How to Know that Auto Repairs are Costing You too Much and You Should Buy a New Car

Getting into a car accident is no fun, especially when you consider the costs of repairing a vehicle so it’s road safe again. Generally, if one gets into an accident that isn’t your fault, determining whether or not it’s even worth repairing is a decision made by the insurance company. After an accident, if the damage to the vehicle plus the cost of labor to fix it exceeds the total worth of the vehicle (which is usually determined by its Kelley Blue Book value), then the car insurance company will typically cut you a check of that amount, rather than pay to have it fixed. But what if your insurance company won’t pay for it and you’re left to pay for it yourself?

Determining whether or not your car is worth salvaging after damage has occurred depends on a variety of factors. Money, time, and the age of the car are all considered, but this varies from person to person. Before any decisions are made, however, you should always have a reputable body shop and mechanic look at the vehicle and determine the cost of repairs. For example, if a large tree limb falls on the car but it’s still capable of being driven without being a safety concern, then sometimes the cost of just dealing with an unsightly car far outweighs the cost of repairs.

However, if you have an older car with high mileage, the cost of repairing it (presuming you don’t have good insurance to cover most of the costs) might not be worth it. Many older, higher mileage cars can be purchased for under $4,000, so if you’re willing to swap one old car for another, then doing so is often a better decision than repairing your old beater.

Another factor to consider is the timing. Were you considering buying a new car anyway? If you were looking to upgrade your vehicle, sometimes selling the car to the shop or donating it for a tax write off might be more beneficial than repairing it. Typically the worth of the car before the accident is used in determining the amount you would write off, so if you have the money available to purchase or lease a new car, donating it to a good cause if often the best course of action.

Every situation is different, so there is no right answer. If you think you might need to purchase a new car, rather than pay to have your current one repaired, speak with your insurance company to help determine the best course of action. Oftentimes they can point you in the right direction to get the most money and the best possible deal out of your unfortunate situation, so utilize them as much as you can. Finally, ask the mechanic who quoted the cost of repairs. Many will offer to buy the car off you for parts, or to simply repair it themselves and sell.

Posted on January 8, 2013 at 9:00 AM