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Should I repair or replace my old car?

Grown weary of breakdowns? Here's when to switch to something new.

An expensive car repair can feel like a punch in the gut and leave you wondering whether it’s even worth it. But before you start shopping for a new set of wheels, weigh the benefits and drawbacks to decide what makes the most sense for your finances.

First, consider the big picture

When you’re debating between repairing your current car or opting for something new, consider how long you’ve had the car and its current value. A $1,000 repair on a relatively new car is much different than a $6,000 repair on a car that has a history of breaking down.

So what’s the right answer? Look at the current value of your car along with the cost to repair it. If repairs cost more than half the value of your current car or a year of payments on a new car, it may be time to upgrade to a more reliable model. For instance, spending $3,000 to replace a transmission may not be worth it if you can score a decently priced used car for $200 a month — or $2,400 a year.

You should also consider potential savings — and costs — that come with buying a new or new-to-you car. Factors like better fuel efficiency and lower mileage can save you money in the short and long term. But increased premiums that often come with insuring a new car could make it more expensive than just fixing your current vehicle.

However, there’s always an exception to the rule. If frequent breakdowns have you trapped in a stressful cycle, it could be worth investing in a more reliable car — even if it’s more expensive.

If you decide to repair your car …

You’ll need to have a trusted independent mechanic check out your car. If possible, try to avoid going to a mechanic associated with a specific manufacturer. This way, you know there’s no sales team attached that may want to pressure you into getting a new car.

If you think a mechanic is trying to pull one over on you, consider getting a second opinion from another shop to ensure you’re getting the best deal on your repairs.

Benefits of repairing your car

  • Already know your car’s accident and repair history
  • Skip car shopping and loan applications
  • Avoid bad deals from quickly selling or trading in your car
  • Insurance premiums won’t change

If you decide to sell your car …

You’ll need to figure out if you want to repair your car before selling it. While it’ll cost more up front, you’ll get more money than if you simply sold it as-is. If you decide against repairing it, you’ll need to factor in the cost of repairs to the purchase price to ensure you’re breaking as close to even as possible. And if it’s a junker beyond repair, you can at least sell it for scrap to get something.

From there, you’ll need to decide if you want to buy new or used. Buying new may be the most appealing choice, but a newer used model can be just as reliable with a much lower sticker price.

Benefits of replacing your car

  • More advanced safety features and technology
  • Save time by avoiding frequent trips to the mechanic
  • New and recently used cars typically still have warranties
  • Newer cars are typically more reliable

Compare car loan options

Name Product Filter Values Minimum credit score APR Loan term Requirements
PenFed Auto Loans
Starting at 1.79%
3 to 7 years
Active membership with PenFed
Low APR car loans from a well-known credit union.
No minimum credit score
3.9% to 27.9%
18+ years old, annual income of $4,000+, no active bankruptcies
Get pre-qualified for used car financing and receive competitive, personalized rates. Car Loans
Varies by network lender
Varies by lender
Must be a US citizen with a current US address and employed full-time or have guaranteed fixed income.
Apply with a simple online application to get paired with a local auto lender. No credit and bad credit accepted.
CarsDirect auto loans
No minimum credit score
Varies by network lender
Varies by network lender
Must provide proof of income, proof of residence, and proof of insurance.
Save time and effort with this lending service specializing in beginner-friendly or subprime car loan.
Auto Credit Express Car Loans
Must be employed full-time or have guaranteed fixed income of at least $1,500/month and be a current resident of the US or Canada.
Get connected with an auto lender near you, even if you have bad credit.
Monevo Auto Loans
3.99% to 35.99%
3 months to 12 years
Credit score of 500+, legal US resident and ages 18+.
Quickly compare multiple online lenders with competitive rates depending on your credit.
Good to excellent credit
Starting at 0.99%
Varies by lender
18+ years old, good to excellent credit, US citizen
Compare multiple financing options for auto refinance, new car purchase, used car purchase and lease buy out. Car Loans
Starting at 1.89%
550+ credit score, no open bankruptcies, $24,000+ annual income, US citizen or permanent resident, 18+ years old
Get up to four offers in minutes through one simple application. Multiple financing types available including new cars, used cars and refinancing.

Compare up to 4 providers

Bottom line

When deciding whether to repair your current car or upgrade to a more reliable model, it depends on how big of a bill you’re facing at the mechanic and your car’s current value. Though you may also want to factor in the headache you’ve experienced from multiple breakdowns in a short period.

If you decide to trade up, compare your car loan options before you hit the dealership to find the best deal available to you.

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