When is it time for a replacement? - Chicago Daily Herald
Some folks believe the deciding factor is the car is not worth fixing if the repair exceeds the book value of the vehicle. Another point of view would be to take the amount of money needed to fix up the current car and go buy another used car -- or use it as a down payment on a new car. Assuming the car you own meets your needs and is not a total pile of junk, it may make sense to spend some money fixing it up. It doesn't make sense to buy another used car because you already have one of those and you know it's positives and its... Let's also assume the car is worth about $4,000. To my way of thinking, most people would be willing to pay $4,000 for a perfect $4,000 car. Typically though, someone goes out and pays $3,000 for the $4,000 car and thinks they got a deal when in reality the used car still needs $4,000 worth of work. The other option is to buy new and most of us don't have the money to pay cash for a new car, which means we are making payments. According to Edmunds, the average new car payment is $479 per month. In 10 months you will have paid the equivalent of the $4,000 worth of repairs but you still have four or five years of payments to go. If you are trying to keep good wheels under you for the least amount of money, it is clear repairing the old car... Source: www.dailyherald.com
