Co-author: Michelle Norton
To service or replace… It can be a difficult – and often emotional – decision. Here are Canstar’s tips to help you answer the question: When is it not worth repairing a car?
Plenty of people love their cars like a member of the family; some people even give their vehicle a name! (If your car doesn’t already have a name, why not try a car name generator like this one?).
But no car has an infinite life – and most of us are not driving a brand-new car to begin with. So that means there will likely come a time where you have to weigh up whether continual repairs are worth it.
New car or new-to-you car, it doesn’t matter, sorting out your car insurance should always be top of mind. To quickly and easily scan the car insurer market – for free – use Canstar’s car insurance provider comparisons.
When is it not worth repairing a car? The safety test
When the rubber hits the road, it’s hard to put a price tag on the peace of mind that comes from the safety upgrades in a new or, at least, newer car. Even if safety is not your top priority, you can bet it’s vitally important to your passengers!
Cars today are being designed better and better, with more safety features coming as standard. An old car simply cannot remain reliable forever, since old and worn-out parts obviously work less effectively. So, even if you saved some money by hanging onto that 20-year-old bomb you inherited from Grandma, worn brake pads can mean a life-and-death situation.
Don’t let a broken-down car make the decision for you. Think ahead so you have time to make a reasoned decision that works for your budget as well as your passengers.
Is it better to buy a new car or fix an old car? The maths to help you work it out
What are the pros and cons of repairs versus new car repayments? Answer the following questions and, when you’re done, you’ll pretty much know whether your old car is worth keeping (from a strictly financial viewpoint).
- How much is your car worth? You can check your car’s value with Redbook. A 10-year-old car may still have some considerable value, while that 20-year-old bomb from Grandma is probably worth $2,000 at most – or it may only be worth something to the wreckers. Note: If you’re going to sell your car pre-repair, you are required by law to let the buyer know about any repairs that need done.
- How much would it cost to replace your car? A car repayment plan for a relatively cheap car can be around a few hundred dollars per month, so it might cost less to just do the repairs. You can work out what your monthly repayment would be at different interest rates using our Canstar Car Loan Calculator. Compare car loan interest rates here. And don’t forget to factor in car insurance, too!
3. How much are you paying in services per year?
If you’re paying more in car service repairs than the estimated car repayments would be, a new (or “new” used) vehicle could give you some peace of mind. Future repair costs are unlikely to be needed anytime soon for a new car, and also fuel efficiency costs are lower than in old cars.
4.How much is this particular repair going to cost? If the repair costs less than half of the car’s market value, it could still be worth doing. But if the repair is going to cost more than the car is worth, cut your losses. Take that 20-year-old car from Grandma. If it’s only worth $2,000, then repairs of $2,000 are worthless because you know the car is on its way out anyway, and more repairs are coming down the road.
5.How long will this repair keep your car going? If the repair is for a once-in-a-while issue and will keep your going for an extra few years, it could be worth it.
6. What can your budget currently afford? If you are currently struggling to pay an expensive repair every now and then, then your budget will probably also struggle to pay a few hundred dollars a month in car repayments.
Want some extra help with budgeting? Canstar can help you create a budget that you can stick to. Read our tips, here.
Once you have these numbers, you are equipped to make a better financial decision.
Don’t be afraid to get a few quotes if your mechanic gives you a number that is downright terrifying. Other mechanics can give you a quote without seeing the car, as long as you can tell them what repair it needs. Get them to email you the quote, if you can, so you can see how much of the price is labour costs (which can vary hugely) and how much is the cost of parts (which shouldn’t vary much).
Look at your personal situation
Okay, we’ve done the math. Now, let’s get personal.
- Were you planning on this car being a hand-me-down to your kids when they start learning to drive? If so, those replacements like the timing belt or the water belt or the fan belt (what is it with belts?) could be worth it.
- How much do you really need this car to last you a while longer? Maybe you need some time to save up and get your finances in order, so that you can plan ahead for a deposit on a first home. Pay for the repairs and keep that hunk of junk going for a couple more years.
- Do you really love your car? Maybe it was your first car and you worked for five years to save up to buy it, or maybe it was a gift from a loved one. You might feel like buying a new car would be a betrayal, giving up on an old buddy. Don’t dismiss those sentimental feelings – just make sure you still think about safety and do the math. It’s not betrayal if your old buddy is a black hole swallowing all your money!
- Are you getting tired of driving to and from the mechanic every month for a recurring issue? You could be spending that time much more productively/pleasantly, such as down at the beach!
Car Brands that New Zealanders are satisfied with
Our Canstar Blue award for Most Satisfied Customers in 2019 went to Kia, which scored five stars in the following categories: Overall satisfaction, reliability, value for money, point of sale service and after sale service.
Again, no matter what car you go with, don’t risk fixing or upgrading your car and then going without car insurance. While you’re looking up car models, also take the time to look at the options for car insurance providers. Use Canstar’s free comparison tools to put the wheels in motion.