Should You Sell Your Car or Repair It?
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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?