Showerthought: Is it better to fix an old car or buy a newer one with a loan?

My 2005 Honda Civic died on me last Thursday after 180,000 miles. The mechanic said it needs a new transmission, around $2,800. I'm torn between putting that money into a car I already know and trust versus taking on a $400 monthly payment for something newer. My neighbor says I'm crazy to fix something that old, but my brother fixed his 1998 Toyota and got another 4 years out of it. Has anyone else had to make this call recently and how did you decide?

2 comments

2 Comments

blair_allen1mo ago

Funny you mention your neighbor being against it, but honestly, $2,800 is less than half a year of those $400 payments. Plus you already know that Honda drives nice and you probably won't have another huge repair for a while after the trans is swapped.

grant.jason1mo ago

Wait, hold on. You're skipping over the fact that $2,800 is cash out of pocket right now. That's a chunk most people don't have just sitting around for a 10 year old car. A $400 payment at least you can spread out over time. And "probably won't have another huge repair"? Big if, man. Transmissions don't just fail out of nowhere, that thing's been living a hard life. You're basically betting the next big failure won't happen before you've saved up the equivalent of those old car payments. I'd rather put that $2,800 down on something with a warranty than roll the dice on a car that already let me down.