Should I Repair My Car or Buy a New One?

For many people, “no car payment” is a lifestyle. It’s empowering to drive a vehicle, free from the burden of a loan. But when you stop considering the cost of yearly car maintenance (especially on an older or high-mileage vehicle), those feelings of initial freedom can slowly morph into uncertainty. 

If you’re a vehicle owner and have satisfied your loan, there may come a time when you ask, “Should I keep my car or buy a new one?” And while there’s no definitive answer to this question, some variables are worth considering. 

Here, we’ll discuss the pros and cons of maintaining an older car vs. buying a new one and share tips for protecting your safety and wallet no matter which direction you take. 

Buy or keep? It all starts with maintenance 

The average vehicle owner will spend 9.68 cents per mile, or $1,452 in a 15,000-mile year, on car maintenance and repairs. That’s why AAA encourages motorists to save at least $50 monthly to cover routine preventive maintenance and unexpected repairs. In the case of many paid-off cars, higher mileage and age-related wear and tear are common and tend to increase the cost of monthly and yearly maintenance. 

Consider that between 90,000 miles and 120,000 miles, major car parts begin to fail. Timing belts, water pumps and other drive belts are some big-ticket items that can require replacement in older vehicles. A timing belt package alone can run between $600 and $1,000. And when you factor in brake work, replacement of aged electrical parts and any additional maintenance on rubber belts, hoses and seals, you’re looking at a potentially hefty maintenance bill to keep your car running. 

So, what should you do?

Calculate the cost of maintenance for your current car

An easy way to figure out the maintenance costs for your current car is to add up all of your repair bills for the past two years. Then, average those costs over 12 or 24 months to see what you’re paying monthly. If the repair costs exceed your car's retail value, you might consider purchasing a new vehicle.

The advantages of buying a new car

Safety, dependability and reliability are among the top reasons for buying a new car. Some people’s lifestyles are less flexible than others; if you have children to take to school or a rigid work arrangement, you may not have time for multiple trips to the repair shop or potential breakdowns. In these instances, buying a new car may make the most sense. 

Consider, too, that if you live in an area prone to severe or hazardous weather conditions, the modern safety equipment on new vehicles may be a welcome change and a necessary one.

New Advanced Driver Assistance Systems (ADAS) like automatic high-beam headlights and even biometric sensors are just a few of the advancements you’ll find in many new cars that aren’t generally available for purchase or installation on older vehicles. Even a working air conditioner can be a good reason for purchasing a new car if you live in a hot climate and often travel with children or pets that can’t withstand prolonged periods of extreme temperatures. 

Finally, car parts will become more challenging to find as your vehicle ages. While this may not be an issue of immediate concern, eventually, replacing key components on an older car may cost far more than you’d spend on a down payment or a few monthly payments for a new car. 

The advantages of fixing a car

It almost always costs less to repair a car than to buy or lease a new one, even when repairs are high. Sure, the money spent on repairs might serve as a nice down payment, but consider the costs of a new car beyond just the monthly payment; insurance, registration and depreciation are three areas of a new car purchase that people tend to overlook. Do the math on the cost of new car ownership before you ditch your old ride. Tools like the Edmunds True Cost to Own® and Car Depreciation Calculator can help reveal the total cost of a new car over a 5-year period. The AAA Banking calculator is another good option for figuring out the total monthly payment of a new car, as it factors in the type of car you choose, the loan term and the interest rate. 

Consider, too, that automakers continue to face supply-chain disruptions on multiple fronts. If the make and model of the vehicle you want isn’t available or doesn’t include the features you prefer, you may want to put a few extra dollars into your old car to keep it running until the car you want is available. 

Another good reason to keep an old car is the potential for lower insurance premiums. At some point, the value of a vehicle falls so low that you may be able to adjust your policy options, such as collision coverage and comprehensive coverage.

Still can’t decide? You have other options!

If, after weighing the pros and cons of repairing your old car vs. buying a new one, you still can’t decide, don’t worry! You have other options that can serve your budget, lifestyle and preferences until your final decision is clear:

• Buy a used car – Used cars can be a nice compromise between buying a new car or fixing an old one. Certified pre-owned vehicles often come with an extended warranty and can provide peace of mind, assuming the model you purchase is newer and in better condition than the car you have.
  Utilize public transportation – If you live in an urban area where public transportation is an option, consider purchasing a bus, train or subway pass to ease the burden on an aging vehicle. Public transportation is also a nice way to buy time or save money for a new car purchase.
  Hire ride-sharing services—If you don’t have a daily commute or need a car regularly, ride-sharing services like Uber and Lyft are a helpful resource for those whose older cars require more frequent visits to the shop.
  Carpool – Carpooling with colleagues or neighbors is a smart way to get around while deciding whether to keep your car or buy a new one.

Deciding whether to keep your old car or invest in a new one is a big financial decision that depends on your budget, lifestyle and driving needs. While repairing an older car is often the most cost-effective choice, the reliability and safety features of a new vehicle can provide peace of mind.

By weighing the pros and cons, calculating long-term costs and considering alternative transportation options, you can make the best decision for your situation. No matter what you choose, planning and budgeting for car expenses will help you stay prepared for the road ahead.