Dear Dave,
We have a 2008 Honda Accord that needs a new timing chain. Our mechanic says the repair will cost about $2,200. The car is worth about $4,500. Is it time to get another car, or should we have it repaired?
Susan
Dear Susan,
That sounds a little high for a timing chain fix to me. Maybe I’m wrong about that, but let’s look at the math of your situation.
You say the value of the car is $4,500 if fixed and running properly. Let’s say for the sake of argument the value of the car if you sell it as-is—basically salvage—is $1,500. If you take the value of the car as-is, plus the repair, and the number you come up with is more than the value of the car after it’s fixed, you don’t repair the car.
So, if this car is actually worth $1,500, the idea of fixing it is very questionable. If you can get $1,500 for this thing as-is, I’d sell it and put the $2,200 I would’ve thrown into fixing that old thing toward a better car.
You’re talking about a big repair on an old car, Susan. If the repair price you got is right, and it was from an honest mechanic—not some padded, overblown quote from a dealer—I think it’s time for that old beater to go!
Dave
. . .
Dave Ramsey is a seven-time No. 1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 18 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.