My vehicle needs some expensive repair. Should I have it repaired or replace it?

There are several questions that you will need to answer:

• Does the vehicle still meet your needs?
• Do you like the vehicle?
• What is the cost to replace the vehicle?  New or used?
• How many car payments does the repair cost equal?
• Can you expect the vehicle to last throughout that time period?
• If the replacement vehicle is used, what repairs will it likely need?

You know the history of your vehicle.  The used replacement vehicle’s history may not be as clear.

If you’re planning to buy a new vehicle, the sales tax and tags cost may cover the cost of repair of your present vehicle.  These two expenses are not “buying” anything with respect to the actual vehicle.

Certainly, I can’t estimate the pride of ownership of a new vehicle, but that choice is usually the most expensive option to resolve a repair problem!  Additionally, it is virtually impossible to predict the future repair problems that your vehicle may need, but if you have established a good relationship with a repair facility, they should be able to provide some sage advice to help with your decision.  If not, you’re on your own.

Personally, I drive a 1972 Chevrolet pickup that I bought in 1976, so I believe in keeping a vehicle that I like and meets my needs.  In 1999, I replaced the motor at a cost of $3400.  Was it worth it?  Certainly I think so.  I’m still driving it.

This is an age-old question when confronted with a major repair on an older vehicle.  Many people buy or lease a new vehicle to escape the higher cost of a repair.

Cars are built better today than ever.  A properly maintained Honda can last 500,000 miles as an example.  The key word is “properly.”  Some owners just change the engine oil and keep it clean.  That attitude will not provide longevity!  Regular, periodic maintenance, as outlined in the owner’s manual is the key.

The table below shows an example of whether to keep a 1992 Honda Accord you already own, put a ton of money into fixing it up and keeping it verses what it costs to replace it.  The chart is based on a 7.9% interest rate and the lease is based on what Honda has advertised in recent years.

It’s over $3,000 less to keep your present car than to buy a new one, and $9,000 less than leasing.  Check with your accountant, but this example can be very enlightening.