Is it better to buy a new car or fix an old car?
To answer this questions, you need to know the cost of necessary repairs and how long can the vehicle last after the repairs. To find this out, ask your mechanic to assess the vehicle's overall condition when taking it for service. Watch out for early signs of problems, such as leaks, unusual noises and changes in the way the vehicle drives.
Servicing a car.
Ask your mechanic what repairs to expect in the near future: For example, will the timing belt or tires or struts need to be changed soon? If you live where salt is used on the roads during winter, ask to check for rust damage underneath. If the vehicle will need expensive repairs in the near future or has substantial rust damage, trade it in or sell it while it still drives.
Take a few minutes to check reliability ratings at ConsumerReports.org and JDPower.com. Research owner reviews: What are the common problems that other people have with the same car? If the vehicle is not rated well for reliability or many owners report having expensive problems, don't wait until it breaks down; start looking for a new or "new" pre-owned vehicle.
Let's look at these real-life examples to illustrate:
Mike had an older Acura TL that he had paid off. It was a great car to drive, but it developed an expensive problem: the engine had overheated and needed to be replaced.
The small shop quoted him $2,200 to replace the engine with a used unit. Mike decided to go ahead with repairs because according to the mechanic, the car was still in good mechanical shape. He hoped to drive it for another two-three years without having monthly payments. The alternative was to scrap it and buy another car, which would mean that Mike would have to come up with the down payment and deal with monthly payments again. In the end, it worked out well: Mike drove it for two more years and sold it privately. He bought a new Subaru Impreza.
Rani had a minivan that drove well, but needed new brakes and a few other minor repairs. However, when the mechanic lifted the vehicle on the hoist, he noticed that the structural beams holding the rear chassis components were badly rusted due to salt used on the roads in winter months.
He advised Rani that he can get the brakes done, but considering the rust damage, the vehicle will not be road-worthy for long. Rani wanted her vehicle to be safe, so she decided to trade it in instead of repairing it. She bought a late-model pre-owned SUV.
Ali had a 5-year old Nissan Sentra. She was happy with the car, but at some point, the air conditioner stopped working. Ali wanted to know whether she should keep the car or if it is time to buy a new one. She started looking into common problems for this vehicle and found that there are many complaints about the transmission failing in this particular model year. Even though she hadn't noticed any problem with the transmission, she decided not to wait and started shopping for her next car. This time, she wanted an SUV. She found out that whether the air conditioner was working or not didn't make much difference on the trade-in value she was getting for her car. After visiting a few dealers and checking several vehicles, she traded the car in and bought a new Ford Escape.