Repair or Replace? Tough Car Decisions

For the past year, my brother-in-law has been living with us. His name is Garion and we’ve been working hard on improving his overall financial stability. A few weeks ago his car started having issues. First, it was the battery—a fairly routine fix at $200. No big deal. Then came the brakes and rotors, setting him back another $600. Routine maintenance, sure. Then the muffler cracked, okayyyyy he never wanted to sound like one of those guys but it’ll be awhile before that’s a necessary fix. 

And then came the big one: the dreaded limp-home mode. On his drive home from work one night, his 2014 Dodge Charger refused to shift out of second gear. Though he temporarily cleared the issue using an app on his phone, he didn’t take it to a mechanic. He just kept driving, hoping for the best. I think most of us have done this before but it’s not a great idea.

This week, about a month later, the car that he bought used just 6 years ago for $26,000 and only has 86,000 miles on it says enough is enough. After a lot of prayer he takes it to a mechanic shop hoping for the best. The verdict? $1,200 to get it running again and an additional $2,000 to bring the maintenance up to date. Ouch. My father was a mechanic for 30 years – a perfect example of ‘What’s Your Advantage’. I call him to get his thoughts on the prices, their recommendations, and most importantly, should we repair or replace this car? He gave it to me straight: Get rid of it. At only 86,000 miles, these problems shouldn’t be happening. This car was a lemon, plain and simple. My brother-in-law doesn’t like the idea. This was his dream car, and he’d already spent so much money! How could it still be a bad investment? But after consulting his girlfriend’s family mechanic, who confirmed the diagnosis, he came around. The decision is made, time to replace. The next big question: Now what?

Here’s where we stood::

• Garion still owed $5,600 on his car loan.
• He had $7,000 in savings but didn’t want to drain it.
• The Charger’s trade-in value was roughly $5,000.
• He wanted a reliable vehicle without taking on another loan.

So, what did we do?
First, he took his time. Garion rented a car for a few days so he could get to work while we explored his options and prayed for discernment. Second, he was willing to consider his family resources. My husband, Josh, and I are in a better financial position, and he’d been considering upgrading to a truck. His current car, a 2017 Toyota Corolla with 227,000 miles, still drives like new and is fully paid off. After some discussion, we decided to sell it to Garion for $4,500—the lower end of its Kelly Blue Book value. We then put that money towards getting the truck. And lastly, Garion figured out how he could get rid of the Charger and pay off the rest of his loan. Because it needs extensive repairs he just wanted to be done with it. We took it to WeBuyCars.com for a quick sale where he made $3500. While he might have lost a bit of cash, saving time and energy was worth it. He used that money and more from savings to get rid of his car loan. 

Key Takeaways:

Quick Fix, Quick Action: When your car stops driving, use the quick fix as only that, a quick fix. Take it to the shop as soon as you find a good mechanic. 

Beware the Sunken Cost Fallacy: Experiencing the ‘sunken cost fallacy’ in real time can cloud your decision making. My brother-in-law really wanted to just continue fixing his vehicle but mechanics knew the issues were speaking to the longevity of it and told him its not worth staying on the sinking ship. 

Take Your Time: We didn’t make any hasty decisions concerning it and that gave us the time to work through every scenario and keep our options open. Rushing into a decision could have led to costly mistakes. Renting the car to buy us time was worth it.

Do Your Research: Reviewing his Charger’s history revealed major issues early on: the engine computer/module had been replaced twice, the alternator and wiring replaced, the PCM reprogrammed, and the wheel sensor repaired—all before it hit 25,000 miles. My brother never looked at the Carfax before purchasing and it was to his detriment. 

Look for Longevity: Good vehicles shouldn’t need major repairs before 100,000 miles, aside from routine maintenance like oil changes and batteries. If the Carfax shows a long repair history and there are things peppered through you’ve never heard of or research says are expensive, walk away.

Stick with Reliable Brands: While no car is truly bulletproof, Toyotas and Hondas consistently outperform competitors in reliability.

Avoid Loans if Possible: If you can, avoid loans and interest payments. A paid-off car is a stress-free car.

If you want to read about our truck buying experience it’s in the post ‘Private Car Sales 101: Avoiding Lemons and Finding Gems’.