And here I was thinking you were only discussing the old/existing car in the annual ownership costs.
Oh well, thanks for the exchange anyway.
Even if you buy only used cars, which I did for many years, you still have to compare the annual repairs incurred with the cost of buying a replacement car of the same year.
Many on this site will recommend doing an expensive repair if the rest of the car is in very good condition, rather than buying another used car whose condition is unknown.
Say you have a pristine 12 year old car that needs a transmission for what it costs to replace the car with the same model and age. It is less risky to do the repair than to buy another used car for that money.
If my 2007 Corolla blew its transmission I would spend the $4000 or so since the car has no rust, is reliable and has only 60,000 miles on it.
The initial rules my sister set out were general and companies would use those. It allows you to track when the time will come up to make the decision to trade. Decisions on an individual repair depend on the mileage and condition of the vehicle and the probability of another such repair happening soon. The individual owner has to make that decision.
Disposal ages of some cars we have owned were:
- 1948 Chevy 12 years, mileage 110,000 miles
- 1957 Plymouth 8 years; 70,000 miles, these cars were disasters.
- 1965 Dodge Dart 13 years, 154,000 miles (rusted out and unsafe)
- 1994 Nissan Sentra 18 years 180,000 miles (sold to student for $750)
- 1976 Ford Granada 13 years 108,000 miles (nickel and dimed us to death)
- 1988 Chevy Caprice 19 years, 156,000 miles; sold in good condition ($1400) for business reasons,
My personal cutoff has always been if the average repair cost per month approached 1/2 a new car payment.
Pretty much that exact scenario happened to me about 25 years ago when I was in high school and had no money. I’d just put a bunch of work into my new (to me) Tercel that my dad had handed down (mostly involving adding a radio and an air conditioner since it came with neither), and an idiot in an SUV ran a stop sign and totaled it. The thing was an '84, so it was worth pretty much zip in the blue book, but it was also a ridiculously reliable little thing that I probably could have gotten at least 10 more years out of.
What I got from the insurance property damage payout was less than I’d spent on the AC and radio, and wasn’t nearly enough to replace it with anything close to what I had, especially since it was a New Mexico car that had since been moved to Minnesota, and so it was rust free - good luck finding a replacement in that price range with no rust up here.
I ended up getting enough from the personal injury lawsuit to replace it, but of course that was several years later at which point I’d already gotten a different car that was a rolling pile of crap which cost me a lot of money to keep on the road.
But, lacking a crystal ball, we can’t know when such things will happen and can only make decisions based on the best information available. Statistically speaking, you probably won’t get into a crash right after you do an expensive repair and so it’s reasonable to do it. After all, if you get a new car to avoid the possibility of losing 2 grand worth of repair in a crash, and then you get in a crash with the new car, you have to pay a lot more in insurance premiums for awhile because you crashed something expensive rather than something that’s almost worthless. 
My rule of thumb is to never own a car that I don’t have enough savings to replace the car if something happens to it. I do carry collision and comprehensive, but drop the collision and comprehensive after the car reaches s certain age. I effectively then become my own insurer. I figure that the car will always have some scrap value and I can deduct the rest of the loss from my taxes.
I decided to do this while I was in graduate school. Two weeks into my second semester I was awarded an assistantship which gave me a monthly income. I had already paid my tuition. Since the tuition was included as part of the assistantship, I was refunded the tuition I had paid for the semester. I put that money into savings and dropped the collision insurance on my car. I reasoned that I now had enough savings to replace the car. Fortunately, I didn’t have to replace the car while in school and the extra savings on insurance went in the bank. When I finished my coursework, we had enough in savings to buy a newer car.
That happened to me as well. I had a 1966 Chevelle Malibu V8 in near perfect condition with 98,000 miles on it when it was wiped out in a snowstorm. The car was 10 years old and the insurance payout was miniscule. No personal injuries, thank God, I had equipped this car with a transmission oil cooler and a heavy duty trailer hitch as well as the wiring.
The cop who took my statement and the tow truck driver both felt sorry for me.
A new car will get you something more reliable (at least under warranty), safer, nicer to drive because everything is new and tight. And it looks cool, and has features no one imagined 7 years ago. But realistically, your older one has 4 wheels like any other car, and probably goes down the road just fine.
Unless it’s a rare exotic it will always be cheaper to repair than buy a new one. However, an unexpected 2K bill is a bigger shock than a $300 a month car payment that is expected every month. Of course, insurance is another factor, and depending on your state, registration fees can be high the first few years.
I know one family that only buys from Carmax, and pick up something nice that is still under warranty with low miles and one they would not normally buy new because it’s would be too expensive. Takes the rub off that depreciation the first year or two.
You always have options, just think long term.
There are WAY too many variables in the equation to be able to give you a direct answer. It depends mostly on your budget, your ability to do your repairs yourself, your free time that you are willing and able to put into the process… For example, if you make a gob of money and can afford a brand new car every two years, you’ll have very little time, and money into repairs but more into car payments and insurance. I can fix anything that breaks on a car, for the most part anyway, so a $400 dollar repair on a 15 plus year old car doesn’t bother me. I figure, “look at all the new car payments and full coverage insurance bills I’ve saved”. But, and this is kind of key, I have the experience, the tools, the equipment and the time to be able to fix my own stuff. For me, I run it till they just won’t run anymore. If my frame is getting rusty and there are a ton of little issues with the car and the motor blows…it’s going to the scrap yard. If it’s otherwise sound and has very little in the way of minor issues with it, I’d fix it.
When is it time?
When your gut tells you it’s time. Or your wife… even more of a sign than your gut. 
Yeah agree with #9 way back and if your wife tells you it’s time. If you don’t have a crystal ball to anticipate repairs and don’t want to pay for them, drive a car with a warranty and pay the freight. The is no free ride. The thing you have to remember is that for every single mile you drive, plus for every day that goes by, there is an expense. You may not have to pay for it that day or that mile, but at some point you will need to write a check. So pick your own cost per mile based on your experience from 15 to 50 cents a mile and be happy if you end up paying less.
My rule of thumb is if it gets to age and miles to make a road trip confident the 2 dogs 2 cats (cats gone now) wife and luggage are probable without trouble keep it. So last year with the 03 trailblazer with 190k miles was the last road trip with the family. Nothing major has happened, but we got a rav 4 for the road trip, going to rent a uhaul truck at $20 a shot to pull the boat in and out, so the trailblazer is now a town car.
Not if you’ve been putting away, say $200 a month for 10 months! After all, you aren’t making a car payment, now are you?
That’s the point of a number of these comments and also the wedge car salesmen use to convince you that a $300 car payment 12 times a year is better than $2000 repair bill every 3 years or so.
Its also why the “Millionaire Next Door” droves a 10 year old sedan. That’s a book title, by the way, and a good one.
Yup!
He certainly didn’t become a millionaire by leasing his cars in order to look like he is living beyond his means.
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Agree that individual circumstances will vary. OP asked the question on an “all other things being equal” basis; in other words what is the most logical way to decide when large repairs start to happen. Again we assume the work will be done by others and OP has a budget to either do the repairs or buy another car.
I spent 10 years in sales where the car had to be both reliable and good looking to reflect the company’s image. So we traded every 3 years, regardless of mileage or condition. Employees were then allowed to buy the car at the company’s book value, which was a very attractive price.
If your car is not used for business your decision process is different, and the rules we previously discussed apply.
There is one more thing in keeping an old chariot going, I may have mentioned under a similar topic that for older cars even with relatively low miles, ‘time’ can be a factor. Like gray hair and wrinkles, time can be hard on cars depending as it applies to different materials, and of course where you live (by the sea, salted roads).
Time can mean deteriorated bushings, tires, and gaskets due to oxidation. Rust of course, especially if it affects exterior parts related to suspension, brakes, and steering linkage.
These are things that break down gradually but can certainly impact how a vehicle drives and more urgently it’s safety.
Such defects can certainly mean expensive repairs, and likely be a deal breaker when push comes to shove.
I wish I could have answered the question as to how to tell when it’s time to cut your losses. I just don’t see how there is AN answer. There’s more to it than any one situation or any one answer. Again, just too many variables. The real choice is to either buy new and have a lower likelihood of needing maintenance or keep fixing the old one and follow the old, “it’s cheaper to fix than buy new” saying. In my experience, there’s no such thing as winning the game of making the right choice. A new car can cause you more headaches than it’s worth or an old one might last a really long time.