And when the time comes, keep sentimentality out of it.
Cars break down, it's part of what they do. With so many moving parts, it's almost inevitable that even the most well maintained cars will eventually wear out. And when they do, they can cost a pretty penny to repair. If you do the repairs yourself, the parts alone can cost a couple of car payments. Air conditioning compressors, for example, tend to run about $600, and that's not including the cost of labor or refrigerant. When your car stops running or starts making odd sounds, how do you know when you should repair it or find a new ride?
Consider Cost Cost is the first factor you probably think of when talking about car repairs, but there's more to consider than the cost of the repair itself. Ask yourself the following questions: What is your car currently worth? It doesn't have to be an exact amount, but plug your statistics into Kelly Bluebook or something similar to get an idea of your car's current worth. What are your current car and insurance payments? Both will likely go up if you decide to trade for a newer vehicle. How much will you likely pay for a new vehicle if replacement becomes an option? Consider the above questions before making a decision to repair or replace.
Know the Statistics How old is your car? How many miles does it have? According to the National Highway Traffic Safety Administration (NHTSA), the average lifespan of a passenger car is about 152,000 miles. Depending on how often and how far you drive, this could take 5 years to accomplish, 20 years, or even longer. For example, I recently sold a 96 Lincoln Towncar that was purchased new. When I sold it this year, it only had 68,000 miles on it. Perspective!
Determine the Cost The big question to consider is how much the repairs will cost. Ask yourself the following questions: Will repairs cost more than a few months of payments? More than 12 months' worth of payments? Will these repairs fix the problems or will they likely lead to more problems? Will these repairs extend the life of your vehicle? At this point, it's all about practicality. If the repairs cost more than a few months of payments, but won't extend the life of your vehicle or will likely lead to other problems, it's probably time to trade it in.
Same goes if your repairs are going to cost more than 12 months of payments, or more than 50% of the value of your car. A well-thought out decision could save you quite a bit of money in the long run. Practicality outweighs sentimental value, and if car repairs are going to cost you more than your car is worth, it's time to trade it in for something a little more reliable and a little less painful to the wallet.