Hi everyone: first post here. My 2000 Solara has 180,000 miles. Transmission died a few weeks ago and debating what to do: rebuild (transmission specialty shop quoted $2,500) or just donate it and move on. Very attached as this was my first car that I saved up for and bought in my first job. I’m not super mechanical so I did the basic maintenance throughout “her” life. In fact had to replace engine two years ago (to an engine with 60,000 miles).
If rebuild, I’m going to use for work commute for another 2-3 years — that is, when we start going back to office again in mid 2021. All intown highway miles. I don’t want a car note hence not wanting to get another car if I can help it. My fiance thinks I’m being too sentimental: he thinks rebuilding is too unpredictable, that it’s throwing good money after bad and that it’s time to move on. We have a spare car between the two of us so we have no issues getting around without my car. Needless to say, the value of the car now is below the cost of rebuilding the transmission (~$1,900 for one in working condition).
I know you do not want a car payment, but a good way to justify repair vs replace is to run payment numbers. Consider what a replacement car payment will be. Lets assume $250 a month, if your Camry lasts 11 months you are ahead of the game. A more realistic payment would be $300 to $500 a month, you can do the math. A lot depends on the condition of the car. Body rust is a huge show stopper. Have your mechanic look the car over, if it is sound otherwise might be a good deal to replace the tranny. I personally would not, but I am not in your shoes.
Thanks Steve! Good exercise on the repair vs. replace math - I’ll do that right away. No body rust issues and no other general big problems that regular maintenance can’t take care of. But my fiance also said the same as you: he wouldn’t bother either. Donate it, hold off on buying until I start going back to the office again…
These questions are almost impossible to answer over the web. I have no idea how good your replacement engine is or how long it will last . If you can actually get the transmission rebuilt for 2500.00 and have some kind of warranty that might be a good choice . Right now used vehicle prices are ridiculous . I myself would just let the thing go and start saving money for when I had to have a vehicle.
Fair point! And good reminder to inquire about the warranty from the transmission shop. And you pointed out another reason about my not wanting to buy a car now: the prices of used have been so high (and I’ll be buying used, needless to say).
Can you get references for the transmission shop? How did you find out about it? If the shop checks out, I would consider the replacement seriously. The major expenses are the engine and transmission. If you are satisfied with the engine, get a couple more detailed estimates for comparison.
Note that donations don’t have the same tax value they used to. In this case, the charity will sell the car and send you a receipt. That is what you can deduct on your taxes. You may only use your interpretation of the fair market price if the charity uses the car themselves or donates it to a family in need.
Thanks JT: the transmission shop has been in my neighborhood for years: a father-and-son vet-owned business. Stellar reputation for honesty and good work. Provides warranty on their work. I’m leaning heavily towards rebuilding…my fiance still thinks I’m wasting time and money.
Good call re. vehicle donation and FMV. I didn’t realize that’s how charities handle donated cars, appreciate you clarifying. Pretty safe to assume that the car, if they come tow it today in the condition that it is now, will be worth nearly nothing. It would be a feel-good exercise to donate (and frankly easier to deal with) – but certainly won’t make much of an impact on tax deductions.
You say that you have a spare car between the two of you. The cheapest thing to do is to sell your car as-is, and drive the spare. This will also save you insurance and registration costs.
One of the things wrong with over-repairing your car is that if it gets totaled, insurance will just pay bluebook. If your car as-is is worth $500 and your new tranny is $2500, then you have $3000 in the car when it is worth only $1900.
If the spare car idea doesn’t work, then I personally WOULD get the tranny fixed, since you would have a car you trust for $3000. That is hard to find.
A 20 year old car with 180,000 miles needing a transmission? Time to move on. Maybe you could donate it to someone but I suspect it will be to call the junk yard for a pick up instead. Now if it were some kind of an upscale or collector vehicle, or something you wanted to pass on to your heirs, it might be worth it. Look at it this way, you can’t keep a car for ever and would have had to buy one sometime. The decision was just moved up a little.
Totally agree: I’ve “self-insured” my car for awhile now, exactly to your point. We are definitely able to get by with the spare car especially given this year’s broader environment. Saving on the registration and one fewer car to deal with annual emission check is nice too (my state requires it): good call on that.
Are you saying you don’t have an actual insurance policy on your vehicle . In my state the bond requirement for self insuring is thousands on deposit .
Sadly you’re spot on: it’s a run-of-the-mill 2000 Camry. It’s truly of little value to anyone in the world except me lol - and even to me, it’s 50% sentimentality I must confess! Loved this car for my “starter” car and loved that it’s been through everything with me. But perhaps it has lived a good life, served me well and it’s time for it to cross the rainbow bridge…
Like I said before, I think that line item on my insurance payment is somewhere around $60 for six months, on pretty much either car. Not a big expense.
I keep repeating myself but also consider the new standard deduction. For 40 years until recently I have itemized deductions but try as I might I have not been able to get higher than the standard deduction anymore. Plus no records or math. Just call the junkyard. I got $100 for our Olds-cash when the fuel pump finally went. I needed the garage space and for 10 miles a year didn’t get used much.
I am in the move on camp. Use the spare car, save up and when the offices open buy a good used car. You are going to like the newer car even more as it will have a lot of features you are missing in your Toyota now.
But you don’t live on the left or right coast. I do, and my deductions are are way below the level required to itemize.
It appears that the OP is not as well off as you and me, and maybe they could actually itemize and make it work. I don’t know where the OP lives or what assets she has, and that can certainly play into the standard deduction choice.
I am going way against the grain here. What is important is not the Blue Book value versus the repair costs. The Blue Book value represents what the car is worth on the open market, and takes into account the fact that when buying an older used car with a lot of miles, there is a lot of risk. Much of that risk is due to the fact that an older car will have passed through several owners, and there is no way to ascertain that it was properly maintained, not driven aggressively, etc. However, the car is worth more than KBB to you the owner, because you don’t have this same level of risk since you know the car, and have driven it for several years.
What is important is how much the repairs would cost versus the alternative, which for most people is buying a different used car. If you have a car which is otherwise in good condition, and has received proper maintenance, the fact that the Blue Book says it’s worth $1500 (for example) and needs $2500 worth of repairs isn’t important. What’s important is the probability that spending the $2500 will result in a good running car for several more years, and whether or not you could buy a better more reliable car for that $2500. If the answer is that the repair is likely to be successful, and you cannot buy a better car for the price of the repairs, then it makes sense to do the repairs.
Another way to determine if a car is worth repairing is to compare the monthly payments and full-coverage insurance costs per month on a different used car to the cost of repairs on your current car. If a different used car is going to cost about $400 per month, and your current car needs $2500 worth of repairs, then it takes just 6.25 months to cover your costs. Put differently, if you have the car repaired, every month after the 6th month that it continues to run, it is literally putting money back into your pocket, month after month after month.