You’re driving your car and you pause for the stoplight. Your car is already 10-year old. It has scratches, stains, major signs of usage but you don’t want to let go yet. The stoplight goes green but your car does not move – yellow and red flashes on the panel and the car restarts reluctantly. Suddenly, it feels bad and expensive. Is it time to buy a new car? Or can I still repair it?
Here are some of the guidelines to help you with your decision-making process:
Get a car repair estimate
- Bring your car to your trusted local mechanic instead of the dealer. Dealers tend to charge more than the usual.
- Upon knowing the estimate, check with the mechanic if there are other alternatives to make it cheaper – rebuild, salvage parts, etc.
- Lastly, ask the mechanic if the repair will extend the life of your car. If it’s just a band-aid solution, then it is not worth the repair as you will keep on coming back for more in the future.
Run the numbers
- If the cost of repairs is greater than either the value of the vehicle or one year’s worth of monthly payments, it’s time for another vehicle.
Consider other factors
- While holding on to your car as long as you can maybe a financially-wise decision, you should also connsider other intangible factors such as – Are you worried you’ll get stranded when your car breaks down? Will you always be late for work because your car is unreliable? Is your car still safe to drive? Or do you still like looking at it? While these factors are based on emotions, don’t ignore them. Life is too short to be stressed out on your car.
- Buy a new car that’s less expensive. Want a Ford Fusion? You may consider a Ford Focus that is $3-4k cheaper?
- Buy a used car. You have used your Mazda 3 and has been good for you for so long until it needed major repair? Consider buying a newer used model – way cheaper than buying a new one from a dealer.
- Set a target date for buying a new car. – You opted to repair your car instead? Save up while living with your car for another year or two.