Welcome back to “Ask buy a car!” Where you send us your questions on how to navigate this tricky market and we’ll do our best to help you. This week we discuss the age-old conundrum of whether or not to repair or replace a ride that becomes expensive to maintain.
Long time reader, first time writer. I’m going to ask a question that I know has been asked a million times before, when is the right time to repair or replace a vehicle and buy new? I know the general consensus is “it depends” or “no more than half the value of the car”, but both options seem suspicious to me given the current economy. Car prices, new and used, are insane. The cost of everything else, gas plus some shortages of parts, also makes me question repair. My salary has also not had the benefit of increasing to cover the costs. I know we’re in a car bubble right now that will eventually burst, but who knows when? For the record, I currently drive a 2015 Dodge Charger with nearly 100,000 miles. No issues beyond cosmetic wear from now on. I’m not really considering getting rid of it right now, but do want to be prepared. What worries me is that KBB estimates close to 17k for my trade-in value. If it needs some major repairs, is $8,500 a fair amount to start off with considering it was only worth 13k a few years ago? At the moment I have no idea, but both options sound expensive. Any guidance is appreciated.”
This is a difficult question and there isn’t really a clear answer. In the past, I would have said that when your regular repair bills start to look like car payments, it may be time to cut your losses and move on. The two main issues buyers now face when it comes to replacements are affordability and availability. Many people looking to upgrade to something newer find the prices of high-quality replacements simply too high for their budget. And even if they can afford a new ride, they’ll be faced with the options of either paying a high price for a car that’s available now, or waiting several months for some sort of factory order.
Given the difficulties of buying a replacement, I don’t think it’s really helpful to look at a repair-to-vehicle value ratio. The most important thing is to research what kind of repairs the car will need, how much it will cost and how much longer life that investment will give you.
For example, if you have a car that is worth $10,000 and needs $5,000 in repairs, historically it probably isn’t worth it. But if you look at what else you can get for $10,000 and those options seem risky, it would be wiser to spend half to get a few more years out of your current ride. On the other hand, some cars are so distant that any further investment in that vehicle is better applied to something else. That’s why it’s critical if you’re not mechanically inclined to have a reliable mechanic who can give you an honest assessment of what to do. In the same vein, it is having the mechanic explain what repairs are critical versus what repairs are recommended. Sometimes you can spend a little bit to get the car up and running so you can save some time.
The other factor in the repairs if you choose to repair the car is the availability of the parts. I’ve had a few customers who planned on doing an affordable and “easy” repair on their current car, but a critical part was on backorder for months. Needing a vehicle to get to work, they didn’t have the luxury of waiting and jumped into the auto market.
The big takeaway here is that now is not the time to cut corners on your maintenance, because you have a functional car, it’s usually best to keep it as long as possible. On the other hand, if you think you might be looking for a replacement in the future, now is the time to come up with a plan because it could be several months before that new car arrives, and you don’t want that to be in a position where you have to scramble and either pay too much or get something that isn’t ideal.
Tom McParland is a contributing writer for Jalopnik and runs AutomatchConsulting.com. He takes the hassle out of buying or leasing a car. Do you have a question about buying a car? Send it to [email protected]