You’ve been through so much together–long drives up the coast, parties on Friday nights, and maybe even that first car seat when the new bundle of joy came along. But times have passed, and things have changed. Everything isn’t running as smoothly as it used to, and your relationship has hit a snag.
We’re talking about your car of course. When your relationship with your car has reached this point, you may decide to stay together, or trade it in for a newer model.
As the “pros and cons” battle begins in your thoughts, it becomes a financial affair. The typical categories to consider are your financial situation and options for financing, your vehicle needs (such as family size and safety), gas mileage, and personal preferences. Below are some things to consider, the most common sources of financial upkeep on the current car, and the argument for buying a new car or newer used vehicle.
What Lies Ahead with Your Current Vehicle
Even if you’ve treated your car to regular maintenance and upkeep, high-cost repairs can be unavoidable. Hoses, belts, brakes, shocks, and struts inevitably run down over time. For example, the timing belt of your car is a critical engine component, and the risk of it falling apart is much greater in high-mileage vehicles over 100,000 miles. Shocks and struts can be just as expensive to replace.
According to Marc Uchuiyama, assistant service manager at Honda of Santa Monica, via Edmunds.com, “It’s around this time that people decide what they’ll do with the car. Is it going to be a hand-me-down to your kids?”
Planning on fighting the good fight and sticking with Ol’ Reliable? Read below for what possibly lies ahead.
If You Plan to Keep Your Car and Fix It Up…
There are no “golden rules” when discussing where to spend maintenance dollars first. However, a solid guideline for making a decision is to plot out what the total cost of maintenance will be over the next few years, and whether it will cost more than a monthly payment on a newer model.
TheSimpleDollar.com has some cost calculations to help you determine the hit your wallet will take when maintenance of your current vehicle is required. Replacing a blown motor or failed transmission could cost between $2,500 – $7,000, which is in the ballpark of a solid down payment. If you’re still considering keeping your vehicle, you should consider taking it to the local repair shop for a complete diagnostic test run to determine what lies ahead.
If You Plan to Buy a Newer Model Car…
If you plan to finance the purchase of a newer model car, making a down payment is usually a good idea. Online resources including DMV.org recommend a down payment of around $2,500, but the final figure depends on the vehicle you’re buying and the lender’s requirements.
Purchasing a new car relieves you of the worry of unforeseen issues, due to the presence of a standard warranty of at least three years provided by the vehicle’s manufacturer. There are options for financing through the dealership, but don’t forget to consider financing options from other sources as well. If you are stuck between buying a new car and keeping your soon-to-be clunker, perhaps a newer-model car is a happy medium.
Final Thoughts Before Trading In Your Car
While doing research on your next vehicle, you may find that a trade-in scenario is a good option. You can be free of potential repairs down the line, and there are great options for financing your new vehicle. Whether your new vehicle is the newest model year or used, securing a loan for a car before going to the dealership isn’t a complicated process, and worth looking into before making your purchase.