That old car used to run well, but now it’s become a money pit. Major parts are breaking down. It’s leaking oil all over your driveway and the exhaust cloud has a bluish hue to it. This might be time to get rid of your old vehicle and get a new one. But when is a good time to do this?
The Tipping Point
Deciding when to sell your old car and buy a new one mostly depends on personal preference. You may just want something new even if you can squeeze a few more miles out of the old one. But major damage like a blown engine, a transmission that won’t shift or a front end that chews up tires because it can’t hold an alignment can make the decision to sell the car easier. If it often leaves you stranded or the only way you can start it is with jumper cables, it’s time to get a new car. Safety issues are important, too. If your floorboards leak and exhaust fumes get in the car, it’s definitely time to replace it.
Choosing a New or Used Car
New cars start at nearly $12,000 with payments normally spread over two to seven years. Once you drive the car off the lot, depreciation happens quickly. A good used one is cheaper and won’t depreciate as much, though you likely won't get a longer-term loan. If those numbers don't fit your budget, repairing your car may be your only option.
Look at what you spend per month for auto repairs, including those you’d like make if you had the money. Compare that with the monthly payments for a new car. If the repair costs are higher than that, it’s definitely time to get a new one. However, even an engine overhaul will cost less than a year worth of monthly payments. If a repair costs more than the car’s Kelley Blue Book value, consider replacing it.
Advantages of an Older Car
As long as it still runs without leaving you stranded, owning an older car has its advantages. Insurance costs are cheaper across the board and you seldom have to worry about getting collision coverage for that battle-scarred vet. With a new car, you’re required to pay for full coverage as long as you’re paying for the vehicle. Chances are you own the older car outright, so you’re saving money on payments. Cars normally last for about 200,000 miles and the Federal Highway Administration reports the average motorist drives 13,000 miles per year -- that’s 15 years of use.
Doing Your Own Work
If you know how to fix it, you’ll save even if your car needs frequent repairs, A decent mechanic with enough driveway space can change his oil, swap out the spark plugs and replace an alternator. Buying the part from a parts store is a lot cheaper than going to a garage. Picking up these skills can delay the need to replace your car.
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