Question

My car needs a repair for 1k. Its with our trusted family mechanic that our family has been going to for years. He says if we do this repair, then my car should run for a few more years. To get the repair done, I would have to completely wipe out my emergency fund, and then probably start saving for a new car. To buy a new car, I'd have to also completely wipe out my emergency fund, plus have a car payment. What would you do? ***Edit*** Car is a 2002 Jeep Grand Cherokee, 230k miles on it and is paid off. The AC is broken which is miserable in the summer. So that would also add to the cost of the repair. The Jeep is worth about $1600-1900 on Kelley Blue Book. So the 1k repair is worth more than half of the value of the car itself. If I were to trade to a dealership, KBB says I'd get about $500 which would basically be the value of the car minus the repair. The way I see it, in both situations I have to wipe out my emergency fund then put probably spend $200+/month towards either a car payment or savings for a new car. If I were to buy a new car, at least that 1k would go towards the car itself, rather than having to replenish the E. F. and then save for a new one.  

Answer 1

Fix it! You can replenish the EF since you wont have that car payment! Start a separate fund for a car purchase in the future! or If you got a new car would you be able to replenish the EF while paying your new note?!  

Answer 2

No question. Keep the car.  

Answer 3

Fix the car for sure

Answer 4

Fix it for sure!  

Answer 5

What's the repair? How old is your car? Do you have other major maintenance coming that you haven't thought of yet? Will your cost of ownership exceed the cost of replacing it? Could you purchase a "new to you" vehicle for 2-5K (or even 7), have the mechanic make sure it's sound, and save yourself the repairs?  

Comments

These are all rhetorical, btw. You dont need to answer them :) Just designed to give you something to think about and allow you to look at bigger budget questions like future cost of ownership. (Because that oil change might turn into a water pump plus alternator plus solenoid etc even though it should run a few more years right now).  

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I added this in the original post but to add here as well. Car is a 2002 Jeep Grand Cherokee, 230k miles on it and is paid off. The AC is broken which is miserable in the summer. So that would also add to the cost of the repair. The Jeep is worth about $1600-1900 on Kelley Blue Book. So the 1k repair is worth more than half of the value of the car itself. If I were to trade to a dealership, KBB says I'd get about $500 which would basically be the value of the car minus the repair. The way I see it, in both situations I have to wipe out my emergency fund then put probably spend $200+/month towards either a car payment or savings for a new car. If I were to buy a new car, at least that 1k would go towards the car itself, rather than having to replenish the E. F. and then save for a new one.  

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@painful156 knowing it's a Jeep GC, I'd argue that in "as is" condition (needing catalytic converters and ac repairs) you can sell it privately for $3500-5K (depending on your sales ability) even with 230K on it. I'd sell it and get a used one. Don't buy 08-13 jeeps; go 05-08 or 13-17 then 19-20 (depending on the model but esp the wranglers) and skip the compass altogether. Love me some jeeps

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Also, if you get 3500-5K for it, you might be able to get a low interest loan on a new to you car for like 13 that's nearly brand new (like 17 or 18) and certified. Talk the dealer into lifetime oil changes, and 5 years of free maintenance, then put what you sold it for down on what you buy. You'll walk away with a fairly low payment that you can double up on (applying towards principal, depending on the bank) and pay off in a couple years instead of 5 or 7.  

Answer 6

I’d fix it

Answer 7

Personally, if I knew the car only had a few years left anyway I wouldn’t sink anymore money in it. I’d sell as is (assuming it’s paid off) use whatever you profit as a down payment and find a reasonably priced new to you car. Don’t use your $1000 emergency fund and crunch the numbers to make sure you can afford the payment. Also consider mpg and call your insurance for a quote to make sure it’s affordable. Check interest rates through a credit union. I have excellent credit and my regular bank was going to give me 7% on a car loan. Credit union gave me 3. 1%. Just my two cents ‍♀️

Comments

I'm leaning more this direction. Its a 2002 with 230k miles on it so its old. Plus has a broken AC.  

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This is what I’d do too. and check personal property taxes if you have them where you live too.  

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I've got spreadsheets of number crunching so I know I could afford a payment. And 100% agreed that I'd rather have the E. F. Thank you for your advice!  

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I definitely wouldn’t put $1000 in a vehicle that old with that many miles but that’s just me. Not sure what needs you have as far as needing room for kids or AWD for your climate but where I live you can find great used cars for $4-$5K.  

Answer 8

Fix it. If you think about a payment being around 300 a mob that-you need about 3months with the car to break even.  

Answer 9

However, now might be a good time to buy in if you lock in low APR and get a few months payment free.  

Answer 10

Keep the car. Bask in the glory that is your EF. If you didn't have an EF you would probably have had to put that $1k on a credit card. Good for you that you don't have to! Don't you see? The positivity of your decision making is already starting to affect your life in a good way. You will have that EF back in no time and a car that will last a few more years, allowing you to save that car payment and apply it to something else! Wow, you are really doing awesome!  

Answer 11

Fix that car save for new car and replenish EF and start a car repair sinking fund so that you have money for repairs next time

Answer 12

What kind of car is it?  

Comments

2002 Jeep Grand Cherokee with 230, 000 miles on it!  

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@painful156 what is wrong with it?  

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Needs catalytic converters replaced. I drive a pretty steep hill that is a highway every weekend and it can barely make it up. I end up going 35mph by the time I'm at the top which is super unsafe. Makes me feel so anxious while driving.  

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@painful156 if it’s a safety issue than there is your answer. time to get a new (to you! ) car

Answer 13

Repair the car! You can replenish your emergency fund and save for a new car. Avoid paying interest on car payments at all costs (speaking from experience)

Answer 14

Fix it  

Answer 15

Fix it. Then build up your EF again. If you buy another car, you’re sinking the $300/mo towards a car and not yourself.  

Answer 16

Fix it! It may seem like the money is better spent towards the car but the interest will completely screw you. It's worth the time and money to have some kind of EF and begin saving cash for a car.  

Answer 17

I would say, time for a new car! That would last you MORE than 2-3 years! With A/C and no problems for years