Should I Repair or Replace My Car?

Should I Repair or Replace My Car?

Does your car require yet another expensive repair? If you’re tired of sinking all your savings into your vehicle, but you’re not sure whether trading it in would be in your best interest, there are several factors you can consider to help you decide which route to take.

When it comes to deciding whether you’ll repair your current vehicle or buy a different one, you’ll want to consider the positive and negative aspects of both options. Before you make your choice, use the information below to help you determine whether your car is worth the cost of repairs or if it’s time for a different ride.

The Cost of Repairs

The cost of your vehicle’s repairs depends on numerous factors. Take each of these into account — as well as your vehicle’s age and how much you owe on it — to decide if it’s worth the repair or time for a replacement.

  • Repair type: Some repairs may be expected based on the age of your car. In these circumstances, making the repair may add years to the life of your car. Others could be indicative of a larger problem or be expected to only be a short-term band-aid on a larger problem. To find out which type of repair you’re facing, check around with local mechanics and dealership to determine an average of how much you can expect to pay and what the outcomes of the repair are expected to be.
  • Dealer vs. mechanic: Where you take your vehicle to get serviced will also factor into its repair cost. Parts and labor are typically more affordable at independent mechanic shops, but a dealer may be more knowledgeable regarding your specific vehicle brand. Check with each about their experience with your particular repair and make sure they guarantee their work.
  • Vehicle make and model: Finally, the make and model of your car significantly determines how much your repair will cost. Luxury vehicles or older cars whose parts have been discontinued will often be more expensive to repair than standard or newer models.

How Do I Decide Whether to Repair vs. Replace?


The right decision will be different for each unique situation. The following are some questions you should ask yourself before making a repair or heading to the car lot.

1. What Does My Warranty Cover?

Before you agree to an expensive repair or trade in your car for a different model, check your vehicle’s warranty coverage. If your car still falls under warranty, you could pay little or nothing for repairs. Review your owner’s manual and extended warranty paperwork to determine if you could take advantage of any existing coverage.

2. How Is My Credit?

If you have poor credit, you might want to take some time to raise your score before you try to purchase a car and request a loan. Fortunately, you can take several steps to turn around a bad credit score. Your score will rise over time as you eliminate your debts, pay your bills on time, and don’t open or close credit card accounts unnecessarily.

3. Do the Car Repairs Cost More Than My Car is Worth?

Some car experts suggest the 50% rule when determining if you should repair or replace a car. This means moving forward with the repair if the cost is less than 50% of the value of the car and shopping for a different ride if the cost is more than 50% of the value. However, the price of a repair doesn’t always paint the complete picture, meaning there are many other important factors to consider when determining whether you’d be better off repairing or replacing your vehicle.

Other factors to consider include:

  • The mileage on your car – Are you getting close to mileage milestones that will trigger costly maintenance or are typically associated with expensive repairs?
  • The overall condition of your car – Outside of the current repair you’re considering, are there other issues with the car that need to be addressed?
  • Impact on value – Will making the repair increase the value of your car? If so, this could help you sell it in a year or two when you’re ready to switch to a different vehicle.
  • Your ability to take on a car payment – Even if a repair is costly, spending the money upfront may cost less than several years of car payments. If you don’t have room in your budget for an ongoing payment, you may need to seriously consider the short-term expense of the repair.

4. Is It Worth Fixing My Car After an Accident?

If your car experienced damage due to an accident, deciding whether to repair or replace might not always be your decision to make. Insurance companies often dictate whether they’ll pay for your car to be fixed or whether it’ll need to be totaled and replaced. Check with your insurance provider before making any decisions after your accident.

Ways to Save on Car Repair

If you do choose to repair your current vehicle, your next step is to make your bill as inexpensive as possible. Here are some tips to keep your repair budget-friendly.

  • Call around for a second opinion: Even if you’ve gone to the same mechanic for years, don’t accept the first quote you’re given. Call around to find the best price and ask about discounts.
  • Postpone unnecessary repairs: If a professional confirms that your vehicle can be driven safely without issue, you may decide to hold off on the repair until you’re ready to purchase a different vehicle. When it’s time to trade in your current vehicle, be honest and transparent about any known issues or needed repairs. Some dealerships may accept a trade-in even if it’s not in perfect working condition.
  • Pay for the repair with a cash rewards credit card: Get cash rewards when placing the cost of your repair on a cash rewards credit card. By paying with PSECU’s Founder’s Card, you can earn 1.5% or 2%* cash rewards on purchases.

Finance Your New or Used Vehicle with a PSECU Auto Loan

If you’ve decided to replace your vehicle, we’re here to help make the process as easy as possible. We offer low rates and flexible terms to put you in the car of your dreams.

Apply for an auto loan today to get started, or use our vehicle calculators to determine how much car you can afford before you buy.

*You can earn 1.5% cash rewards on purchases. You can earn 2% cash rewards on purchases if you maintain a PSECU checking account and qualifying monthly direct deposits of at least $500. See the Visa® Founder’s Card and Visa® Alumni Rewards Card Rewards Program Terms and Conditions for full details.

The content provided in this publication is for informational purposes only. Nothing stated is to be construed as financial or legal advice. PSECU does not endorse any third parties, including, but not limited to, referenced individuals, companies, organizations, products, blogs or websites. PSECU does not warrant any advice provided by third parties. PSECU does not guarantee the accuracy or completeness of the information provided by third parties. PSECU recommends that you seek the advice of a qualified financial, tax, legal or other professional if you have questions.