When repair costs get too high, it might be time to sell that old car
Columnist Dave Ramsey says the cost of selling the un-fixed car plus repairs is too close to the car's value when fixed to keep it.
We have a 2008 Honda Accord that needs a new timing chain. Our mechanic says the repair will cost about $2,200. The car is worth about $4,500. Is it time to get another car, or should we have it repaired?
That sounds a little high for a timing chain fix to me. Maybe I’m wrong about that, but let’s look at the math of your situation.
You say the value of the car is $4,500 if fixed and running properly. Let’s say for the sake of argument the value of the car if you sell it as-is—basically salvage—is $1,500. If you take the value of the car as-is, plus the repair, and the number you come up with is more than the value of the car after it’s fixed, you don’t repair the car.
So, if this car is actually worth $1,500, the idea of fixing it is very questionable. If you can get $1,500 for this thing as-is, I’d sell it and put the $2,200 I would’ve thrown into fixing that old thing toward a better car.
You’re talking about a big repair on an old car, Susan. If the repair price you got is right, and it was from an honest mechanic—not some padded, overblown quote from a dealer—I think it’s time for that old beater to go.
Dave Ramsey is a personal money-management expert, a bestselling author and host of the nationally syndicated radio program “The Dave Ramsey Show,” which is heard locally on KROC-AM. For more financial advice, visit daveramsey.com .