Here's What Happens When You Keep Repairing an Aging Car

As of earlier this year, the average new car price was about $48,000, reports Cox Automotive. So if the idea of having to buy a new car -- and take out an expensive auto loan -- doesn't appeal to you, that makes sense.

Now, perhaps you don't need a new car right away, since your current vehicle is still chugging along. But what if your current vehicle is on the older side and repairs start to become increasingly necessary?

It can pay to repair an aging vehicle, but only to a point. And you'll need to decide what that point is to avoid spending a lot of money to get little usage from your vehicle in return.

The problem with sinking money into an aging car

It's one thing to spend $50 to change the oil on an older car, or to spend $100 to $200 on minor repairs. But it's another thing to pull, say, $4,000 out of your savings account to fix a car that may not last very long even once you make that repair. That's why you'll need to crunch some numbers before repairing an older car to see what makes sense. 

The average monthly car payment these days is $733, according to Edmunds. But let's say you're willing to buy a less expensive vehicle that will result in $500 monthly car payments. If you're looking at spending $4,000 to repair an older car, you'll need to ask yourself if you think that fix will give you at least eight more months out of that vehicle.

Since a $4,000 repair bill is the equivalent of eight months of car payments at $500 apiece, that's your break-even point. So if you do the repair and your older car lasts nine months or longer, you'll actually come out ahead financially despite that outlay. But if you're not confident your aging car will make it that long, or if you simply don't want to take the chance, then you may not want to spend the money on repairs. 

A tough call to make

Sometimes, it can pay to keep repairing an older car, especially if those repairs are minor in nature. But you might also reach the point where you begin to throw your money away by continuing to repair a car that's at the end of its road. 

Of course, without a crystal ball, it can be difficult to make the right call. But if you have a car that's old enough to be a senior in high school and you're looking at a multi-thousand-dollar repair bill, you may decide it makes more sense to replace your vehicle rather than fix it again. 

Keep in mind that in addition to having a car payment on your hands, replacing your aging car might also mean having to spend more on auto insurance, since the value of your replacement vehicle will likely be higher. But if you can swing that expense, then you may find that it's worth parting ways with an older car if a really costly repair pops up.