If your car keeps making that rattling noise that just won’t quit, you might be wondering: Should you pony up and pay for the repairs? Or are you better off buying a new car?
The answer depends on your situation. After all, you don’t want to waste money fixing a car that will need to be replaced soon, but you also don’t want to splurge on a new ride if your car has a few good years left on the road.
To help make your decision, ask yourself these questions:
1. How frequently are you going in for repairs?
The cost of auto repairs can add up quickly. If your car’s list of problems is constantly growing, it may be time to consider buying something new.
On the other hand, if you’re facing a one-off maintenance issue, or an expense associated with normal wear and tear—for example, purchasing new tires—this comes with the territory of owning a car. If your car is only a few years old, you probably don’t need to buy a new vehicle yet. But you may want to set money aside in a rainy day fund so that you’re prepared to pay for the occasional repair.
2. Would repairs cost more than the value of your car?
Check the Kelley Blue Book to find the approximate value of your car. Then, consider the cost of repairs against the value of your vehicle. If you’d spend more money replacing the breaks than your car is worth, you’re probably better off buying something new. But if you have a newer car, it may be a better deal to pay for repairs than to start browsing the latest models on the lot.
To determine how long you can expect your car to be roadworthy, ask a trusted mechanic to examine it for problems. This appointment is a small price to pay for peace of mind, or for confirmation that it’s time to consider a new car.
3. Have car troubles endangered you or your family?
If frequent car trouble has left you stranded, late to work, or stalled in the middle of the road, it’s time for a new vehicle, according to Edmunds. Ultimately, your safety is worth more than trying to save a few bucks.
4. Does a new car fit into your budget and your lifestyle?
Whether you’re looking at buying new or pre-owned, consider if you’re ready for everything that comes with a new car: Can you afford the monthly payment? Would your insurance premium increase? What kind of loans and interest rates are available?
Do your research before you kick your old car to the curb and make sure that a new vehicle fits within your budget and in your lifestyle.
Money can be a source of stress even in the best circumstances, but add in a global pandemic and...
Buy now, pay later—no credit card required. Online loan companies like Klarna, Afterpay and...
Many of us are feeling anxious about our finances right now. A recent survey found that 60...