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Dave Says Charity Needs Clarity

David1454 Wrote: Aug 28, 2012 8:16 AM
When looking at whether to sink money into an older car, the value of the car is irrelevant. The relevant question is, "What would it cost to replace it?" The car should be checked out by a mechanic, who should be able to tell you the significant repairs or maintenance that will be required in the next year. With THAT number in hand, you compare the cost to keep versus the cost to replace. The value of the car is not a factor. An old Hyundai may be worthless as a used car, but have another couple years of service in it.
Robert97 Wrote: Aug 28, 2012 12:42 PM
David is right. The "value to sell" is not the same as "value to use." I drive to work in a 10-year Hyundai, 100,00+ miles, maybe I could sell it for $500. But by getting to work, I earn more than $500 per week.

Dear Dave,

My old car has been having lots of problems lately. Do you have any advice on how to decide when it’s best to just fix an old car or get a newer one instead?

Kristin

Dear Kristin,

This is a good question! Mathematically, the first thing to look at is the car’s worth if you don’t make repairs. Should you spend $1,000 to increase the value of the vehicle $500? Dumb question, right? At that point, you sell the car as-is and put the $1,000 it would take to fix it toward something newer.

On the other hand,...

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