[Bob Lincoln]

you have a 10/15 year old car thats worth $2000 that works great except you have a ac leak. Do you spend $1500 to fix it?
I don't think so.

That depends. If you are planning to keep it another 5-10 years and amortize the cost, then maybe yes. It could be cheaper and more satisfying than spending a large sum of money on a new car.
I spent $1700 repairing and mitigating rust on the frame and chassis of my 1992 Dakota in 2014. Why? Because it was cheaper than replacing it, and keeping it another 10 years amortizes the cost nicely. I've already amortized it down to less than $37 a month for the repair. Keep it another 5 years, and the rust repair was amortized to only $16 per month.

I just repaired the A/C in it myself, spent $290 for the condenser, drier, seals, R134a. In 5 years that cost will be amortized down to $4.70 per month.

The total cost of owning and operating this truck, which has 237K miles on it, taking into account EVERYTHING (used purchase price of $3,000 in 2004, sales tax, annual excise tax, gas, maintenance, repairs, insurance, registration, annual inspection - everything - comes out to only 32 cents per mile. The average new car costs about 60 cents per mile.

When you have all the data, you can make the choice that makes sense for you.

 

[Doug D]

I agree with Bob. You can't (or at least shouldn't) compare repair costs to the value of the vehicle. In the past 7 months I've spent over $3,000 in repairs on my 2006 Dodge Ram 1500 SLT (253K miles). I had the interior HVAC assembly replaced (faulty blend doors) as well as the evaporator and heater core back in November. A month later new LCA/ball joints. Doing the math I found it reasonably affordable to have the repairs done vs purchasing a new truck ($40,000+) or lightly used truck ($15K-$25K). New trucks are well in excess of $700/month - even with 10% down. $600/month if you are lucky. Even new sedans are in the $500/month range - maybe $400 if you go cheap and small.

Sure I could have justified spending money on a new or used truck by saying the repairs were too costly, but when I analyzed the numbers it still made sense to go with the repairs. Besides, my truck has long been paid for and I didn't want a vehicle payment. Another factor - my wife's name is on the truck title and she simply would not let me trade or sell it. Period. End of story.

 

[Bob Lincoln]

Data should drive these decisions. For each vehicle, I keep an average and rolling average graph, which shows me both historically in the life of the vehicle and in the last 12 months, the trending of costs. When the cost trends low and holds steady, then you face one expensive repair, looking at the graph tells you if the vehicle is worth fixing or if it's nearing end of life/experiencing too many costly repairs.
In this graph, you can see that since I bought the truck, the average cost over ownership (blue line) dropped off rapidly when the purchase was amortized, and has held to a steady, affordable level. The red line is the 12-month rolling average, and you can see a couple of expensive repairs around 2014-2015, which were the $1,700 frame repair, a new bumper, and a fuel pump (original at 211K miles and 24 years). As you can see, they quickly amortized back to a low, affordable level, which proves that economically, they were worth doing. This is the kind of data that helps make these decisions easy.

 

[AllanC]

D . . .In this graph, you can see that since I bought the truck, the average cost over ownership (blue line) dropped off rapidly when the purchase was amortized, and has held to a steady, affordable level. . . . .

The single largest category of expense in vehicle ownership is the initial cost. People think (incorrectly) that repairs are the largest cost. You tend to remember a single or multiple, expensive repair costs in a short period of time. The sneaky thing is that depreciation of the vehicle is dramatic in the first few years of ownership and is a non-cash loss that you do NOT see raiding your bank account each month.

That is the reason when the economy took a dramatic down turn in the 2008 - 2010 time frame and new car sales dropped so dramatically (less than 10 million units per year) that dealers were scrambling for business. People got fearful and decided to NOT trade a 3 - 5 year old vehicle and keep it a few more years. Even business and rental companies cut back and were not purchasing vehicles.

If everyone followed the thinking that Bob L promotes, there would be a permanent depression in the auto industry. And someone has to buy vehicles new so that there are some lower cost opportunities in the used car market with 1 - 3 year old vehicles.

 

[Bob Lincoln]

The single largest category of expense in vehicle ownership is the initial cost. People think (incorrectly) that repairs are the largest cost. You tend to remember a single or multiple, expensive repair costs in a short period of time. The sneaky thing is that depreciation of the vehicle is dramatic in the first few years of ownership and is a non-cash loss that you do NOT see raiding your bank account each month.

That is the reason when the economy took a dramatic down turn in the 2008 - 2010 time frame and new car sales dropped so dramatically (less than 10 million units per year) that dealers were scrambling for business. People got fearful and decided to NOT trade a 3 - 5 year old vehicle and keep it a few more years. Even business and rental companies cut back and were not purchasing vehicles.

If everyone followed the thinking that Bob L promotes, there would be a permanent depression in the auto industry. And someone has to buy vehicles new so that there are some lower cost opportunities in the used car market with 1 - 3 year old vehicles.

And we were fortunate enough to buy a new vehicle 6 years ago. It shows the same curve, only better. The only repair has been a recirc motor for the airbox, in 70K miles.
But if you buy a vehicle used and keep it long enough, gasoline becomes the largest expense, not the purchase price:

 

[Doug D]

I use to keep a fuel log for my Ram that included amount of fuel, $$ paid, etc. Apparently I deleted my log I kept online though I still have the paper version.

Anyway, I keep track of all my household expenses via Microsoft Money and am able to get a Spending by Category report.

Bob's right - fuel costs is the biggest cost in the long run.

For fun I ran the report with dates 9/1/2006 - to present (12 years). I purchased my Ram in Sept 2006 (Labor Day weekend).

Spending was as follows:
Automobile : Gasoline = $54,424.95 (note this includes fueling all vehicles - not just the Ram - but the Ram's fuel costs were probably 80% of what was spent so probably about ~$43,000)
Insurance = $35,508.75 (note this includes insuring my son's vehicle while in college and my wife's vehicle)
Automobile : Maintenance = $17,041.26 (includes all vehicles of which the Ram's maintenance/repair spending = $13,688.93)

My average yearly cost for fuel is $4,536 but that will trend downward as I have been telecommuting for the past 2-3 years and the Ram is only driven about 75-100 miles per week compared to the 600 miles per week I drove it when first purchased. My wife is also paying for her own fuel now so her fuel costs are not included as of a year ago.

 

[withmoon]

since it's already old it won't really have the same coldness that you can get from a new car but what you can do is check the HVAC actuators. I also saw one my friends installing another ac (just not sure where you can buy that)