Is it time to sell your old car or truck? Here's how to tell

Auto technician looking at engine

Each year you drive your old car is one more year you don’t have to worry about paying for a new one.

Yet, with every turn of the odometer, you're one mile closer to big repair and maintenance bills.

At some point, it costs so much to keep your old ride on the road that you'd be better off investing all of the money you're spending at the garage on a new car or truck. Our database of the best auto loan rates can help get you started.

There’s no magical mileage threshold that tells you when it's time to ditch your car. In fact, many of today’s vehicles routinely exceed 100,000 miles without experiencing major mechanical problems.

But if you're being hit with one repair bill after another, these 5 steps can help you decide if the time has come to ditch your old car or truck.

Step 1. Find out what your car is worth.

All smart decision-making starts with this.

To find out what your car is worth, research it on an auto valuation site, such as Edmunds.com or Kelley Blue Book (kbb.com).

You'll be asked a few questions about the year, make and model of your car, the odometer reading and the condition it's in, taking any repairs you're planning to make into account.

Those websites will provide you with three potential values for your car.

The one you want to use is the trade-in value, which is the lowest of the three estimates.

This is the amount you can expect to receive from a dealer if you include your current car in a deal to buy another car there.

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Step 2. Determine how much it will cost to keep it on the road.

Ask your mechanic for a rundown of all the:

We're not talking about oil changes.

We're talking about the more costly work required as vehicles reach 60,000 to 100,000 miles — everything from changing the transmission fluid and coolant to replacing worn-out tires, brake pads and rotors, water pumps, suspension parts and timing belts.

Check your owner’s manual for the manufacturer’s recommended maintenance schedule. If you don’t have the manual, any reputable shop can check the schedule for your car and tell you exactly what you'll need to do and how much those repairs will cost.

Postpone that work and you'll run a greater risk that your car will break down and stick you with an even bigger repair bill once you've been towed to the shop.

Take the timing belt, for example. It connects the crankshaft to the camshaft and controls the opening and closing of the valves in your engine.

Replacing a timing belt often costs $600 or more. But if you don’t do it, you can pretty much count on a worn-out timing belt breaking at some point, seriously damaging your engine.

Then it would cost $2,000 or more to get it running again.

Also, watch for two signs of big trouble:

Step 3. Do the math.

Add up all of the repairs and maintenance you'll need to do over the next year, and compare it to the trade-in value of your car.

If you'll have to spend more than the car is worth to keep it on the road for another year, then it makes financial sense to invest that money in a new ride.

Step 4. Recalculate your costs using past repair bills.

You aren't finished if that comparison falls on the side of keeping your old car, especially if it's not a decisive difference.

Mechanics can't look at your car and predict everything that's likely to break over the next year, so maybe you didn't have a list of estimated future repairs in step 2.

That doesn't mean you're not going to have any.

Reliability guides, such as the ones from Consumer Reports, provide entire lists of problems that consistently plague almost every make and model as it ages.

In fact, here's a pretty tried-and-true rule of car ownership: The older your car gets, the more stuff breaks.

Average cost of car loans

Length of financing Interest rate
36-month new-car loan 3.99%
48-month new-car loan 4.12%
60-month new-car loan 4.21%
36-month used-car loan 4.71%
Source: Interest.com weekly survey of major lenders from Feb. 26, 2014

So dig back into your records, and see how much you spent on nonmaintenance repairs over the past year.

Add your total repair costs from the past year to any critical repairs you must do right now and major maintenance costs you’re looking at this year.

Compare that projected cost to the trade-in value of your car.

If that tips the scales against your car, ditch it.

Step 5. Trust your judgment.

If this is still a close call, spend the next couple of weeks evaluating your old car.

Think about how well your car runs and drives.

If it feels like you're behind the wheel of a rattletrap that's getting ready to fall apart, then it probably is.

Break the tie by saving your money on repairs and replacing your ride.

Follow a simple rule of thumb: Monthly payments shouldn't exceed 8% of your gross monthly income. If that's $3,000, then your payments should be no more than $240 a month.

Use Interest.com's auto loan calculator to determine how much you can afford to spend on a new car or truck.

Then take advantage of our 5 simple steps to the best deal on a new car or truck or 10 smart moves for buying a used car to close the deal.

Join all of the savvy readers following Interest.com on Twitter and Facebook.

  • Randi

    I recently purchased a new vehicle. I had a 2000 Pontiac Grand Am GT that had 178,000 miles on it. The vehicle needed new tires, and those alone were about $1300.00. The vehicle used a V rated tire. Then there was just maintenance issues. The total I was spending now was $2700.00. Did I want to spend that much money, then there was the thought what if some major problem occurs. The problem was the vehicle was strictly maintained by the dealer, and it looked brand new inside and out. I finally decided to part with my ride. I am not sorry. I no longer have to worry about something breaking just by being worn out.

  • Gary

    I have a 2001 Dodge Ram 1500 that I bought new and have 154,000.0 miles on it. The truck runs great and is due to taking care of it as you should. Before the Dodge I bought a 1988 Jeep truck new and kept for 14 years before selling in a great running condition with over 250,000.0 miles! Now I did rebuild the engine myself and no I'm not a mechanic just wanted to oversize the cylinders for more hp. I sold it because it did not have AC. The point is if you can afford to buy new take care of you're car or truck so it will last until you want another to replace it or to add to what you have. If you are one of those who think you are letting some sucker pay for the big hit on buying new, unless you know personally the previous owner, you my friend are the real sucker! Sorry but the truth hurts. I know from family as well as friends. I have never been one of those who has to have the latest greatest on the market it's just foolish! And by the way the money it saved me in insurance I could afford other toys!

  • http://comcast.net Diana

    FOR T.GRANT: We feel the same way
    about our vehicles!

  • http://comcast.net Diana

    MEANT TO SAY J. GRANT

  • G

    If you take care of your car, perform your sche=duled services as described in your manual, your car should last alot longer then this article suggests. Deceptive journalisim, written by a lady who knows nothing about autoimobiles, and doesnt even mention that newer vehicles cost MOREE for that same regualr service then an older car (Spark plugs cose around 25 each, copmpared to $5, $10 on high end sporty cars), synthetic fluids (Dexron ATF is $4 a bottle compared to newer ATF+4 full synthetic at 10-15 a bottle).
    Stuff does not magically break, as the authir would have you believe, Breaking stuff is usually the result of neglect, or poor service habbist, do not wait 7000 miles for that oil change, trust me, the oil companies who make your oil reccomend 3000-5000 (I go 3000, but I own an older Jeep), you have to weigh then fact that they know their product with them wantint to sell you more, the difference is 3K-5K, as per your owners manual.
    Insurance premiums will be ALOT mroe compared to your old faithfull also, Hidden costs everywhere, and this author, Mrs Margarette Burnette just did not complete her research, Sorry.

    Or you can click on the authors links all going to http://www.interest.com with NO OTHER INNPUT...... LOL, dont be a sheep

  • http://comcast.net Jersey Girl

    While my car still has wheels, a seat, a steering wheel I intend to keep it.
    Why feed the car companies? Especially since most cars are manufatured over-seas.

  • http://comcast.net car dealer

    If anyone is in the need of a car, consider buying a "demonstration" model. They
    cannot be sold as new and you usually
    can get a great deal on one.

  • http://www.interest.com/auto/news/is-it-time-to-sell-your-old-car-truck/?ec_id=cmcta_01_comm_aut_mainlink# annely.noble@comcast.net

    I love my 1986 SAAB 900, which has over 305,000 miles and I cannot think of a logical reason to replace it with anything else. We've been great friends for 26 years, she's hosted my three children and now is carting around my three grandchildren, and has never let me down. My car is fairly unique (compard to others) and is easily recognizable around town according to my friends! My SAAB gets great gas mileage, runs lean and clean, and hugs the mountain corners like a race car; I have no complaints and am keeping my sweet ride!

  • http://xfinity/comcast Marty

    It also depends on how much you drive,cost of insurance and you age.

  • John

    I think this is sound advice for the most part. I had a 2000 Toyota Celica with 129,000 miles on it. No warranty, starting to rust from the marvelous new england weather and I am a clean freak. I babied this car, but it was always in the shop. I did weigh in my options and the costs of fixing it. It made more sense to buy new. Now I have a fully warrantied 2012 Chevy Cruze which averages 14 mpg more than the celica and my insurance only went up $37 a year. My payment dropped about $100 a month compared to my average repair bills. Was it worth it? 150% YES!!! I'd do it again too. I loved owning my car outright but it cost me more time and money waiting at the shop and paying those stupid repair bills than it does for me to enjoy my saved time with a good car!

  • L Mitchell

    My family has three vehicles: 1978 Ford LTD with 298,000 miles and two Dodge minivans, one 1992 an the other 1994, which we have used consistenly on a near daily basis since we got them used, each with over 100,000 miles on them. One hhas nearly 200,000 miles on it and the other 169,000. Other than oil changes, wipers blades, tires, and batteries, the actual repair bills have been for mostly minor things have run about $2,000.00 per year...for all three vehicles combined! This is only about $55.00 a month per vehicle. My insurance is very low. And with al the money we saved, we had enough for a down payment on a house which we closed on in April of this year. Now I proudly park my used cars, which I own outright, in front of my home! Do the math, we did! And now my kids will not ever have to worry about about not having a roof over their head because some greedy landlord is raising the rent again. By the way, we used the minivans to move all our stuff into our new home and saved a couple thousand!

  • disqus_p6hJ2yoKYN

    I guess I don't understand why you should compare your repair bills to the worth of the car. To me, it seems you should compare the cost of repairing your car to the cost of making monthly car payment on a new one. $250 a month fixing your old car seems expensive, until you compare it to $500 a month for a new car payment.

    Just my two cents worth.