Mechanic assessing car
Car Buying, Auto & Auto Buying

Should You Repair or Replace Your Car

If your car is several years old and needs a significant repair, you might be questioning whether to fix it or sell it. While there’s no perfect answer, there are pros and cons you can consider to help you make a decision.

Reasons to Fix Up Your Car

Timing is usually the biggest reason people spend money on repairs rather than buying something else. Paying for the repair now can give you time to save up more for a new car in the future. But there are other reasons to stick with what you’ve got:

  • Paying for a repair is usually less expensive than buying a new car. Even if the repair is very costly, it will still be less than if you used that money for a down payment on a new car because you’d be starting over with car payments.
  • New cars usually come with a higher price tag for auto insurance and registration. So even if you’re still paying a monthly payment on your old car, and the new payment is roughly the same, you’ll end up paying more out-of-pocket because of those other costs.
  • New cars depreciate in value by about 22 percent in the first year. You’ve already been through that with your current car.

Reasons to Sell Your Car and Buy Something New

If you don’t have a sentimental attachment to your current car, and you’re in a financial position to afford something more reliable, it might be time to buy something new. Starting fresh has several advantages:

  • New cars are more fuel efficient, which could save you big at the pump.
  • While you’ll pay for regular maintenance, you can have peace of mind that you won’t be shelling out thousands of dollars in repairs for at least the next several years.
  • If your current car has been in and out of the shop multiple times in the last several months, and you’re nervous about another breakdown, a new car will remove that fear – and the costs associated with repairs.

Ultimately, your personal financial situation will play a big part in determining whether to fix or sell. Consider your needs, and if you are ready to buy something else, let your Credit Union help. We offer low-rate financing on new and used vehicles, and we can even help you find and purchase the car you want without ever stepping foot in a dealership. Click here for more details.