The Loans Canada team sits down with Gary Schwartz of the Canadian Lenders Association to talk about open banking.
Should I Repair My Car Or Buy a New One?
Loans Canada: The Country's Best Loan Comparison Platform
At one time or another, most of us have asked ourselves the age-old question: “is it better to buy a new car or fix an old car”? The answer to this question is never black and white.
This concern comes up for most people after they have been in an accident. Sure, things like brake issues, tire issues, or battery issues come up from time to time, but those often only cost a few hundred dollars, at most, to fix. And likely won’t think about replacing your car after something like that.
But if you are involved in a large accident or crash, the repair costs can be much higher and this is when you need to start thinking “is it worth fixing my car after an accident?” or “should I repair or replace my car after an accident”? The choice will ultimately be yours to make and will depend on a number of things such as your financial situation and the overall costs of the repairs.
Are you a Toronto resident in need of some repairs? Learn about RepairMatch.
The Steps to Take With Each Option
Here’s a closer look at the steps you should take no matter which option you choose. It is important to know what goes into each option before making your choice. After that, we will look at a few considerations to make which will help you decide whether you should replace or repair your car.
Check out this infographic to learn more about your auto financing options.
When You Want to Fix Your Car
First, let’s look at a few things to do if you want to fix your car. It is, of course, a good idea to shop around and get quotes from different body shops and mechanics. Different shops will have different prices so look around until you find a price you are comfortable with.
You should also have a budget in place when it comes to how much you are willing to spend on these repairs. You never want to put yourself into debt just to fix up your car. Some things must be fixed right away while others can wait. You can save money by putting off the unnecessary fixes until later, but remember to budget for them going forward as well.
When You Want to Replace Your Car
When you want to replace your damaged vehicle, you have a few options. First up, you need to decide whether you want to buy a new car, buy a used car, or lease a car. What you choose will completely depend on your financial status, your wants, and your needs. All are good options, but for most people, finding a quality used car at an affordable price is the way to go.
What’s the difference between leasing a car and buying one? Find out here.
Cars can range from very affordable to extremely expensive, so don’t get carried away and spend more than you can afford. Next, you need to look at what features and options you want in a vehicle and look for cars that have them. With so many cars out there you could potentially buy, it is a good idea to narrow them down into a couple and then go from there. Once you have arrived on a specific car, either pay for it in cash or get a loan from a reputable company or provider with affordable rates, like Loans Canada.
Deciding Between Repairing or Replacing
Now that you have seen the steps involved with both options, we will look at a few tips and considerations to make when deciding between buying a new car or keeping the old one.
Consider the Cost of Repairs
Repair costs can range a lot depending not only on what got damaged but what type of car you have. Some makes and models will be affordable to fix, while others most definitely will not be. If your car repairs cost more than the car is worth in the first place, it is generally not a good idea to fix it and you might be better off buying a new-to-you car. Of course, for this to work, you need to know what your car is worth before and/or after the repairs, and this can generally be found out by doing a little bit of research online.
Read this to learn about financing your car repairs.
How Old is the Car?
It is also important to think about how old your current car is. If you have a relatively old car, you also need to consider the fact that you will likely encounter future repairs or problem as the car gets older, so it might be worth upgrading now instead of waiting until you have another repair. Of course, older cars that are maintained well will be fine, but father time never loses, so an old car will eventually break down, it’s just a matter of time.
If you are buying a used car, always make sure to check the history beforehand.
Will the Repair Prolong the Life of Your Car?
Repairs and damage come in all shapes and sizes. If the repair is something very important, yes, it might be expensive, but it could also add years to the life of your vehicle. If the repair is something that is just likely to break again in the future or is something that won’t extend the life of your car at all, you should potentially look to replace the vehicle.
Consider Your Budget and Financial Situation
Ultimately, your choice will come down to your finances. You need to consider current costs, future costs, insurance costs, gas mileage of your current/future car, and more. Thankfully, loans and financing can make repairing or replacing your car a little bit more manageable.
Is your car loan more than your car is worth? Read this.
However, think about what your new car payments will be if you decide to replace your car. If you have troubles paying off your expenses and debts now, it might not be wise to add on that extra debt and you might be better off just paying for the repairs until you are in a better financial situation and are able to get a newer car.
Think About the Future and Your Plans
Recent or upcoming changes in your life can sometimes play a role in your decision. If your commute recently became much longer, you might want a vehicle with good fuel economy. Or if you are planning on having kids in the next little while, you may want to look at a bigger vehicle.
Still not sure about buying a used car or a new one? Take a look at this infographic.
Look for Recalls
We cannot stress enough the importance of keeping an eye out for open recalls on your car. Many issues you are experiencing might be due to factory defects and as a result, aren’t up to you to fix. Many vehicles can have recalls on anything from brakes, to starters, to engines, to ignition switches, and more. If it turns out that the damage to your car was created by a recalled component, you can likely return to the dealer and get the issue corrected and the damage repaired free of charge. Dealers should often reach out to you if your car has a recall, but it can’t hurt to do your own research as well.
Want to know how much car you can realistically afford? Click here.
The Right Decision For You
The answer to “should I repair my car or buy a new one?” doesn’t have a definitive answer. The decision will depend on your wants, needs, repair costs, financial situation, and much more. However, before deciding, it is a good idea to crunch the numbers and also do research on both of the available options and see which makes the most sense for you. If you’re interested in more information about repair financing, Loans Canada can help!
Rating of 5/5 based on 1 vote.
Largest Lender Network In Canada
Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.
goPeer — Helping Consumers Achieve Financial Freedom by Connecting Canadians Looking For Financing With Canadians Looking to Invest
goPeer is Canada's first consumer peer to peer lending platform and connects creditworthy Canadians looking for a loan with everyday Canadians looking...