Vehicle EconomicsKeep vs Replace Car
Is it cheaper to keep your current car or replace it, over your chosen horizon? This is the site's normative decision engine, the fullest example of what every substantive engine here aims for.
Why this comes up
"Should I keep fixing this car or just replace it" is one of the most common vehicle decisions there is, and most people answer it on gut feeling, whichever repair quote feels too big, or however old the car feels. The real answer depends on economics most owners never lay out side by side: the current car's forward costs against a replacement's full ownership costs, including the ones a "just get a new car" impulse tends to ignore, like financing interest and transaction costs.
How we calculated this
Each path sums its own total economic cost over your chosen horizon: financing interest, depreciation, fuel or energy, insurance, maintenance, and repairs, plus transaction costs for a replacement. Whichever total is lower wins. Separately, we solve for the one number that would make the two paths tie: the annual repair cost on your current vehicle that would flip the decision toward replacing, holding every other figure constant.
Worked example, using this page's own defaults: keeping totals $28,150over 3 years, replacing totals $39,610, keeping wins by$11,460. The repair break-even lands at approximately$5,220/year, well above the $1,400/year in the default scenario. Run the calculator above to check your own numbers.
What this means
- The repair break-even is the number to actually watch: if a real repair quote comes in above it, the economics favor replacing even if keeping "feels" cheaper in the moment.
- Financing interest and transaction costs are the two figures a "just replace it" impulse tends to skip, they can be a third or more of a replacement's total cost.
- A near-tie result deserves a second engine, not a coin flip, see Replace Now vs Wait One Year or Optimal Vehicle Replacement Timing once you're implemented that batch.
Limitations
Every dollar figure above is what you entered or accepted as an estimate; this engine does not know your specific vehicle's actual reliability risk, only the numbers you supplied. It also does not monetize non-financial factors like reliability peace of mind or the inconvenience of a repair, note those separately when you decide. See Methodology.
Methodology
This engine combines Vehicle Economics' ownership total cost model (every ownership cost, depreciation, financing, fuel, insurance, maintenance, repairs, and fees, summed over your horizon) and break-even search model (a closed-form solve where one exists, otherwise a bounded search over a stated plausible range). See Methodology for the full detail.