Should I Repair or Replace My Car?

Should I Repair or Replace My Car?

Updated on April 30, 2021

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 should consider.

When it comes to deciding whether you’ll repair your current vehicle or buy a different one, you’ll want to weigh the pros and cons of each option. 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 – when deciding whether to proceed with the work.

  • Repair type: Some repairs may be expected based on the age of your car. In these circumstances, having the work done may add years to its life. Others could be indicative of a larger problem or be only a short-term band-aid for a bigger issue. To find out which type of repair you’re facing, check with local mechanics and dealerships to determine about how much you can expect to pay and what the outcome of the repair is expected to be.
  • Dealer vs. mechanic: Where you take your vehicle to get serviced will 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: The make and model of your car significantly affects how much your repair will cost. Luxury vehicles or older cars with discontinued parts will often be more expensive to fix than standard or newer models.

How Do I Decide Whether to Repair vs. Replace?

The right decision is based on your unique situation. Here 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, review your owner’s manual and extended warranty paperwork to determine if you could take advantage of any existing coverage. If your car still falls under warranty, you could pay little or nothing for repairs.

2. Am I Financially Prepared to Replace My Car?

Even if a repair is costly, spending the money up front 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 tackling the short-term expense of the repair.

If you feel ready to take on a loan, you’ll want to consider the state of your credit first. If you have poor credit, you might want to try to raise your score before applying for a new car loan. You can take several steps to turn around a bad credit score. Your score will rise over time as you eliminate your debts and pay your bills on time.

3. Do the 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 results in moving forward with the work if the cost is less than 50% of the vehicle’s value and shopping for a different ride if the cost is more than 50% of the value. The price of a repair, however, doesn’t always paint the complete picture. In some cases, it could increase your car’s potential value, which may impact your decision.

4. What is the Current Condition of My Car?

Are you getting closer to mileage milestones that will trigger costly maintenance? Are there issues other than the possible repair that need to be addressed? If all you see is dollar signs when you look into your car’s future, it may be time to move on.

5. Are There Other Parties Involved in the Decision?

If your car was damaged in 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 an accident.

Ways to Save on Car Repair

If you choose to fix 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, you may decide to hold off on the repair. When it’s time to trade in your current vehicle, be honest and transparent about any known issues or needed repairs. Most dealerships will accept a trade-in, even if it’s not in perfect 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 2%* or 1.5% 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, and 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 deposit(s) 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. Some products not offered by PSECU. 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.