As vehicles age (or face expensive repairs), many people weigh repair costs against the vehicle’s worth. If the repair cost exceeds the vehicle’s worth, they will often sell or trade in the vehicle. By “worth” here, we’re referring to resale value.
I recommend a different approach. Blue Book and Edmunds (etc.) can help you decide what to sell your car for, or what you might pay for a used car. But they can’t quantify what the car is worth to you.
I’m not talking about emotions and memories here either. I’m coming from a practical point of view.
My car is a great example. It’s a daily driver 1994 Toyota Corolla with 165k miles on it. If you look this car up on Edmunds or Blue Book, you’ll see a private party resale value around $1,000 to $1,500.
I’m a big fan of this car. Sure it’s not fancy or new, but it’s frugal and reliable. I wouldn’t begin to consider selling it for $1,500.
$5,000 or $6,000? Maybe (and maybe not.)
See, I know that I can easily spend $2,000-$3,000 and buy a used car with more problems (current or upcoming) than what I currently drive. My odds might be better in the $5,000-$6,000 range, but I’d still have to make an educated decision (and I’m a knowledgeable mechanic!).
So it’s an old car with 165k miles, right? Well sure, but I hope that it will last to 300k miles and beyond. It may well need some major repairs along the way, but my ownership cost would likely still be less to fix this reliable car than to replace it.
This is an area where you want to be smart. You have to look at the overall condition of the vehicle. Replacing an engine or transmission in an otherwise sound vehicle is one thing. But (for example), if the engine is knocking, the transmission is slipping, various suspension parts are worn out, AND there are electrical problems, that picture can change. We are big fans of the end game here at Marinelli Auto Service. What will cost you less money for the long haul? Keeping or replacing your car? Why?
Now practically speaking, safety can play a role here too. My car has a 20 year old airbag system in it and does not have ABS. I understand that it might not protect me or handle as well as many newer models. I’ve even had a couple older cars (daily drivers) come into the shop that don’t have any airbags!
Where does this leave us then? If you want to make smart financial decisions, there’s more to it than comparing the mechanic’s repair estimate to a vehicle value calculation. I suggest that you consider your cost to replace your car with something equally or more reliable. We hope you have a shop you can trust, with people that care about you, who can help you think through this decision.
In closing, here’s a brief list to consider:
- Resale/market value is tied to desirability and doesn’t always have much bearing on the mechanical integrity of your vehicle and it’s practical worth to you.
- Resale/market value does not always account for long-term reliability. (A newer vehicle will not necessarily be more reliable or have a lower maintenance cost.)
- Replacing your used car with another used car often means swapping one set of maintenance or repair issues for another.
- Keeping and repairing your vehicle is NOT always the best option. Safety, long-term ownership cost, reliability, and replacement cost are all valid considerations.
Are you trying to decide if you should keep or replace your vehicle? We hope you have (or find) a shop with trustworthy, caring people. Considering this decision with a trustworthy, skilled mechanic who’s looking out for your interests could be a great help to you in making this decision.