While getting a car as a way to invest your money isn’t the best choice, every vehicle you have will likely need you to invest some amount of money into it regularly in order for it to maintain functionality. However, at a certain point, you might begin to wonder if you should be putting more money into your car or if you should just be replacing it with a new vehicle.
To help you in making this decision, here are three things to consider before investing money into your vehicle.
How Much Will The Repair Cost You?
People usually don’t start thinking about replacing their car until it’s getting old, doesn’t suit their needs anymore, or starts needing a lot of costly repairs on top of its routine maintenance.
One thing you’ll want to consider before making any bigger repairs on your car is how much those repairs are going to cost you. At a certain point, you may be putting more into your car than it’s actually worth. Especially if those repairs will likely be followed by additional expensive repairs, you might find that it’s better to just cut your losses and get a new car. Some of the types of repairs that could push you over the edge here, according to Jon Linkov, a contributor to Consumer Reports, are anything with your brakes, issues with the mechanical components, problem with your electrical components, fixing your exhaust, and worn down shocks or struts, among other things.
What’s Your Car Worth?
To help you in making the decision of whether or not some necessary repairs should be done rather than just getting rid of your car, you should really think about how much your car is worth.
According to Philip Reed, a contributor to NerdWallet.com, what you should really be trying to figure out here is what the breaking point is for when investing more money into your car is a bad idea. For example, if you’re going to be putting more money in to repair your car than the car would actually be worth, than making those repairs doesn’t make sense. Additionally, if the repairs are going to cost you more than a year’s worth of monthly car payments, it might be time for you to get a new car instead of repairing your current one.
Do You Still Owe Money On Your Car?
If you still owe money on your car, especially if you still owe more than you could get for selling your car, then it can be harder to make the decision to buy a new car rather than just fixing up your old one.
However, if you are upside down on your car payment and your car is becoming unreliable for you, DaveRamsey.com shares that the best thing to do would be to sell your car and then take out a loan to pay off the rest of it. Then, you should try to get a less expensive car until you’re able to pay off that new loan.
If you’re at a crossroads of whether or not to put more money into your car or to part ways with it, consider using the tips mentioned above to help you in making this decision.