Are Car Repairs On Old Car Worth It

9 Min Read | Aug 26, 2022

Your car has been in the shop more than in your driveway lately. And you have another big repair on the horizon. Yous're ill of sinking money into information technology, but y'all're non certain what to do next.

Do yous keep throwing cash into it and promise information technology doesn't pause downwardly over again? Or do you sell it and employ that money toward another ride? Information technology'south a big determination.

The first step in solving a dilemma similar this is to do a trivial math. Don't worry! We'll walk you through it stride by step. Your calculations will indicate yous in the right direction and assist take the stress out of your controlling!

And the best part? After y'all decide what to practice, nosotros'll prove you how to relieve money for the repair or your next car. Check it out, and then get dorsum to your life—and all the places it takes yous.

Should I Repair or Replace My Car?

Before we get into the numbers, it's important to call up at that place's always a spectrum when it comes to car repairs. Meaning the math can only prove you and so much—like whether you're leaning more than toward a repair or replacement. Other factors, such as repair frequency and what y'all owe on your auto, come up into play likewise. Proceed these in listen as y'all're running your numbers.

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Okay, time to get started. First, guess the value of your car (without repairs). Sites like Kelley Blue Book or Edmunds are adept examples of resources that tin can help you with your estimation.* Just for statement'due south sake, let's say it's $5,000. And your estimated repair is $ane,000. Nosotros'll say for this example that the repair volition bring the value of your car upwardly to $vi,000. That may non be the case in every situation, depending on the overall condition of your machine and the blazon of repair. Your mechanic should be able to requite yous an idea of how much value your repair volition add together to your motorcar.

So in this example, if you had to sell your car immediately afterwards the repair, you'd nevertheless recoup the money you but put into it. In this example, you're probably leaning more toward a repair. Now, if this is your commuter automobile and you're getting to work tardily one time a week thanks to a breakdown, it might be fourth dimension to evaluate what these repairs are actually costing you—in terms of headaches.

On the other mitt, if that initial mechanic bill was closer to $two,000, and the value of the automobile increased to only $six,000 with the repair, you're likely leaning toward selling the car and putting that money toward another car with your $7,000. That way, you lot're substantially getting a improve motorcar for the same money.

Owe more than on your machine than it's worth? Hither'due south what to do about your upside-downward car.

If You Want the Ready: 6 Steps to Pay for Car Repairs

Decided to become ahead with the repair? Your next result is paying for it—because it's probably going to cost a not-so-dainty chunk of change. But what if yous don't have the cash on hand to pay the bill? That'southward okay. Here are half dozen steps to finding the money you lot demand to fund your repair:

Step 1: Store around.

Don't accept the first quote you're handed. Get the initial diagnosis from a trusted dealership or a larger mechanic shop, but don't assume their price is the price. The majority of your cost is probably not parts, but labor. And it'south well-nigh always higher at larger, more than established shops.

To find a reliable mechanic for a lower cost, enquire a few friends where they become for trustworthy work. And so phone call effectually to find the best price. While you're on the telephone, inquire almost whatever current discounts and specials they might offer too.

Step 2: What can you do yourself?

Peradventure you need new brakes, but y'all also need to replace the door handle that came off this morning.Why non get the brakes fixed at the shop, and notice an after-market replacement for your door handle online? Then watch a YouTube video and prepare it yourself. Just be certain to follow the directions very carefully.

Pace three: What tin can expect?

If the estimated repair is however out of your condolement zone, ask the mechanic what needs to be fixed now and what tin wait a few months. Don't skip important safe features like brakes, tires and timing belts. Simply you can live without automatic windows for a while.

Pace 4: Brand a upkeep.

Permit's say you've lowered the repair price as much as possible. At present it's fourth dimension to find the cash to pay your bill. We recommend making a zero-based budget before you kickoff overturning your couch cushions in search of loose modify. You tin make a budget in nearly ten minutes with our favorite budget app, EveryDollar. It's gratis, and information technology'south a way less labor-intensive than digging through your sofa.

Pace v: Move your money.

If y'all're still coming up short, no trouble. Simply punch your budget back in nonessential areas like restaurants, haircuts and new wearing apparel. You lot can also divert your savings temporarily. And every bit a very last resort, you can utilise your emergency fund for absolutely necessary repairs. Just restock it every bit soon equally possible.

Stride 6: Budget for future repairs.

Ensure this issue doesn't happen to you again by creating a line particular in your budget for future car repairs and maintenance. That mode, the money will exist at that place waiting for you when you need it—and you will.

If You lot Desire a Replacement: Should You Lease, Buy New, or Buy Used?

Let's say you lot've decided it's not worth it to repair your current machine. Y'all're ready for something else. While it's tempting to desire your next car to be new and under warranty (read: no repairs!), the last thing you want to practice is head to the nearest new car dealership. Here's why:

New Cars.

The depreciation on a new vehicle is jaw-dropping. A $twenty,000 car volition be worth about $8,000 in v years.^[1] That's a 60% subtract! Even afterward only one yr, the car could become down in value as much as 25%. So unless you accept a net worth over $1 million, don't buy new—ever. Allow someone else blot the depreciation.

Leased Cars.

A lease is simply the most expensive way to operate a car. Every month, your lease payment goes to cover the car's depreciation plus the dealer's profit. At the end of the lease, you have nothing equity in the car, simply you practice have the option to buy it. That may or may not be a good deal since the purchase price is set at the beginning of the lease and isn't based on the actual value of the car at the terminate of the lease. So at that place are the fees—a fee y'all'll pay if yous exceed a certain number of miles or have excessive wear and tear on the automobile, a fee you'll pay if you determine not to buy the automobile when your charter is up, and a fee you'll pay if you practise determine to purchase it. All that adds upward to a good bargain for the dealer—non for y'all.

Used Cars.

Your best bet is to buy an affordable, used car with the money you have saved (combined with the cash from the sale of your current car). That way you own the machine, rather than it owning you. Used motorcar doesn't mean crap car; information technology just ways you're smart plenty to let someone else pay for that initial drop in value. Buying used is the but way to go.

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How to Pay for a Car in Cash

Don't go into debt for a car. It's just non worth it. That will only give you more grief downwards the route. Remember, all cars need repairs and maintenance eventually. With a loan, you lot'll have a monthly automobile payment and repair bills on top of that.

Don't go into debt for a car. Information technology'southward just not worth it.

So how exactly do you live without a car payment and still go the car of your dreams? The cardinal is in your approach to saving money. Hither'southward a strategy we dearest:

1. Save Your Automobile Payment.

Get ahead and buy the car you tin can afford with the cash you lot have on paw—let's say it's $5,000. That can get you around for at to the lowest degree 10 months or and so. So take $500—the average monthly payment on a new car—and relieve it every calendar month.^[2]

two. Sell Your Car and Combine Your Savings.

After 10 months of doing that, you'll take congenital your car-buying budget back upward to $5,000. Add that to the cash you get from the sale of your current car (permit's say $4,000), and you have $ix,000 for a new ride. That's a major upgrade in car in but 10 months—without attributable the banking concern a dime!

iii. Keep Saving and Upgrading.

Merely the fun doesn't have to end there. If you lot keep consistently putting the same amount of money away, 10 months later you'll have some other $five,000 to put toward a motorcar. You could probably sell that $ix,000 vehicle for a little less than you lot paid 10 months before—meaning you'd likely have effectually $xiii,000 to pay for a car, just xx months after this whole process started.

Pay for Car in Cash

The bottom line is this: There's a lot you could do with an actress $500 a month!

The less money you're spending on your car, the more money y'all have to put toward more than important things, like your kids' higher fund, your retirement, and paying back those old pupil loans. It'southward okay to own a nice car—just don't let your car ain you.

In fact, don't let whatever of your stuff—or even your coin—own you. You're the 1 in charge here! Yep—you lot. If you want to larn how to accept control of your money for skillful, give Ramsey+ a test-drive. You'll get all the tools and all the teachings you need to make your coin work for you lot, instead of the other fashion around. And right now, you can try Ramsey+ in a free trial. Nail.

*Kelley Blue Book and Edmunds are not in any way affiliated with the publisher of this content. The site links provided are for reference only and not an endorsement of any product or service. No warranty or representation is made regarding these third party sites or services.

Ramsey Solutions

Well-nigh the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, abound their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our fiscal advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well every bit two syndicated radio shows and 10 podcasts, which have over 17 meg weekly listeners. Learn More.