How To Decide When It Is Time To Replace Your Vehicle
Cars, they are a necessary evil of life for most of us. They are a liability rather than an asset. They don’t appreciate, but rather depreciate in value. They cost you money every week, with gas, every month with insurance and every year with some form of maintenance. You notice I didn’t mentioned payments, well, that is because I am an advocate of not having a car payment, but for some, they even cost them in a payment every month. Part of my budget is putting away a car payment into savings rather than paying someone else that payment. That way, when it is time for a repair or a replacement, I have the cash to do so.
Both of my vehicles are 2001’s, I purchased one of them new and the other one, which is an Explorer Sport, used and it needs some fix’n up with some maintenance issues. I have had the Explorer for just about 7 years. It was a fairly good deal when I bought it, but I knew it had been driven pretty hard. The issues are really just general maintenance for the most part for a vehicle that has been used hard and has over 100000 miles on it.
So how do you decide when it is worth fixing or when it is time to cut and run? It is a hard decision, especially if you like the vehicle and for the most part it has served you well. However, it is a vehicle, just a hunk of metal that has a purpose of getting you from point A to point B safely and reliably. At the same time, it is a liability and you don’t want the liability to cost you more than it has to. That is where I am with this truck and what brings me to this post. How to decide when it is time to replace your vehicle.
It is not an easy decision and the decision is different for each person depending on the situation you are in. For example, if you have a paid off vehicle that needs repairs and you absolutely can’t afford a replacement but you can afford the repairs, of course repair it. Chances are the repairs are not going to cost you more than a monthly payment for 12 months or more.
On the other hand, are the repairs going to cost more than what the vehicle is actually worth, especially when you add on the cost of previous repairs. The Explorer has been reliable, it is has never stranded me, but, I have made repairs on it in the past, and when I start adding up the cost of the vehicle when purchased, the cost of the repairs to date, and the cost of the current repairs, onto of the cost of insurance, and the age of it, this vehicle is costing more than it is worth, for me, it just may be time to look for a replacement.
Now I know what you are thinking, that a replacement will still cost more than making the repairs, that is correct, that is what makes the decision so difficult, even though I have been saving for this moment, after all, we all know a car won’t last forever. None-the-less I hate to let go of the money, but I would rather let it go in something that is a bit newer and can last another 10 to 15 years, than a car that is already 15 years old and will only last another couple of years at most and will continue to have maintenance issues from here on out . Either way, I will pay, now, or later.
So the best way to determine if you should fix and repair your current vehicle vs replacing it can be done by asking yourself these questions:
- Is the vehicle I currently have paid off? If so, will the repairs cost as much as a monthly payment every month when divided out over 12 months? If so, may be time to consider a trade up.
- Is the cost of the repairs more than what the vehicle is worth and are chances good that based on the age of the vehicle it will keep causing you repairs? If so, it may be time to consider a trade up.
In either case, if you do decide to trade up, I never recommend a brand new vehicle and if possible, avoid car payments, if you can pay cash that is the way to go. Yes I know very few people can pay cash, but you know a car will break down at some point, just like Christmas comes around every year….budget for it on a monthly basis so you are prepared.
If none of the above cases apply, repair what you have. Don’t get a newer vehicle just because you want one and are using the repairs as an excuse.
First priority is to always make sure your vehicle is safe for your and those around you as well as reliable, other than that, it is just a hunk of metal, a tool, it is NOT a status symbol, so go as cheap as possible.