If your vehicle is almost as old as your grandparents are or has turned out to be a lemon, you might be wondering whether it’s worth getting fixed all the time or whether you should simply cut your losses. In this article, we have aimed to help you determine whether you should sell these cars for scrap metal or whether you should keep them going a little longer. At the end of the day, it all comes down to what makes the most financial sense.
What do the corporations do?
When big corporations decide to update their fleet – whether the vehicles are 3 years old or 20 – they reach this conclusion by determining whether the car will cost them more in the future than simply buying a new one. They consider the following factors:
- Whether the new vehicle is fuel or energy efficient;
- Whether the new machine will work faster;
- Whether the payments for a new car will be greater than the repair costs of the old one in the long run;
- What the lifetime of the new and old vehicles is; and
- How much they will receive as a trade-in for their old machines.
You may have noticed that past costs don’t factor into the decision – no large corporation will consider past costs because the money they have already spent will never be returned. This is known as “sunk costs” – you ignore past expenses in evaluating future costs.
How do I evaluate the costs?
When it comes to determining whether you should sell your car for scrap metal or whether you should continue fixing it up, you will need to consider the following factors:
- Condition of your vehicle
Remember that no two cars of the same make and model are going to be exactly the same. This is because the condition of the car is directly related to the quality of replaced parts, how routine maintenance schedules are followed and how nice you are to it.
- Consult other car owners
When studying your own vehicle, it doesn’t hurt to gather information from similar car owners. This will allow you to determine what sorts of repairs other owners have had to undertake and what order many of these repairs were required in.
- Research loan payments
You should also take some time to research the monthly loan payments for the top 5 cars that you would like to buy as a replacement. Don’t forget to consider rebates, financing offers, price and the trade-in value of your current vehicle in your research.
- Compare all of the costs
To determine whether buying a new car or repairing your old one is going to cost you more, divide the total potential costs for keeping your vehicle into a monthly amount. Then, compare this amount with the potential car payment you have researched.
Once you have undertaken all of the steps outlined above, you should be in a much better position to decide whether selling cars for scrap metal is going to make the most financial sense or whether fixing it up is. If the final figures are relatively close, you should also consider the fuel mileage differences, as well as how long the warranty on your repairs is going to last. You might find that getting a brand new vehicle is quite affordable.