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Establish what the issue is and how much it will cost to repair it.
Figure out how much your vehicle is worth.
Compare the cost of repairs with the value of your vehicle.
Take action.
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As your car ages, it will need more repairs and maintenance – that’s totally normal!
However, in certain situations it may make more sense to purchase a new car rather than sink more money into repairing the one you already have.
How can you tell when you’ve reached that point? Let’s discuss!
First, establish what the issue is and how much it will cost to repair it.
Car making a funny noise? You will need to take it to a mechanic to determine what the issue is. Once there, the mechanic can give you a quote for how much any necessary repairs would be.
Depending on the issue, you may be able to make the repair for a reasonable price. Needing simple repairs and basic maintenance (like getting new brake pads) isn’t a reason to purchase a new vehicle, but major issues that cost a substantial amount of money may be.
Second, figure out how much your vehicle is worth.
You can use online tools like Kelley Blue Book or J.D. Power to determine your car’s monetary value. Simply plug in your VIN number, your car’s make/model, or your license plate number and you will receive a rough estimate of how much money your vehicle is worth.
Third, compare the cost of repairs with the value of your vehicle.
Will it cost more to repair the car than it’s worth? If that’s the case, it might be a better financial decision to purchase a new one rather than try to repair it.
If you’re not sure what the best course of action would be, sign up for a free session with one of our certified financial counselors to talk through your options and figure out what will work for you.
Lastly, take action.
Once you’ve made your decision, it’s time to take action!
Handling Repairs
If you decide that the repairs are worth it, there are a few factors to keep in mind.
First, you want to be sure that the mechanic you’re working with is reputable. Before taking your car in, look online for reviews of the garage or ask people you know for recommendations.
Second, you will need a game plan for the time your car spends in the shop. Depending on what kind of repairs it needs, you may have to leave your car for several hours or overnight. If that’s the case, ask a friend or loved one if they could give you a ride home and to pick up your car when it’s ready.
Purchasing a New Car
If you decide that purchasing a new (or new-to-you!) car is the right move, check out our Car Buying Guide for a step-by-step overview of the process, from researching prices to driving off the lot with your new wheels.
Note: If you still owe money on your current vehicle, you will need to compare that amount to the actual value of your car. If your car is worth less than you owe on it, it may be a good idea to speak with a credit union loan specialist to review your options.
Questions?
Schedule a free financial counseling session today by clicking here.
This material is for educational purposes only and is not intended to provide specific advice or recommendations for any individual.
