Deciding when to replace your aging vehicle can be a difficult decision

Deciding when to replace your aging vehicle can be a difficult decision. Usually the up-front costs associated with vehicle replacement seem very daunting, but it is important to factor your vehicle costs over time. If you are expecting ever increasing repair bills on your existing car it may actually prove to be a cheaper option to move on to a new vehicle…

Firstly it is necessary to determine if you actually need to replace your vehicle. I recommend trying to make this decision with a detached mindset, think about the facts. Write down your needs in a car, compare them to what your current vehicle provides and if your needs are not matched, move on to considering the financial situation. To fully consider the financial pros/cons of vehicle replacement it is probably useful to consider the state your vehicle is in and to try and generate a list of expected running costs. Be realistic; consider part replacement, engine mileage, body condition and any safety concerns that need to be addressed. This will hopefully give you a figure of the short term to medium term costs your current vehicle will incur. Then it is time to run some numbers on a new vehicle. First decide upon a vehicle that meets the needs and wants you listed at the beginning, then start working the financial side. Will you lease, buy outright or finance? Determine firstly the actual cost of the vehicle and determine your expected monthly payments, determine any expected additional costs you will incur, i.e. upgrades etc, and compare your numbers. If your old vehicle is worth anything you can factor its value and subtract it from the cost of the new car. Don’t forget the nitty gritty things like differences in insurance premiums, fuel consumption, and repair schedules.

You will probably be surprised with what you come up with! Now that you have some numbers you will be able to make a much more informed decision.

Reasons to replace the old ride:

1. Function: You may have different requirements now then when you got your original vehicle. For example, you moved to the country/city, you need a vehicle for business, or maybe your family grew and now you need extra space.

2. Financial: The old clunker may be getting expensive, i.e., gas guzzler, repeated breakdowns, insurance premium changes.

3. Simply wanting a new car: Tired of driving the same car, fed up and time to move on.

Consider your existing vehicle:

1. Mileage: The higher the mileage the greater your expected repair schedule. Also, the higher the mileage the less your vehicle is worth as trade-in or private sale.

2. General Condition: Consider everything you can, tires, wipers, body, engine, drive train etc. Be absolutely realistic in your expectations of how much these things will cost if you find they are expected to need servicing.

Financial side:

1. New cars = Less mileage = less breakdowns = Less expected repair scheduling = cheaper to operate.

2. Fuel efficiency: Newer car generally more fuel efficient.

3. Financing. Do you own your old car? What kind of financing is available?

4. Insurance. What is the difference in premium between the vehicles?

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