AUTOMOTIVE
Time for a New Vehicle?
Evaluating whether to keep your old vehicle or look for a replacement means weighing costs while considering your needs and wants.
By Will Scott | Illustration by Jeannie Phan
TIME FOR A NEW CAR? It’s one of the toughest decisions you’ll make. So, we asked Matt Boles, fleet operations manager from AMA, for help. “I get this question all the time,” he says. “And it’s complicated.” Read on for his tips to help make the best decision.
Personal finances: the core question
Compare the costs of keeping your vehicle against the costs of buying a replacement, new or used. If your budget is small (e.g., $5,000), you might find that any car you can afford won’t be significantly better than what you already own. So, it might make more financial sense to invest in fixing your current car, as you know its history and potential issues. However, continuously pouring money into repairs can quickly deplete your savings, so it’s essential to continually reassess your budget. If major repairs become too costly (e.g., transmission or engine failure) and you decide it’s time to buy, exploring financing options might be necessary.
“Compare the costs of keeping your vehicle against the costs of buying a replacement, new or used.”
Essential factors to consider
• Annual repair costs vs. vehicle value: A common rule of thumb is to consider moving on when a vehicle’s annual repairs meet or exceed its value. While there is some logic to this, it’s not the sole determinant.
• Known history vs. unknowns: Keeping a vehicle you’ve owned for a long time means you know its complete history, reducing the risk of hidden problems. If your vehicle has been generally reliable, you might get a few more good years out of it.
• Structural integrity: Rust and corrosion can render a car unsafe and too costly to repair. A significantly rotted frame and body are usually beyond saving.
• Comprehensive inspection: Have a trusted mechanic perform a thorough inspection. You can trust AMA’s Approved Auto Repair Service (AARS) facilities to assess your vehicle and help you determine what costs you may be facing in the future. They can also inspect a vehicle you are considering buying and offer advice on its condition.
Other considerations
• Changing needs: Has your lifestyle changed? Are you expecting children and now need a larger vehicle, such as a minivan, instead of a two-door coupe?
• Total cost of ownership (TCO): For new car purchases, consider the lifetime costs, including insurance, fuel/charging, payments and general maintenance. Visit carcosts.caa.ca to calculate your costs.
• Additional costs of buying new/used: Watch for hidden costs when purchasing a new or used car, such as GST (even on used vehicles), licensing, delivery and certification, as well as dealer fees, such as documentation or prep fees. Insurance rates for newer cars are usually higher, too.
Ultimately, this decision is highly personal. Take your time, do your homework, and you should come to a solid conclusion that works for you. AMA
Time for an Upgrade?
Use this quick decision tree to weigh your budget, safety and lifestyle before deciding whether it’s time to trade in your keys or stick with your current ride.