Repair or Replace that Old Car #218

few years old. But either way, there are payments on cars, and a lot of times I think we we blow out of proportion the amount of money that we put towards repairing our vehicle. And so that's what we're gonna talk about this episode. Man, you know, this isn't a slam dunk though, Like we're not gonna tell everybody to hang onto their old vehicle. There are some great reasons to replace that vehicle, and we're gonna cover all of those and some more in this episode. Buddy, Man, a

lot to cover here. I think we've got a lot of good information for people to consider if they're driving an older car that's starting to give them more issues and they're not sure what should I ditch it, should I keep it? Should I be trading up for a newer vehicle, and there's just there's just a lot of moving parts in the situation. Uh, not to mention the parts that might be breaking down in your car. So yeah, we'll kind of cover a lot of that stuff on

today's episode. That's right. Well, before we get to all that, I wanted to share a quick little story my car insurance company. I noticed that they had this application that you could download. They started offering one of those apps that you can download and it's super easy and it tracks you're driving. A lot of insurance companies are offering these now, and what's great about this is that you have the opportunity to decrease your premiums every single month.

And I thought, you know what, I like saving money. I'm going to give this a shot. And you with how little you guys drive, you only have one car and it typically sits in the driveway a lot of the time. Yes, yeah, the large portion of the day it sits there. That's that's why I've considered doing the what's that app? Touro where you like rent you know, where you can rent out your view goal. It makes some money side money with it. Yeah, I mean, it's

just it's an asset. It's it's money literally sitting in our driveway that is doing us nothing except for be there for when we need it. And I guess it's worth it because for that reason, otherwise it would be earning its keep. On the side, I think, yeah, insurers are going more towards tracking your driving and giving you discounts if you drive a fewer miles, which I love because really, car insurance should be in an ideal world based on how much you drive, because someone who drives

more is you know, a bigger risk to the insurance company. Absolutely, So how's that going for you? Then? Yeah, well, so we did it. It was a three month period, right, It was about ninety days that they tracked my driving keeps driving and specifically, I'll tell you what they were

looking for, at least you know this app. It was specifically looking for how hard we break, how quickly we accelerates, as well as the percentage of driving that we were doing at nights so nighttime driving, and it took all three of those things into account. And at the end of that three month period where they were analyzing our driving, we were gifted a discount of a bucks which isn't huge, but it is way better than nothing, right, and so

it's also worth noting though. Here's the thing, and this is why I wanted to share it with folks. There are a lot of different apps out there, but what's important to look at is whether or not you can potentially see your premiums increase. And that is the case now or some companies. If you read the fine print, like there's a you know, eight edits in drivers will see their premiums decrease, but to edits in that drive freaking crazy, they're going to see the premiums go up.

And so if you know that, that's you. You know, if you're a heartbreaker or you just like to get wherever you're going as quickly as possible, you might want to stay away from down letting that app uper premiums where they are because you might be getting a deal. As it is for folks to drive like your grandma, drive cautiously and also rarely drive like we do or don't drive very much at all. I think it's a it's a great way to go. I think, you know,

we did the same thing with our insurance company. But this was probably a couple of years ago. And I think we saved roughly something like that off our overall premiums, so pretty huge. Yeah. Uh. And it's one of those discounts that keeps going in perpetuity. Yeah, I like those forever discounts. And of course, this is in addition to the savings that a lot of car insures are also

providing their customers. Due to the fewer claims that so many of these companies have experienced over the past several months due to sheltering in place, a lot of folks are receiving checks or credits directly from their auto ensure, completely unprompted. But if you haven't, definitely look into that as well. If you're interested in saving some money. And we Matt, there's an article I wrote a long time ago on the site, but it's still incredibly relevant about

how to save money on insurance. So for folks that want to read more about that, we've got tips like this, but even other ones that little known that might take you an hour, that are gonna that are gonna save you hundreds of dollars every year in perpetuity. So yeah, we'll link to that article in our show notes. Yep, like we often do, all right, well, let's get onto the beer that we're having on the show today. We're drinking Zombie Dust by Three Floyd's Brewing. They're out of Indiana.

Big thanks to listener Doug for sending this one our way. Three Floyds has been around a long time, been making good beers for quite some time now. Plus this is one of those fun ones that have to that it kind of has this cult following. Like you hear people talk about Zombie Dust and you're like, oh, yeah, zombie does. I think when you have a standout name like that, it's easy to grab a lot of people's attention and it kind of stands out in the crowded beer markets.

But yeah, excited to share this one with you, buddy, for sure. Man looking forward to it. We'll give our thoughts at the end of the episode. But Matt onto the subject at hand. We're asking the question should you repair or a place that old car? And for a lot of folks right now there who are self quarantining because of the coronavirus, still it continues to to have a major impact on our society and on us as individuals.

There's much less traffic out there on the roads. People are leaving their cars in their driveway kind of like you do a lot of the time. Welcome to my world. Uh And and so hopefully your car is not experiencing many issues right now, but it's important for us to discuss on this episode if you do have an older car that's having more and more issues, well, maybe your mechanic is really nice person, but you still don't want

to become best ease with him or her. And there is of course a point where repairing an older vehicle no longer makes sense and you'll be throwing good money after bad. But many folks make the decision to abandon their still solid vehicle based on the desire to drive something newer instead of an actual need to upgrade their vehicle and and get something that's more reliable. And also it's important to note that the cost of upgrading your car could blow a hole in your budget, since cars

are typically the second biggest line item in our budget. Yeah, man, that's right, transportations typically second on the list. I actually should know if it's second on my personal list, because we do drive so infrequently. I bet, like health insurance or you know, our health coverage, I'm guessing that probably has the second place spot. But I should know that though, right I've I've got all the numbers there. I should dive into those numbers and share that with you, gay man.

While you gotta do is like if you care run a quick program. I'm sure on your excel and you can figure it out. Well, I mean, we we total our expenses every year, but I've never actually ranked them. And so I don't know why I've never done that because I like numbers. I don't know I've set you off exactly, but no, I totally agree, man. And as the repair costs of owning an old car like they will start to increase, and so the question you know, we're often asking ourselves is should we keep that car

or should we ditch it? And so today we are going to discuss when you should repair a used car and when you should consider getting rid of it and opting for something newer. And we'll also touch on how to sell your old car and where to go if you decide to upgrade. So before we get into kind of the finite points, well, a lot of this episode is going to dive into those nerdier aspects of things that you need to consider when you're you're asking yourself

this question things like math repair costs exactly. But before we dive into the numbers, it's important to address that there are a few reasons why it might make sense to replace and not repair that old car. Basically, there are different personal considerations to keep in mind, and all those depend on who you are as an individual and what your car means to you. So partly depends on

what you value. Right. For instance, you might really appreciate being the first owner of a vehicle and completely knowing the history of a car starting with the first hundred mile that you put on it. Right, These are cars that are treated like a member of your family. You might even have a name for that car, like Scottie or Steve, Like j L's got Steve in his garage.

Yea our friends, our friend j L who came on recently and Steve Steve two point out, Or speaking of garages, like you might even have a separate room of your house dedicated to housing this car, you know, like, if you think about garages, it's a house for your car that you park in like it's it's it's kind of crazy if you think about it, Like how much of the percentage of our homes is dedicated to the care

of our vehicles. And maybe I'm saying all this because I don't have a garage, jealous garage envy, but like, until I have a garage, I can make fun of it. But some people really love their car that much and so and so for them having a garage, having a place to work on it, having a place to keep it clean, it makes a lot of sense. And so if you are one of those people who really values having a new car, Matt's got a fairly new used car.

I've got older used cars. But the great thing about how we view money is that it's not necessarily the worst thing in the world for you to buy a new car. If it's something that you value, it's high, high up on your priority list, well then we would say let your money follow your values. Well, Joel real quickly, you know, I think it's worth mentioning. This is why

we have a nice craft beer on every episode. We quickly cover this on our interviews, right like we talked about how beer for you and me, uh, craft beer specifically, it's a little bit of a splurge. Sometimes we'll get some really nice beer. Is that we really enjoyed because it's something that we value. And so whereas a lot of people are thinking, why would you drink beer like water is for free or next to free, you know, you get it out of your faucet, like that is

something that's better for you. This is hot water though. Basically, come on, that's what I would say to those people. It meets the Bavarian standard of being considered a beer in Germany. What is it? There's like a high standard to be considered. Uh, it has to include four ingredients and maybe only four water, malts and hops, yeast. I don't know, something I don't know. Yeah, yeah, we're probably gonna get lampoon for for that right there. But but again,

for us, this is a parallel. This is why we

spend our money on this because we value it. And you know, when it comes to vehicles, even though I've never purchased a brand new car or even near new, right like, I totally get this line of thinking of as far as putting your money towards something you value, especially to if you're looking at getting something newer, like I understand wanting to have that predictability in the peace of mind that comes with being the first owner and the only owner of a vehicle, right, Like, you know

the ins and outs, you know the maintenance history of that vehicle. It's something that you can count on. And so while I know that it can be just a strong sticking point for a lot of people to where it's just across the board. You should never have a new vehicle or even a newer vehicle. Uh, that's something that you and I would push back against. Your money

should follow your values. And if you value you know, having a newer vehicle and it works into your budget really well, then that's not something we would follow people for. And at the same time, I think car ownership can have like this emotional component. That's another consideration that people have to make is I know some people have this strong attachment to their car, or this strong detachment they

almost hate their car. And I think sometimes we can make a decision because of past history and we have a negative emotional tied to the vehicle that we're driving, Like I just want to get rid of it. I don't care about the finances. I don't care about the fact that I'm gonna lose money or that I can't really afford it. But this car I'm just so tired of it. I'm fed up with it, or they or they say I love it, like this is something I'm wanting to spend a lot of money on some guy.

I'm I'm gonna put that four thousand dollar transmission into it just because I love this car, even though it's not worth it. Right, And so I think we do have to step back, and it can't just be an emotional decision either way, whether it's a good one or a bad one. Yeah. Man, Well, so you know, we're talking about these different personal considerations of repairing a vehicle

or getting a new one. A lot of it depends to on if there is a change in what you need out of the vehicle, right, Like this might be an obvious reason, but what we need out of the vehicle it changes over time. It's safe to say my old CB five fifty motorcycle, you know, back from my bachelor days, that wouldn't really cut it these days with the kiddos. Although I have seen little kids with helmets

on the back of motorcycles as passengers before. Dude, if you had all four kids on the back of a motorcycle with helmets on, you guys are be in a circus or something. Yeah, it really would be like the circus, Like, I'm not gonna or you get arrested. Well, that's the thing. It's not illegal, Isn't that crazy. There's no age limits to how old a passenger on a motorcycle can be. So like, I'm not gonna judge anyone, but there's no

way that I'm going to do that myself. And so for us man moving from a small old sedan to a vida up station wagon like that made sense for us. That was back when we were doing tons of garden and yard projects. And by the way, we're driving around a baby in a full size Great Dane around the holidays, and so like, for us, that was a smart move. We couldn't continue to do those things and include those aspects into our personal life with that really really old,

tiny little sedan Great Dane. Even harder to take around on a motorcycle. Uh, you gotta do the sidecar, Yeah, exactly. You've seen those dogs in the sidecars with the goggles in the scarf. Adorable, pretty freaking hilarious, so cute. And so I think another personal consideration that people need to take, Matt, and this is what we're gonna spend most of the rest of the episode talking about is what is your

specific financial situation. If you've been doing smart things with your money your entire life, you're a millionaire, right, go ahead and replace that old car for something newer. It's likely just to drop in the bucket for you compared to your overall net worth. And and that was one of the things that Jail mentioned too, just recently, just a couple of weeks ago. Was he felt comfortable buying

a brand new superru Forest or not going overboard. I mean, he didn't buy a Bentley or anything like that, but he bought a nice new car. And he basically his defense for it, Matt was, I'm financially independent, and this moves the needle. Not at all on my overall network, this doesn't have an impact, but it did with a needle when it comes to his enjoyment of life exactly. Like they drive around the country all the time when they're back in the States, like that kind of thing.

And he wanted a vehicle with foil drive because he had this like steep, snowy driveway. Just all these things. It made so much sense for him to actually get that. Sure, But like you said it had very little impact on

his actual financial situation. Yeah, And for our listeners out there, well, you might not even value cars all that much, but if you're doing really well financially, then you might value the convenience of not having to deal with the repairs and a maintenance schedule of an older vehicle, and that's a real benefit to you, right, And so I think our personal financial situations have to be taken into account. If like we've talked about matt cars being one of

the most expensive line items in our budget. Most people don't have the free willing cash, aren't financially independent, aren't in the place where jail is, and so we have to make a decision that makes more sense for where we're at financially. And so yeah, I think there's a lot of information that we have to kind of get out there so people can make an informed decision when

it comes to repairing or replacing. That's right, man, So real quick before the break, I wanted to ask you what was your or what is your favorite car of all time that you've owned. So it's probably a tie between the Nissan Leaf that I'm driving now because it's fun and zippy. Yeah, I got the little e V. Yeah, but in my first car nine nine Toyota Camry because it was a manual transmission. And I gotta say, I missed driving a stick shift so bad. So what about

it do you miss? Just? I mean, it's just fun to drive a stick Yeah, it's just the sense of act of driving experience, exactly, the sense of kind of control you have while you're on the road. I miss my care, I mean, and I really do think if I hadn't have been involved in like a minor accident which basically total the car, I think I'd be driving

that car to this day. It was such a good car. Yeah, you know, I never drove a stick as a primary vehicle, but I learned on all my friends sticks, which means that I was average at best drive stick shift cars. And they can still but well they're so rare though they're still they're rare. So your favorite car, okay, Well, the most fun car I've ever owned was in college. I was driving a nineteen nine, not in eighty nine.

I was slightly knewer than what you had going on, but I had a white Land Rover Range Rover Man. This car was the most fun vehicle of all time. Just first of all, it was so unique, right, like you never saw these on the road. It wasn't very

practical though at all. One time I was driving out on the Interstate and it kind of got like the speed wobble thing going on, and I thought, we're just gonna flip for like doing nothing like like I didn't really swerve or anything, but it just started getting really fishy. That might be the time you know that you need to replace that whole car, all right, Matt, Well, all right,

we gotta talk more about the specifics of repairing. What are the average repair costs, and how do you know where your car fits in and whether your specific car needs to be repaired to replaced, And we'll get to some thoughts on that right after the break. All right, man, we're back from the break and we're talking about whether we should repair or replace that old car. And so before we dive into the repairs, man, I think let's

let's touch for a second about financing. Right, if you are upside down on a car and you still owe money on it, the decision to repair or replace a vehicle it becomes a lot more difficult when you still owe money on your car, your options are going to be more limited, and so the goal here should be to get out of debt on your car as soon as possible. Once you own it free and clear, then you can make an informed, rational decision about upgrading to

a newer car that might be in better condition. It's just a terrible place to be in financially when you trade in your old ride and you get into one by rolling that old loan into the new one. Uh, your interest rate is going to skyrocket, and then you'll owe far more on this new loan than that new car is even worth. It's just a terrible sort of perpetual cycle to find yourself falling into. Yeah, it's like

a slippery slope. And for folks that don't have a paid off vehicle and they're trying to roll that into the purchase of the next it is financial armageddon for you. For you, if you continue to do that, it balloons your payment and if you have issues with that car. Then people do this not just once, but sometimes two and three times, and and car dealers are more than willing to to lend them the money at higher and higher interest rates, jacking up that payment. It's just not

a good situation. It reminds me of like a previous episode. We're talking about interest rates, right, and when you have interest rates working for you, it's like being on the correct escalator and it's just kind of like shooting you up to the next level. But if you have interest payments working against you, and this is so easy to do with car payments, when you are adding to that principal amount, well that's like you trying to run up

the wrong escalator where it's working against you. Yeah, I mean, you're you're a salmon trying to swim upstream when you have interest that's working against you like that, Yeah, for sure. So all right, Matt, let's get nerdy. Let's get into

the numbers of repairing or replacing. And so oftentimes that decision to repair a place comes down to the math, and and really in large part it should you know, we've covered some of those personal considerations, and I think that's really helpful, Like people should take the math into consideration and filter it, I think, through their own personal values.

But the math is crucial here. So that's why we recommend matth that people keep track of repairs and associated costs, because I think it's easy for people to think that their car is a dud, but is that actually accurate? You'll want to have some facts to go on. Not just like we said earlier, being emotionally done with your ride and keeping track of the actual repair costs that you incur on that car will help you make an informed decision as opposed to just assuming that it's costing

you an arm in a leg. Yeah, just like with all of the different amounts that we budget for and track when it comes to our spending, it's easy to fool ourselves into thinking that, you know, I spend way less than that on going out to or not in spend that much on vacation. But when you actually track and see how much you are truly spending, you can make, like you said, you will, informed decisions based on those dollar amounts. I could just see Shakira saying the numbers

don't lie and shaking her hips or whatever. I'm taking to the Super Bowl halftime exactly. Okay, So you know how much you're spending on your actual vehicle, and then next you'll want to know what the average repair rates are going to be for your specific vehicle. Consumer reports they have some great data on this, and just like we mentioned at the beginning of the episode, generally speaking,

it turns out that's a five year old vehicle. It takes about three fifty dollars worth of expenses every year to keep that car running. And it's in yeal vehicles, it takes just under six hundred dollars annually in repair costs. Right, and so knowing where your specific car where it stacks up like that s helpful information, and you know, it can also allow you to know that if the repairs you're having made to your vehicle, uh, if you're getting

a good deal or not. If if if you can see that like Consumer Reports says that my Toyota camera should cost me about four hundred bucks to maintain and repair every year. But you look back at your records and you see that you're spending eight hundred dollars. Well, like, there's maybe a chance that you're overpaying, maybe you're getting ripped off every time you have to take your car

to the shop. You might be, and you all, but you also might have experienced just a year that costs more, right, and so maybe that year you had a timing belt and water pump go bad. And that's just something that when you look at the life cycle of a car is bound to happen, and just because you had that one extra pair that year doesn't necessarily make your car

a dud either. So you do have to kind of look at these these repair costs across multiple years in order to get a good gauge of what that car is actually costing. If you look at just last year, it might look like a dud, but it might not be a dud. It might just be that one big repair that you incurred. But but the car is now

good to go for a while. Yeah, it wouldn't that be a terrible position to be in, Like you drop all this money on, like you said, maybe getting the timing belt changed, which basically means that your car is good for another hundred thousand miles. Yeah exactly. But but you know what if you saw that though, and then the next year you thought, you know what, I don't want to go through that again, and then you sell your car to somebody who's going to be able to

not change the timing belt, that exactly. It's good to take multiple years into account for sure. Yeah, it's also really helpful and smart to to look into the reliability numbers for your specific make and model, and that will help you determine if the car that you have is worth hanging onto for the long haul. So JD Power and Consumer Reports come out with lists every year which would help you see which cars are typically the most reliable and so Lexus, Mazda, and Toyota are top three

in the most recent findings from Consumer Reports. And if you're curious about your specific car and and model and year, well, you can pay for one time access to a sightl Consumer Reports, or you can go to your local library and get it get it for free. But it's worth looking into, like, Okay, how reliable is my vehicle because if typically those vehicles are historically reliable, well, and that's at least one check mark in the decision to keep

it and make the repair, have the repair done. But if your car falls along Matt like your land Rover would have would not have been a good vehicle to keep. Consumer the information from Consumer Reports would have said, get rid of it now and find something more reliable. Lots of fun in the short term, a lot of heartache and the long term, well, then here's the thing though, next step. If you find yourself at a crossroads with a repair, and you're trying to figure out whether it

makes sense to move forward with that fix. That's when you need to know how much this current repair is going to cost, obviously, and so with that in mind, a good rule of thumb for you is if that repair costs more than half of what the car is currently worth, then that's when you want to seriously consider ditching your car in favor of a newer one. Obviously,

rules of thumb don't apply to every single situation. We know that in a lot of cases, like the older vehicle gets, if you know everything on it is solid in your car, unfortunately though, it's not gonna be worth very much. And like you said, again, let's reference back to a timing belt. Timing belts cost a lot of money. But if you know that that one fixed will allow you to continue to drive that car for for years and years, well, then that's an instance where this rule

of thumb, you know, it may not be quite as applicable. Yeah, I think the older your car gets, it almost becomes a does the repair cost more than what your car is worth as opposed to more than half of what your car is worth? So, yeah, if you're driving that older car, and an engineer transmission goes bad. I think

that's that's a completely different scenario then. But yeah, the next step in this process is to estimate the value of your car, and Kelly Blue Book and Edmonds are the best sites to help you see what your car is worth. When you're entering in the information, make sure that you're filling it out accurately so that you can get a decent representation of the actual value of your car.

There's a big difference between a car that's an excellent condition and a car that's in fair condition, right, that has scratches and dense or that just hasn't been kept in overall great condition. But that's the number you want to weigh your repair costs against when you're making this decision. And having kind of that informed value in your hands as to what your car is actually worth is really helpful,

totally man. And the reason for this is because we can be unfortunately very emotional when it comes to our vehicle, right, because we can talk ourselves into doing anything. We can say, oh no, my car is worth way more because I've taken care of it. Like we recently talked about the endowment effect, right, and that's when something you already own, like it's you're gonna perceive it as being more valuable

than it actually is. And so in that case, you might think your car is worth way more and so you can justify these expenses because you really want to hang onto that vehicle, or you might really be hankering for like a new car, and so you might think, all my car is not worth anything, you know, like, is there a worse option than fair? Like, is there crappy?

Because because I'm gonna sell like that, you know, but like be honest with yourself because you want to make sure that you are making an informed decision based on facts, not just what you are trying to convince yourself into doing. You don't want that fake news, Matt, when you're facts

not fiction when you're making that decision. Yeah, another thing that considers does your car have lingering issues, like other issues besides the main thing that you feel like needs to be repaired, So it's not necessarily just about the singular repair. You'll you'll want to take into consideration the preponderance of other issues that might be happening with your

car at this point in time. So if you can't remember the last time you took your car into the shop even to get the oil change, then there's a good chance that there might be other work that's been left undone that needs to be completed too. You're like, does my car take oil? I'm not sure. Then you're in a bad spot. Yeah, well to answer that if you have a gasoline vehicle, like, yes, your car takes oil. It's also worth considering if you can do the work yourself.

So neither you nor I are car nerds that know how to fix major issues, but learning how to do maybe some basic repairs, it could allow you to extend the life of that old car. If you're pretty handy in mechanically minded, then that's an instance where you can put that skill to use. Joe Hery told you about the switch I installed on my old Jeep. No, oh man, you're gonna love this. So I had an issue with my old Jeep to where the the radiator fan it wouldn't kick on at the right time, and that's the

fan that cools your engine. Oh, I think you did tell me I tell you about this. I think we talked about it on podcast. With the switch Okay, Yeah, basically I installed like a manual switch to where I would turn that fan on myself because I was sick of it kept breaking and I was tired of taking it into the shop, and so I was mechanically minded

enough to install a manual switch. But it probably generally thinking wasn't a good idea to kind of mess with the electrical installed the switch that bypassed everything else at the computers and the car was telling it to do. I would not recommend doing that yet, not for use at home, but but for for for some people who you know. I've changed an alternator before with the help of a friend, Yeah, which is uh, depending on what where it's located in the car. That can be semi

easy or really really really hard. And spark plugs whatever, stuff like that, whether it's bigger like an alternator or or smaller like spark plugs or changing your own oil, whatever you can do yourself. And by the way, YouTube so helpful, or having mechanically minded friends who can help you out, that can be the difference between feeling like you need to get rid of your car or or being able to kind of salvage some more years out

of it. And of course d I ying almost anything in your life is going to save a whole lot of money as opposed to taking something to a professional for help. And so yeah, not that we don't need mechanics most of the time. I mean, I know I do.

We do in our family. But if there are those little things you feel like you can tackle on your own or something you can at least try that can help, you know, lower the costs of continuing to keep that vehicle on the road and allow you to continue to benefit from not having a car payment or having to go into debt in order to to get another vehicle.

That's right, man. And something else to consider is that you might even have to make some of these repairs anyway just to sell your vehicle if you did want to sell it, and if you don't want to make these repairs, and you're gonna have to settle for less money when it does come time to sell. So keep

that in mind. Like that's an instance where when you're on KPB and you're entering that the condition and some of that stuff, you can see how much of an impact that is going to have on the resale price. Experiment there figure out what the actual impact of those repairs are going to have on that resale value and you can make an informed decision from there. And Matt will also link to a calculator that has detailed inputs that can help you make that decision with the numbers

in hand. Yeah, what's great about that calculator specifically is that it takes a new account other factors, not just repair costs as well. Right, Like it's taking into account insurance, sales tax, or ad valorum if you're purchasing a new vehicle gas mileage. There are a number of factors that you do want to keep into account when you're considering a new vehicle. Yeah, for sure. All right, but let's say you've determined that your car is right for the

chopping block and you need to sell it. We have to cover the best ways to go about selling that vehicle and to go about buying another vehicle that that works better for you, that's more reliable. And we'll get to some thoughts on that right after this break. All right, Joel back from the break, and let's go ahead and keep talking and about cars. And we're gonna talk about

how you can sell your ride. Right, if you've determined that it's time to sell your car, one of the biggest things we want you to take away is to remember to not trade your car into the dealer. Why is that, Matthew Well funny that you ask, because you get a much smaller amount for that car when you trade it in as opposed to selling your car to

an individual buyer. You're gonna see that difference if you look at your car's value on a site like KBB dot com, you're gonna see that discrepancy between what you're going to get as a private seller versus versus what the trading value is going to be. Yeah, that descrepmancy can be huge. When you're playing around on KBB and you're trying to figure out how much your car is worth.

It literally has a couple of buttons, and one of them is to press to see what it's worth if you're selling to an individual, and the other one is to press what your car is worth if you're trading it in. And the difference can be huge, thousands of dollars. And what's interesting too, is that that's it's one of the first things that you click. It's not like a final option, so where you can go back just one

step and and kind of bounce between the two. It's interesting that they put it at the very beginning, and they kind of make you commit to doing one versus

the other. And so I would challenge folks to, you know, go through all those steps again and actually see what it would be if you were to do a dealer trade in and compare that to private sale, because I think, you know, seeing that, you know, multi thousand dollar difference like that would be enough of the kick in the pants to make you pull up your fancy iPhone or whatever phone you have and snap some really nice pictures of your car, shine it up, you know, take it

to the car wash, have a looking real good before you list it yourself. Yeah. So, on that note, Matt, for someone trying to sell their car, I think we would say that the best way to do that to get the most money for your vehicle is to sell it to another private individual. And I've kind of thought through it. I think the best way for someone to approach this, Matt, is especially if they have like a

week or so that they want to sell their car. Well, there are giant used car companies like Carbona and CarMax that you could tell your vehicle too. You could get a quote from them quickly. Carbona Online in almost no time. CarMax. Take your car there, they'll tell you what your car is worth, and they will actually literally hand you the amount that they will buy your car for and it's

good for a full a week. So what I would say is you're gonna say that they'll hange your money, and if you give them the car, the cash sticks around. But if you hang under your car, then then then the cash just disappears. Well that would be one way of sweet magic. But basically what you're doing is you're getting this guarantee that you can go back the very next weekend and sell your car for the amount of

money that they promised. And so what I would suggest is go to car Max, get that number in hand, and then for the next week, try to sell your car via like Craigslist and the Facebook marketplace. Matt and the car that we sold most recently we sold on the Facebook marketplace. That was where we got the most buzz and it's free to list it. So yeah, like you said, take some good picks with your phone, write up a listing for your car that makes it sound appealing,

and see what trickles in over the next week. Listing it closer to that private party value that you've been able to determine from Kelly Blue Book, right, and so you'll notice that there's a big discrepancy. But at minimum, we think it's important to give yourself a week to try to sell it privately because it will make a big difference in the return that you get when you

do decide to to sell a car. Yeah, maybe another way to look at it is think about that difference almost as a commission that you get to pay yourself, Like this is extra money that's going to be rolling

in were you to do that yourself. And Jel you mentioned, you know, making sure you take some nice pictures of it, make sure you have that car nice and clean to like take it to the car wash, maybe splurge on like the sixty dollar car wash where there's actual people touching your car, you know, like like not just the drive through, but they're kind of detailing your car. That's gonna go a long ways and how your car shows and people are gonna want to pounce on that. Yeah.

I don't know if it was frugal or cheap, but I just took mine down the street to the five dollar car wash and I vacuumed it out really nicely, and I did you get some arm or all like like to make stuff shiny? I feel like that that like a wet wipe kind of like down the dash so shiny for a second and then they got dull and dusty looking exactly. Yeah, yeah, but you know it did the trick. It works fine. But yeah, you'll be surprised at how good your car looks after one of

those car washes. Let's talk about if you are going to buy like quote unquote new. If you do make the decision that replacing your car is best, you'll have a decision to make. You know, do you buy used or are you gonna buy new? We much prefer that you buy used, but there are certainly some paces where buying new makes sense. We have an article up on the site at how to money dot com that Joel wrote that helps you to decide when buying a new

vehicle might make sense for you. Just like a lot of the different financial decisions we make in our lives, there are a lot of different considerations than things you want to think through. And may you did a good job and kind of walking us through that process. But if you opt for a used car, then probably the most important thing that you can do is to make sure that you have it checked out by a private mechanic.

They'll usually charge you maybe for an hour of their time to go over the car, but man, that small fee can save you thousands of dollars and a ton of hassle. Man. You can ask Google, you can ask Siri, obviously in those instances you'll get some highly rated local mechanics, but also don't overlook a personal recommendation or a word

of mouth. I know, when we're looking for a specific mechanic for for our van, I guess around the neighborhood and there are multiple folks that mentioned this one mechanic that they've been going to for over fifteen years. So of course it was a super easy decision for me to check him out. And we couldn't agree more. Man, we've been going there for years now. Yeah. Man, I've totally had next give me the thumbs up and the or the thumbs down on a car that I've brought there.

And I really appreciate that if you go to a mechanic that you know and trust, who is going to be able to shoot straight with you and and tell you you know what this car has enough problems that it doesn't make sense for you to jump into it, Well, then I would listen. And it has helped me avoid buying a car that I thought, on the surface looked really good, looked like it was kept up nicely, but I didn't realize all the issues that were lingering. So, yeah,

that's a really important step. Yeah, that could save you a lot of heartache and a lot of hassle. Yeah, completely. And on that note, we know that repairing a car can be a hassle, right, but when you compare that cost to the years of new car payments that you will incur by upgrading yourself and getting something a whole lot newer or buying a new car, it will likely for you make sense to fix your car instead of dumping it, especially if owning a really nice car just

isn't high on your list of values. And the highest cost of car ownership isn't the cost of the repair, which when we're faced with the repair, especially in expensive repair, that's all we can think about in our minds is how do I get into something new or that's not gonna break down on me and make me pay the mechanic money. That's just kind of the way our brain works.

But the actual most expensive cost of owning a car is the cost of depreciation, And so when we're faced with the cost of repair, we just have to have that in the forefront of our brains. Okay, if I do decide to sell this car and upgrade into something nicer, I just have to know that one of the trade offs is I'm going to pay a lot more in depreciation in the coming years. That is where my money

is going to go. It might not be going to the mechanic to to fix this car that has a couple of issues with it, but it's definitely over a longer period of time, going to massive amounts of depreciation if we decide to upgrade instead of to continue rolling with the car that we we currently have. Yeah, man, you know, and we think that whether or not you're going to repair a vehicle or you're going to replace it, you want to make sure that you're doing that from

a standpoint of financial security. Right Like, if you're going to hang on to an older vehicle, you know that you're going to incur these repair costs, so start putting money aside into maybe an emergency fund. But like ideally you would have a separate fund specifically for repair costs, repair and maintenance. It's going to cost you money to

maintain that vehicles. To start setting that money aside now, or if you know that in the near future you're going to replace that vehicle, well you need to set aside even more money because we don't want you financing that vehicle. That's something that we again want you to do from a position of strength, to start saving now for a new or newer car before you get to that point of having to make a tough decision that

could hurt you financially. Yeah, Matt, having cash in the bank when you're making this decision and not scrambling, because

cash in the bank changes the game completely. You don't have to make a rash decision that will actually, maybe in the short term, be better for your incoming and outgoing cash flow, but ultimately is going to lead you into more debt and a lower net worth right and and and having an expensive car that you're paying on monthly is a detriment to your overall wealth building process. And so fixing that older car it might or might not be the best decision. There are certainly a lot

of factors at play. Here, But it makes it so much easier for us to make a rational decision if we have a well stocked emergency fund, if we have been saving and investing consistently, and if we're able to make this, like you said, decision from a position of financial strength as opposed to financial weakness, it just means we're gonna make a better decision ultimately, no matter which side of the aisle we come down on, whether we buy a nicer used car or a brand new car

that is inexpensive because we're gonna own it for more than ten years, or we decide to repair that car and roll with it for a couple more years because that's best for our finances. Either way, doing it from a place of financial security and stability is is gonna be a game changer, and it's gonna be a whole lot less anxiety producing too, well, said Buddy. All right,

let's take it back to the beer. This episode, we were drinking Zombie Dust and this is by three Floyd's out of Indiana, and this one was donated to the show by Doug. So Doug thinks so much for this beer. Um, I'll go ahead and give you give you my thoughts on this one, Buddy, Like, so it poured a clear kind of golden color right, like, just a nice looking

pale ale. And for a pale, I feel like it kind of had like a nice kind of pineapple citrusy kind of hot presence going on, but at the same time is balanced with this kind of nice, bready maltiness. It was just a well balanced, easy to drink pale ale. I feel like it's a now it's a classic example of what a pale ale should be in the US. Really enjoyed this one, buddy, Um, Yeah, but your thoughts on it. I feel like this beer was what made

brewers start to make pale ales actually taste good. Yes, this beer has been around for a while, and they really brought a ton of tasty hops to the game in this one. And I love three Floys. I love their braining, I love their style, I love their kind of brash attitude, and and this beer was kind of at the forefront of that attitude, bringing just a lot of hops into the beer and making it taste superb. I totally agree they kind of put pale ales back

on the map. Yeah, most beer nerds usually relegate pale ales to the back of the line then, and this beer definitely does not deserve to be there because it really has stood the test of time. It's a fantastic beer full of all sorts of hot flavor. So yeah, I really enjoyed this one. Big thanks to listener Doug for sending it our way. All Right, man, that's gonna be it for this episode. For listeners who want the

show notes for this episode to see that calculator. That's gonna help if you make this informed decision on whether to repair or place your old car, well, you can go to our website how to money dot com and wherever it is that you listen to your podcast. We would be incredibly thankful if you mash that subscribe button right now, if you are not already subscribe to our show, and if you haven't yet already leave us a review

over at Apple Podcasts. It helps others to to find the show who haven't already discovered the beauties of personal finance, as well as the huge impact that it really does have on our lives, on our everyday lives. Agreed, Buddy Man. All right man, that's gonna be it for this episode. Until next time. Best Friends Out, Best Friends Out,