What Happens If The Repairs For My Car Cost More Then Its Worth For The Warrenty

9 Min Read | Aug 26, 2022

Your car has been in the store more than in your driveway lately. And y'all take another big repair on the horizon. You're sick of sinking money into it, but you're not certain what to do next.

Do y'all continue throwing cash into it and promise it doesn't break downwardly once more? Or do you lot sell information technology and utilise that money toward another ride? It's a big determination.

The kickoff step in solving a dilemma like this is to practise a little math. Don't worry! We'll walk you through it step by pace. Your calculations will point you in the right direction and help accept the stress out of your conclusion-making!

And the all-time part? After you determine what to do, we'll show you how to save money for the repair or your next car. Bank check it out, then get back to your life—and all the places it takes you.

Should I Repair or Supervene upon My Car?

Before we become into the numbers, it's important to remember there's e'er a spectrum when it comes to car repairs. Pregnant the math can only show you lot so much—like whether yous're leaning more toward a repair or replacement. Other factors, such as repair frequency and what you owe on your car, come up into play likewise. Keep these in listen as you're running your numbers.

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Okay, time to go started. Get-go, guess the value of your machine (without repairs). Sites similar Kelley Blue Book or Edmunds are good examples of resources that can help you with your estimation.* Only for argument's sake, permit'southward say it's $v,000. And your estimated repair is $1,000. We'll say for this case that the repair will bring the value of your car upwardly to $half dozen,000. That may not be the example in every situation, depending on the overall condition of your car and the type of repair. Your mechanic should be able to give yous an thought of how much value your repair will add to your automobile.

Then in this example, if you had to sell your car immediately afterwards the repair, you'd even so recoup the coin you merely put into it. In this case, you're probably leaning more toward a repair. Now, if this is your commuter car and you're getting to piece of work late once a week thanks to a breakup, it might be time to evaluate what these repairs are really costing you—in terms of headaches.

On the other hand, if that initial mechanic pecker was closer to $two,000, and the value of the car increased to only $half-dozen,000 with the repair, you're likely leaning toward selling the car and putting that money toward another car with your $7,000. That way, y'all're essentially getting a better motorcar for the same money.

Owe more on your car than information technology'south worth? Here'due south what to exercise virtually your upside-down car.

If Yous Desire the Prepare: 6 Steps to Pay for Car Repairs

Decided to go ahead with the repair? Your next issue is paying for it—considering information technology's probably going to cost a not-and then-nice chunk of change. But what if you don't take the cash on manus to pay the bill? That's okay. Here are six steps to finding the money you need to fund your repair:

Step 1: Shop effectually.

Don't accept the first quote you're handed. Get the initial diagnosis from a trusted dealership or a larger mechanic shop, merely don't assume their price is the cost. The bulk of your cost is probably non parts, simply labor. And it's almost e'er higher at larger, more established shops.

To observe a reliable mechanic for a lower toll, inquire a few friends where they go for trustworthy work. And so call effectually to detect the all-time price. While you're on the phone, ask nigh any electric current discounts and specials they might offer too.

Step ii: What can you do yourself?

Maybe yous need new brakes, but yous also demand to supercede the door handle that came off this morn.Why not get the brakes fixed at the shop, and find an after-marketplace replacement for your door handle online? Then watch a YouTube video and gear up it yourself. But be sure to follow the directions very carefully.

Step 3: What can wait?

If the estimated repair is still out of your comfort zone, inquire the mechanic what needs to be fixed now and what can wait a few months. Don't skip important safety features like brakes, tires and timing belts. But you can live without automatic windows for a while.

Pace 4: Brand a budget.

Let'due south say you've lowered the repair price as much every bit possible. Now it'southward time to detect the cash to pay your pecker. Nosotros recommend making a goose egg-based budget before you lot start overturning your couch cushions in search of loose change. Yous can brand a upkeep in about 10 minutes with our favorite budget app, EveryDollar. It'due south costless, and it's a way less labor-intensive than excavation through your sofa.

Step 5: Move your coin.

If you're still coming up curt, no trouble. Simply dial your budget back in nonessential areas like restaurants, haircuts and new clothes. You lot can also divert your savings temporarily. And as a very last resort, you tin can use your emergency fund for admittedly necessary repairs. Just restock it every bit soon every bit possible.

Step vi: Upkeep for hereafter repairs.

Ensure this issue doesn't happen to yous again by creating a line particular in your budget for future car repairs and maintenance. That way, the money will be in that location waiting for you when you lot demand information technology—and you will.

If Yous Want a Replacement: Should You Lease, Buy New, or Buy Used?

Let's say yous've decided information technology's not worth it to repair your current motorcar. You're ready for something else. While it's tempting to desire your next automobile to be new and under warranty (read: no repairs!), the concluding matter you want to practice is head to the nearest new auto dealership. Here'southward why:

New Cars.

The depreciation on a new vehicle is jaw-dropping. A $20,000 automobile will be worth most $8,000 in v years.^[i] That's a 60% subtract! Fifty-fifty after just ane year, the car could become down in value as much as 25%. And then unless you have a internet worth over $one meg, don't buy new—ever. Let someone else absorb the depreciation.

Leased Cars.

A lease is simply the near expensive manner to operate a motorcar. Every month, your lease payment goes to cover the auto'due south depreciation plus the dealer's profit. At the end of the lease, you lot take aught disinterestedness in the automobile, but you practice have the option to buy information technology. That may or may not be a expert bargain since the purchase price is set at the beginning of the lease and isn't based on the actual value of the machine at the end of the lease. Then in that location are the fees—a fee y'all'll pay if you exceed a certain number of miles or have excessive wear and tear on the car, a fee you'll pay if you decide not to buy the car when your lease is upwards, and a fee you'll pay if you lot do make up one's mind to buy it. All that adds up to a adept deal for the dealer—not for you.

Used Cars.

Your all-time bet is to buy an affordable, used machine with the money yous have saved (combined with the cash from the sale of your current car). That way yous own the car, rather than it owning you. Used machine doesn't mean crap car; it just means you're smart enough to allow someone else pay for that initial drop in value. Buying used is the only way to become.

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How to Pay for a Car in Cash

Don't go into debt for a motorcar. It'southward just not worth it. That volition only requite you more grief downwards the road. Recollect, all cars need repairs and maintenance somewhen. With a loan, you'll have a monthly car payment and repair bills on top of that.

Don't become into debt for a car. It'south just not worth it.

Then how exactly do you live without a car payment and still get the machine of your dreams? The key is in your arroyo to saving money. Here'southward a strategy we beloved:

1. Save Your Car Payment.

Go ahead and buy the car you can afford with the cash you lot have on hand—let'southward say it's $5,000. That can become yous effectually for at least 10 months or so. Then take $500—the boilerplate monthly payment on a new auto—and salvage it every month.^[2]

2. Sell Your Machine and Combine Your Savings.

After 10 months of doing that, you'll have built your car-buying budget back upwardly to $v,000. Add that to the cash you get from the sale of your current car (let's say $4,000), and y'all accept $9,000 for a new ride. That'due south a major upgrade in motorcar in simply 10 months—without attributable the bank a dime!

3. Keep Saving and Upgrading.

But the fun doesn't accept to cease in that location. If you continue consistently putting the aforementioned amount of money away, x months later you'll have another $5,000 to put toward a automobile. Y'all could probably sell that $9,000 vehicle for a trivial less than you paid 10 months before—meaning you'd probable have around $13,000 to pay for a car, simply 20 months after this whole process started.

Pay for Car in Cash

The bottom line is this: There's a lot you could do with an actress $500 a month!

The less money you're spending on your car, the more money you take to put toward more of import things, like your kids' college fund, your retirement, and paying back those one-time pupil loans. It'south okay to own a prissy car—just don't permit your car own you.

In fact, don't permit any of your stuff—or even your money—own you. You're the one in accuse hither! Aye—you. If you desire to learn how to have control of your coin for expert, give Ramsey+ a test-drive. Yous'll become all the tools and all the teachings you need to make your money work for you, instead of the other manner around. And right now, yous tin can try Ramsey+ in a free trial. Boom.

*Kelley Bluish Book and Edmunds are non in any mode affiliated with the publisher of this content. The site links provided are for reference merely and not an endorsement of any product or service. No warranty or representation is fabricated regarding these third party sites or services.

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