I hear all the time that people get really costly maintenance problems as their cars get older, and instead of making the repair they get another car. Does this financially make sense though? Lets say I have a car with 200,000 miles on it worth less than 1,000 bucks. The transmission goes out and I can’t go into reverse. So the transmission needs to get rebuilt, that would like 2,000 bucks or so? Wouldn’t it make sense financially to get a rebuilt transmission and spend the 2,000 bucks on a car that’s only worth 1,000 dollars? The cost of the repair, $2,0000 can’t get a good reliable car. If you make the repair you will be driving a car with 200,000 miles on it with one of the most expensive repairs you can make to a car completed, that you probably won’t have to make again. It seems to me that from a financial perspective any mechanical repair should be made over getting another car. The total cost is less.
It would seem that it would make sense to get another car if say for example you get into a really bad accident with your 200,000 mile car, multiple panels are dented and scratched down to the medal, some windows are broken etc, and it cost $10,000 repair. Common sense from a financial perspective would say to take that $10,000 and get a car with half the mileage.
Can you help me out? It seems that from a financial perspective it ALWAYS makes sense to make mechanical repairs because it’s cheaper than getting another car. Am I wrong? I would agree if you get into a really bad accident that costs thousands and thousands of dollars to repair, it makes more sense to get another car with significantly less miles with the money it would cost to make the repair.