Unless your car is a classic or has sentimental value, working out whether to pay for major repairs, or to sell and buy a new car, should be based on economics: which option will be less costly in the short – and long–term?
A major failure under warranty, while unwelcome, is at least covered by the manufacturer. You’re more likely to encounter major mechanical problems with an older model, in which the warranty is long gone.
The potential repair bill should be compared with the market value of the car which, if it’s more than 10 years old, will only be a small fraction of the new value. You should also factor into your decision that a car with high mileage is likely to continue to develop problems due to wear and tear.
Selling the car ‘as is’ won’t get you close to the normal market value for the make and model, but in some cases is a better way out than completing the repairs and trying to get a better price, which can leave you even further out of pocket.
It’s worth weighing up the cost of a reliable replacement car – if a newer model in better condition with lower kilometres is not within your budget, you could well end up back in the same position.
That said, used cars are bargains in Australia. Cutting your losses on your old car then shopping smartly for a five-to-10-year-old, low-kilometre Japanese or Korean Car in good condition can be the best way to put the financial loss behind you and avoid big repair bills in the future.
Regular maintenance and servicing will prolong the life of your car and help you identify problems before they result in a large repair bill. When in doubt you can always contact an NRMA mobile mechanic to discuss your options.
Or if you’d like to start by chatting to an expert, our motoring advice team provides professional advice. You can reach them on 13 11 22 (Monday to Friday, 8.30am to 5.00pm).