Should I Repair or Just Replace My Old Car?

I love my car, but it's getting on in years. It's paid off, which is great, but even routine maintenance now runs me a few hundred bucks, and the mechanic is always upselling me on additional repairs that are hundreds more dollars. Is it time to just retire my ride and buy a new car, or should I stick it out for the long haul?

It can seem like a fine line between when your old, well-loved car is costing you more money than a new one would, but it's not difficult to make the call here. Part of it is math, and part of it is just taking a good look at your personal situation. In the end, both factors should determine whether a new (or new to you) car is in your future, or you should stick with your tried and true ride until the wheels fall off.

Do the Math: How Much Are You Paying in Maintenance?

The first, and perhaps biggest question you should ask is how much are you paying in repairs? Even a couple hundred dollars in regular maintenance every several months is less than any new car payment would be, even if you bought a used vehicle (assuming you didn't pay cash on it and buy it outright). In your case, your car is paid off and completely yours, and the only costs it incurs are fuel, insurance, and maintenance. Assuming that your fuel and insurance costs wouldn't change significantly with a newer vehicle, you're probably not paying so much in maintenance that it would make sense to buy a new car.

The picture gets a little murkier if your car isn't completely paid off: if you're still making car payments and you think that your maintenance costs are higher than another vehicle with a similar payment, you may be better off getting a new car, but you'll lose any money you've already sunk into paying off your existing vehicle. It may fit into your budget, and you may save on some of the maintenance costs (since you'll certainly incur new maintenance costs with a new car), but unless you feel like you're spending so much on maintenance that your car is a lemon, you're not going to save money by trading out for another ride.

If you're looking to save some cash on regular maintenance, the best way is to start doing some of it yourself. Simple things you probably pay a dealer or a mechanic for, like changing your oil, checking your fluids (and adding more when levels are low), changing spark plugs, replacing air filters, and more are all things you can easily do yourself with a little research first. Google your car's make, model and year, or just check out your vehicle's Haynes manual for a wealth of information on how to do your own repairs. Odds are someone online has detailed instructions on how to do the work you need done, and some things—like changing oil or replacing an air filter—are so simple you'll be surprised you've been paying someone else to do them for you.

More Math: How Much Do You Pay in Repairs?

Of course, bigger issues that you're not comfortable handing on your own (or that you don't think are worth your time versus your money) should be handled by a mechanic that you trust. In your case, it sounds like your mechanic is trying to squeeze you for dollars, considering every time you take your car in, they try to upsell you on more repairs that you may or may not need.

One of the worst tricks I've seen—and this is usually at car dealer service bays—is the "free 100 point inspection" that comes with your vehicle's scheduled maintenance. It's billed as a favor, but it's really just an upsell opportunity for the service bay. They inspect your vehicle (that part's fine) and then come to you with a laundry list of work they'd like to do. We've shown you some ways to avoid getting ripped off like that before, and our friends at Jalopnik have some great tips to find a good, honest mechanic, but keep your eyes open. Part of the reason you may be considering a new car over your current one is because you're just paying too much for repairs or getting ripped off when you get maintenance done.

If the repairs are legitimate though, here are some things to keep in mind:

• Is the repair less than a few months' car payment on a new vehicle? If the repair is less than a single month and your vehicle is paid off, it's a no-brainer. If it's less than a couple of months and you think that you'll be able to go a few months without additional repairs or maintenance costs, it makes sense to go ahead and get the repairs done as well. Where you start running into trouble is when you have to chain expensive repairs every few months. For example, a $300/month car payment versus a $1200 repair every four months evens out pretty quickly. Again, you have to add regular maintenance into both scenarios, but repair-wise, it starts to make sense to get rid of a car that's costing you that much every four months in costly repairs. Then again, if you have a car that's setting you back that month every four months just in repairs, you probably already know you have a problem.
• Is the repair less than half of the car's market value? If the answer is yes, then you're better off doing the repair. For more sporadic repairs or maintenance you may have neglected, if you take your car to a mechanic and they quote you $1500 on a vehicle that's worth $4000, you're probably still better off getting the work done. If you know your vehicle is only worth about $2000 however, it probably doesn't make much sense unless you can spread those repairs out over a period of time that makes it worthwhile (and also increases the trade-in or sale value of your used car) or get a bargain on them. If you're not sure of the market value of your car, check Edmunds' True Market Value calculator or its Kelley Blue Book value here.
• Consider how long the repair will add to the life of your car. In the previous example, even a car that's only worth $2000 can be worth getting a $1200 repair on if you know that the repair will extend the life of your vehicle longer than you would normally pay that $1200 off in new or used car payments. If you know the repair is something that's only a once in awhile issue, and will add a few years to the life of your car, it makes sense to get it done.
• Check for recalls before getting any repairs done. Our own Thorin Klosowski, who's been known to keep aging vehicles running himself, explained that he can't stress the importance of checking for open recalls on your vehicle before you get any repairs done. You may wind up paying someone to fix something that a dealer will repair for free, and in the course of a recall repair you may get additional parts that needed replacing anyway. Getting all of your recall work done—especially if you haven't checked recently—can extend the life of your used car by years.

If you're still weighing the issue, AGCO Auto has a detailed calculator on their site that can help you weigh the costs of keeping your car versus buying a new one.

How Much Is Your Peace of Mind Worth?

Of course, there are no guarantees that a new (or newer) vehicle won't break down or have the same repair costs that your current one has, but odds are it won't. You do have to consider some of those "softer" costs and benefits that come with owning a newer car.

For example, you may get a warranty that will cover early repairs, and all you have to worry about is regular maintenance. You'll ideally eliminate the back-and-forth to the mechanic that comes with high-mileage cars, and you'll probably get a safer, more up-to-date, more fuel-efficient vehicle by getting something new. A newer vehicle will be more dependable than your older one—and depending on how old that older one really is, you won't have to worry about it breaking down on you spontaneously and leaving you on the side of the road when you need to get somewhere. Dependability and reliability are worth a lot, at least mentally and emotionally.

At the same time however, if you have a good, honest mechanic, and the repairs you elect to do add years of life to your current car, your current ride can be just as reliable and dependable as a new one. The average age of a car in the United States is over 10 years now, higher than it's ever been before, and with the right care and maintenance, yours can easily last as long or longer. Plus, since yours is all paid off, there's no reason you should be in a hurry to walk into a new or used car loan that'll result in a monthly payment.

Finally, Consider Your Budget

Finally, think about your budget: if you're having a hard time paying for those costly repairs now, how will you be able to easily fit a car payment into your monthly expenses? Even new cars sometimes have unexpected repair costs. There's a big difference between a $2-300/mo car payment and a $500 out of the blue repair, but if you don't think you can fit a car payment into your budget, your question has answered itself.

Edmunds has a great breakdown of both sides of this debate here. One thing we'll reiterate though: Don't let a broken down car make the decision for you. You should definitely try to make the call to get a newer vehicle before your old one gives out completely. Sure, a catastrophic breakdown or a total will make the decision for you, but ideally you shouldn't have to wait for that to happen to plan for the future.