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Last week I was driving home after finishing the grandkids’ school run when an amber engine warning light flicked on. Being the type of guy I am, I didn’t wait around wondering about it. I drove straight to my local mechanic to get it checked out.
They plugged it into the diagnostic system and gave me the likely verdict: the timing chain was starting to stretch. Nothing was confirmed yet, since they wanted to do a proper mechanical inspection first. But they gave me a ballpark figure in case it was: $1,500.
I booked in for the inspection and drove home turning the number over in my head. The car is a 2017 with 87,000 miles on the clock, realistically worth about $8,000. Is it sensible to put nearly a fifth of the car’s value into a repair, on a car that’s already well into middle age by mileage? By the time I pulled into the driveway, I’d talked myself into a completely different plan: forget the repair, go and find a replacement.
So that’s what I did. I spent the afternoon test driving two-year-old cars, and I won’t pretend I wasn’t enjoying myself — the tighter steering, the new-car smell, the sense of a fresh start. By evening I was in full planning mode.
I was already thinking about where the cash would come from, and how to structure the withdrawal to keep the tax hit as small as possible. In my head, the decision was more or less made. And then, somewhere between dinner and bed, the enthusiasm drained away as quickly as it had arrived.
I found myself thinking about the old saying I’d heard more times than I could count: the most financially sound choice is almost always to stick with the car you already have. Repairs feel painful in the moment because they’re concentrated, one bill, one number, right in front of you. But they’re almost always cheaper than the alternative. A $1,500 fix is a rounding error next to the depreciation, sales tax, insurance bump, and the lost investment returns from pulling cash out of the market to buy a “new” car, even a two-year-old one.
I hadn’t actually run those numbers when I was standing in the dealership car park feeling pleased with myself. I’d just felt the pull of the shiny option and let the spreadsheet catch up afterward.
What strikes me looking back is how fast the whole cycle happened. Inspection booked, verdict feared, replacement chosen, financing half-planned, and then reversed, all within about twelve hours. Nothing about the underlying facts had changed in that time. The car was the same car, and the $1,500 estimate was the same estimate.
What changed was that I’d let a moment of anxiety about an unknown repair bill talk me straight past the boring, obvious answer and into a much bigger, much less obvious decision.
I don’t know yet what the mechanic will find. Maybe it really is the timing chain, maybe it’s something cheaper, maybe it’s something worse. But whatever the number turns out to be, I suspect I already know what I’m going to do with it. Pay the bill, keep the car, and let it keep doing its job for a while yet.
Memo to myself: stop comparing repair bills to the car’s value. Compare them to the cost of replacing the whole damn thing—tax, insurance, and the market returns I’d sacrifice along the way. That $1,500 bill I was sweating over? It’s not 20% of an $8,000 car. It’s about 4% of a $35,000 replacement. Suddenly it doesn’t look like a waste. It looks like a bargain.
Well said, Mark. We faced a costly repair with a Honda at around 100,000 miles. It turned out to be chump change. We drove it to almost 200,000 miles and still attracted top dollar when we finally sold it. We also didn’t fret about parking lot dings and scratches like we would’ve on a newer car!
Look at it this way, now that you saved all the money on the new car you can splurge and get the central air conditioning you were looking at last week.
Joe, Got that sorted, I purchased three 12,000 BTU portable air conditioning units with six-foot flexible vent kits — they even have a whisper mode for nighttime use. Totally awesome. Used them Monday and Tuesday, and what a difference! I could finally sleep soundly again.
Tonight (Friday), I’m at the vacation home, and my wife had the heating on for an hour… classic Irish weather!… Happy 4th of July.
Financial wisdom is the realization that our first reaction often needs to be second-guessed.
Jonathan Clements
Dan, if I had paid more attention to Jonathan’s wisdom I would have saved myself 12 hours of faffing about!
Not that this will change your mind Mark, but we bought a brand new car two years ago who’s value was 5x the value of the replacement an here in the US the insurance went down. When we received the unexpected refund check of a portion of the premiums I called the insurance company. They confirmed the check was legitimate. The refund was due to all the new safety technology decreasing the risk of an accident.
We have a 2015 Toyota Highlander with 137,000 miles. It would take a LOT more than a$1500 repair to consider buying another car. On the other hand, we are at end end of a three day heat wave. I am very glad we were willing to spend for air conditioning.
Marilyn, wow, that’s great mileage! Other than my first car, I don’t think I’ve owned a car with over 100,000 on the clock.