When do you junk a car rather than keep fixing it?
A reader asks…
I think this may be a personal preference. Ive heard some say that you should junk it when repairs cost more than the car is worth, but this happens all the time. How many time someone has a car that if they sold it on the street would get like 2000 dollars for it and then one or two things go and they spend 800 dollars for labor and repairs.
what do you think?
See answers below
4 Responses to “When do you junk a car rather than keep fixing it?”
When the cost of repairs (on a monthly average basis) exceeds the cost of replacement, it is time to replace the car.
For example, if you have a car that runs well, but needs a new transmission, you take the cost of repair, and divide that by the time that you can expect to continue to use the car after repair. If you spend $1200 on the repair, and can keep the car for another year, that means that the repair cost is $100/ month of use. If you were to replace the car for $5000 and expect the replacement to last 3 years your cost would be about $139 per month of use. This assumes that you will have no repair costs on the replacement car, and we all know that will not happen.
well, I’d spend 800.00 to fix a car worth 2000.00. One thing to consider is how much your car payment would be if you bought a new one. Divide the 800.00 repair cost by that car payment amount. So if your new car payment would be 400.00, the repair is worth 2 car payments. If the repair is gonna last much more than 2 months then it’s well worth it (to me) to get it fixed so I can save more money for the new vehicle.
If you keep having to repair one thing after another and those repair costs are mounting up then you are better off spending that money on a new car with no problems.
Well eventually after so many repairs the car should be in good condition. Why get rid of a old car that has all new parts?