This oft-asked question often just has the one answer. Usually, by the time you’re thinking of putting your car down, it means that you probably should have done it already.
Of course, that’s not always the case. We’ll look at how to evaluate the situation and how to weigh different factors, so it’s easier to decide.
How Much Are You Spending on Maintenance?
Oil changes, tune-ups, timing belts, suspensions, brakes: every trip to the mechanic should be treated like a standard car payment. Add up everything that you spent over a year, divide by 12, and you'll know how much you're spending a month. If you’re spending $2,500 a year, that means you have a payment of around $210 per month. If the car is only worth $6,000, it won’t take you long to spend more on maintenance than the car is worth.
When you’re asking this question, factor in the costs of any repairs that need to be done. Todd Bialaszewski, owner of CarScrappers, says “Don’t try to estimate on your own. The only way to know is to take it to a mechanic.”
What’s the Total Cost of the Car Every Month? Every Quarter? Every Year?
This isn’t just repairs. It’s gas, insurance, etc. For instance, if you have a barely functioning car, it’s probably guzzling fuel. You might be able to save some money if you bought a relatively new hybrid.
Then there’s the cost of insurance, which can go either way. Most newer cars are more expensive to insure, particularly if you lease or finance — which you probably will. Of course, there is the possibility of paying a little less in some cases. For instance, if you have an old sports car, it could be more to insure compared to a sensible counterpart.
That scenario makes a lot of assumptions though, so make sure you do your research before you decide how much you’re spending now and how much you’re likely to spend with a newer car.
What Are Your Replacement Possibilities?
Junking your car won’t get you a lot of money ($1,000 is probably an unrealistic expectation), but it can go part of the way toward getting you into something safer. New cars might come with incentives, like low interest rates or reasonable car payments.
We don’t recommend going with another junker. If that’s your only possibility, you’re likely to spend the same amount on the next one too. Remember that all the money that you’re funneling into your old car per year can be put into your new car.
What’s the Current Market Value?
The value of most junkers is defined by scrap metal demand. This market swings wildly, and went through a few very rough years (for both scrapers and their customers). As of late, it’s been on the rise, but remember that it can turn at any time.
If your car has reusable parts, that could be a great step toward cashing in. For instance, if your engine or transmission can go on to have a second life in a new car, that could mean a big bump in your cash value. Just keep in mind that most junkers don’t have reusable parts.
Upcoming Repairs: What’s Your Car’s Condition?
Bialaszewski remarked, “Car owners get into this cycle of ‘just one more repair’. They seem to think that if they make that one investment, they won’t have any issues for the next five years. It doesn’t happen. They just end up hauling it back in again and again.”
If your car is in rough condition as it is and needs several big repairs, it’s probably not a good idea to count on those repairs being the end of the road. Also, keep in mind how long the repairs will take. If your car needs to be in the shop for a full week, that could impact anything from your work schedule to your ability to pick up your kids.
Safety: Will You Survive?
The fatality rate for a car built in 1997 is just under 18 per 100,000 vehicles on the road. For a car built in 2017, it’s just a hair over 10 per 100,000 vehicles on the road. Air bags, brakes, tires, seatbelts: they all need to work to keep you and the people around you safe. If that’s worth something to you (and it should be), it’s probably time to retire the old car.
Can You Afford It?
It’s usually more prudent to ask if you can afford the consequences of choosing not to replace it. If you’re prepared for the car not to start, whether in your driveway or at work, then you might be able to get away with keeping it. Still, even if you just factored in safety concerns, you probably can’t afford not to get something new.
Let’s pretend you’re in a debate when you’re deciding whether to junk or fix your car.
Why Fix Your Car?
- It’s cheaper to repair than replace.
- You don’t want to be responsible for the registration or monthly payments.
- You don’t want to pay more in insurance.
- A new car’s value depreciates the moment you drive it off the lot.
- You don’t want to risk buying a lemon of a used car.
- You only need the car to last another 6 months (year, etc.).
- The car was a graduation gift from your favorite uncle (or similar).
Why Junk Your Car?
- You’re tired of unpredictable performance.
- You realize that ‘just one more repair’ is not the right logic.
- You want a car with a warranty.
- You know that there are plenty of reliable used cars out there.
- You’re tired of spending time at the mechanics, away from work or your family.
- You’re embarrassed by driving it or it’s uncomfortable to be in (broken AC, louder than a trash compactor, etc.).
- You don’t want to be stranded in a bad area or face a higher chance of fatality due to primitive safety features.
We get it. Cars are ultimately more than engines and wheels. If you love your car, it can be hard to think about giving it up. However, when a car has reached the end of its life cycle, often the best thing you can do for everyone is make new memories with something more practical.