Vehicle problems may be one of the most frustrating expenses to me. Most people are striving to prevent vehicles from becoming budget busters. We all know vehicles are mechanical and have electronic components. Murphy’s Law says anything that can go wrong will go wrong. So, just relax and realize we’re all going to have vehicle troubles sooner or later.
Such troubles always seem to come at the most inconvenient of times, don’t they? There are many people who work hard to get out of vehicle debt. Yet, they get their vehicle paid off and Murphy (from Dave Ramsey) is around the corner with some sort of problem. Or, Murphy creeps in just a short time after buying a car.
My Murphy was a VW Passat which we thought was a cool car at the time. We took out a loan and bought it used [car loan=BIG mistake]. Yep, just a few weeks later we had our first minor mechanical failure. Then, it seemed like problems came one after another until a 3-4 years into owning the car the big one arrived. A problem under the hood would require us to spend over a thousand dollars for a repair. By this time, the car was paid off, but we had reached our pain threshold, so we cried uncle and sold it to the mechanic.
That decision put us back into car debt for another 4 years. Was it the right decision? I don’t know. I certainly don’t think the issue and issues to come would have added up to what we paid for our new used car (Honda Civic). So, one could argue we’d be better off financially having ran the course with the Passat. However, one might consider the type of car we purchased and reasonably see that we could save a lot more money in the long-run with a Honda Civic which may drive 200,000 miles requiring little problem resolution.
Should you sell your car or repair it?
I suppose that’s the question several people face and it’s not an easy one to answer. At least for those that want to avoid car debt.
I recently read some good advice from Dave Ramsey on his new personal finance iPhone app about this particular subject that nicely fits the situation I’ve described.
Dave says you get another car for two reasons:
- Safety – you don’t want to drive anything unsafe
- The hassle factor. Sometimes it’s time to sell and get another car when the maintenance is driving you nuts.
Almost always it’s cheaper to pay for repairs versus making a payment on a vehicle. I would agree. At least in the first 5 years, but some cars have Murphy sitting in the backseat. For those cars (my Passat), I think you have to guess whether or not Murphy is going to stay around indefinitely. If so, you might just reason you’re going with the hassle factor, unload the vehicle and try to save in the long-run.
Of course, if you opt to sell you’ll want to avoid going into debt on your new used car or at least minimize it (unlike what we did). In hindsight, I think I made the right decision to unload the car, but I should have minimized the debt, or purchased an older Honda Civic and continued to save for the upgraded Honda Civic.
What are your thoughts? Would you sell your issue prone vehicle or stick it out for the long-run?
Photo by Stampest
{ 9 comments… read them below or add one }
I got into this situation with my last vehicle where the car had over 130,000 miles, and had just started having issues. It was becoming a hassle. Finally when the car started having transmission troubles, and required a $1800 repair, – which was approaching how much the vehicle was actually worth – we got rid of it by trading it into a dealer and getting about $1000 for it. The dealer was able – I’m sure – to fix the vehicle for less and sell it for a profit, and we got rid of it because of the hassle factor. Would it have been cheaper to just get the transmission fixed and keep it? Probably. But in the end we decided to move on because we were willing to pay for a newer car that didn’t have all the hassle. Of course we planned ahead and paid cash for the new car as well, so we had no payments on it.
I found this post very interesting because we also purchased a used Passat a little over 2 years ago. The Passat was 6 years old when we bought it…(don’t think we’ll be buying a car THAT old ever again…hindsight is 20/20) There were only 79,000 km and we felt it was good for at least 150,000-200,000 km so we decided to purchase. We didn’t have it didn’t have it a week and had gas line problems. The next month of ownership we had to replace the motor for the drivers side window. In month four, two catalytic converters had to be replaced. The water pump and thermastat had to be replaced in month five. In month ten one tie rods end had to be replaced. Needless to say we were very disappointed but thankfully we had purchased a warranty when we bought the car and many of the repairs were covered.
We have not had much trouble with it since and hopefully we won’t because the warranty is now over! We love the car…it gives the best ride of any car we’ve driven. Luckily we do not have a car payment so it hasn’t caused any financial strain. We hope to keep the car as long as it doesn’t spend more time in the garage than it does in our driveway.
Some issue prone cars seem to have a “sixth sense” i.e. breaking down when you really need them e.g. on an interview morning and thus they end costing more by virtue of lost opportunities than if you had “listened” to them and got rid of them.
I find there are often other factors. I take care of handicapped family members. I need to have a vehicle that will not leave me/them stranded somewhere. I also need to consider the time repairs would take due to appointments. I think having very young children would also be a factor along with your personal age. Vehicle dependability is a major concern in a lot of cases. Maybe I need a second vehicle for ‘insurance’.
I agree with Gloria, there are some of us who depend on our vehicles and “downtime” costs us in one form or another. Which is cheaper? Renting a vehicle for these downtimes, having a second vehicle (with taxes and insurance) or having a newer, more reliable vehicle?
With a second vehicle you can take your time on the repair and do it yourself. Fixing cars isn’t very hard to do when it isn’t needed to take you to work the next morning. Plus, learning how to do something on one car (replacing the water pump or window motor) will help you next time you need to do it to the other car.
I am shocked at what some of my friends pay for a brake job. Yes, you need to get some tools to do it right but after you perform two brake jobs, the tools have more than paid for themselves.
You pay for everything with your car. If you take it to a mechanic, you pay for their time, parts, and you still use your time. You can also do it yourself and pay for parts, your time, and your learning curve. I go back and forth between the two depending on the job. The hassle factor is a big deal to me. My truck has rarely ever had issues and I save up for breakdowns so I can deal with it when it comes. Since it’s been so hassle free, I plan to keep it till it keels over.
You can also save money by looking online for parts deals. I recently saved over $90.00 buying a part from a dealer online who had overstock. I work in a a dealership and still look for deals by searching for overstock or special order parts that were never picked up by the customer. Now I am even listing my extra stock online and passing the saving onto anyone who needs the parts that are on my overstock list. If you can find a great deal to buy your parts just make sure that your mechanic will put the part on if You bring it in to him, so want to sell you the part also.
We bought a used Oldsmobile (about 10 years old) for 2K and it ran great for about a year, and then the expenses came:
1) We had a big snowstorm and the motor gave out after several days of being outside in subzero temperatures (the garage was full with other newer cars that we wanted to protect) and that ran us $1400 in repairs.
2) Two weeks later, the gas pump gave out and it’s going to be $350+ for repairs.
We’ve decided to fix it this one last time and see how much longer it runs, and if it needs more major repairs we’re probably going to try to sell it or trade it at a dealer’s (who’ll probably give us less, but faster and with less hassle) for a new or at least a newer used car. We’re hoping to at least get back the 2K we paid for it originally.