Should you sell or repair your old car?

How to determine what's better financially
Posted at 9:31 AM, Jan 16, 2017

According to a survey from, 64 percent of American drivers are riding in cars with more than 100,000 miles on the clock. The reason so many odometers are rolling into triple digits is simple – saving money. According to 81 percent of the drivers surveyed, the ideal lifespan of a car is ten years or more — or until the car dies.

While driving an older set of wheels spares you from a monthly car payment, it raises the conundrum of when to fix a mechanical problem and when you should decide to part ways with your faithful ride.

As your car ages, you are naturally going to have to spend some money on maintenance. Beyond simple things such as oil changes, you will have tires, brakes and more, including flushing the cooling system every occasionally. But once a vehicle edges up beyond 70,000 miles, recommended maintenance can stretch to include replacing the timing belt and perhaps the water pump, too. That is a job that can run up to $1,000, but it is still less than the interest that you would have to pay on a new car loan, and far less than a new car itself.

You can get a good gauge of typical maintenance costs by checking out the True Cost to Own Calculator at, which estimates all expenses associated with the first five years of owning a car, broken down by make and model. Then you can budget an auto maintenance fund based on those figures.

On average, maintenance and repairs account for four percent of total ownership costs, and budget experts recommend setting aside $75 to $100 a month as a starting point. You will not spend that money every month, so let it build up enough cash on hand to cover repair bills, instead of putting them on credit and adding to your debt.

Another option is that, once you have paid off the car, direct the money you were sending to the finance company to a savings account to establish a kind of automotive emergency fund to cover more expensive repairs as the car ages.

Once the odometer rolls past 100,000 miles and your car is getting as old as a premium bottle of Scotch, you are going to start to wonder if the money spent on a major repair is just being thrown away. Nobody wants to be in the position of spending thousands on replacing a transmission, only to be stranded when the head gasket blows a month later.

Two rules of thumb can be applied. The first is that if the repair is less than half the value of the car, you are better off fixing it. Another benchmark is that if the repairs are expected to cost more than a year's worth of car payments, it is time to find a new set of wheels. For a detailed analysis that can take into account higher insurance payments for a new car and depreciation, plug your numbers into the Replace or Keep calculator.

Other factors you want to consider are whether the car is still safe to drive, and just how reliable you need your transportation to be. If you can take the bus to work or carpool when your car is in the shop, getting it fixed is a minor inconvenience, but if you drive 150 miles a day for a sales job, having a car that needs constant repairs is a major problem.

One more thing: Before shelling out big bucks for a major auto repair, check to see if the problem might be covered by a recall or by a manufacturer's technical service bulletin, which covers persistent problems with a specific model and will get you a free repair if the car still is under warranty. The best repairs are the ones that are free.

This article was provided by our partners at

To Read More From MoneyTips:

Save Thousands through the Slightly Used Car Market

That Used Car You're Eyeing May Already Be Recalled

7 Keys to Buying a Used Car


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