If you’re an automobile owner, you’re probably familiar with the thrill that only comes when you realize your car needs repairs. If your car is an older car, though, this thrill is eclipsed by the question of whether spending the money to repair your car is worth it, or if you should buy a new car instead.
Unfortunately, there’s not a hard and fast answer to this question. However, there are some guidelines you can use to figure out whether your car is worth repairing or not.
Benefits of Fixing Your Old Car vs Buying a New One
The biggest benefit of fixing your old car instead of buying a new one is that it’s cheaper. Even a pricey repair like having to replace your transmission won’t come close to the money you’ll have to spend to buy a reliable new car. While an auto loan will make buying a new car more affordable, you'll still have to make monthly payments until your loan is paid off.
Paying for a car repair can also help you avoid having to buy a new car before you’re ready. Even if your old car is on its last legs, repairing it can give you some much-needed breathing room to save up money and search for a new car that meets your needs at a good price. This can potentially save you thousands of dollars.
Benefit of Buying a New Car vs Fixing an Old One
Of course, buying a new car also has some benefits. The biggest benefit is the peace of mind you’ll get from not having to constantly worry about repairs. This is especially true if you get a new car, which almost always comes with a warranty that covers any issues you have for the first 36,000 miles or three years, whichever comes first.
You might even be able to save money if you get a car with better specs than your old one, especially the miles per gallon rating. If you get a car with a higher MPG, you’ll end up saving money at the pump—and if you get an electric car, you’ll be able to do away with your gas budget entirely.
When to Stop Fixing Your Old Car
Now that you’re aware of the benefits of each option, the question of when to stop fixing your old car and use the money as a down payment for a new one still needs to be answered.
The first thing you should consider is the cost of the repair. If the bill will be over half of your car’s value, you should start thinking about whether you want to invest your money in a newer, more reliable vehicle instead of trying to keep your old one alive.
You should also think about getting a new car if you find yourself taking your old one to the mechanic’s more and more often. Even small repairs can add up over time, and the more often your car is in the repair shop, the less it’s able to transport you and your family to work or school. It’s also worth pointing out that if your car needs frequent repairs, the odds that it will break down on you when you most need it are a lot higher.
Having said all this, you’ll need to make sure you can actually afford a new car, or at least have enough money in your budget to make a monthly auto payment. If now is not the best time to buy a car, you’ll need to bite the bullet and pay for the repairs. Once your car is fixed, though, you should probably make saving for a new car your next financial goal.
Repair Your Current Car or Buy a New One With First Alliance Credit Union
Deciding whether to buy a new car or repair your old one isn’t an easy decision. You need to consider how much the repairs cost, the value of your vehicle and weigh the expense of buying a new car against the peace of mind you’ll get from owning a more reliable vehicle.
No matter what you decide, First Alliance Credit Union can help. Get a pre-approved auto loan if you’re ready to buy a new vehicle, or open up a personal line of credit if you need some cash to keep your old car running. You can even use our online banking platform to check your balance and make payments on either of them.