The older a car gets, the more expensive it becomes to keep her on the road. On the other hand, if you keep Old Reliable running, you save money on hefty monthly car payments. Finding the point at which that balance tips in the favor of repair costs is the crux of determining when to trade-in your old car and move on.
Observe, step back
There is no exact formula or pre-determined mileage threshold for determining when Old Reliable becomes Old Money Pit. Finding the right time to sell requires a lot of careful estimates and calculations, as well as an ability to step back from any sentimental attachment you may have. Old Reliable may have been more than transportation to you in her day, but she is not so reliable anymore and everything has its time.
What is she worth?
To begin with, you need to know what Old Reliable is worth. The place to start is at main car evaluation sites, Kelley Blue Book and Edmunds. These sites will ask you to enter information about the car, its year, make, mileage and so forth.
They will also ask you about the condition of Old reliable and what work you have done on her. If you’ve been a diligent owner and kept receipts for all of her repair work, that it easy. Otherwise, you will have to remember the best you can, make phone calls and estimates.
If you are planning to have any work done on the car soon, include estimates of those costs as well.
Kelley and Edmunds will give you several values to work with. The lowest of the three is the trade-in value, which is what you need to be looking at to lower the cost of the next car you purchase.
What is Old Reliable costing me?
If you are mechanically inclined, you can determine much of this yourself. Most of us lug-nuts, however, need to take it to a mechanic for a diagnostic exam. You want to find out what big repairs may be needed soon, what repairs can be delayed a bit but will need to be done in the next year, and any issues that may lead to repair costs more than a year away.
After you feel like you have a pretty good handle on the value of the car and the cost of keeping it on the road, it’s simple subtraction. Standard wisdom has it that if you spend more to keep Old reliable on the road for the next year than she is worth, it is definitely time to say good-bye and send her on to the next life.
However, by that point it probably would have been sensible to dump her six or eight months ago. Even if it costs 75 percent of the car’s value to keep it on the road for 12 short months, that, for this writer, is too expensive and it’s time to see the clouds on the horizon.
A judgement call
It is, ultimately, a judgement call, but by making the calculations described above, it can be an informed judgement based on economic sense rather than on lust for a new model or sentiment for a dying mechanical friend.