The Tipping Point: When to Repair or Sell Your Car

by Sarah Collins

    One too many break-downs could mean it's time to sell.

    Noel Hendrickson/Digital Vision/Getty Images

    The average cost of a new car tops $30,000, according to National Public Radio, so for many of us the idea of selling the car and buying new doesn’t seem realistic. A variety of factors go into determining when it’s financially prudent to repair a car versus sell it -- know them to determine whether to hang on to ol' Kinda Reliable or finally say goodbye.

    Value of the Car

    Once you receive a cost estimate from a repair shop, compare it to the total value of the car, as well as the expected lifespan of the vehicle. For example, if the repairs total approximately $1,000 and the car is worth $3,000, it’s smart to repair the car. Alternatively, if the car is worth only $1,000, but those repairs mean you expect to drive the car for least another one to two years, go ahead with the repairs, CBS News suggests. However, if the repairs cost $3,000 and the car is worth only $1,500, it’s a better idea to get rid of the car. Find the market value of your car by visiting the Kelley Blue Book website.


    If your car has been faithful and these repairs are out of the ordinary, feel comfortable in forking over the money. However, if this is just one instance in a long line of repairs – even if the price tag is small – consider trading it in for a more reliable vehicle. Cars typically last about 15 years, according to the “Arizona Republic”; however, after 10 years, an oft-broken car oft turns into a rolling money pit, if it rolls at all.

    Public Transportation

    If you choose not to repair your car but you can’t afford to buy something new, consider how you’ll get from place to place. If you live in a city where public transportation is easy to get to and affordable, selling your car makes financial sense. For longer distances, rent a car from a company that specializes in loaning vehicles to city folk. However, those than live in rural or suburban areas without an effective bus or subway service might be better suited for hanging onto the car, even if it’s not as reliable as you’d like.

    Cost of Replacing Your Car

    If you decide to sell your car to replace it with a newer vehicle, consider all of the costs -- it'll help you decide whether to keep driving the old one. Determine if you have enough cash available for a down payment, if one's necessary. Tags and title are sometimes included in the loan or purchase amount. Additional costs exist at the DMV to register the car in your name. An older car, even one that’s less reliable, typically costs less to insure. If you are considering selling your car and buying a new one, find out how much it will cost to insure the new vehicle before you make a firm decision. The drastic difference in insurance cost for a new car versus an old one may break your bank. Over the long run, an increase in monthly insurance premiums might make less financial sense than the cost of the car repair.

    Photo Credits

    • Noel Hendrickson/Digital Vision/Getty Images