Fix Up or Trade Up? When To Repair Your Car or Buy a New One --

Fix Up or Trade Up?

When To Repair Your Car and When To Buy a New One


Something goes wrong with your car and you're faced with another high repair bill. This isn't the first time it's happened, and you're getting tired of pouring money into an aging machine. It would be nice to get a new car, but is that the smartest decision? Would you be better off fixing your current ride, or is it really time to buy a new one? The answers to these questions will vary, but we can show you several sides of the issue to help you make a more informed decision.

The Costs of Wear and Tear
Even if you take good care of your car, some-high priced repairs are unavoidable. Wearable items such as axle boots and brake rotors eventually need to be replaced. One of the more expensive repairs on a high-mileage car is the timing belt. On many cars, it needs to be replaced at around 100,000 miles. Most dealers recommend that a person also replace the water pump and the other drive belts in the car at this point. This "timing belt package" can cost between $600 and $1,000. Problems like this often begin to surface between 90,000 and 120,000 miles.

"It's around this time that people decide what they'll do with the car [in the long term]," says Marc Uchuiyama, assistant service manager at Honda of Santa Monica. "Is it going to be a hand-me-down to your kids? Do you want it to last until you get married?"

Arguments for Fixing Up
Buying a new car may not be on your radar at this point. If you aren't sure if fixing it is the right thing to do, here are a few reasons why it is a good idea to bite the bullet and get the repairs done.

  • It is almost always less expensive to repair a car than buy a new one.
  • Although something as severe as a blown motor or failed transmission will run you between $3,000 and $7,000 to replace at a dealership, it still doesn't cost as much as buying a new car. That amount would certainly make a nice down payment, but then there are the monthly payments to consider. You can purchase a used car for that much, but just keep in mind that another used car could come with its own set of issues.
  • Insurance and registration fees will go up with a new car.
  • A new car typically loses an estimated 22 percent of its value in the first year. Your existing car has already taken that depreciation hit.
  • You need the car to last a while longer. In 2011, the average person kept his car for about six years before trading it in, according to a Polk research study. Let's say your car broke down earlier than expected. You were planning on getting a new car in about a year or two. Repairing it now will keep you on the road and keep you from making a hasty new car purchase. It'll also give you more time to save up and get your finances in order.
  • You have a sentimental attachment to your car. Maybe it was your first car, a gift from a loved one or a dream car you finally were able to purchase. For you, buying a new car would mean giving up an old friend.

Arguments for Buying New
After that last trip to the dealership, you swore you wouldn't put another penny into your old car. But buying a new car seems like an intimidating prospect. Here are a few reasons why buying a new car might be the way to go.

  • You don't want to worry constantly about future breakdowns. A reader in the Edmunds forums likened a high-mileage car to a 40-year-old pitcher for a baseball team: His arm could go out in one pitch. And repairing one thing doesn't guarantee that another breakdown won't happen down the line. If you buy a new car, you'll have at least three years — often far longer — before you have to worry about paying for any major repairs. Some new cars come with free standard maintenance as well.
  • You're tired of the back-and-forth to the repair shop. Some things don't get fixed the first time around, while others seem to need constant attention. Either way, trips to the mechanic are costing you too much money and time away from work or family.
  • You're tired of your old car. Perhaps it embarrasses you and rattles like crazy. Or you have to bang on the A/C to get it working. Every morning when you walk outside and see the neighbor's car, you long for something new. That's perfectly normal. Just take a good look at your budget and make an honest assessment of your financial situation. Let our suite of auto calculators do the math for you.
  • You want something safer. New cars are safer than ever, thanks to modern safety equipment. Features like side airbags, tire-pressure monitors and electronic stability control are increasingly becoming standard fare on new vehicles.

When Is It Time To Buy Another Car?
If the cost of repairs is greater than either the value of the vehicle (check its True Market Value (TMV®) here) or one year's worth of monthly payments, it's time to buy another vehicle.

When the time comes, buying a used car is (almost) always a more cost-effective option than buying new, largely because you avoid the big depreciation hit. We should note that a used car can potentially have its own list of items that need repair, so choose your vehicle carefully if you go this route. Visit our used car center to search the local inventory, or check out our Used Car Best Bets for help in narrowing your used car search.

Other Factors to Consider
If you are not yet faced with making the tough decision to fix up or trade in your vehicle, there are steps you can take to prevent or avoid high-priced repairs.

  • Get your new car maintained at its proper intervals to avoid problems and breakdowns. Use our maintenance tool to learn the recommended service intervals for your vehicle. Maintaining a much older car means paying close attention to items that commonly break down. (See "Broke with a Beater.") Use our maintenance articles to help make your car run forever.
  • You might consider purchasing an extended warranty. If you plan on keeping the car for a long period of time, this can be a great way to save money and have peace of mind. A $3,000 repair for a new transmission isn't as intimidating when you only have to pay $200 for the deductible plus the cost of the warranty itself. Remember that extended warranties are negotiable.
  • If you're experiencing issues with your car and don't know whether things are likely to get worse, "Look for advice on message boards and forums," says Loren Wong, a former warranty administrator for Acura and BMW. "Most likely, other people have gone through the same problems." You can benefit from others' experience and see what types of problems are associated with your vehicle as it ages.

Don't Let the Clunker Make the Choice for You
Everyone seems to have a theory on when to repair a car and when to get a new one. But you know your needs and your car's history better than anyone else, so use our tips as a guide. Buying a new car might seem like the easy way out of a high repair bill, but depending on your circumstances, it may not be the best financial decision.

On the other hand, a car that's teetering on the edge of oblivion can keep an owner awake at night. It's better to make the decision to part with that car on your terms rather than waiting for it to break down at exactly the wrong time. If you make the decision while the car still has some value, you can sell it or trade it in, turning it into a down payment on your next car. If you also can take advantage of the incentives and rebates being offered on new cars today, you may find that a new car is within reach for you. And it's hard to put a price tag on the peace of mind that a new vehicle can bring

To find a dealership that knows how to treat shoppers right, please visit's Dealer Ratings and Reviews.

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