Car Repairs vs. Car Payments: When to Repair or Replace a Car

By Jackie Beck   Updated 08/23/2022 at 2:38 pm

Have you ever needed a car repair that cost you hundreds of dollars? Or maybe even a couple of thousand dollars? I sure have. There’s no doubt about it, paying for car repairs is no fun.

Costly repairs can happen pretty easily too, with the prices of parts and labor being what they are. 

It’s frustrating and inconvenient, and it’s even worse if you don’t have the money to pay for what you need. That’s usually the point at which you wish you had a new car. But should you get one?

Getting a new car instead can be tempting

A new car sounds so good, right? Instead of constantly paying for car repairs and maintenance, you can just get a comfortable, nice-looking, reliable new car.

It’ll have a bumper-to-bumper warranty, so you (supposedly) won’t have to worry about a thing. Reliability is great!


According to Experian Automotive, the average monthly payment for a new car in the fourth quarter of 2015 was $493, and the average amount financed was $29,551.

$29,551 and $493 a month will buy a LOT of car repairs and maintenance.

Way more than you’re likely to have over 67 months, the average new car loan term.

If you bought new in that case

You’d essentially be trading the possibility of some several-hundred dollar repairs for the certainty of 67 several-hundred dollar payments.

$33,031 worth of them in fact, plus your down payment.

That makes no sense. It’s even worse if nothing’s really even gone wrong with your car, and you just think it might because your car is “getting old”.

I remember thinking that way back when my 1990 Miata was about 6 years old. You know what though? I came to my senses and didn’t spring for the new car. Instead, I stuck with the Miata (which I love). It’s 26 years old now and still super reliable.

Now I’m not suggesting YOU ought to keep our car for decades or more, but waiting until you have the money can make an enormous difference to your bottom line and your lifestyle.

When replacing a car makes sense

There absolutely are times when replacing a car makes sense over paying for car repairs. To my of thinking, that’s when:

  • Your car really is breaking down all the time (say, on a monthly basis) as opposed to it just feeling like it’s always breaking down.

  • You’re not confusing maintenance (new tires, alignments, brake jobs, clutch, timing belt, battery, checkups) with repairs (your radiator springing a leak, for example.)

  • You just want a different car for whatever reason and can afford one.

But they only truly make sense IF you’ve got the money to pay for that replacement car (after selling your current one).

Paying cash for a car

“But I can’t afford to just buy a car outright!” you may say. And, maybe you don’t have that kind of cash just sitting around, waiting to be spent on a car.

But, I’d argue that if you don’t have the cash to buy a car outright, or to pay for expensive repairs, you also can’t afford to be spending hundreds of dollars a month on a car payment. Every month, without fail.


But you can get your current car fixed now — or maybe even fix it yourself even if you aren’t mechanically inclined, since labor is often a big part of the cost. (Hint: YouTube & a Haynes repair manual can be super helpful.)

Once you’ve got the immediate situation taken care of, you can start setting aside whatever you’d thought you could afford in monthly payments into a replacement car fund.

You can either keep that up until you can afford to pay cash for the car you really want, or until you’re able to at least buy a better car than what you have now with cash. (And then rinse and repeat, til you get the car you really want.)

Patience is key

If you want to get ahead and get out of debt, you’ve got to be patient. I know it’s no fun. I’ve never heard anyone say, “Oh I’m so happy to wait for something I want right now!”

I’ve certainly never said that myself. But I have heard people say that they’re so glad they don’t have a car payment anymore. (I sure am.)

And I’ve heard many people say that it’s worth the time and effort it takes to get out of debt. In fact, I’ll say right now that it’s AWESOME, and I’d do it all again in a heartbeat.

So do what’s best for you financially long term. Don’t let a car payment drag you down. Beat the cycle of debt instead.

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Paying for car repairs can be expensive, but here's something to keep in mind when thinking of getting a new car...

7 thoughts on “Car Repairs vs. Car Payments: When to Repair or Replace a Car

  1. You make some excellent points about the value in buying a used car. Not having a car payment can really enable you to be okay with spending more in auto repair shops. It seems that even if you had to take your car in once a month, it would still be cheaper than buying new!

    1. Yes, buying a used car will solve a lot of problems, especially on cost. Instead of paying a lot of money to buy a new car, why not buy a used car and try to check it carefully before purchase, in addition to careful use, make sure you will not have to waste too more money for repairing the car. Pardon me for my English

      1. A word here; check the reviews for the most reported problems and the cost of repair when looking at a used car. Also check out the dealership or individual your purchasing from. I purchased a car from a licensed dealer, paid cash but four month later i still have not received my title. Contacting the different state agencies has proved useless during the Covid19 shutdowns. All i can find out is the paperwork us incomplete.

  2. I was on the brink of buying a new car and taking on a car payment for the first time in 8 years. I had absolutely no peace about it. Your article just stopped me from making a Huge mistake. I’m fixing the van and saving the payment to buy a newer van later. Thanks

  3. Hi Jackie,
    Absolutely loved this article. Learned a lot from your article and changed my decision to buy a new car. This article saved my money.

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