Buying & Leasing a Car

Should I Keep My Clunker or Buy a New Car?

Editor’s note: This is one of the 20 tough financial questions posed in the “Do This or That?” cover story in the September 2011 issue of Kiplinger’s Personal Finance.

Editor’s note: This is one of the 20 tough financial questions posed in the “Do This or That?” cover story in the September 2011 issue of Kiplinger’s Personal Finance. Use the drop-down menu above to consider other financial conundrums and the right answers for you; share your own experiences and insights in the Discuss field at the bottom of this page.

Keep the clunker if it’s paid for (or nearly paid for), and service and repairs are costing you less than new-car payments. For example, the average cost to replace a cylinder head assembly is $1,800, according to CarMD, a vehicle-repair information site. That’s equal to four typical car payments. Also, because some repairs are elective, you can wait until you have the money to do them.

SEE ALSO: 10 Cars That Refuse to Die

SEE ALSO: How to Get the Best Deal on a New Car

Buy a new car if you anticipate having to make expensive repairs that would cost close to what the vehicle is worth. For example, a failed transmission, which can cost more than $3,000 to repair, is usually a deal-breaker. Also, if the car has been unreliable from the start and is in the shop a lot, it’s probably time to say goodbye. A new-car warranty will be a salve to your soul if you’ve been dealing with persistent breakdowns. Plus, more manufacturers are now offering free maintenance when you buy a new car. The best programs are from luxury makes, such as Volvo (coverage for five years or 60,000 miles) and BMW (four years or 50,000 miles), and even include wiper blades and brake pads. Mainstream brands, such as Volkswagen (three years or 36,000 miles) and Toyota (two years or 25,000 miles), don’t cover the wear-and-tear items, but all four of these automakers offer roadside assistance.

Most Popular

Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
The 12 Best Tech Stocks to Buy for 2022
tech stocks

The 12 Best Tech Stocks to Buy for 2022

The best tech-sector picks for the year to come include plays on some of the most exciting emergent technologies, as well as several old-guard mega-ca…
January 3, 2022
Can AI Beat the Market? 10 Stocks to Watch
stocks

Can AI Beat the Market? 10 Stocks to Watch

An artificial intelligence (AI) system identifying high-potential equities has been sharp in the past. Here are its 10 top stocks to watch over the ne…
January 14, 2022

Recommended

11 Winter Car Maintenance Tips
Buying & Leasing a Car

11 Winter Car Maintenance Tips

Cold temperatures put stress on your car. Get ahead of the situation and keep winter woes from hurting your ride or your wallet.
November 22, 2021
Renting a Car Over the Holidays Will Be a Trip
cars

Renting a Car Over the Holidays Will Be a Trip

Chip shortages, the pandemic and a surge in demand will combine to make renting a car a challenge. Here’s our best advice to find a rental you can aff…
November 17, 2021
After Storms, Beware of Flooded Cars for Sale
Buying & Leasing a Car

After Storms, Beware of Flooded Cars for Sale

There's a chance the used car you have your eye on could have been damaged. Here’s what to watch out for.
October 29, 2021
Car Buying for Beginners
Buying & Leasing a Car

Car Buying for Beginners

Haggle over the price of the car and the terms of the loan to keep your monthly payments in check.
October 27, 2021