How much money and time are you spending to keep your car running? When do you throw in the towel and call it a liability? According to Suze Orman, the financial expert, it’s smart to keep your car for as long as possible. The main thing is that you spend as little as possible in repairs and maintenance to keep the car safe and reliable.
While it makes sense not to spend a fortune on a new car, it’s important to face facts. A car, says Orman, “is a lousy investment” that only loses value over time. Most people will tell you they must have a car; at the same time, Orman suggests that the main consideration is that the car can still get you where you need to go and doesn’t leave you stranded by the side of the road with a car on the fritz.
But let’s say your car is beginning to need more and more work as it ages and falls into disrepair. How do you choose between buying a new car and continuing to spend on an old car that is turning into a money pit? Not to mention, if you’ve already put a significant amount of money into your current car, it may not seem smart to write it off in favor of an expensive new car purchase when prices are always on the rise.
Cost of Repairs
Most of us are aware of the standard formula for these things: if the cost of repairs will exceed the resale value of your car, it’s time to part ways. That’s all well and good, but beyond the conventional wisdom, one must think about whether such repairs will add value or at least help keep the current value of the car from declining. Keep in mind, too, that buying a new car, or even a used car in great condition, comes with its own significant expenses. Such costs may include more costly insurance premiums, loan payments, and taxes.
There is also no guarantee that a new or newer used car won’t come with its own peck of troubles. You may end up paying for even more costly repairs and/or more costly maintenance requirements. Prospective buyers would do best to weigh these costs against the cost of continuing to pay for repairs on the car they already own. It just may be the better option.
Then again, the main issue to consider is not the expense of maintaining or replacing your car. Your first concern should be safety. Is your old car still safe to drive? Expensive cosmetic repairs may not be critical or even necessary, but repairs that keep your car safe are imperative. If keeping your car safe will cost more than it’s worth, you may have to throw in the towel and spring for a new or newer used car.
Is A Rusty Car Safe?
One important consideration is rust, a significant problem for older cars. Rust can affect critical components, such as brake and fuel lines, the gas tank, and the frame. Widespread rust is difficult, if not impossible, to halt or eradicate, and tends to worsen over time. Your car may become unsafe as a result.
On the other hand, a new car often comes with safety upgrades not available in older cars. One popular conviction has it that older cars are better because they are built to last; like tanks they are indestructible. Newer cars, however, have built-in crumple zones, designed to absorb energy on impact permanently damaging the car, while diverting the energy away from passengers to keep them safe in the event of a collision.
No matter how attached you may be to your old car, if it constantly breaks down, forcing you to stand stranded on the roadside waiting for a tow truck, or having to call on a friend to take you to work because your car won’t start, it’s just not worth putting any more money into it. The availability of parts are also be a consideration. Parts can become unavailable once a car is no longer on the market, and may even be discontinued. Sure, you can go on the hunt for parts on the internet, but they will be harder to find as time goes by.
In this case, it absolutely makes sense to retire your car while you can get one at a decent price, rather than being forced to pay through the nose when an old, beloved car suddenly and finally breaks down for good.