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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.
Mark…having spent decades in auto sales finance (the bank side, not the dealer side) I can assure you… the 4% number, NOT the 20% number…is the Right Answer.
I have had to deal with this twice in the last 6 years. My bride’s car is a 2006 Chrysler touring convertible. She loves this car. It’s worth is probably less than $2000 however, in the past six years, I’ve put $1800 in a front end and $1500 and other repairs. Meanwhile, we haven’t had a car payment on her car since 2010, when it was paid in full.
it has 79,000 miles on it and you should see the smile on her face when her top is down.
For those in the camp that autos are simply transportation tools and among the worst investments ever known to man; the winning score goes to those who spend the least money on them (all in) in their human lifetime. This includes the purchase, registration etc. fees, annual taxes, insurance and of course, maintenance.
For those who are of this mind set, MAINTENANCE is the operative word. It is where much of the leverage is to win the game of reducing your lifetime spend on these abysmal investments.
If you are among those who want to minimize your lifetime spend on autos, here are some thoughts on automobile MAINTENANCE:
Another issue I learned from my brother in law who ran the parts department in a major leasing company. He told me dealerships have a repair “book” that tells them how long it should take to perform a repair. If it is completed in less time, they still charge you what the “book” lists. Ah, no thanks!
David, I’m definitely picking up the vibe that you’re not a fan of dealerships 😉. In the UK, most manufacturers now offer a full, comprehensive warranty stretching towards the seven or eight year mark. Unfortunately, that means your relationship with the dealership gets extended for a lot longer too. The law does allow you to use an independent workshop without losing your warranty, but most people are too nervous to do so — and end up paying top dollar for servicing for many extra years as a result.
Here is an example of why going to a dealer for more than warranty covered interventions is a bad idea. We have a Toyota Crown Signia (bought it in fall of ‘24) it came with “two years of “free” maintenance. I brought it in recently for an interval service.When you drive in there is a device that the dealer says checks your alignment. I drove in not a peep about an alignment. About an hour later I get a text, yes, not a service technician saying I needed an alignment. I spoke with the service rep and said I had had one the last service interval, but they said I had not (when I returned home and I checked my service papers I had an alignment performed at inspection because I could tell it was off).
One other story about dealership service. We owned a ‘14 Subaru Forrester. There was a class action settlement on them because they burned oil (more than a quart per 5K oil changes). They had to replace the engine within the first 100K if it burned more than X oil within a certain number of miles. We failed to qualify earlier on when we first did the test. At 90 K I decided to have it tested again. They changed the oil. When I got home I drove the vehicle into our garage (a flat surface) I checked the oil level to make sure it was filled correctly. Sure enough they had over filled it. I called the service manager and brought the Forrester in for them to check and they confirmed. I said the manager on the oil change either they were trying to pull a fast one (by later showing the correct oil level after the test mileage), or their technician was incompetent. The manager came out an listened to the car and said there was a knock in the engine and she would see if Subaru would replace it and they did.
Also one time there was a recall on the car. They serviced it and said three other issues needed to be addressed. I brought it to my regular mechanic down the street. He said let me guess what they said you need X,Y,Z. He said they tell everyone that. Needless to say those “problems” never needed to be addressed.
David,
The Subaru engine oil consumption caper is literally a viable text book example for Business Schools on how NOT to handle a corporate crisis. Subaru is a “ no go” for many (including me) as a result of that reputation hit. They still have a loyal following though.
Your Crown Signia is a very nice car. Very odd the dealer would even try to sell an alignment for such a young car.
You and other Toyota/Lexus fans may like the YouTube channel “ The Car Care Nut”. He is a former dealership mechanic who opened his own independent shop. He tells it like it is regarding how dealer service shops operate. He covers many other general interest topics across brands as well and does not cut Toyota any slack when it is deserved. In fact he recently did a very positive review of the Crown Signia.
Ha Ha Dunn,
Usually I would not even consider a first model year vehicle, HOWEVER: 1) this is a Toyota, and 2) we watched a review of the vehicle by The Care Care Nut, and that convinced us it was OK to purchase it. Main selling points were: 1) most of the components, chassis, hybrid engine, and dash layout are the same as several other Toyota models, and 2) it is assembled in their Lexus plant in Japan.
PS, we love it!
Excellent information, thanks for taking the time to put it together. I’ve used the same independent mechanic for years, and honestly, it never occurred to me to tell him I wanted to keep the car long-term. Probably too late for this one, but next time — whenever that is — I’ll bring it up as soon as the manufacturer’s warranty runs out.
Totally agree!
“I’d talked myself into a completely different plan: forget the repair, go and find a replacement.”
I have these debates with friends and family (and in my head) about the repair vs. replace decision as well, but I struggle with what happens if you ‘forget the repair’. Do you sell the car for $6500? After all, you now have a $1500 liability on an $8000 car, highlighted by the amber dash light. Short of somehow hiding the fact that repairs are needed, an informed buyer should discount the value of the vehicle accordingly. I seem to personally always perform the needed repairs and then independently decide its “time” to buy another car based on overall age and reliability or, just because I want to. So far, I have never been able to justify not repairing a vehicle or at minimum disclosing the need.
Genuinely curious because I often hear the comment that it’s just not worth repairing but, in my mind, buying vs. repairing are two separate decisions unless the repairs represent a near total loss (e.g. wreck or transmission/engine replacement on an old vehicle). Ken
Kenneth, fair question — honestly not one I gave much thought to at the time. What happened was I drove to a dealer, test drove a few potential cars, and then the sales manager gave my car a once-over: flicked through the service book, asked about the warning light. I told him the likely prognosis, and he went off and worked out a trade-in value as-is.
I guess if I’d been optimizing for maximum value that day, I’d have bought the new car, kept the old one, got it repaired, then sold it privately to capture that extra premium. But I wasn’t optimizing for best value — I was optimizing for least hassle.
Our second car is a 2010 Honda Civic with 140,000 miles. I used to drive it 500 miles a week to commute to work but since retiring in 2018 it only gets occasional use (to help discourage chipmunks from building a commune under the hood). The AC went out on it last year and it’ll cost as much to fix it as the car is worth so it didn’t make sense to fix it, as long as I don’t drive it on hot days.
Plus here in Connecticut we pay very high annual personal property taxes on vehicles. Our main vehicle was taxed this year at $700, while the Civic is only a $70 hit. So will I be shedding it for some fancy-schmancy new one? Nope. At least not until the wheels fall off.
Ted, on your point about the second car not racking up many miles — my wife’s car only did 264 miles in our last year of owning it. We live in a highly walkable town, so we easily cover more distance on foot each year than the car does on the road.
I drove a 2007 Honda CR-V with 190,000 miles until January. (It was so old it had a cassette player). My wife had been begging me for several years to replace it with a car with modern safety features. I held out until I was reading a personal finance book by, I think, Barry Ritholz, that insisted replacing an older vehicle could be a lifesaving decision since the old car had 18-year-old air bags, etc. I suffered a syncope spell while driving in 2012 and crashed a Nissan Altima into a utility pole and I did not want to repeat that experience. So, I took the plunge and could not be happier. I bought a used 2022 compact SUV with 53,000 miles for $25,000 less than a new one. It has all the new safety features (no cassette player though) and I feel safer and it is much more comfortable. The decision to replace a vehicle should include the safety items, if you can afford it.
That was my thinking when we replaced Chris’s 2010. My 2020, which lacks a couple safety features, is fine as a second car; I will drive it for many more years.
I agree that cars without safety features should be replaced. But many older cars, including my 11 year old Highlander do have them. We regularly rent cars when we travel. Almost all of those vehicles, which are newer than our car, lack many of the safety features we have on the Highlander. Newer doesn’t guarantee all the features.
Just curious as to type of safety features on a older car.
My 2017 has stop/start adaptive cruise control, front and rear parking sensors, blind spot mirror indicators, lane keeping assist, and voice control for phone and music. It also has adaptive cornering headlights that adjust the beam through bends at night for better visibility. On top of that, it’s got more airbags than you can shake a stick at, plus the maximum five-star Euro NCAP safety rating — including the highest rating for passive pedestrian collision protection.
Backup camera I think now required on all cars. Blind Spot detectors , parking assist, my favorite— adaptive cruise control which has ended discussions with my husband about tailgating— lane detection, the feature that stops the car if the one ahead stops — don’t know what it’s called . That’s what comes to mind. Also heated and cooled seats whic we never use, and heated steering wheel that I love in winter. These latter are nice to haves.
During Covid, we wanted to go to our place in NY but didn’t want to risk staying in a motel. We were able to sleep pretty comfortably in the back of the Highlander at a truck stop outside if Erie PA. I lnow — not a safety feature— but a real plus at the time!!!
I’m impressed all that is on an 11 year old car. It wasn’t on mine at that time.
I’d heard about adaptive cruise control and figured it would save our marriage— just kidding. Our Ford Explorer had. 235,000 miles on it and, while still reliable, we decided the end might be in sight. Our initial plan was to replace it with a Ford Edge— my husband wasn’t thrilled because he claimed I like to haul too much. Problem was the tech was delayed at Ford, so we shopped. Subaru had it, but the dealership couldn’t get a bigger SUV with it. The Toyota dealership was across the road from Subaru, so we stopped in. The Highlander was sitting in the middle of the showroom ( just remembered, it also has the feature that turns the high beams on and off depending on approaching traffic on dark roads,). The car is more loaded than we’d want — captains chairs in the second row and the most uncomfortable seats in the third row which we’ve used once. But it’s a great car. We didn’t negotiate with the salesperson. We determined what we’d spend including tax, registration, and the old Explorer, and it was take it or leave it. Paid cash even though they tried to push financing,
But you still have a nine year old car with more likely repairs on the horizon and your $1500 may be money down the drain. In my experience once the repairs start, they keep growing, plus the aggravation that goes with them.
My engine light came on last week. Turned out the gas cap wasn’t on right.
Do you keep all your money where a withdrawal would trigger taxes? I keep cash in a brokerage account for such things.
Dick, I 100% get the attraction of new cars. Heated seats, cameras pointing in every possible direction and all the modern driving aids. And I think once people have reached the necessary financial situation, buying a car you love is a great way to use money to enrich your life.
For me, the car I actually want to drive is my 21 year old Toyota. As part of my current job I was offered a modern car, but politely declined. I just enjoy the simpler, more straightforward nature of my vehicle compared to the newer options.
To each, their own!
If I could I’d like to have back my first car, a 1963 VW bug, but that didn’t even have a heater.
I like new technology. Yesterday when I started my car there was a fireworks display on the screen and a Happy 4th of July. The car said “Welcome back, Richard.” Most of what I want to change I just ask the car. When I am on the road, I just say “Hey Mercedes, take me home.”
All unnecessary for sure if you want to go from A to B. But when you can say to your car “Hey Mercedes, how are you today?” And the reply is “ All the better for hearing your voice”. It’s pretty cool.
A flaw though. Something happened after my last service and now when I ask the tire pressure it says it in German, used to be pounds.
I could talk all day to Alexa, but so far have not had the urge to do so.
I still hold most of the cash from my business sale outside of my portfolio. The majority of these funds are locked into laddered bank CDs, they remain entirely tax-free. However, because I only maintain about $50,000 in instantly accessible, tax-free cash, an unplanned, impulse purchase like a new car would require me to tap my taxable portfolio. If I didn’t do so, my liquidity buffer would be smaller than I’d be comfortable with.
I keep cash in different accounts designated for different purposes such as a car or travel. They are money market accounts. Psychologically I have already spent the money so when it’s time to actually do so I am prepared mentally and financially.
I had four cars we drove until the engines literally blew up. Once going 65 mph on a highway in another state. I just left it in a junk yard. I had bought it used. No more of that for me.
You’re very risk averse when it comes to cars. You traded in a car last year that’s undoubtedly on the road in NJ! One $1500 repair is not a predictor of massive expense on a car with only 80,000 miles!
I traded in a 10 year old car that needed $8,000 in repairs. $1500 a predictor, perhaps not, but nine years old, quite likely.
$8000 at a Mercedes dealership. Not the least expensive place to get repairs!!
Very true, probably half as much elsewhere if you found someone qualified, but even if they said $4,000 I would not have spent that because it was ten years old and had none of the safety and driver assist functions or even CarPlay.
I may have one more new car left in me and it will be another Mercedes. The money is being accumulated now. I waited until I was age 70, I’m not giving up now.
Besides as I pointed out before my car costs about the same as a well equipped pickup truck and some SUVs both of which seem the choice of the middle class.
My Equinox is six years old. Though the original tires looked fine, the traction was lousy. That evil little gremlin in my brain had totally justified my desire to replace the car with one that had all wheel drive and adaptive cruise control, and the cost of a new ride is totally within our comfort zone. Finally though, better judgement prevailed, and I found myself at the tire store, replacing the original rubber with a set of Michelin Crossclimate tires, which, based on my current driving usage, may just be a lifetime supply.
I love those tires – they are excellent in winter !
I have similar dilemma. My almost seven year old car with only 54k miles somehow has a leaky head gasket (coolant leaking). Service advisor doesn’t know how leak started. Cost to repair is $9k, labor intensive; car is valued by dealer between $8-13k, if in good condition. My choices are repair, or sell car and replace (lease or buy new). I can complain to car manufacturer, but out of warranty, so this may not work. In any case I need a car.
Oh man, that’s brutal. If I were in that position and the corporate route came up empty, I’d definitely just replace the car. One half-assed suggestion though — not sure if this works the same way in the US. A friend of mine had something similar happen about ten years ago. He went to an independent workshop, and they sourced a second-hand engine of a similar age. Between the engine and the labour, it ended up costing half of what a head gasket replacement would’ve been. Although I still think I would cut my losses.
If you bought this car new and have maintenance records showing that you took care of the vehicle, you have a case for complaining loud and hard to both the dealer and manufacturer. If they still say no, make sure you tell them you will be headed to Facebook and Instagram to highlight your complaints.
Mark, as an owner of a 21 year old Toyota Hilux and manager of an automotive workshop for 9 years, I agree wholeheartedly. Keeping an older car going, unless the repairs are catastrophic, is almost always the best financial decision.
In many instances our customers were considering dumping their second hand car to buy another second hand car. I would always remind them that currently they “know what they’ve got”. If they go and buy another second hand car, they may well be taking over someone else’s headache.
Greg, the comments on this post are really making me reconsider my plan to change cars next summer. My current car will be pushing close to 100,000 miles by then, but it seems a well-looked-after vehicle can last much longer than I’ve always assumed.
According to AI, modern cars are built to last 159-200,000. Right now, at 80,000, your car would be considered moderate mileage.
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!
DJ, I’m in total agreement with you about parking lot scratches. When I was younger, I bought a brand new two-seater sports coupe, and for the first couple of years, I parked it as far away from the crowd as humanly possible.
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.
David, I had a test drive in a brand new MG S6 EV Trophy Dual Motor, man, I nearly snapped my neck with the acceleration! (I’m not sure, but I don’t think you’re allowed to buy that make in the US.) There’s been such an evolution in car technology and comfort since I bought my 2017 SUV. I’m really looking forward to changing my car at its planned replacement date in mid-2027.
No MGs for sale in the US, mainly due to US regulations concerning Chinese EVs and technology.
Polestar just got canceled here too. Their appeal to continue selling cars in the US was turned down.
I saw a review of the Rivian R2 today, and that looks like a nice car. If I wait a few years, I’m sure I can pick one up for half the original retail price, but right now my fifteen-year-old Lexus with 80k miles is just ticking along nicely, so I have no excuse to get rid of it.
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.
It’s really not all that exceptional. These days cars do last. The car before this one, a Ford Explorer, had 235,000 original engine and transmission. I expect this one to go 200,000.
The first 3 cars I owned I sold with over 400,000km (250,000 miles) on the clock. Fond memories of all of them!
Greg our first new 3 cars were US manufactured, purchased in the 80s. The cars back then had 3 year 30K warranties, and each were sold as soon as the warranty expired. Years ago started buying Toyotas (with the exception of a Subuaru Forrester-had the engine replaced under a class action lawsuit due to burning >a quart of oil between changes). Now own a 2020 Tacoma with just under 50K, and a 2025 Toyota Crown Signia. Since we are retired and 68 and 67 yo, they’re Toyotas, and we keep cars until they die, there is a strong possibility these are the last two vehicles we will purchase. We are so sure this will occur that they are in our trust.