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Is It Time to Upgrade Your Car?

time to upgrade your carI got that fateful call last Monday, “Honey, you’re not going to like this, but the car just broke down on my way to work…” She was right. I didn’t like it. I had tons of work to do, I didn’t want to put our money toward car repairs (who ever does?), and I didn’t even want to think about scrambling around to buy another car (in the event that this repair would be too pricey). But….sometimes you just have to take what life throws at you.

Immediately after the call, I packed up my laptop and papers and rushed out the door. Twenty minutes later, I pulled in right behind the tow truck. Thankfully, Liz was fine and in good spirits. After getting the details of the breakdown, it didn’t take us too long to conclude that the issue was the transmission…..I had a feeling that this was going to be a costly repair. Ugh. Sure enough, the mechanic confirmed it – it was the transmission and it was going to cost us around $900. At this point, many people told me, “It’s time to upgrade your car.” But is it really?

Is it Time to Upgrade Your Car?

Quite a few people in our situation would immediately call that broken-down car a loss and would run to the nearest dealership and buy a brand new one. I think this is absolutely ludicrous – mainly because of the high price tag of a new car. But, even buying a new-used car might not be the best option in this situation. So how do you know if it’s time to upgrade your car? Put your logical hat on. It’s time to ask yourself some pretty important questions….without letting your emotions get mixed up in the equation.

1) What’s the Cost of the Repair?

For us, the cost of repair is a one-time expense ($900). For others, this cost could be a running total over the last year or so. Perhaps you needed to replace the water pump, the timing belt, maybe even the head gasket – if this is the case, you might want to consider the sum of each of these costs when considering if it’s time to upgrade your car.

2) What is Your Car’s Value if Fixed?

So before your car took a dive, what was it worth? Unfortunately, the Dodge Intrepid wasn’t worth much – maybe $1,800 or so – which made the decision to fix it or replace it a little more difficult. Before you just quickly decide to junk your car, do your due diligence and find out what you could sell it for if it was repaired.

3) Does the Repair Cost More Than the Car’s Value?

So now it’s time for a little 3rd grade math. Will the cost of the repair be more than the overall value of the car? In our situation, it’s pretty obvious that it’s not. If I junked the car today, I could maybe get $200 scrap value for it, but if I put $900 into it, I could sell it for $1,800 (maybe even more, now that it has a new transmission in it), which ‘earns’ me $900, $700 more than just scrapping it.

20150925 - time to upgrade your car

If your car will cost $1,000 to repair, but is only worth $800, you might want to consider forgetting about the repair and just scrapping the car for a couple hundred bucks. This is a definitely possibility. But, just because the repair costs more than your car does not automatically mean you should just junk your car 100% of the time! There are other factors to consider before deciding that it’s officially time to upgrade your car.

4) Can You Buy a Reliable Car for the Cost of Fixing It?

If your car is worth $800, but it’s actually pretty reliable most of the time, then maybe it’s worth making a one-time fix of $1,000. After all, how many dependable $1,000 cars are there out there? Not too many. And, even if you think you’re buying a dependable one, it could still turn into a lemon. The absolute truth is, I’d rather keep my used car that I know everything about than junk it and buy another cheap one that I know nothing about. So is it time to upgrade your car? This isn’t an exact science – you’ll have to think logically through this one on your own.

5) How Long Will the Repair Last?

If you do make the repair on your car, how long do you figure it will last for? At this very moment, the mechanic is putting in a used transmission that has 107,000 miles on it. It all checks out, and it comes with a 6 months parts warranty, but how long will it really be good for? Another 20,000 miles? 50,000? Maybe more if we’re lucky? My best guess would be 40,000 miles or more if we baby it, which will last us another 2.5 years. For $900, that’s not too bad at all – especially since everything else on the car has been rock-solid.

Before deeming that it’s time to upgrade your car, ask yourself how long you think the repair might last. If you’re paying out $1,000 and you doubt the repair will last more than a year, then the fix is probably not worth your time OR your pocketbook. Again, when you ask yourself if it’s time to upgrade your car, the answer is not easily calculable. You’ll need to know your car and it’s general dependability.

6) Will You Be Able to Find a Deal on a Car Today?

What I absolutely hated about our car breaking down is that I had no idea it was coming. I hadn’t been searching the automobile market, and I had no idea what was available or if what I found was a good price or not. The last thing I wanted to do was go to a car dealership and get sold a piece of crap because I absolutely NEEDED a car right then and there. FYI – I did this once before – and it resulted in a $1,500 repair within the first two months. I DID NOT want to find myself in this situation again.

If your car died, but you don’t yet have a solution for buying a new one, do your best to find a Plan C – which is typically to borrow one from a close friend or relative. Borrow a vehicle while you search for another one. You can even offer to pay them a little bit of rent for their car if you want. The important part of this situation is that you won’t feel as rushed to buy another car. If you don’t feel quite right about the purchase, then this temporary loaner will give you the power to walk away.


If you think it might be time to upgrade your car, chances are that your emotions are just getting in the way of a logical decision. Has your car been fairly reliable? Will it  be reliable after the repair? Even if your car is on its last leg (or tire…), the last thing you want to do is go out and buy a brand new one. You’ll probably pay too much to begin with, your net worth will take a hit as it depreciates year after year, and it might not even be as dependable as your old car. Just because it’s new doesn’t mean that it won’t have any problems.

So be honest with yourself, is it time to upgrade your car? For 90% of us, the answer is, “probably not”.

Battle of the Mind Money


My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. We used to upgrade cars too often – and then we got wiser about money a few years back… luckily we are still living with those fairly new cars and haven’t had to face this dilemma yet. Growing up though, it seemed to be time to replace a car when it was dangerously unreliable… like the car liked to break down and leave you stranded on the side of an interstate. Of course, that was before cell phones… but I think when I start stressing about whether or not my car can make it to the destination, that will be when I upgrade.

    • It’s crazy how long cars can last if you just take care of them and stop thinking about buying new. It’s a huge money-saver too! Thanks for the comment, Mrs. SSC

  2. I drive an older car with many miles on it and I plan to just repair it rather than buy a new car if it breaks down (within reason). Like you said I’d rather fix my old car then buy someone else’s and not know anything about it.

    • Since I hardly drive anywhere (work is about 3 miles away), I’ll be keeping one of the older cars while Liz eventually gets a newer one. The question is, which one do I keep? I love the Honda Civic, but it has 223,000 miles! How long will it last? Is it better to drive the bigger Dodge Intrepid that has 157,000 miles and a newer transmission?? Decisions decisions…. It sounds dumb, but it is seriously a tough choice.

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