Have you ever figured out how much your old car costs to keep running?
Maybe it’s time you did. Old cars have a way of eating through our bank account without us realising it. Paying a £3,000 bill for a new transmission may seem like a better deal than buying a new car, but it is?
Follow along and learn how to calculate how much it will cost to keep your old car running. If the monthly repair costs are more than a monthly payment for a new car, maybe it’s time to send your old car to the scrapyard and get a newer, more reliable and cheaper vehicle.
Asking the Right Questions
The first thing to do before deciding on a vehicle upgrade is determine if keeping your old car running is going to cost more than purchasing a new car. Questions you need to answer include:
- Will the repair costs of your old car be more than the payments on a new one over time?
- How much longer can your car realistically last?
- Is the new car more fuel-efficient than the old car?
- How much money could you get from selling, scrapping, or trading-in your old car?
Now that you know what questions to ask, let’s see how to answer them.
Comparing Future Repairs and New Car Payments
Identifying Future Repairs
Before making a decision you need to assess the current condition of your vehicle. Knowing how old your car is and how many miles it has on it isn’t enough. The condition of your car is based on things like:
- How well it was maintained
- Quality of replacement parts and repairs
- Driver tendencies
Even if you have kept track of these things over the years, your best bet is to visit a mechanic you trust. They will be able to assess the current condition of your vehicle and clue you in to problems that are just around the corner.
You should also consult other auto owners. While no two cars are exactly the same, people who own the same make and model as you can be a valuable resource. Many times the same make and model will have similar problems during the lifespan of the vehicle. You can find online forums with discussions focused on your exact make and model. Problems other owners have experienced can help you identify repairs you may have to make in the future.
Once you have that information you can come up with a rough estimate for what it will cost to keep your car running over the next X amount of years.
Now it’s time to begin looking at payment options. The first thing you need to do is identify five or six cars you would consider purchasing. Check manufacturer websites, online forums, and consumer review sites to get an idea of the features and reliability of your choices.
Once you’ve determined that these cars are suitable replacements, check the price, financing options and any available rebates. Compare multiple dealers and banks to find the best price and financing options available. Once you’ve done that, take your top choices out on the road for a test drive.
After the test-drive call up three or four area dealerships and get final offers for a monthly payment. When determining your monthly payment consider all factors, including:
- Financing options
- Price of the vehicle
- Trade-in value of your vehicle if you’re trading it in
If you opt to scrap your car instead of trading it in, be sure to factor that money into your total.
Choosing Between New and Old
Now that you have the information you need about future repair costs and the cost of a new car payment, it’s time to decide between the two.
Take the amount you figured for potential repair costs and turn it into a monthly amount. For instance, if you determined your current vehicle could last you another two years, take the potential repair cost and divide it by 24. Compare this amount to the monthly payment for the new car you picked out. The lowest payment is the winner. If the totals are close, take gas mileage, repair warranties, and insurance costs into account. It’s possible that your old car is costing you more than a new one would.