Compare repair bills to the cost of car payments
You should expect to replace tires, batteries, belts and brakes from time to time. But if your car has needed pricey, unusual or frequent repairs, it’s tempting to cruise by the nearest car lot to eye the latest models. Before you drive off with a shiny new car payment, see how your repair bills compare to monthly payments.
In July 2020, the average cost of a new vehicle was more than $38,000. In 2019, used cars averaged nearly $21,000. If you don’t have the cash to buy a car outright, you could be looking at several years of monthly payments. It’s becoming more common for people to finance cars for five or six years. The average payments are just under $400 per month for used cars and nearly $570 per month for new cars.
If the cost of car repairs is getting you down, consider the impact a regular monthly car payment could have on your budget. Add up your necessary repair costs (not maintenance costs) to see if you’d be better off keeping your current car.
How to know when it’s time to replace your ride
Sometimes there’s just no way around it. You need a new vehicle. How do you know when it’s time to replace rather than repair?
- You need a safer car.
- Your car has been in the shop multiple times in the past year.
- You want to stop worrying about constant breakdowns and can afford a new car.
- A repair would cost more than half the value of your vehicle.
If you’re losing sleep worrying your car will leave you stranded, it might be time to upgrade.
Do this 8-point inspection before you go kick tires
Car shopping can be exciting. Especially when Cinfed loan rates for new and used cars and trucks are as low as 2.24% APR.* Before you take your first test drive, though, it’s a good idea to:
- Make sure you know what you can afford.
- Research the models you’re considering.
- Find the value and going prices for the cars you like at edmunds, Kelley Blue Book or TrueCar.
- Get a CARFAX® report on any used vehicles you like.
- See how much it will cost to insure the model you want.
- Get pre-approved for an auto loan - Cinfed’s Fast Lane Auto Loan literally put a check in your hand, so you can shop without worrying about financing.
- Check into a Flex Auto Loan to get lower monthly payments on the car you want.
Visit Cinfed to learn more
Learn more about car loans at the Cinfed Financial Education Center. When you’re ready, call a Cinfed branch or schedule an appointment. We’re ready to help however we can.
*APR= Annual Percentage Rate; Annual Percentage Rate is based on credit history, vehicle year, and term of loan. Floor rate limit for new Flex Auto Loans is 3.24% APR. Subject to credit approval. Federally insured by NCUA.