You thought your car was cruising until it wasn’t. The repair bill sent you into sticker shock. You’ve been hit with every car owner’s dilemma: “Do I repair or replace my car?” With so many variables to consider, you wonder at what point does car maintenance become more expensive than it’s worth?

It’s never a simple decision, but a few rules of thumb can help you sort out math from myth. The time will come when it’s time to trade in that pumpkin for a carriage. However, if you don’t have a fairy godmother, here are the hard numbers you need to calculate your true cost of car ownership.

Repair or replace my car?

  1. Your vehicle’s worth. The age, mileage, and condition of your current vehicle gives you a starting point for making this major decision: do I repair or replace my car? Check the usual sources: Kelley Blue Book or Edmunds. They’ll give you unbiased estimates.

    Also, is your car paid off? If your repair is less than the value of your vehicle, your answer to “Should I repair or replace my car?” is to make the repair. The general tipping point between repair and replace is when your repairs are more than half the value of your vehicle.

  1. Repair bills. Gather your repair bills for the past year and divide by twelve. How does that amount compare to the car payment you would be making if you bought a vehicle? If the repairs are more than a car payment, your answer to “Do I repair or replace my car?” is “replace it.”

    Another way to consider whether to repair or replace your vehicle is to take the current repair bill and consider whether it’s more than half the value of the car.

    Complicating matters, you also need to consider how much the repair adds to the extended life of your vehicle. Will you be back to the repair shop soon, or will the repair keep you running for another year? It could be a toss-up whether to repair or replace.

  1. Routine oil changes and other scheduled maintenance costs are part of your annual cost of owning and operating a vehicle. If you’ve neglected routine maintenance, you could be adding to your repair costs. Stay on track. It’s money well spent. But do add this expense to your annual cost of operation.
  2. Other operating costs. Consider what you’ll need to pay for the license, registration, insurance, and gas for a new vehicle compared to your current costs. New vehicles can be more expensive to license and insure. But safety features such as blind spot warning and collision avoidance systems could help reduce your costs.

    Math helps in determining an answer to that vexing question, “Do I repair or replace my car?” When you have a tight budget, you need real numbers. You need to take a hard look at your budget before you take on car payments.

Sentimental value

Parting with and shopping for a car is fraught with emotion—anticipate it! Your emotional attachment to a car is real:

  • Your first car
  • The car you brought your first child home from the hospital
  • Your coveted “I’ve arrived” dream car.

It’s hard to let go!

Doing the math helps you put your emotions in the proper perspective because numbers don’t lie. You know the answer to “Do I repair or replace my car?” is to replace it.

The numbers to buy

Even when the numbers tell you it’s time to buy a new vehicle, you might want to repair your vehicle. Consider these questions in addition to “Should I repair or replace my car?”

  • What can I realistically afford as a monthly payment?
  • How much do I have for a down payment?
  • What’s my current credit score?

You need a reality check. You don’t want to delay buying a new or new-to-you vehicle to the point that your car completely breaks down. You want to be in control of the timing!

But making one more repair can buy you time to get your finances in order. Use the time to save up for a down payment. Also pay off debt to improve your credit rating.

And come see a loan officer at United Financial Credit Union before you shop for a new vehicle. Our process is simple. We can assist you with a loan application and pre-approval. That way, when you go shopping for new wheels, you know what your budget allows.

When you’re ready to replace your car, come see us!