Keep Your Old Car or Get a New One?

Thu, 7/5/2018 - 9:23 pm by Kirsten Rincon

One of the most common myths that many car owners believe is that it’s cheaper to buy a new car than to continue fixing the one they’ve been using for years. But, you just need to do some simple math to see that this claim is not completely true.

Most people use their cars for at least 5 years before they start thinking about replacing them with new ones. After you’ve been driving your car for 5-6 years, it’s only natural that certain defects are going to start emerging more frequently and it will probably not be cheap to fix them. At this point, you are likely to be paying at least $1,000 a year for repairs. In addition, you have to factor in gas costs, which will be higher as compared to a new car, as well as auto insurance.

As the car gets older, repair and maintenance costs will only go higher and at some point, they will reach $3,000, $4,000 and $5,000. This is not a small amount, and a lot of people believe that buying a new car is a more cost-effective solution. But, you have to compare these costs to the costs of buying a new car. When you buy a new car, unless you can afford to pay cash for it, you must take into consideration that you will have to make monthly payments that will surely cost a couple of hundreds of dollars for about 5 years. A lot of people are forgetting that after a couple of years, your car will be paid off and you won’t have to worry about monthly loan payments any more. That’s a fact that shouldn’t be overlooked. Also, insuring a new car costs more than insuring a used one, due to the fact that new cars are more expensive.

However, if your car starts repeatedly experiencing the same serious defects that cost a lot of money to repair, you should start thinking about replacing it. In general, if repair bills for your old car exceed $3,000, it might be more worthwhile to buy a new car.