When you’re facing expensive car repairs, it can be hard to know whether it’s time to say goodbye to your trusty vehicle or buy a new one. Here are some tips.
Does it seem like your vehicle is getting crankier and more temperamental by the day? If so, you may be wondering whether it’s worth repairing or replacing your vehicle.
There isn’t a one size fits all response to this common dilemma. It’s a decision you shouldn’t take lightly and there are some key factors you should consider. With the rising price of petrol and the increasing cost of owning and maintaining a car, it’s important to ensure you’ve invested (or are continuing to invest) in the right vehicle.
Let’s weigh the pros and cons of repairing or replacing an older car.
4 reasons to repair an older car
1. Lower upfront costs
Fixing an older car can be cheaper, especially if it’s well-maintained and running smoothly. Generally, you will spend less money on repairs than buying a new car.
There are, however, some exceptions to this. For example, a failed transmission or a blown motor will likely cost you thousands of dollars and you could buy a second-hand vehicle for the same price.
However, this replacement car might not be reliable and could cost you more in repairs in the long term. It’s also worth considering using the money you would have spent repairing your old car as a deposit on a newer vehicle.
2. Sentimental attachment and familiarity
You might be attached to your old car and if it’s running smoothly and has been well taken care of, then why not keep it for as long as it keeps going? Besides, you know your car and its features. If it stops being reliable, this might be a sign to replace it.
3. No depreciation
Buying a brand-new car in New Zealand can cost you a lot in depreciation, as a new car becomes a second-hand vehicle as soon as you drive it away from the dealership. According to Canstar, new cars depreciate by 15% the moment you buy them due to the GST component of its asking price, and then by another 10 to 15% in the first year.
This means a $50,000 brand-new car could be worth just $35,000 after only one year. While the level of depreciation slows as the car gets older (provided you keep maintaining it), it’s a known fact that brand-new cars are hit by the highest levels of depreciation.
4. Extra costs and the time factor
Shopping for a new or second-hand car can take a lot of time and effort because of the research, viewings, and test driving required. You might also need to spend some money on pre-purchase inspection reports, which is an extra cost you need to factor into your budget.
4 reasons to replace an older car
1. Safety first
As safety features continue to evolve, it’s almost worth replacing an older car simply for some of the major safety upgrades. For example, a new car might come equipped with automatic emergency braking, blind-spot monitoring, and a reversing camera for better safety. Is there a price you can put on this peace of mind?
2. Less wasted time
If you’re on a first-name basis with the staff at your local auto repair shop, you may have been spending too much time there recently. Not all car problems get fixed right the first time and this can leave you with more downtime as you take your vehicle back and forth for repairs. This is also a sign that your car is starting to become unreliable.
3. Cheaper running costs
If you’re upgrading from an internal combustion engine (ICE) to an electric vehicle (EV) or hybrid, this will reduce your day-to-day running costs. You’ll save on petrol and can also take advantage of the free charging stations dotted around the country. EV batteries can also last up to eight years, compared with six years on an ICE vehicle, which is another cost-saving factor to consider.
4. Repairs cost more than your car’s value
Before you accept a quote for major repairs on your older vehicle, step back and consider how much they’re going to cost you. For example, if you’ve been quoted $3,000 for repairs and your vehicle is only worth $2,000, it might be time to get a new vehicle instead.