When not to repair a car

There’s a saying out there. You’re not supposed to repair a car whereby the cost of the repair is more than its value. But when you compare a repair to the cost of a car payment, it would seem to me that repairs would have to be quite expensive before buying a new car or a newer car would make sense.

But that leads to two questions? The first question is how do you define value as there is a wide range between the trade-in price and the retail price? The second question is utility: how long can you drive a car after making that repair? Also part of that question is: what is the probability that a similar car would have a similar repair - aka if you have a $3,000 car, isn’t there a high probability that another $3,000 car would have the same repair in six months from now? The second question depends on model - there are cars that are lemons and there are cars that are very reliable.

If I have an $8,500 car at retail, I probably will fix the head gasket or tranny. But if it’s worth $3,000, it probably doesn’t make sense as I likely will have to make significant other repairs within a 3 year period.

The commercial and the consumer decisions are different due to taxes and the need for “uptime”

In a post last week I had 5 reasons for getting rid of a car, and two dealt with repairs. If you have a low mileage car in very good condition, but worth little due to tis age, a single repair as large as the market value may be justified.

For instance, my neighbor has a pristine 2001 Toyota Solara convertible which his wife drives about 7000 miles a year. If that car needed a transmission for $4000 it would be worth spending the money since the rest of the car is flawless, even though the Gold Book value is only $2800 . Car has about 200,000 miles on it but was always garaged and well cared for. The car is a unique model as well and convertibles in that size range are rare.

On the other hand, if the car is in below average shape and has more potential expensive repairs, get rid of it; it would be sending good money after bad.

P.S. I would add that monthly car payments are not a good comparison even though the Tappet Brothers refer to it quite often. A car loan is typically 5 years whereas the car should last you 10 years. So one half the car payment each month in repairs is a more realistic comparison. If my car needed half a payment’s worth every month I would get rid of it.

On a cashflow basis, if the total annual ownership cost starts exceeding the average annual cost to date, it’s time to say good-by. That’s the inflexion point on the ownership cost curve and from there it’s progressively more expensive and the car becomes less and less desirable.

Volvo owners are often so proud of their cars that they will drive them forever regardless of cost or reliability or appearance.


There are many considerations whether to repair or replace and all are personal as well as practical. Figure out the proper question before you do the calculations.

Personal questions like… Do you like the car? Does it still fit your needs? Would you need to go into debt to either fix it or buy the replacement?

Then some more practical questions… If you don’t fix it, what are you going to do with it? Scrap it? Sell it as a handyman special? Are you doing the work yourself? Can you buy an equivalent car for what it costs to fix this one plus scrap cost? Is it a rustbucket? Are there other major repairs looming on the horizon?

My repair costs are usually low since I do my own work. Do I want to spend 10 hours swapping a transmission? When I was 20, sure, not so much anymore! Maybe if I liked the car more. Personal vs financial considerations.

Pretty sure there is no right answer that fits everyone.


As mentioned, there are many variables. The value of the car is not a big factor IMO.

It depends on the rest of the car, life expectancy after the repair and also how important is it to have a reliable ride. If your tolerance for down time is very low, then having a beater as a daily driver is risky.

A friend is keeping a Volvo on the road with over 200 K miles on it. It has had many repairs including engine and transmission repair. He has had to rent a car quite a few times over the last 2 years. Last month he got an e-mail from enterprise saying they have been missing him. I guess that was a good month. I don’t think I will keep throwing money at that car.

I think that should be replacement value – factoring in the “unknowns” of what and when repairs might be needed in a replacement vehicle.

Like I said before, one of the main reasons to let a car go would be if there is rust. Mechanics can be fixed but rust is a death blow. The other thing to consider when people compare the cost of a repair with avoiding car payments is to consider it is simply delaying a purchase, not eliminating it. If at some point in your life you will buy a car, not doing it now is simply a delay of the inevitable if it makes you feel any better. Whether a repair is cost effective or not you’ll never know until the end when you do the cost per mile calculations. I should have gotten rid of my Riviera at 350,000 instead of keeping it to 520,000 but I didn’t know that until the end. Thought I was saving money but a true joy to get into a car that everything worked and didn’t have to check on the mile markers to be able to tell the tow company where I was to pick me up.