Should you repair your car, or replace it?

repair_or_repalce_toyota_lexus_scion.jpgThe question of whether a vehicle should be repaired or replaced is a common one. We've found that if the right factors are in place, repairing your vehicle can be justifiable even in instances where the cost of the repair rivals the selling value of the car.

If you were to pump that kind of money into a vehicle that you intended to sell immediately, then it almost certainly wouldn't be justifiable. If, on the other hand, you ask yourself whether the repair would be a cost-effective manner in which to get reliable transportation of this particular style—then quite possibly it can be justified.

Some of that depends on what you'd come up with as an alternative if you were to sell it and turn around and buy another. Will buying another car cost less and be more reliable? If so, then that clearly serves your purposes. If you take this route, you'll want to be sure to have a thoroughgoing pre-purchase inspection done to minimize your risk; otherwise it's too easy to buy into fresh problems when you buy another used vehicle.

Will fixing your car cost less and result in a reliable vehicle? If so, then that clearly serves your purposes. When asking if fixing your car will result in reliable transportation, you need to keep in mind, of course, the broader condition of the vehicle and any other known needs that are on the horizon. One line of thinking is to calculate what the known repairs will cost per mile of use if amortized over some reasonable number of miles you expect you might drive it.

A $2500 repair amortized over 50,000 miles only costs 5 cents per mile. The same cost divided over half that distance still only costs 10 cents per mile. Since the federal government allows 51 cents per mile when claiming business expenses, 5 to 10 cents per mile seems like a pretty reasonable level of investment in your transportation.

This still leaves plenty of room for oil changes, gasoline, and even the possibility of other repairs that might be needed. A longtime customer of ours (10 years so far) recently commented that in the 21-years he's owned his car, the total cost of its maintainance and repairs averages out to only $40 per month--that's less than the cost of most cell phone plans!

When considering whether it will be cost-effective to keep your car, any known needs that you believe will have to be addressed in the near future should count directly into your calculations. Past needs that have already been successfully addressed don't count against the car, and in fact, should weigh in favorably as issues that won't have to be addressed again. There's an emotional tendency to look at past repairs and think "the car's costing too much-it's a money pit" based on those repairs, but the only objectively valid question is whether the car will be cost-effective from this day forward. Unless there have been poorly done repairs that compromise it's future, the fact that you've spent money in the past shouldn't count against it in the future.


That only holds true of vehicles that were statistically well made vehicles, of course. With vehicles that statistically were prone to repeated failures you should assume the same expenses will be coming around again. Another thought to keep in mind when considering a major repair is that when you're finished, you will have the ongoing benefit of that repaired portion of the car. In the instance of an engine overhaul, you will have an engine that is for most practical purposes new. In most cases you won't have that advantage if you opt to instead go out and buy a different used vehicle. If those questions can be answered to your satisfaction, then I'm not at all uncomfortable with performing major repairs on older vehicles. That's not always the case.

We've had people come in that clearly needed to disconnect from their car rather than enter into some major repair. Most of these people will back off from doing the repair when we urge them that they ought to find something else.

Occasionally, however, someone will be so emotionally invested in their vehicle that they will continue on maintaining and repairing it for years past when we've had earnest heart-to-heart conversations that they ought disconnect and start all over. One last thought through an anecdote: Some years ago we had a customer come in and lay his keys on the counter and tell us to look his 1990 truck over, fix whatever was needed, and call him when we were done.

I told him that we needed to have some parameters more clearly defined before we started, and asked him if he had any price constraints. He said he was comfortable going up to $1500-2000 without our calling him. We inspected his truck, made up a list of possible repairs that totaled $2700. We called him, and he went right down the list with us saying to do each and every item. When we finished and he came to pick it up, he told us that he had priced new trucks out and the trucks he was looking at cost $30,000.

He went on to tell us that the money spent repairing his truck amounted to about 3 months of payments, and that if the truck only lasted 3 months he'd figure he'd broken even. As it turned out, he drove it for 2 3/4 years before he eventually sold it and bought a 1994 truck to replace it.

I've heard and read repeatedly that more often than not the most economic vehicle to own is the one you already own.

Although that's not always the case, it is so often enough that it bears considering rather than reflexively moving toward replacement when faced with needed repairs.

Below are links to some online articles regarding repairing vs replacing your vehicle:

Keep Your Car Or Buy New Car Dilemma:

Repair or Purchase New


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