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Buy A Newer Car Or Keep Your Old One?

Updated on October 22, 2015

Thinking Of Buying A New Car?


Buy A New Car Or Keep Your Old One? Our Story.

We recently brought our 2001 Acura to the shop for its checkup. Acura was nice enough to give us a loaner car while we waited for our car to be repaired.

They had found a few extra things that needed to be fixed, as usual. This time the bill was going to come to $2000!

We have the car paid off and it is a nice, dependable car with a good engine. We just had the transmission replaced, due to a recall, a few years ago.

Making The Decision To Buy A Newer Car Or Keep Your Old One

We had to make a decision. Should we sell our car and replace it with a newer one or keep the one we have and pay the $2000.

We tried a few other cars out with good gas mileage, but nothing fit my husband's 6'4" frame or my kids huge car seats unless we went with an SUV and we already have one so we did not want another.

We asked the dealer how much they would give for our car if we traded it in. They called us a few hours later and said they would give $2500. Just a little over what the bill would be.

It made it pretty tempting to trade it in since the repairs would cost almost as much as the car is worth.

Car Lot

Car Lot
Car Lot | Source

Researching Your Car Purchase

We started doing research on monthly payments for a newer car. We normally buy used, but they were having a great sale. Buy a New car and get 0% financing.

Another way to entice us to trade in our car. Sometimes the amount you pay in the end for a used car with 3-4% interest could cost the same as a new car with 0% interest.

With a new car, we would also have brand-new warranties. We figured that every $10,000 for a loan would equal around $180. So If we bought a car for $10,000 we would pay around $180 per month. A $20,000 car would be around $360 a month. A $30,000 car would cost us around $540 a month.

With most of the cars that we would like costing between $20,000 - $30,000 a month, we figured our monthly payment out to be anywhere from $360-$540 a month!

That is a lot of money! Since we already have our current car paid off, we could pay $2000 for repairs and hope it would last another year or so. We would have to keep it for around 5 more months to break-even with the repair fees.

An Old Car

Picture Of An Old Car
Picture Of An Old Car | Source

Is It Better To Buy A Newer Car Or Keep Your Old One?

We spoke to the repair guy at the Acura shop and asked him if he has seen Acura's like ours with higher milege coming in for repairs. He told us that he regularly sees older Acuras with over 250,000 miles on them.

We are only halfway there since we have 120,000 miles on ours! He also told us that since we had the transmission replaced recently, there should be no large-scale repairs until after it has reached 200,000 miles.

In the end, we decided that our car has been good to us and we should definitely be able to break-even and then some. Why have a monthly payment, when you can keep driving your dependable, paid-off car?!

When Buying A Newer Car Is The Right Choice?

I would only consider trading in a car once it costs more to fix it each month than it would be for half a car payment each month.

Once a car gets to that point safety risks go up and it is just better to get a newer car with that money.


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    • flacoinohio profile image

      flacoinohio 5 years ago from Ohio

      A 20K loan at 5.33% for 72 months is $315. Acura(an overpriced Honda) is a good vehicle and will run forever as long as it is maintained. We have 2 cars that we are financing and two we own. Next year we will own our impala, my wife says she can't wait to not have a car payment. We agree that keeping your car with no payments is better especially in this economy.