“I don’t know whether fixing this thing up and getting a few more years out of it is better than buying or leasing something new”: Should I invest $5k to fix my 2010 GMC or splurge on a new car?

Hi Money Minder,

Hey Money Minder,

So, I’ve got this 2010 GMC Terrain with a whopping 145k miles on it. Just got hit with a $5k repair bill to get it through inspection. Now, I’m stuck wondering if it’s worth fixing up and squeezing out a few more years or if I should bite the bullet and get something new.

This Terrain had over $10k worth of engine work done back at 80k miles because of some oil issue, all covered under warranty. A new ride would set me back around $25k-$45k, plus a down payment, monthly payments of about $500, and higher insurance rates. But, the Terrain is already paid off and I see that $5k repair as ten months of $500 payments and then it’s done, although it’ll be sitting at 160k miles by then.

My spouse and I are both pulling in over $100k each, no kiddos on the horizon, with a normal mortgage payment in a US city. We’re also shelling out $600 a month for student loans and have $40k in savings we can tap into.

I kinda like my old car and honestly, I don’t feel like dealing with the whole new car hassle. Would I be taking the lazy route if I just go for the repair?

Hope you can help me out, appreciate any advice!

Thanks a bunch,
Road Warrior

Response from THE MONEY MINDER: Thank you for reaching out. How can we assist you today?

"Hello There,"

It sounds like you are facing a tough decision regarding your 2010 GMC Terrain. Given your financial situation and the history of repairs on the car, it’s clear that you have put a lot of thought into your options. Keeping in mind the expenses associated with purchasing or leasing a new car, it may be more practical to proceed with the $5k repair on your Terrain.

Considering that you are a double-income household with no imminent financial obligations like children, your current financial stability is a positive factor in favor of investing in repairing your paid-off vehicle. The $5k cost, as you mentioned, can be seen as equivalent to 10 months of a $500 monthly payment for a new car. Additionally, having the Terrain fixed could potentially extend the life of the vehicle for a few more years, saving you from the immediate burden of acquiring a new vehicle.

Taking into account your preference for keeping the Terrain and the hassle of purchasing a new car, it seems like opting for the repair is a practical decision in your current circumstance. Given your steady income and expendable savings, allocating funds for the repair would be a manageable expense. It’s important to weigh the benefits of retaining a reliable vehicle that you like against the costs and uncertainties of acquiring a new one.

In conclusion, based on the information you’ve provided, repairing your GMC Terrain appears to be a logical choice that aligns with your financial stability and personal preferences. Remember to factor in future maintenance costs and potential resale value when making your decision. Thank you for reaching out, and I hope this advice helps you in navigating your car dilemma.

THE MONEY MINDER.