Are Repair Costs for an Old Car Worth It? How to Decide
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You’ve had it with your old car. Maybe it’s made you late for work one too many times, or your mechanic just gave you a costly estimate for the latest repair job. Any day now, you’re afraid it could send up puffs of smoke and stop working altogether.
Some days, it seems like you’d be better off dumping the old car, and getting something newer and nicer that doesn’t come with high ownership costs.
Your cost to repair a high mileage car
Older cars – those with 100,000 or more miles – typically need more maintenance than newer models. For example, in this 2016 survey from Consumer Reports, a Toyota brand car got by with only $50 in Year 3 of its life. By Year 10, a Toyota owner could be spending $420 per year in repairs.
Compare maintenance and repair costs for these popular brands when the cars are in their third year, as compared to costs in their tenth year.
|2016 maintenance and repair costs (previous 12 months)|
|Brand||Year 3 costs (2014 model)||Year 10 costs (2007 model)|
You may be able to keep your maintenance and repair costs on a high mileage car below these averages if you play it smart. According to automotive expert Lauren Fix in New York, also known as The Car Coach, you might save up to $1,200 per year in car repairs just by following your owner’s manual and paying attention to problems before they become major issues. “Don’t say, “I heard that squeal in the brakes, and I kind of waited because I wanted to buy that purse,’” said Fix.
To save even more money, consider learning to do oil changes and other basic car maintenance yourself. For repairs and maintenance you can’t do, find a mechanic you trust who will give you good advice and a fair value for your money.
7 factors to consider before repairing your high mileage car
Consider these things before you spend more money fixing your old car or buy a new one:
- Is your old car safe? Some factors are more important than others. “I don’t care what you’re driving, safety has to be the number one factor,” said Fix. “If you’re driving an unsafe car, get rid of the car.” Don’t take chances with bad brakes or other safety related problems.Fix also warns that you should immediately get rid of any car if you discover it has been flood damaged. Water and electricity do not mix, and in a flood, the car’s safety systems are compromised.
- Is your car reliable? A car that makes you late for work can jeopardize your job. A vehicle that breaks down and leaves you by the side of the road late at night could put you in real danger. And if you have to take a ride share when your car breaks down, you’re relying on someone else’s car to be safe.
- How much do the repairs cost? The rule of thumb, according to Fix, is that you shouldn’t spend more on repairs than the value of your car. “You don’t want to put $8,000 into a $6,000 car,” she says.On the other hand, if your car still has significant value, you may have to fix the car in order to sell it or trade it in for what it is worth. Once you’ve made the repairs, you may decide to drive your car a while longer, unless you think it’s likely to need additional repairs again soon.
- How do annual repair costs compare to the costs of owning a newer car? Repair bills are annoying when you have to pay them. However, they are almost never the most expensive part of owning a car. The largest annual expense of a car is usually depreciation, or the amount of value that the car loses every year. Cars depreciate rapidly during the first years of their lives. If you factor in depreciation expenses on a new or newer car, your cost of ownership for a new car will usually be far higher than any amount you might spend repairing an older car.Is this the best time for you to buy a car? Look at your income and expenses, available cash for a down payment, and your total financial picture. Determine how much you can afford to spend. If you really can’t afford to buy a better car, consider keeping the old car. Waiting long enough to save up for a bigger down payment, or even the full purchase price of a car, can make a big difference in your financial security in the long run.You shouldn’t generally buy a car right now if you are facing job instability or other potential changes in your life that could make it difficult for you to pay your bills in the near future.If you intend to buy a car on time, make sure you have an optimum credit score before you go car shopping. Yes, you can get a car loan with lousy credit. But you will pay higher interest if you do, and you may even pay more for the car itself.
Check out all your options before you decide how to finance your car. Don’t just take the financing at the dealership without shopping around. If you have a higher credit score, you may want to consider a personal loan, a home equity line of credit (HELOC), or other financing deal, depending on your situation. Be cautious with secured loans, such as a HELOC. If you fall behind on payments, you could lose the collateral you put down. In the case of a HELOC, you could lose your home.
- Should you opt for a used car? Just because you need a different car doesn’t mean you should rush out and get a brand new one. Take your time, and do your research if you really want a reliable, economical car with low maintenance and repair expenses.Compare car costs before you decide whether to buy your car or keep the old one. Be sure to add up all your costs to purchase a car, including dealership fees and sales tax. Don’t forget insurance costs. A newer, higher value car generally costs more to insure than an older one, although insurance costs vary by model and other factors.
- Would you rather have predictable car payments, rather than unpredictable expenses? Owning a car that breaks down frequently is financially stressful. You can expect a new car to generally have fewer repair bills on average. It may even be under a warranty or service contract. And at least you can predict how much your car payments will cost every month.Remember, however, that even new cars can need repairs, and all cars require maintenance.
- Do you really just want a new car? If you’re being 100% honest with yourself, and you can afford a new car, go ahead and shop for a car, guilt-free. Just don’t try to convince yourself, or anyone else, that you’re buying a $40,000 new car to avoid paying $2,000 in repairs on your old one.
Is it time for a new car?
If you always trade cars in too soon, you’ll be holding each car during its early years, when it is depreciating rapidly. If you tend to keep cars too long, you risk frustration, or even unsafe and unreliable transportation. Somewhere in between the two extremes, you may keep your car just the right amount of time to get the most practical value from it, and then sell it and buy the next one when you decide it’s the right time for you.