Should you repair your car, or is it time to sell it instead? The answer depends on many different factors. So, your car broke down, and you are looking for a repair job that will dent your finances significantly. Should you clench your jaw and proceed with it, or is it time to consider selling it?
It’s normal to grow tired of getting thousands of dollars worth of repair bills. Wanting to sell it so you can buy a new model is normal, but is that a sensible decision? Let’s find out. Today, we will discuss how you can find out whether it’s time to sell your car or repair it instead.
When Should You Repair Your Car?
- When repairs are significantly less than your car’s value: If the repair costs are minor compared to your car’s value, repairing the vehicle would be better. It is true, especially if you own your car completely, and replacing it would leave you responsible for car payments, taxes, registration, and any other hidden costs.
- When repairs can extend your car’s life: Some repairs, like changing damaged brake pads or a timing belt, can be considered routine maintenance and may not indicate more prominent issues. Careful car maintenance can help extend the car’s life and put off the need to sell it.
- Minor repairs: If a repair is specific to a particular part of the vehicle, while the rest is in good condition, selling it doesn’t make sense. If you are struggling with the payment, you can opt for small vehicle maintenance loans.
When Is It Worth Selling Your Car?
- When the total repair cost is higher than the car’s market value: Most cars depreciate 20% within one year and another 15% each year afterward. If the repair cost is close to or exceeds the car’s current value, you should consider selling it.
- If the vehicle will be unsafe even after repairs are done: If repairing your car won’t resolve the safety issues altogether, you shouldn’t put yourself in harm’s way. Be honest about necessary car repairs while exchanging it for a new car. The dealer can do these repairs before they resell it.
- When your car needs repairs too frequently: If your vehicle breaks down too often, this might be a sign of a more serious underlying issue that will eventually require extensive maintenance. Frequent repairs add up rapidly and should be considered against the cost of purchasing a new vehicle.
Should You Repair Your Car Before Selling It?
If you are planning to sell your car but are doubting if repairing it would add some extra bucks on the car’s value, then here are some questions you can ask yourself to figure out the right answer.
. Will repairs increase buyer demand?
Some repairs can boost your car’s appeal and help sell it faster. For example, fixing the air conditioner or doing a paint job can increase your car’s value. Likewise, essential repairs like replacing worn tires can reassure potential buyers of your car’s reliability.
. Will the repairs be worth it?
You can visit a mechanic, get estimates for any repairs your vehicle needs, and weigh those costs against the potential price increase. For example, a $500 repair bill can be worth it if it ends up adding $1,500 or more to your car’s value. But if it doesn’t add significant value to the car’s reselling price, you may want to skip the repairs.
Determining whether to repair your car or sell it may eventually boil down to weighing the repair costs against the purchasing price of a new vehicle. In your calculations, remember to consider the costs of car registration, taxes, and monthly payments if you plan on financing the vehicle.
Before shopping for a car, consider running the numbers using online car payment calculators to understand how much you can afford. That way, you can concentrate on vehicles within that price range.