If you have an old vehicle, you might be getting frustrated with a frequent need for repairs or a lack of features that new cars have. If that’s the case, you might be itching to ditch your old car and get a new one, especially with maintenance and repair costs outpacing inflation over the past year. On average, consumers spend $838 each time they get their car fixed, Kelley Blue Book reported.
However, the cost of buying a new or used vehicle is also getting more expensive, and in many cases, the most economical way to be a vehicle owner is to keep your car for as long as possible. Even if a repair bill seems like a tough pill to swallow, it can quickly pay for itself.
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But there are times when it makes more sense to retire your old car and buy a new one — sometimes for strictly financial reasons and sometimes for what aligns with your personal preferences. Every situation is different, but here are some general signs to watch for.
The Costs of Repairs May Exceed New Car Payments Over Time
Get specific about comparing the costs of repairing versus replacing your vehicle. Divide the cost of the repair by the cost of car payments you would likely incur on a new vehicle. To be as precise as possible, consider total costs of ownership, including insurance and fuel costs. Then, see how long it would take for those new car payments to exceed the cost of a repair and other ownership costs of your old car.
For example, if you face a $6,000 repair bill and expect to spend about $500 per month on a new car, then you would generally need to keep the old car for over a year for the repair to be worth it. If that seems unlikely, then consider retiring your car.
Unfortunately, this isn’t a clear-cut calculation, as you need to consider many factors that often involve some guesswork. Aside from planned maintenance, you don’t know exactly what future costs will be.
However, if the car’s service history or condition suggests that it won’t last long enough to recoup the repair costs before running into new issues, then you might be better off making the switch, according to Mike Maleski, automotive instructor at Rosedale Technical College in Pittsburgh and shop owner and technician at PSK Auto Repair.
“You never want to throw good money after bad,” he said. “I’d be more resistant to making a large investment in repair on a vehicle that has a track record for not being very reliable for a particular age and mileage.”
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You Have Expensive Upcoming Maintenance
Expensive upcoming maintenance doesn’t automatically mean that you’re better off retiring your old car, but it could be the tipping point. For example, if you’re due for new brake pads or a timing belt, you might not want to pay for that versus what you would get with a new vehicle.
Sometimes this is a financial decision, where a new vehicle has less upcoming maintenance for the period you’re likely to own the car. In that case, the total cost of ownership of the new vehicle could be less than the old one, Maleski said. But it can also be more about what you’re comfortable with. For example, a new vehicle might have more safety features that you’d prefer to have, according to Maleski.
So if you know that in six months you’ll likely have a large maintenance bill, you might prefer to sell the car now, get what you can for it and put that money toward a more modern vehicle you’re comfortable with.
You’re Making Lifestyle Changes
In addition to factoring in safety features, you might consider any recent or upcoming lifestyle changes that affect whether holding on to your old car is personally worth it, Maleski said.
Sometimes this is simply about personal preferences, like upgrading from a sedan to an SUV if you’ve gotten into kayaking, he said. If you can afford it, you don’t have to continue putting money into a car that no longer fits your lifestyle.
Or maybe your family size is changing. If your kids are going to college soon, maybe you can switch from an SUV to a sedan. In that case, you might save money by selling your old car and buying a lower-priced compact car. Here too, upcoming expensive maintenance or a large repair bill might tip the scales toward making a change.
Consult Experts To Make Your Decision
Ultimately, however, there’s no universal answer as to when to retire your old car. It varies by situation and can include a mix of personal and financial factors. It’s not an easy decision to make, so consider turning to trusted experts.
Ideally, you’ve built up a good relationship with your mechanic, whose opinion you can trust when it comes to weighing whether a car is likely to last long enough to make the repairs worth it. While to some extent a mechanic might be incentivized to suggest making repairs, keep in mind that their business might be better served by keeping you as a happy customer, meaning they’ll want to give you their honest opinion.
“This topic comes up daily in repair shops. As a mechanic and instructor, I really preach integrity and honesty and trusting the professional to help you with this decision,” Maleski said. “They say a vehicle is the second largest investment we make in our life, and it typically doesn’t have the best return on investment. So having a professional opinion is critical.”
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This article originally appeared on GOBankingRates.com: I’m a Mechanic: 3 Signs It’s Time To Retire Your Old Car
