The decision to trade in your car or fix it up will be determined by several factors.
It would be nice to get a new set of wheels, but can you afford it? If your car has done several miles then you find yourself in need of car repairs almost every month. Cars have a lifespan and after wear, some of the vital parts start malfunctioning.
Constant trips to the mechanic are not only time consuming but also expensive. In this article, we tell you when is the right time to trade in your old car.
Wear and tear costs
This is the key determining factor whether to trade in your car. It is unavoidable to replace some car parts like the fuel pump or oil filters but when a car starts to where you will find replacing more expensive components like the transmission. When your monthly repair costs outweigh monthly loan repayments for a new car then it is time to replace your old car.
An old car has the added disadvantage of being fuel inefficient which leads to an increase in carbon emissions. Fixing your car is cheaper than buying a new car. However, the costs of a new engine or transmission is usually over $1,000 and this will make for a nice down payment for a new car.
Pros for fixing your car
Sentimental value: Cars mean a lot to many people. It could be that your car was a passed down model from one generation to another. This means it holds a special place in your life. Fixing the car will make a whole lot of sense.
Fixing the car is less expensive: buying a new car can dent your household income. You have to make monthly repayments or initial down payment. The option of fixing your old car is less expensive than purchasing a new one.
New cars lose value: if you closely examine the lease payments you will notice that a car depreciates a lot during the first years. You can purchase a new car only to realize that its residual value has decreased. This means you will get less value when selling the car at end of the lease term. If you do not want to spend that much on something that decreases in value then the best option is to repair your old car.
Lack of finances for a new car: if you are going through a tough time like a lost job it would not make sense to purchase a new car at that particular time. Your car is a luxury and you can do with an old one until your finances improve.
High car interest rates: if the economy is suppressed and interest rates high it would not make sense to purchase a new car during this time. The better option would be to fix the car and avoid high monthly interest rates.
Reasons for purchasing a new car
Constant breakdowns: this can be embarrassing. Imagine going for this classy dinner only for your jalopy to a breakdown in front of your guests. You never know when an old car will break down. Most of the time this will happen when you really need the car to do you service. If you are tired of constant car breakdowns then it is time to get yourself a new car. In addition, a new car comes with a warranty. This means you are covered for the time of warranty against spare parts. The peace mind you enjoy with a new car is irreplaceable.
Old technology: you probably bought the car when ABS and air con was not invented and you have been looking forward to technologically advanced gadgets. This would be the right time to purchase a new car. A new car will come with a fuel-efficient engine and it will come with modern tools like Bluetooth, in board computers and LCD touchscreens. These additions make traveling in your new car a delight.
Safer car: old cars are a disaster waiting to happen. Modern cars come fitted with the latest safety features like air bags, reverse cameras, automatic braking assists or blind spot monitoring. Driving such kind of cars ensures you safe driving in under extreme weather.
Too much time spend at repair shop: if the car spends most of the time at the auto repair shop then it is time to replace it. Constant repairs mean the car has outlived its useful value. With time it you will find yourself replacing the engine or transmission. This tends to be more costly and you will be better off paying a deposit with the repair money.
Aesthetic appeal: Cars represent the owner. If you have risen the social ladder and are fed up with your old car it would be the ideal time to get a new one. Your image is at stake and nobody wants to find the new boss pushing his broken down car in the parking lot.
There is no definite answer on whether to replace or repair your car. Your personal needs will be the determining factor. If you are out of work and do not have a paycheck then it is impossible for you to afford a new car. If you have the finances then you need to weight in the costs of repair against making monthly payments with that money. If your car has done over 100, 000 miles than the cost of repair will shoot up.
If you find yourself in need a new engine or transmission then the costs of repair outweigh the costs of getting a new car. You can actually put up a deposit for a new car with that money. A new car comes with a warranty and this ensures that repairs are taken care of. Most of the new cars come with safety features like airbags, braking assists, navigation systems that make it worthwhile getting a new car. They are also fuel efficient meaning you will be spending less on gasoline.
If you are tired of constantly being embarrassed by constant breakdowns then it is wise to get a new car.