It’s going to cost more to fix than it’s worth
You often hear “it’s going to cost more to fix than it’s worth” given as a reason for buying a replacement car. And it’s easy to think that way.
We have been conditioned as a society to believe that new is better, and that old is unreliable or even dangerous. We’re also used to viewing spreading costs out over time as a good thing, while immediate expenses are painful.
But the reality is that how much your car is worth doesn’t matter at all, unless it’s being totaled by your insurance company or you’re trying to sell it. So it’s sort of silly to use your car’s value as the deciding factor in whether or not to repair it.
For instance, I once replaced the engine in my car, which cost about $3200 to do. At the time, my car was probably worth $3000. Why didn’t I just get a new car instead of replacing something really major like the engine?
Well, paying the $3200 was a whole lot less than paying $28,000, which is what a new car of the same model would have cost me. Why would I spend an additional $24,800, plus interest, plus higher insurance costs, to avoid spending $3200? I also could have gotten a replacement car that was the same year as mine for about $3000, but why not just get the new engine (and improve my existing car’s likely lifespan) if I was going to do that?
Now if I had to do enormous repairs like that on my car every single month, the situation would be different. Then it would make sense to get a different car. But my car’s worth would have nothing to do with it — what matters is how much I’m actually spending over the year.
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January 12th, 2009 at 9:48 am
I can see where you are coming from, but I think it’s essential to point out that there are a lot of variables to consider in making a decision such as this. Simply insinuating that you should fix what you have instead of buying new has too much generalization involved.
For example, introduce the notion of buying used. When my engine was shot, I bought a used Oldsmobile for only $2,000 more than a new engine. The Oldsmobile had 20,000 less miles as well, and was a better car all around.
January 12th, 2009 at 6:49 pm
There are indeed a few variables that come into play, but I like the point you make. “It’s going to cost more to fix than it’s worth” is quite often only an excuse to get something new. Sure, there are cases for which this is true but many of us fall into the trap of fooling themselves with such a saying. Nice post!
January 13th, 2009 at 10:57 am
I had a similar decision to make this last summer when our AC was not working properly. The quotes were ranging in the $3,000-$4,000 to fix it and it still was not addressing another issue we had in our home. Apparently we needed some new duct work as well and it was going to cost another $1,000 or more. We made the decision to replace our HVAC as we plan to stay in our home for many years and want to live comfortably in the summer and winter. Our old system was 15 years old and not maintained properly. I think maintenance is key with any system.