Car question -- sell versus replace?

Question

Current car is paid off, and has a book value of approximately 3500-4000 (at most). Current motor vehicle inspection (required by law) will expire in 19 months, at which point the car will be uninsurable without further repairs. Suggested repairs total more than the car is currently worth ($5500 for the recommended repairs). Essential repairs for the 19-month period are unknown, but are probably only in the $200 range barring any more degradation. Fuel economy is about 60% of a new car. 

The course of action appears to be to perform essential maintenance on the car and wait out the 19 months, then scrap the car, while simultaneously saving up for a replacement car. 

Any agreements / dissension / third options?

Bentie · Accepted Answer

The answer obviously depends on your financial position as well. Assuming that you currently do not have the money to purchase a car without a bank loan or something similar you should keep the car for now since it is paid off and deal with the repairs as you go along. You have 19 month to look for a new one. My suggestion would be to immediately start putting an amount equal to your ( projected) loan payments into a savings account on a monthly basis. That way you will have some funds saved up once you need to buy a car.
If within the next few month you see a good deal on a car you still can consider trading/selling your current vehicle.

Anonymous · Answer

More info about type of vehicle, year, etc would help "us" answer....my only suggestion, beyond the plan you have, is to get more estimates on the repairs needed; may be available for less than the 5500 you have been quoted

? · Answer

Trade it in.

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Car question -- sell versus replace?

3 Answers