When faced with a large car repair bill, many people contemplate buying a new car. However statistics show that repairing your current vehicle is always the most cost effective option. Even an engine replacement costing $6000 is more affordable than replacing the car. If you continued to drive the vehicle for 2 more years, it equates to $250.00 per month. This is much less than a new car payment.
On the average most people spend about $200 a month on car repairs and maintenance. Insurance and registration is lower based on the vehicle’s actual value. If you replace your vehicle with a new or preowned car you will still have some maintenance costs, plus a monthly payment. There is also the sales tax you will pay on a new vehicle.
If you decide to purchase used you will again be looking at repair costs on this vehicle.
The easiest way to prepare for repair costs of your aging vehicle is to put some money away every month for this purpose. If you have an unforeseen repair come up you’ll be ready for it.