|The age-old question of whether to buy a new car or fix the old one|
|Written by Warren McCord -|
|Wednesday, 02 January 2013|
Q: I just took my 2000 Honda Accord in for an oil change and inspection and was told it needs a lot of work – they said it is mainly neglected maintenance items – that will run nearly $3,000. Is it time to buy a new car?
A: Only if you want to. Generally speaking, it is more cost effective to repair the vehicle you already own than to buy a new or even newer used vehicle.
The secret to vehicle longevity is maintenance – more importantly, the correct maintenance – doing what is needed when it needs to be done. With the correct maintenance, your engine, transmission and differentials can last hundreds of thousands of miles and you can save thousands of dollars in automotive expense.
As an example, assuming your car is paid off, look at the next three years. If you drive between 36,000 and 50,000 miles during those three years, regular maintenance and repairs should cost less than $3,000, insurance approximately $1,120, and state fees a couple of hundred dollars. Your projected expense over the next three years, including the $3,000 you need to spend for repairs now, is less than $8,000.
But if you buy a new vehicle that costs $25,000, expect to add approximately $2,100 for sales tax. If you make a down payment of $5,000, you would be financing more than $22,000. Monthly payments could range from $200 to $400 or more per month. Maintenance costs over three years might be approximately $2,000; insurance, $2,500; state fees, $1,000 or more. Your expense over three years could reach more than $19,000. Even if the dealer offers “free” maintenance services for a certain time interval, you are still looking at spending approximately $17,000 over three years.
Also keep in mind that your new car depreciates in value the minute you drive it off the lot – it immediately moves from new car to used car.
Keeping the car you have and doing the repairs to maintain its reliability can save you at least $9,000 over three years.
So, how do you know if your vehicle is being taken care of properly? You can choose the dealer, but it may not always be interested in your efforts to prolong your car’s life. The dealer is, after all, in the business of selling new cars. The most likely place to work with you on prolonging the life of your vehicle is an independent repair shop that desires to have an ongoing, long-term relationship with you.
Look for an independent repair shop that is certified by AAA. The organization visits each of its member facilities quarterly to ensure that they have the correct tools and equipment, ongoing training programs for their staff, the correct insurances, paid business fees and a high customer satisfaction index.
Another affiliation to look for is ASE (Automotive Service Excellence). This is an organization that tests auto service employees. The testing, strictly voluntary, is the only testing available in the industry to indicate whether an auto service employee is competent.
Last but not least, look for a clean, well-organized facility that reflects pride in its workmanship.
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