Should I Fix Up My Junky Car or Buy a New One?
Earl asks if he should pay $1,500 in repairs on a car worth $2,500. Is it time to get another vehicle?
QUESTION: Earl on Twitter asks if he should pay $1,500 in repairs on a car worth $2,500. Is it time to get another vehicle?
ANSWER: It’s time to look at getting another vehicle. Here’s the thing about a car: If you can sell a car for salvage plus the repairs—in other words, this car will probably bring $1,000 like it sits, if you can sell it for $1,000 and you’re getting ready to put $1,500 in it, you’re going to have more in it than it’s worth if you’re not careful. You don’t want to spend more on the car than the value it currently has broken plus the repairs. That tells you it’s time to move on to another $2,500 car. Use your $1,500 and the $1,000 you get out of that car sale to just buy another $2,500 car that’s a better car. There’s a lot of difference in $2,500 cars up and down the spectrum. You’ve just got to shop really, really hard and get something that’s ugly but is reliable.