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Buying a New Car vs Keeping the Old

CarPart  ·  October 14, 2021

Buying a New Car vs Keeping the Old

How do you know when buying a new car in Australia will be better for you than maintaining your old vehicle? 

Making the call in such a situation doesn’t need to be so hard. Surprisingly, many people hesitate and find it a difficult thing to do. That happens when you don’t know where to start. 

It all boils down to crunching some numbers, considering your personal situation, and asking the right questions. 

Two Questions to Ask Yourself Before Buying a New Car

Many people ask, “Is it worth buying a new car?” A yes or no answer can be rather flippant without a solid defence behind it. The truth is, it’s not as easy as a yes or no.

So, instead of stressing yourself with this dilemma, you should be asking the right questions to get an intelligent answer. You’ll need to sit down to answer these two guide questions, which I promise will lead you to the answer you need:

1. What’s the cost of owning and running your car?

Get a calculator, a pen, and a sheet of paper to compute how much you spend monthly to own and keep your car running

List down how much you pay for the following:

Next, add all the costs you have listed. 

With that total, let’s compare two situations. 

A. If you fully own the car (fully paid, that is):

The only things that you pay for are registration, insurance, fuel, repair and maintenance, and depreciation costs. Compared to buying a new car:

As you can see, if you keep your car, you will likely spend more for repairs and replacement of parts, but you'll do away with a major headache – monthly amortisation. 

Even if you spend a few hundred dollars every few months for repair and parts, that’s still considerably less than the monthly amortisation on a new car.

In short, if you already fully own the car, keeping it will be healthier for your pocketbook than buying a new one. In this case, better keep your old car.

B. If you’re still paying for your old car:

What if you’re still paying for your old car? Then the picture can change.

If you were to spend similar payments for an old car and a new one, with the old one incurring high repair costs, it looks like it would be better for you to get a new car (or trade in the old car for a new one).

However, in Situation B, we assumed that you will be spending much for repairs and replacement parts. What if that's not the case? Here’s the second question to ask.

2. How much do you spend for repairs and auto parts?

One of the likeliest reasons you’re considering buying a new car is the high cost of maintaining your old vehicle, especially when it comes to repairs and auto parts.

So, it all boils down to this: Are the repair costs so high that it’s worth buying a new car? An easier way to answer this question truthfully is to consider the following situations. 

A. If you fully own the car, and:

Find valuable info from this article about used car market value. To find the resale value of your car, you can search for car market value calculators online.

B. If you’re still paying for your old car, and:

As you can imagine, there are more situations than what this article covers, but you get the gist.

Other Things to Consider When Repairing an Old Car

1. Repairs that add value to your car – some major repairs can add to the lifespan or value of your vehicle. As long as the repair is something that does not occur repeatedly and will extend the vehicle’s life by some years, then it is totally sensible to have the repairs carried out. 

2. Car recalls – before you proceed with having any car repairs carried out, find out recalls made for your car. You shouldn’t spend valuable money to pay for repairs and car parts that you would have gotten from your dealer for free.

Bottom Line – To Buy or Not to Buy a New Car

If you have the money to comfortably buy a new car, then this post wouldn’t have been a very lengthy exercise to write or read.

You can trade in your old car and get a new one – it’s a no-brainer. However, not all people have that luxury. They'll have to think about a lot of things, including the following.


I’ll keep this short so that I don’t scare you away.

All we’ve talked so far was cash flow – Is the cash flowing in (your income) monthly enough to cover the cash flowing out (your expenses) for the same period? What we have not talked about are assets (what you own) and liabilities (what you owe). 

By getting a new car under a new financing scheme, you’re increasing your liabilities or debt. For some people, it spells the difference between sleeping like a baby and staring at the ceiling at night.


Also, a new car depreciates the fastest in the first 5 years. So, if you buy a new car, you need to know that it loses value fast during that period. In comparison, it is assumed that your older car now depreciates at a slower rate. The fact, however, is that depreciation depends on other factors, including make, model, MY, your driving style, and many more.

Rounding Up

The point is, if driving an old car remains feasible for you (like the different situations we’ve underscored above), then you’re better off keeping it for some more years. You keep liabilities and depreciation expense low.

You should only seriously consider buying a new car when the situations become untenable and impractical (also underscored in two situations above) to hold on to your old car. 

I hope you found this helpful. If so, we’ll appreciate if you could share it with friends and family. We also invite you to read more of our blog articles here!

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