If the cost of car repairs has left a big dent in your savings account, you may be wondering if it’s time to replace your vehicle altogether. Even if you’re dealing with some big repair bills right now, it’s important to take several things into consideration before you decide to outright replace your vehicle. In some cases, it makes total sense to start anew with a fresh set of wheels, but sometimes repairs serve as more of an investment in your vehicle, which could extend its life for a few more years. If you find yourself in the middle of this mental tug-o-war, below are a few things to consider:
Your Vehicle's Maintenance History
Reviewing the total cost of repairs you have incurred over the life of your vehicle can give you a rough estimate of how much you have actually spent on the car, outside of its initial purchase price and car-related expenses, such as gas and insurance. Calculating your yearly average can give you a fair idea of the full cost of maintaining your vehicle — and help you decide whether it is worth that cost.
Your Vehicle's Age
Older cars may end up costing you more in repairs as the years go by, even if they are otherwise reliable and efficient models. You could end up spending more for special parts when the auto manufacturer stops making certain makes or models of vehicles, or end up paying a premium just to locate original parts after a breakdown or accident. In these scenarios, it could pay to replace the car for a newer model so you can keep up with maintenance and repairs.
Discover the Value of Your Vehicle
Finding out what the Kelley Blue Book Value of your vehicle is in its current condition can give you a fair idea of how much your car is worth today and whether it’s a good time to sell. You can also use Carvana’s Cardian Angel
car valuation tool, which renders you an accurate and true value that is completely unique to you and the experience you’ve had with your vehicle in two minutes. Additionally, you can compare your vehicle to similar vehicles on the market to determine a good selling price. If the value of your car is still higher than the average, it may be a good time to sell your vehicle or trade it in and upgrade to a newer model.
Estimated Cost of Additional Repairs
If you’ve taken your car in for repairs or service recently, your mechanic may have shared some recommendations on things you need to have repaired in the near future. Get a cost breakdown or estimate of these repairs so you have a fair idea of how much you will be investing in this vehicle over the next year or two. If you’re not comfortable paying that amount for a car that will only depreciate further in value, it may be time to trade-in/trade up.
Trade-In and Financing Offers Available
If your vehicle has a high market value, there’s a good chance it’ll garner attractive offers as a trade-in. You could also use your trade-in value for a down payment on a vehicle that costs more and finance the rest with terms that fit your lifestyle. This financial move could be just what you need to upgrade to a more reliable and newer vehicle so that you end up spending less overall for maintenance over the next few years.
You’ll need to take several things into account when determining whether it’s time to repair or replace your vehicle, but getting a fair idea of the current value of your vehicle and how much you can expect to pay in repairs over the next year or two can help you make a more informed decision.
Written by Sabah Karimi for Carvana.