Do you know what the true costs of owning an older vehicle are? Most people don’t. In theory, owning an older vehicle that is paid off is less expensive, but there are many hidden costs to consider. When the repair costs outweigh the benefits of ownership, it might be time to sell your car. While there are benefits to both sides, is your car worth fixing?
When Car Repairs Cost More Than the Car Is Worth
When should you sell your car? This decision rests on your financial situation, your vehicle’s value and your vehicle’s safety. Your finances may be in order but then one major mechanical component goes out on your car or truck and your finances may be in jeopardy. Your peace of mind in regards to your used high mileage vehicle’s safety is also a factor. This is why selling your car can be a difficult decision. It will cost a lot of money to buy a new fully-loaded vehicle, but, what are the real costs of keeping your old car? Let’s dig into the details to learn whether you should fix or sell your car.
Auto Repair Costs: The older your car gets, the higher the monthly car repair costs increase. While fixing old cars generally cost less than a monthly payment (when averaged out over 12 months or more), they can still be quite expensive -depending on the type of vehicle or type of repair. If your car is completely paid off and the repairs are only once or twice a year, it’s okay to stick it out a little while longer. If you have monthly payments and frequent car repairs, selling your vehicle can actually save you money. In any circumstance, if the repairs are over half the value of your car, it’s probably time to upgrade.
Vehicle Depreciation: While this cost doesn’t immediately come out of your pocket, it will end up costing you a pretty penny in the long run. Car depreciation is the most expensive cost of owning a vehicle, and it sneaks up on you because it’s not coming out of your monthly payment. Can you imagine paying an extra $250 dollars per month for the first five years of owning a vehicle? While the depreciation is steeper for newer vehicles, any car younger than 10 years is still affected by large depreciation costs.
Vehicle Safety: Many older vehicles are not compatible with today’s safety standards. In fact, safety standards have completely evolved in the past 10 years. In a research study conducted by the U.S. Department of Transportation, they found that there is a significant correlation between vehicle age and fatality rates. Even a vehicle that is eight years old can increase your chances of being in a fatal accident by nearly 20%. With higher mileage comes the risk of mechanical failure. Let’s face it, anti-lock braking systems, lane centering assists, and hands-free Bluetooth technology -modern cars have never been safer.
Your Peace of Mind: If your vehicle keeps accumulating noises from unusual places or keeps you guessing as to when it will start or randomly stalls in traffic -it’s time to sell your car. Your vehicle should be as reliable as it is safe. If you say a prayer every time you turn the ignition, and you’re worried that at any given moment your car could give out, it’s probably time to upgrade. Don’t let the car or truck make the decision for you, it’s far better to make the decision before your car leaves you stranded on the highway or in a seedy neighborhood at night.
Repair or Replace A Car?
If your car has over 120,000 miles it is probably time for a major repair such as a timing belt or timing chain, an alternator replacement, a starter replacement, or if it hasn’t been properly maintained by you or the previous owner(s) -an engine or transmission replacement. Replacing a transmission or an engine can be as high as $4,500!
Deciding that it’s time for an upgrade or a replacement to your current vehicle, is a tough decision but there is