Why don't you compare the costs of repairs of older cars against depreciation and the value of a replacement car?
I don't quite agree with your suggestion that we should compare the cost of repairs to the value of the car. We should instead, compare the cost of repairs with depreciation and the costs/value of buying a replacement car. I owned a P-reg Mondeo for 11 years, the last few years of which the value was around £200 so depreciation was nil. This made it economical to pay repairs of say £300-£500 each year. I decided to scrap it when costs of over £1,000 were predicted for the next MOT.
Fair point. You could spend £8,000 on a car that lasts 8 years, losing £1,000 a year, plus fuel, annual tax, insurance and maintenance. Or you could spend £32,000 on a car that lasts 8 years, losing £4,000 a year, plus fuel, annual tax, insurance and maintenance. The car might stagger on past 8 years, worth virtually nothing, but costing £1,000 - £4,000 in annual maintenance and repairs. As you point out, you'd have to be off your rocker to spend more repairing an old car than a new car would cost you in depreciation. But you also need to take account of the reliability of the older car and how important that is to you. If I can’t get into a car and drive 300 miles at the drop of a hat, the car is useless to me.
Answered by Honest John on