Fix it or junk it?

April 11, 2006 8:59 AM

At what point is a car not worth repairing?

My 10-year-old 130k-mile Saturn is showing its age pretty badly—leaking oil, disturbing noise coming from the front end, crumbling exhaust system. I'm having a tough time coming up with a satisfying way to determine if it makes financial sense to pay for the repairs or to just ditch the car and buy a new one (living carless isn't an option, cool as it would be).

The Internet tells me the car's currently worth $700; one common calculation I hear is that if the repairs cost more than $700, they're not worth making. But on the other hand, even if the repairs were to cost twice the value of the car, $1400 is a lot less than the expense I'd incur getting a new one.

So I guess what I'm looking for is advice/perspectives on how these factors play against each other. Does anyone have any experience bringing an aging car like this back from the brink without essentially taking a large pile of money out into the garage and lighting it on fire?

posted by COBRA! to travel & transportation (42 comments total)

You're looking at repairs that could easily cost what the car is worth. When you've done them, the car is still worth $700, and will very soon have other parts crumbling.

This is the point at which a car becomes a black hole that sucks money. You're no longer investing in/maintaining an asset. You're essentially leasing a really crappy car. Ditch it now, it won't get better.
posted by Pliskie at 9:08 AM on April 11, 2006

The problem here is that you're talking about the $1400 like it would be a one-time expense that is cheaper than the cost of a new car.

But it isn't a one-time expense. It's what it would cost you to repair the car at the moment.

However, there are more expensive repairs down the road, it can be assured, and in the long run you will end up spending more on this car than you would on a new one (meaning a second-hand car in good condition).

This is called "cut your losses." A car that is starting to go down hill will eventually become a gargantuan money pit.
posted by Nicholas West at 9:08 AM on April 11, 2006

Get out when the repair costs are half what the car is worth. You're well beyond that point now.
posted by bonaldi at 9:14 AM on April 11, 2006

Intuitively, yeah, I feel like it's shifting over into being a money sink. What I'd like to do is come up with a formal way to calculate the situation. Something like:

A = [cash value of car] + [utility of car]- [cost of this round of repairs] - [cost of likely near-future repairs]

B = [ cost of new car ] - [utility of new car]

and compare them straight across. I guess the tough things to estimate are the utility of the car after this round of repairs, and the cost/likelihood of more near-future repairs.
posted by COBRA! at 9:16 AM on April 11, 2006

You also need to evaluate how much not sitting on the side of the highway at night in the rain waiting for AAA is worth to you.
posted by octothorpe at 9:16 AM on April 11, 2006

While I'm at it, I guess I'd also be interested in opinions on the economics of new/used and buy/lease.

And thanks for everything so far.
posted by COBRA! at 9:23 AM on April 11, 2006

New/lease is for people for whom it's really important to have a new car. Clearly, you're not one of those people.
posted by box at 9:30 AM on April 11, 2006

My opinion on the new/used v buy/lease thing has always been to buy used, preferably a car just off-lease. If it's one-to-two years old, the initial depreciation has taken place, and you're pretty much buying the car at its actual value. If you have chosen a reliable vehicle, you've got about 5-8 years of relatively worry-free ownership ahead of you, with few repairs and less paperwork (changing plates, insurance, etc.) than a churning lease. Just my opinion, though it reflects my actual experience.
posted by Pliskie at 9:30 AM on April 11, 2006 [1 favorite]

Click and Clack say it is "always cheaper" to repair the old car, but as octothorpe says, the time spent dealing with repairs can be considerable.
posted by exogenous at 9:33 AM on April 11, 2006

Old cars have relatively high operating costs because you have to pay to fix them.

You generally don't have to pay much to repair new cars, but new cars have relatively high capital costs. You have the cost of depreciation, and, either the interest cost if you finance, or the opportunity cost if you pay cash.

In the simple case, you replace an old car when the cost of annual repairs exceeds the annual depreciation and financing costs of a new car. There are two complications.

First, reliability has some value. That value depends on the person, their proclivities and their circumstances. Let's say an old car will die unexpectedly twice per year. For some people that might be worth the cost of cab fair on those occaisions, plus a little nuicance money for a couple of shots of Makers Mark that evening. For someone who is ferrying arround their two kids, and their kids 3 friends, you might have to add the cost of the couple of years of their life they loose with worry while waiting with 5 freaked out grade-schoolers on the shoulder of the freeway at night in the middle of a thunderstorm.

Second, you don't actually know what a car is going to cost to repair in the coming year. It might be that the $700 you put into it buys a year of troublefree use, or it might just be the tip of the iceberg.

As to how to turn this into a rule of thumb, that's an exercise for the reader :). I think though that the resale value of your existing car is probably the least important variable. I think the right thing to do is to take the operating costs over the last 12 months, multiply that by, say, 150%, under the assumption that things will just get worse, add the cost of any known upcoming repairs and nuisance cost of unexpected breakdowns and compare that against the annual cost of a replacement. Replace when it looks like the car is going to cost more to keep running than to replace.
posted by Good Brain at 9:36 AM on April 11, 2006 [1 favorite]

"cab fare" "nuisance"... ug
posted by Good Brain at 9:37 AM on April 11, 2006

The first thing that I would ask is the age of the timing chain. If this has not been replaced, then I would get rid of the car. If it has, then I would consider the various repairs (but still possibly get rid of it).

This forum might be able to shed some light. I am a Saturn owner and have found the folks here very helpful. You need to register, but it's no biggie to do so.

Good luck.
posted by Danf at 9:41 AM on April 11, 2006

Good brain has it. Cars are not equity assets, so the actual value of the car enters into the equation much less than does the relative costs of owning this car (don't forget insurance) vs. the cost of financing and insuraning a new car (or using the money for something else). The habit of thinking of cars as some sort of asset (aside from their use-value) is a good way to end up paying way more than you should for something which matters more for what it does than what it is and is worth. Not doing this also answers the new/used+buy/lease questions with alacrity, since there's no reason to buy new something which depreciates at the rate at which a new car does (unless you confuse it's newness with value), nor is there any reason to lease something which you will by definition get the most value from by driving it past the point of its lease.

All of these considerations, of course, go out the window if you're really into cars. Then cars become something other than tools. But, in that case, you wouldn't be driving a ten year old Saturn in the first place.
posted by OmieWise at 9:44 AM on April 11, 2006

New/lease is for people for whom it's really important to have a new car.

Or for people who can't find the make, model, and feature set of the car they want in any local used cars, or for people who require a feature that was only added this year, or for makes and models where the savings for a used car aren't disproportionate.

Lease is normally for people who replace cars on a more frequent basis, though I'm sure there are exceptions if you get a good deal or have other less-common requirements.
posted by ROU_Xenophobe at 9:57 AM on April 11, 2006

Good Brain does a good job of breaking it down, but I think there are enough unquantifiables to make it difficult to turn this into an algorithm.

I was in your boat a few years back--I had an '86 Civic with 180,000 miles. I had already spent more in repairs on it than I spent to buy it in the first place (very used). I'd had some really frustrating breakdowns with it, and was looking at more repairs approaching my original purchase price. It was at that point that I decided any further repairs were sending good money after bad, so I broke down and bought a new car.

In retrospect, buying a slightly used car would have been smarter, but I have to say, it's nice having a car that doesn't give me an upset stomach every time I contemplate a drive that's farther than I'd be able to walk home.
posted by adamrice at 10:00 AM on April 11, 2006

All of the economic issues aside, the stuff you describe is not anything like catastrophic car failure.

Oil leak? So what. Cars can run for decades leaking oil. Crumbling exhaust? So what -- that doesn't make the car run, and is not that hard to repair. Odd noises from the front end? This one might be worrying, but the stress is on might. It could just need a new pair of shocks/struts. Maybe the entire front end suspension needs replacement, but I'd find out first, before I panicked.

Unless you've left stuff out, there's no sign that this car has become an unstoppable money pit.
posted by teece at 10:04 AM on April 11, 2006

The rule of thumb I've heard is that if repairs get up to 2/3 the value of the car, it's probably not worth it. Mostly for the reasons already mentioned--if you're making that many repairs now, you'll probably be making that many repairs again in six months or a year's time.

That said, I took my car into the dealership and they told me I needed $3500 of repairs on a $4000 car; then I took it to a mechanic who told me I only needed about half of that and did it for a third the price. So it may be worth shopping around if your initial estimate is too high.
posted by fermion at 10:05 AM on April 11, 2006

what if you bought a car knowing you were going to spend more in repairs than the purchase price? I bought a '90 camry for $1200 knowing that within a year I will have put in at least that amount to keep it going. The car had 135k on it and I know these cars have historically gone past the 200K even 300k mark. I've had it for about 2 years now and have paid about $800 a year in maintenance and repairs per year. So you need to know what the longevity is for the car you own. Go to Edmunds and see what others are saying about your make and model and then you'll have better visibility on whether your car is worth fixing. My cost to own (initial purchase, maintenance and repairs, insurance) averages out to $166 per month per month for a car that runs great. The extra cost on repairs more than makes up for the amount I'd have to spend on collision and premium insurance for a later model car.

Try to figure out what your cost to own your 10yold car is right now and how much your cost to own is on a newer car. Now take that difference and see if you can justify the added convenience of less trips to the garage or sitting on the highway to the added expense.
posted by any major dude at 10:20 AM on April 11, 2006

Kudos to Omni & Good who have nailed it. You're at the point where resale value is irrelevant. You're not getting any notable amount of money when you sell that car now. The question is "what is it going to cost me to drive?" and that may or may not mean drive -this- car.

As teecee says, so what if it leaks? Oil is comparatively cheap and if you have to put a quart in a week (which would be pretty severe) that's still only about $70 a year. The only way that will be expensive is if you don't stay on top of it. ENGINES are expensive, as my bank account can tell you

As far as exhaust you have three concerns, in descending order: Not asphyxiating, your sanity from the noise, and passing your state's emission requirements. You don't say where it's rusting but particularly in small cars used for short hops what happens is the pipe exiting the muffler rusts up and falls off. This is because all combustion results in water and your exhaust pipe heats up and burns off the moisture from front to back. That last bit never heats up completely and therefor gets just hot enough to increase oxidization.

The good news is that this only matters to you if you're a cop and spend a lot of time sitting and idling in the car. When driving that's close enough to the back to blow out. Your mechanic will be happy to sell you a new muffler and install it but it's unnecessary; it doesn't even make much difference noise-wise.

If you get a hole in the muffler or farther forward it's more annoying and may or may not pass inspection. If you get a hole in your catalytic converter it's even more expensive and you surely won't pass any inspections.

As far as this disturbing front end noise, does it only happen when you are turning and accelerating? A common problem on front-wheel drive cars is a torn constant velocity boot. Once the boot tears and the spinning forces spew all the grease off them the CV joint begins to degenerate. It initially manifests as a slight clunk noise when you turn and are accelerating. You can tell the difference if you can put the car in neutral and not hear it or even just take your foot off the gas.

Eventually the noise will become constant even when going straight and, supposedly, the CVs will eventually disintegrate and strand you. That said, I once drove a Civic with this noise for about two and a half years and never got to the constant stage, much less breakdown. If you can ignore the noise it's essentially a nuisance and nothing else.

as Fermion points out, costs from mechanic to mechanic will vary. The most important thing for you to do if you are interested in keeping this car and spending as little as possible is having a mechanic that is on the same page. If they get the sense that you're interested in fixing every little thing then they are going to push for every little thing. If you present it clearly as a choice between cheap fixes and no fixes at all then they're going to be MUCH more motivated to find a middle ground.
posted by phearlez at 10:36 AM on April 11, 2006

Wow, the info keeps rolling in. Gracias.

Two elaborations: the timing chain's original-- what's the impact there? Am I entering the milage range where it's going to fail soon?

And as for the disturbing noise from the front: it's this buzzing/grinding noise that increases in frequency as the wheels turn faster (so I can't hear anything under 25mph; 25-35 it sounds like a B-17 is flying overhead; on the freeway, it sounds like someone's running a chainsaw in front of my car). I'll be getting that looked at shortly.
posted by COBRA! at 11:13 AM on April 11, 2006

You need a really good mechanic to look the thing over. Is the oil leak a loose oil filter or a head gasket? How much to fix the exhaust? What is that noise in the front end? And most of all, what other maintenance can you expect in the next year? Compare his cost estimates to a year's worth of car payments (and comprehensive insurance).
posted by LarryC at 11:16 AM on April 11, 2006

there's no sign that this car has become an unstoppable money pit.

Hello? GM product? 130,000 miles? That car is about 30,000 miles past the time when it should by all rights have become an unstoppable money pit. It's living on borrowed time.

The noise in the front end may be just a wheel bearing although it'd have to be pretty far gone to be that loud.
posted by kindall at 11:26 AM on April 11, 2006

On the more innocuous front, perhaps that noise is a loose heat shield. You can possibly determine if it's an engine or suspension noise by putting the car in neutral and gently revving the engine or putting the car in neutral when you're going down the road.

And LarryC brings up something I hadn't considered on the economy front - make sure you're not still buying comprehensive insurance on this thing. They'll happily take $100 a year from you to inure a car with a 2k book value. It's a waste of your money.
posted by phearlez at 11:47 AM on April 11, 2006

I was recently faced with a similar predicament.

My daughter had been driving her '96 Ford Taurus GL for 3+ years. Her first and only car. When we bought it used it had about 45k miles on it. It was now quickly approaching 100k and was causing her endless problems. Being a PT worker and student, the money she could afford to put into this ailing beast was limited. Her father in all his wisdom told her to just keep fixing whatever was currently broken, and to take it to a mechanic and ask them what she should do to keep it running for another 100k miles. HUH!?

Not wanting her to end up broken down on the side of the road in the middle of the night we started exploring our options. Rather than buying her another used car and ultimately ending up where we were in a few more years, I handed over my '01 Grand Am (along with a payment schedule) and I got the new '06 Honda.

My longwinded point is there is only so much you can do to keep a car running. There does come a point of no return when it just doesn't make sense to keep putting money into something that's going to continue breaking down.
posted by SoftSummerBreeze at 11:48 AM on April 11, 2006

FWIW, I just sold my '95 Saturn SL2 with 180,000 miles for $1200. It, like all Saturns of this age, was leaking oil (the rings leak and the oil gets burned up) and needed most of its exhaust system replaced (because of the oil in the exhaust, the catalytic converter gets fried along with the other components).

I regret my decision to sell it -- the cash was nice, but now I'm stuck driving my sixteen miles-per-gallon Jeep whenever I need to drive somewhere. Saturn parts are plentiful at the junkyard, easy to work on, and from my experiences, extremely reliable vehicles. The oil leak isn't catastrophic -- many people go 200k+ with that problem; just remember to check the oil level frequently.

What are you going to do if you sell it? Buy another ~$1000 car that has an unknown history? At least with this car, you have a pretty good idea what's wrong with it (and what could go wrong). I'd think twice about it -- that's one of the reasons I'm now holding on to my Jeep. I could sell it for $4000 but what would I do? Most $4000 cars are old enough that there's a lot of uncertainty in their history as well. Has the water pump been replaced? Is the timing belt new? Etcetera -- at least I know these parts have been changed in the Jeep (and yes, she actually has a timing chain...)

A Saturn is much more than just a "GM product", Kindall. Maybe you just had a bad experience... Saturn has one of the highest owner-retention rates of any automaker. They were great cars -- safer, more stylish, and more reliable than the other American cars, and more character than the bland offerings from the Japanese and Koreans. The new models (Ion, etc.) aren't anything special, but the Z-body (S-series) was a fantastic vehicle, a true surprise from GM.
posted by bhayes82 at 11:50 AM on April 11, 2006

COBRA! writes "And as for the disturbing noise from the front: it's this buzzing/grinding noise that increases in frequency as the wheels turn faster (so I can't hear anything under 25mph; 25-35 it sounds like a B-17 is flying overhead; on the freeway, it sounds like someone's running a chainsaw in front of my car). I'll be getting that looked at shortly."

Could be wheel bearings. Get it looked at very shortly, as a catastrophic failure is possible and potentially very dangerous.
posted by mr_roboto at 11:53 AM on April 11, 2006

Dang. I'm sorry to hear about your car. I can't really add anything terribly insightful as all the smart people have already posted. But if you're going to get rid of your car, want to buy my car? It's old and not the prettiest, but it purrs and will last for a zillion years to come. If you're anywhere near southwest Florida and want an '88 Toyota Camry with 83k miles, email me through my profile.
posted by orangemiles at 12:01 PM on April 11, 2006

Cars are always (necessary) liabilties. Barely assets. Drive it until it explodes, meanwhile saving money for a down payment on a slightly used vehicle.
posted by cellphone at 12:09 PM on April 11, 2006

You've already got your answers, and there are many reasons to ditch this car, but this:

it can be assured, and in the long run you will end up spending more on this car than you would on a new one

Is simply not true. It's ALWAYS cheaper to fix an old car and keep it going than buy a new one (except for extreme cases). Click and clack are correct.
posted by justgary at 12:13 PM on April 11, 2006

The timing chain on Saturns is good for 100K . ..depending on whether there was a good supply of oil flowing over it. How well the car has been maintained. Some go earlier than that, some last forever. . .seems to be a crapshoot.

It will be about 800 - 1K to replace it (and the water pump), so add that to the calc.
posted by Danf at 1:11 PM on April 11, 2006

It's ALWAYS cheaper to fix an old car and keep it going than buy a new one (except for extreme cases). Click and clack are correct.

That's what I'm kind of figuring at the moment. Whatever you drive will incur expenses; and with a new car you're adding a posssibly hefty capital expense into the mix.

An old car = no depreciation, no interest (if you've bought it for cash), lower insurance, and so on. The new(er) car benefits for me are not directly financial - but things like reliability, air bags, safety, better components, maybe better mileage, more peace of mind, and so on.

phearlez' point above about getting on the same page as your mechanic is also a good one. Find some dude who will keep it running, rather than restoring it.
posted by carter at 1:24 PM on April 11, 2006

Click and clack are correct.

Yes. Let's say the current costs to repair are (gasp) $1800 dollars. That's pretty steep, right?

$22000 loan, on a three year term, at low interest will run you about $600 a month. That means on a new car, you will be spending the cost of that repair *every three months*.

The great myth is that every year you own a car, the cost of repairs increases. Not true. The curve flattens for a considerable number of years, and you will not pay as much to keep a car running in a year as you will buying a new car. Period. Car needs a $3600 engine? With the loan above, you'll buy *two* of them in a year.

The rules of cars. 1) Buy a good one. 2) MAINTAIN IT RELIGOUSLY. 3) Fix *everything* that breaks. You'll rapidly find you're spending a fair sum of money on repairs and such in a year. Before you scream about that, just go figure how much the loan will cost you *every month.*

When do you get rid of them? 1) The car is no longer useable to you. You have a Miata, but now, you have a wife and three kids, and the wife won't let you keep the Miata and buy a Minivan. 2) The structure of the car has failed. Rust wins in the end, if there's nothing solid to bolt parts to you, it's not economically foolish to make repairs, it's just stupid -- the perfectly good strut fails when it rips off the rusted out mounts. 3) You just hate the car. You won't take care of it if you hate it, it will cost you more money, until you really hate it, then you buy a new car, which means you're out all of those repair bills, and now you have monthly loan payments.

Get a good car. Take care of it. Fix *everything* -- the trim, the passenger door handle, everything. Yes, some of those repairs will cost you real money. You don't replace an engine every month, or even every year. You don't replace a AC unit every year. You might replace the brakepads every year, but you can buy a whole bunch of brakepads for the cost of one month's payment on a new economy car (which, if you hate, you won't take care of, and repeat.)

If you like your current car and the body is solid, repairing it will be cheaper than buying a new one.

If you buy a used car, make sure you like the car. Take it to a good mechanic, and have him check it out. Consider the real cost of the car to be the purchase price plus the cost of fixing EVERYTHING.

If you buy a used car that you like, and everything works, you'll take care of it. If you don't like it, the siren smell of a New Car can suck you in.

Having said all that, I did trade in my last car after 150,000 miles. It was still running well, though it was due for some repairs. I was just starting to hate the car. I vastly prefer my new car.

But I'm not fooling myself. Between loan and insurance, I'm paying about what I paid in yearly repairs every three months. Yes, Honda's reliability is legendary, and I love the mileage I get, but I'm not saving money right now, and I won't save money over the old car until this one is paid off, and the fact that I wouldn't have to spend money to fix the car for the next couple of years didn't even enter into the equation.
posted by eriko at 1:41 PM on April 11, 2006 [1 favorite]

As an aside to the fundamental question (which has already been answered): we just sold my wife's '96 Saturn SL2, and it had a problem with oil leeching into the radiator. Apparently, this problem is pretty common on Saturns of that age, so you might check to see if that's where your oil is going.

If that is your problem, just make sure to keep the oil from getting empty and be sure to flush the radiator once in a while.
posted by JMOZ at 1:42 PM on April 11, 2006

I owned a 1995 ford escort from 135k km to 220k km, which I sold in December 2004, so I feel your pain. I ultimately wound up selling the car for reasons unrelated to its relative state of disrepair. My personal rule of thumb was to junk it if the engine or transmission broke. Everything else was fixable.

caveat: I did not depend on that car for transport. If I didn't have money for a major repair, I'd park it and take transit or ride my bike instead. At that point I was seriously considering the value of having no car at all and renting if one was required.
posted by crazycanuck at 1:49 PM on April 11, 2006

If we're looking at this strictly in dollar terms, eriko is leaving something out of his (otherwise astute) post, and that is the new(ish) car's value after depreciation.

The OP's Saturn has very little value--he's said $700. A car that was bought for $22,000 new and is well-maintained will still have a resale value after 3 years of about 2/3rds that, give or take. Let's call it $15,000. If you choose to sell the car at that point (perhaps you're noticing the warranty just ran out), it is roughly equivalent to having spent $2,333/year on that car.

I was spending about $1500/yr keeping my Civic going (I dunno, maybe I'm a chump), so the delta there is about $800/yr or $65/mo to have a nicer, newer, faster, more dependable car.

If you assume instead that you'll be able to get another 7 years after paying it off of relatively trouble-free use and then sell it for about $4000 (according to kbb, I think this is about right), vs an ongoing $1500/yr in repairs, then the delta is more like $10,000 spread out over a period of 10 years. Certainly not chump-change, but not quite as bad.
posted by adamrice at 3:20 PM on April 11, 2006

Previously: When to replace an old car.
posted by mbrubeck at 3:28 PM on April 11, 2006

A Saturn is much more than just a "GM product", Kindall.

It's true -- you also get their brililant marketing, and all for the sticker price. While the cars may have been better designed than some of their corporate stablemates from a standpoint of styling and features, the mechanicals (which are what we talk about when we discuss reliability and service life) are largely the same as other GM cars, and the vehicles are assembled in a union plant same as every other model.

If you get six digits out of a GM product, or any American car for that matter, you're doing pretty well. A car that has been running relatively trouble-free for years will start needing repairs every couple of months not long after the clock passes 100K.
posted by kindall at 3:57 PM on April 11, 2006

Mid-90's Saturns are notorious problem-cars, and Saturn earns my great disdain for insisting that you change your oil every 3,000 miles (to the extent of denying claims on cars still under warrenty if the interval goes to, say--gasp!--4,000 miles). For that reason alone, I'd get rid of the car.

But in general, it's not the cost of repair that matters, but the cost of replacing your car (as said already) since (presumeably) once you've repaired a part, it won't go bad for another 100,000 miles (or whatever the lifecycle is on said part).

Thus, as long as the body isn't rusting away, you should keep repairing. Once the body goes, however, it's time to move on.
posted by Civil_Disobedient at 4:06 PM on April 11, 2006

Hey, phearlez, I didn't know you owned a Miata (just read the final comments in the other thread that was linked to). What year/color?

/96 red
posted by Civil_Disobedient at 4:30 PM on April 11, 2006

I realize this is just anecdotal, but I drove a 1983 Oldsmobile Cutlass Ciera (GM, GASP!) for 180,000 miles until we finally retired it. It lasted 15 years and I loved that car. I only drive foreign cars now, but for entirely different reasons than reliability. GM can still pump out quality cars.

And eriko and Good Brain's answers are fantastic.
posted by SeizeTheDay at 8:22 PM on April 11, 2006

I have driven three GM products beyond 175k miles, though no Saturns. Don't buy into the "American cars suck" hype.
posted by MrZero at 9:05 PM on April 11, 2006

*is driving a 93 Ford Mustang with almost 180,000 miles on it* Driving a car with high mileage on it and occasional fixing needed comes down to two things: can I afford a car payment right now (no) and are car repairs cheaper than monthly payments (usually). So my car had better get me through another year or so. I think Eriko has the right suggestions.
posted by cass at 9:30 AM on April 12, 2006