Should I Keep My Old Car or Buy a New Car?

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The current car market for new and used vehicles continues to be inflated due to inventory issues caused by “disruptions in supply chains due to COVID and the chip issues that the vehicle manufacturers have had,” money expert Clark Howard says.

Although the average price for a new car fell for the first time in a long time in September 2022, according to Kelley Blue Book, it’s still solidly above the $48,000 mark. “September prices dipped 0.3% ($146) month over month from August but were up 6.1% ($2,775) year over year from September 2021,” says a Kelley Blue Book news release.

Given the state of the vehicle market, you may be going back and forth over whether to fix your current vehicle or buy a new one.

Should I Keep My Old Car or Buy a New Car?

A recent listener to the Clark Howard Podcast is dealing with a similar issue. She says she could trade in the family van and get $11,000, but they still owe $30,000 on it, which they’d have to fold into a new car loan at 6% or more.

Here’s Clark’s advice:

“If that van’s still working and you have to throw some money in it to keep it on the road, keep it on the road,” Clark says, “because everything I’m reading says that the new vehicle prices are starting to trend down slowly and the availability of new vehicles, depending on brand, is getting better month by month.”

Clark says you should hold on to your current vehicle, making sure to keep up with the regular maintenance, rather than fork over big money for a pricey new car that could potentially drop in price (more on that later in this article).

Should You Repair Your Car or Not? Here’s How To Know

OK, so you’re planning to keep your old car. What happens if it breaks down and needs to be repaired? Here’s Clark’s general rule, in the current market, on whether or not to repair a car based on its value.

“If the cost of the repair is half or less than the value of the car, you should always do the repair,” he says. “If the cost of the repair is between half and the full value of the car, and if you think the car will last for another year, you should do the repair.”

Are Car Prices Going To Drop Soon?

Clark says automakers seem to be getting better at dealing with supply chain issues, “which means that prices are almost certainly going to become more favorable as you look month by month through 2023 and into 2024.”

As for the podcast listener’s dilemma, Clark has this parting advice:

“Keep the van you’ve got on the road, knowing that the marketplace is going to become more favorable to you the longer you can stall this purchase.”

Do you have a question for Clark? Use this form to ask him! And remember that you can listen to the Clark Howard Podcast at any time here.

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If you have a question but don’t want to be included in the podcast, contact Clark’s Consumer Action Center for free money help.

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