Mike's Corner - Sep 2005

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To fix or not to fix?

Somewhere down the road every Subaru comes to a major crossroad in its usable life. Some sooner than others and some much later than others depending on how the cars were driven and how well they were maintained. I’d like to offer a few different perspectives for you if you find you and your Subaru are at that crossroad.

The phrase "I’m being nickel and dimed to death" becomes a phrase that can become more common as the car gets more miles on it. Each of us has our own limit to what we can tolerate financially. There is also a point where we can begin to loose confidence in the reliability of our car. Maybe we’ve incurred a lot of recent smaller repairs, or possibly a situation where the car is in need of a serious high dollar repair.

Part of my job and the staff at Smart Service is to help you make an informed logical decision on whether to invest money back into making your Subaru reliable and safe again. We can also help you decide whether it makes better sense to put the money into to repairing your current car, or toward purchase of a replacement car.

Obviously, the first thing we have to establish is if you still like the vehicle. Do you still enjoy driving your Subaru and does it still suit your needs? If yes is your answer to both, then the next thing we must do is perform an overall evaluation of the car. For example, if you need major engine repair, we first want to establish the condition of the rest of the vehicle.

What major service is due in the near future?
What condition are the brakes in?
How are the axles, steering and suspension?
How does the transmission shift?
What is the overall cosmetic condition of the car inside and out?
What is the NADA retail value of the car in good drivable condition?

Once we’ve established the overall condition, we will have a good idea of what kind of expenses you may be looking at in the near future of the car. A comparison of the overall money needed to invest back into your Subaru to make it reliable again vs. its actual value is a good starting point for our comparison.

There are situations where it may make sense to invest $4000 into a car valued at $5000 and other situations where it may not make sense to invest even $2000 into a car valued at $7000. EXAMPLE: A car valued at $5000 may not have any other major mechanical needs or other concerns for the foreseeable future and is clean inside and out, is paid for, and the owner really likes their car. On the other hand, a car valued at $7000 may have a long list of other expensive additional repair needs, the car appears to have been poorly maintained, and the transmission is shifting softly. One may not want to spend $2000 on that car because of all the risk of additional expenses that may crop up. A questionable transmission may last quite a while but if it only lasts another month then you’re back in for another $3500 in repairs.

We also have to look at it from your own personal financial situation. Are you a person that is comfortable with a car payment or would you rather own your car free and clear? A 2005 base model Subaru Legacy with tax and license totals around $26,000. With 10% down payment ($2600.00) and 2.9% financing (which won’t last forever) on a 48 month loan you would have to pay $516.00 per month for the next 4 years.

If you pay that same $516 per month toward a $4000 repair on your Subaru (assuming it is driven another 4 years of reliable service with similar maintenance expenses you would have spent on a new Subaru) you would "own" your car again in 8 months. If you kept putting that same $516 per month away for the theoretical remainder of the 48 month loan, you would have put away a whopping $20,640 (not to mention any interest you may gain on that money). Also you still have the $2600 that would have been put as a down payment to service and maintain the vehicle during that time.

Fortunately for Subaru owners, the cars are inherently very reliable and well engineered for many thousands of miles of reliable, trouble free use. Whether it's time for a new car or just time to refresh your current car it can pay dividends to do your homework before making the choice.