When to replace your car

Should I Fix or Replace My Older Car?

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Should I Fix or Replace My Older Car?

I have an 11 year old Subaru Legacy. I bought it used five years ago and felt that I got a really good car for the money. I have been very happy with it. I told myself that when it reached 100,000 miles, I would start looking around for a newer (not new!) car. I started putting money in my mutual fund to save so I wouldn't have to take a loan when I traded up.

Here's the situation. The Subaru has reached 100,000 miles. It has been in the shop four times in the past six months for various worn out things (battery, CV boot, gas line, and now, axle). My mutual fund has lost principal, so I don't have as much to spend on a newer car as I had hoped. Neither my husband nor I are mechanically adept but we do have a good mechanic who doesn't overcharge and refuses to repair things that don't need it.

What factors should I use as the "break point" to decide that it is costing me more to keep my older car than it would to bite the bullet, take out a small loan, and get a newer car? Should I ride out this period and chalk it up to the year of replacing worn out parts and keep the car till my mutual fund is looking better, or get a newer car with fewer miles?

Ride It Out

I have my second Subaru station wagon. It is 8 years old. The one I had previously wasn't traded in until it had 150,000 miles on it. All cars require maintenance, especially, if you haven't had to spend anything much prior to now. I personally think you probably have a lot more miles on your car and you should ride it out until you can better afford it.

Subaru Is a Winner

I'm not a financial expert, nor a car guru, but I am a registered nurse with about 17 years experience with Subaru vehicles. If you've done the CV Boot, axle, gas line, etc. (actually small repairs, although pricey), you might have another 200,000 miles left on your Subaru.

I have driven in excess of 60 miles to and from work daily for 13 years in a rural area with treacherous wintertime roads. I got in excess of 300,000 miles on two of my three Subaru's in the years that I owned them. The working parts of the car actually seemed to exceed the body life with a few repairs over the years. The body of a Subaru tends to get what I affectionately refer to as Car Cancer (i.e. rusting). But the motor just keeps on going, not to mention the exceptional gas mileage. So, while I cannot speak for your specific car, I can tell you that if you really don't want to take out a loan, and you need to wait until your mutual fund grows a bit. You have already made the necessary repairs. Personally I'd drive the Subaru and enjoy the repairs you've made on it. I was pleasantly surprised at the durability of these cars. Subaru rules for its price, gas efficiency, and four wheel drive capabilities in bad weather. I missed maybe five days work in 13 years because of treacherous weather. Not a bad record for rural, mountainous Virginia.

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Repairs Better than a Loan

The deciding factor is how well the Subaru is liked. Even if her car required an engine rebuild and transmission overhaul, it would still cost less than a newer car. 100,000 miles is not a lot for a car, and my guess is that with routine maintenance she could get 200,000 out of it without much spent in repair bills. The exception is if she has a real "lemon", which is doubtful or she would've probably tried to get rid of it earlier. If she likes the car, then I suggest that she keep it for at least another 50,000 miles, and set aside a "car payment" in the bank each month just as if she were buying a newer car. By the time her car really is getting worn out, she'll have enough in the bank to pay cash for another car. This also gives her bargaining power at that time to make a real deal! I have an '89 Ranger that has 250,000 miles on it so it's just about time for me to trade up!

Need Versus Want

I've got a truck that's in the same boat. Here's how I look at it. First of all, consider what you're paying to keep your car on the road each month. Obviously you want the average, extrapolated into the future. Your mechanic should be able to help you on this. Is it less than a car payment? If so, then you are money ahead by driving the clunker.

Second, how much time do you have to invest in keeping your car alive? Add up the actual time in the shop, plus the time making the repair appointment, making alternate arrangements for your travel while you are waiting yours to be fixed. How inconvenient is dealing with this car overall?

Third, is there a safety issue? You need to consider not just how safe the actual vehicle is, but the consequences of a breakdown. We bought our last vehicle when its predecessor kept stalling out in heavy commuter traffic and our mechanic couldn't find the problem. My wife used that car for driving to work (through a rather rough neighborhood) and for driving to see her parents (a 3-hour drive). She was six months pregnant at the time. We decided that the risk involved in keeping that car was just too high.

I've had people tell me that it doesn't make sense to spend $300 to fix a car that has a blue book value of $700. My response is that it depends on your perspective. I don't look at my vehicles as an investment. Even new, they depreciate at an incredible rate. For me, my vehicles are tools. They get me and my family and whatever we need to move from point A to point B, and that's all. I won't get caught in the mental game where I think my value as a human being is reflected by the car I drive. Some people really like cars and can justify $500+ each month to have something they want. That's fine, just don't confuse it with something you need unless you really do.

Reviewed September 2017

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