Repair or replace your car.

Worked example

Your car is worth $6,000 as-is and the repair quote is $2,500, a repair-to-value ratio of 41.7% (under a 50% rule of thumb). You expect $500 a year of other repairs, and it would be worth $4,000 in 2 years. Keeping it costs $2,500 + 2 x $500 + ($6,000 - $4,000 lost value) = $5,500, or $2,750 a year. A $25,000 replacement worth $19,000 in 2 years, with no repairs, $300 a year more to run and $3,000 of loan interest, costs ($25,000 - $19,000) + 2 x $300 + $3,000 = $9,600, or $4,800 a year. Keeping is $4,100 cheaper over the 2 years on these numbers.

How it works

Keep = repair quote + other repairs per year x years + (value now - value at the end). Replace = (replacement price - its value at the end) + repairs per year x years + running-cost change per year x years + loan interest. The sale of the old car cancels out because the old car's value is already counted on the keep side. Repair-to-value ratio = repair quote / current value.

The comparison depends on estimates you make: a repair quote can grow, an old car's future repairs are uncertain, and values differ by condition. It does not price safety, reliability, features or what else the cash could do. A mechanic's inspection and independent quotes will do more for the decision than any ratio.

Everything above is arithmetic on the numbers you type. No prices, rates or values are assumed or looked up, and no outside figures are used.

Not financial advice. This is a planning estimate from the numbers you type. Taxes, fees, insurance and lender or lessor terms vary; confirm every figure against your contract or written quote.

FAQ

When is it worth repairing a car?

There is no single rule. A common rule of thumb says repair if the cost is under about half the car's value, but it ignores future repairs and the cost of replacing. The tool compares total costs over your chosen period as well as showing that ratio.

What is the 50 percent rule for car repairs?

It is a common rule of thumb, not a published standard: if a repair costs more than half the car's value, consider replacing it. You can change the threshold in the calculator.

How do I estimate future repairs on an old car?

Use your own records of recent repairs and what your mechanic says is likely to fail next. The tool uses a flat yearly amount, which is a simplification.

Why does value lost matter when I keep the car?

Even without a purchase, an older car loses value over time. Counting it puts the keep and replace sides on the same footing.

Does this include the safety or reliability of an older car?

No. It is arithmetic only. If the old car is unreliable or unsafe, that may outweigh the numbers.