No one wants to deal with a car after the transmission breaks. It becomes stressful deciding whether you want to replace the transmission or move on with a newer car. That’s when you have to ask yourself – is it worth replacing a transmission or is it better to buy a new car?
To figure out if it’s better to replace the transmission or buy a new car, you must first evaluate the cost of repairing the transmission versus what the car is worth. If the car isn’t worth the fix, it might be better to get a new vehicle. However, you might not be in the right financial place to purchase a car. Therefore, fixing it might be a better option.
In this guide, I look at reasons to fix the transmission versus arguments for getting a new car. I also discuss what makes a transmission repair so expensive, and look at all of your available options.
Reasons to Replace the Transmission
1. Less Expensive
You should almost always replace the transmission if the cost is less than the value of the car. Transmission replacement is expensive, so an older car probably won’t be worth it.
However, if you have a vehicle worth $15,000, there’s no reason to avoid the transmission replacement. While you could sell the car, you aren’t going to get nearly the retail value out of it with a failed transmission.
2. Depreciation Already Occurred
Because you aren’t driving a brand-new car, there’s less depreciation occurring. If you keep the vehicle for another year or two, you aren’t going to lose a lot more money off of the value.
However, the new car can depreciate more than 22 percent in the first year. That’s a lot of money lost.
3. Not Ready for New Car
Maybe you just aren’t ready for a new car and payments. That’s okay. You can replace the transmission and buy yourself some more time.
After the transmission is replaced, go ahead and start saving for a down payment on the new vehicle. Maybe you will be ready in a year or two.
4. Sentimental Reasons
If there’s an emotional attachment to the car, the resale value won’t mean much to you. It could be that this was your first car, it was given to you by someone you love or it was a dream come true.
Either way, if you buy a new one, you would have to part with this friend you’ve grown accustomed to. To keep it running, go ahead and replace the transmission.
Reasons to Buy a New Car
1. Cost Outweighs Value
The most logical way to figure out whether to buy a new car is to look at the value. If the retail value is lower than the cost to replace the transmission, there’s no reason to put more money into it.
Instead, it’s time to get rid of the money pit and treat yourself to something better. Get what you can from the vehicle and move on.
2. Worried about Breakdowns
Older cars are known for being unpredictable. The broken transmission could be one of many problems you start dealing with.
If you aren’t ready to pay for additional repairs, you might want to cut your losses now. Instead of paying for more repairs, you can put the money towards something newer.
3. Tired of the Old Car
If you’ve grown tired of the old car, there’s no reason to stay stuck. Whether the car is embarrassing or it is falling apart around every corner, you deserve something better.
Examine your budget to see if you can move on. With flexible auto loans and leasing deals, it’s not difficult to find something for any budget.
4. Ready for an Upgrade
Newer cars come with more technology. You can enjoy the latest safety equipment, tech features and entertainment options.
Whether you are looking for a backup camera, lane change assist technology or heated seats, these can all be found. Even a used car can offer you some newer technology if you drive something that’s ancient.
Why is Transmission Replacement So Expensive?
1. Mechanical Complexity
The transmission isn’t as simple as some others on the vehicle. There are a lot of mechanical parts working together to keep the transmission running.
Because of this, it takes special skill to repair or replace a transmission. You won’t be able to spend an hour of labor on a transmission replacement like you would for a brake pad replacement.
The make and model of your vehicle both have a profound impact on how expensive the replacement is. A smaller car might have a transmission that’s less expensive and easier to replace.
On the other hand, many luxury cars have expensive transmissions. With that added cost, these usually need a special mechanic for the replacement, too.
3. Age of Vehicle
If you drive an older vehicle, it could become difficult to find parts for it. Plus, getting a replacement transmission isn’t always simple.
The mechanic might even charge you more for the replacement, especially if they aren’t accustomed to working on something so old. You may even need to wait until the parts are sourced, which adds more downtime.
4. Manual vs. Automatic
If your car has a manual transmission, the replacement might not be as much as you would think. These are generally the cheapest type of transmissions to replace.
However, the automatic transmission has more moving parts and is more expensive. If you drive a high-tech automatic, it’s going to be even more pricey.
5. Labor Rate
Your mechanic’s labor rate depends solely on where you live and their experience. Urban mechanics usually charge a higher price than rural shops.
You might want to perform the transmission replacement yourself to save money. Sadly, this isn’t usually a good idea, because it requires special equipment and a lot of expertise.
What Can Be Done When Car Transmission is Bad
1. Junk the Vehicle
If the vehicle is old and it’s not worth much without a working transmission, get ready to junk it. You can call local salvage yards to get the best rate.
Most yards will tow the vehicle and pay you a small amount of cash. You could also part out the vehicle yourself, but this takes a lot of time.
2. Sell it/Trade it
Go ahead and sell the vehicle the way it is. A mechanic might be interested in fixing it up and selling it.
There’s also the option to trade it into the dealership where you will buy a new car. While you won’t get a lot of money for it, there might be enough given to you to put a down payment on something newer.
3. Purchase Used Transmission
Your local mechanic might be able to get a used transmission. This would be the cheapest option, with some models costing less than $1,000 for the parts.
However, you probably won’t have any warranty on the used transmission. Plus, you still have to pay the mechanic to put it in.
4. Purchase Rebuilt Transmission
Many transmission shops recommend the rebuilt option. The mechanics take out the transmission and make it like new, replacing all of the vital parts.
This could cost $1,500 to $2,500 on average for the transmission, plus the added costs for labor. You may also get a warranty on the repair, depending on where you get the service performed.
5. Purchase Remanufactured Transmission
The transmission shop might be able to hunt down a remanufactured model. This is like getting a rebuilt transmission, but in this case, it is often performed by the manufacturer.
The price goes up a little higher, but you’ll get a better warranty. That’s why this is a good option for newer models that have a failed transmission.
6. Purchase New Transmission
You also have the option to install a new transmission. This might not be an option on an older vehicle if the transmissions are no longer made.
However, this is your most costly option, which is why most people don’t go this route. Still, if you have a luxury vehicle or one that’s worth a lot of money, you might want to know that it is still in factory condition.
Is it worth fixing a transmission on a car?
It depends on a number of factors, including the make and model of your car, the extent of the damage to your transmission, and the cost of parts and labor. If you have a newer car with a damaged transmission, it is probably worth fixing. However, if you have an older car with extensive transmission damage, it may not be worth fixing. Ultimately, the decision on whether or not to fix your transmission should be based on a cost-benefit analysis.
Is a new transmission better than a rebuilt?
There is no definitive answer. A rebuilt transmission may be as good as a new one, or it may not. It depends on the quality of the rebuild. A reputable transmission shop will do a good job rebuilding your transmission, but there are also many shops that do poor work. If you choose to have a rebuilt transmission installed, make sure you get a warranty from the shop that did the rebuild.
How much is a car worth that needs a new transmission?
A car is only worth what someone is willing to pay for it. If you need a new transmission, the cost of the repairs could range from $1,500 to $8,000. The average price of a used car is about $15,000, so if you’re selling your car as-is, you can expect to sell it for much less than that.
You might be able to get a few thousand dollars for it, but it really depends on the buyer. Some people might not want to buy a car that needs significant repairs, while others might be okay with it, as long as they’re getting a good deal on the price.
How long should a transmission last?
Many things factor into how long a transmission will last. Driving habits, the way the car is driven, the type of fluid used, and how often it is serviced are all important components of transmission longevity. On average, transmissions will last for about 200,000 miles. However, this number can vary greatly depending on the factors listed above.
READ MORE: 10 Best Used Cars to Buy