once he fixed some of the older pipes and components in the home, others were breaking down just by his attempt to get to the problem.

Surprisingly, people are more willing to shell out big bucks for home repairs or appliance repairs than they are on auto repairs. In my heartfelt opinion, some of the reason for this is because people don’t trust repair facilities or technicians.

While some places will try and rip you off, a good repair shop won’t and can actually give you an estimate in through the mechanics eyes on how much longer your car will run. Take heed of that advice before you decide what to do.

New Car Costs

The price of new vehicles has risen dramatically over the past ten years because of consumer demand on what they want the vehicles to do and what they want in them. Options, options, and more options! A new vehicle, with all the options, can cost you twice the price of purchasing a certified pre-owned vehicle.

When looking at vehicle costs, limit your options. Do you really need two DVD systems in it? Start with the base model price and only add the options you really need. All manufacturers’ offer this “build-a-car” option on their website—so do some dealerships.

Pre-Owned Certified Vehicles

A pre-owned certified vehicle, (most of them are bought by dealerships at auction), are more than not former rental vehicles. If a pre-owned is your choice, check out Consumer’s Digest again and look at what the model year and make is going for. Remember to compare apples to apples. Don’t price a used SUV against a used truck for example.

Another tip, if you do decide to buy new, a dealer will only give you the wholesale price for your trade-in vehicle, so see if you can sell it on your own first and use that money as a down payment.

Be Smart When You Buy a Warranty

Finally, when you buy a car from a dealership, both a new or pre-owned car will come with some sort of warranty, whether it’s the manufacturer warranty, aftermarket used car warranty, or dealer warranty. So find out exactly what that warranty will cover if you need repairs. And be sure to contact Warranty Direct for a money-saving quote before you buy a warranty from the dealership!

Making a Decision

Ultimately, it’s you that has to make the decision on whether to replace Good Old Betsy, so be wise and commit to some research on purchasing a new or pre-owned vehicle.

If your car will give you a good amount of performance years by repairing it, then do that. Or, if the repairs don’t equal the value of your car, perhaps it’s time to buy new. Remember to weigh the options of a repair bill and a monthly car payment.

And, if you find you must buy a new or certified pre-owned vehicle, wait for manufacturer high-rebate months—typically in August and September as they want those old model years out of their showroom—dealers will often add to these saving—they need to push their inventory too.

Be an informed customer, do some research, and look at your lifestyle before you invest in costly repairs or a new vehicle.