Australians love their cars. We have more than 14.8 million passenger vehicles registered to drive on our roads, according to the Australian Bureau of Statistics, with one car on average for every two people living here.
With our cars 10 years old on average, it’s likely many vehicles may not be covered by a manufacturer’s warranty. The NRMA says this type of warranty typically lapses five to seven years after buying a new car. This adds up to a lot of potential repairs. In fact, IbisWorld predicts about $12.2 billion worth of revenue will be generated by the Motor Vehicle Engine and Parts Repair and Maintenance industry in Australia this year.
So, emotions aside, should you replace or repair your car? And, when may it be a good time to start thinking about replacing it if you decide to?
How to work out if you should replace or repair your car
National mechanic chain Ultra Tune spokesperson Rod Cedaro says that the decision whether or not to replace or fix an older car could be a hard one to make. But, as a rule of thumb, he says that if it costs more to repair than it’s worth, then it’s perhaps time to consider your options.
“Have your vehicle assessed and valued,” Mr Cedaro said. “If the cost of rectification exceeds the value of the vehicle, that’s a pretty good indication it is time to cut your losses and dispose of the vehicle.”
A way of approaching this could be to:
- Research how much it might cost to repair. Ask for a quote for repairs from a mechanic, or mechanics, if you are able to get multiple quotes.
- Research your options for your car if you decide to replace it. Consider:
- how much you might get for your car if it was in working condition and you sold it on the open market
- what its trade-in value might be. You could contact a few secondhand dealers for estimates.
- what a wrecking yard might pay for it if the repairs needed are extensive
- Research your options if you buy another car:
- estimate how much you might be able to spend on a new car and what car fits into your budget
- work out the cost of maintaining a new car, such as the expenses if you choose to take out a car loan plus ongoing running costs, and how you might fit these into your budget
At the end of this research, you should have a clearer picture in terms of finances when it comes to choosing between repairing or replacing your car. Other factors to take into account could include logistics, such as how you will get around while your car is being repaired or replaced, and sentimental value – how much the car means to you emotionally.
Explore: Car repair loans: what to look for
At what car age do people replace their cars in Australia? What is considered as an ‘older model’ car?
As stated earlier, the ABS says that the average age of passenger vehicles in Australia is about 10 years. More than one in five (about 28%) of all cars are five years old or newer, and more than one in five (about 22%) are similarly aged 16 years or older.
However, Mr Cedaro says that the average age of vehicles serviced by the national mechanics chain is between five to 12 years old.
“An older car would be considered seven-plus years of age,” Mr Cedaro said. He said that’s because manufacturers are now typically refreshing their model range every five to seven years.
“Cars are being turned over at a slower rate than usual during the current pandemic, however, the general trend has been a lot more models coming onto the market at a faster rate in newer-created segments than ever before,” he said.
Technology changes are also driving that higher rate of turnover. A case in point could be the recent surge of ‘green’ vehicles coming on to the market, such as electric and hybrid vehicles. ABS statistics show that people are increasingly opting to buy these kinds of vehicles, replacing traditional powered cars with these new models.
Are older cars more expensive or cheaper to repair than newer cars?
Whether or not it’s cheaper to repair and service an older car than a newer one depends on many factors, including the make and model of the car and what needs to be done. It could pay to get quotes from a few different mechanics or service centres to compare prices. You might also compare service and repair costs charged by manufacturer service centres to those not affiliated with a car brand. It could also be a wise idea to check the terms and conditions of your car’s warranty, if it has one, before embarking on any repairs.
Mr Cedaro said in some cases, at the moment, it could be cheaper to service an older car than a newer one when using a mechanic who isn’t affiliated with a manufacturer, due to the technology needed to access the computer systems of newer cars.
“Technology in the motor vehicle sector is changing rapidly, which means continuously having to update technology to read vehicle computers which indicate faults,” he said. “From that perspective, much of the cost of maintenance in relation to newer vehicles stems from the ongoing need to update technology.”
What are some of the common problems with older cars?
Mr Cedaro said an indication of the most common problems with older cars could be found when looking at the items that the national car service chain most commonly supplied to customers. These “high turnover” items include:
- brakes
- lubricants
- batteries
- tyres
- wiper blades
- filters (oil and air)
- shock absorbers
- suspension pivot points
- bushes
“These items wear out in typical vehicle use and need to be replaced intermittently during the lifecycle of the vehicle,” he said.
Other common issues for older cars include weathered interiors and oil leaks.
Explore further: The most expensive car parts to repair
Do you need to regularly service older vehicles?
Mr Cedaro says maintaining a car costs money, but this could potentially save you in the long run.
“Vehicles typically have scheduled maintenance intervals around mileage travelled – generally every 10,000km,” he said. “They are there for a reason. When scheduled maintenance is ‘skipped’ to ‘save money’, problems can compound.
“For example, not replacing the oil or oil filter can lead to dire engine problems with catastrophic consequences. The same [can happen] with brake pads – not replacing brake pads can destroy other brake components.
Mr Cedaro said costs to fix problems that could be easily avoided by following a simple maintenance schedule “can potentially run into many thousands of dollars”.
Most car manufacturers issue a manual which sets out recommended service intervals. For new cars, skipping services or not fixing items in a timely manner could impact your warranty coverage.
Are there 'early warning signs' a car might be about to cost you a lot of money at a mechanic?
There are some telltale signs that a car might be having difficulty and need some mechanical attention, according to Mr Cedaro, which can include:
- loss of power
- unusual noises
- increased exhaust smoke
- uneven “pulling” or tracking of a vehicle to one side
“In short, do not ignore a warning light,” is Mr Cedaro’s firm advice.
Are there any benefits mechanically to owning an older car?
There are many benefits to owning an older car, according to Mr Cedaro, including styling and often the quality of build.
“Mechanically... they ‘don’t build them like they used to’: meaning that a well maintained older vehicle that was built to do a lot higher mileage would outlast [many] a current day model,” he said.
How can you dispose of a car?
If you make the decision to replace your car, there are a few options to consider:
- Selling it privately, such as by listing it on an online car sales site. It’s worth noting that you may have to get a roadworthy certificate before you can sell your car yourself, depending on where you live in Australia.
- Trading it in. You may be able to exchange your old car for a discounted price on a newer car from a new or used car dealer. You may or may not need a roadworthy, depending on the outcome of your negotiations.
- Donating or giving it away. Mr Cedaro said that there are various groups located around Australia that will come and collect your vehicle and dispose of it for you, including not-for-profit groups such as Kids Under Cover.
When a car has come to the end of its life, and you have decided to no longer repair it, there are a few options you may like to consider:
- Local government dump/recycling centres: Some councils allow residents to take a car to a council-owned recycling centre or landfill site and leave it there, either for a fee or for free, depending on the council
- Car recyclers/wreckers, who could potentially pay you money to scrap it, or remove it for free in exchange for scrapping rights
- If you have mechanical knowledge, you could break it down for parts
Compare car insurance
If you’re considering car insurance policies, regardless of whether it is for your current or future vehicle, the comparison table below displays some of the policies currently available on Canstar's database for a 30-39 year old male seeking cover in NSW without cover for an extra driver under 25. Please note the table is sorted by Star Rating (highest to lowest) followed by provider name (alphabetical) and features links direct to the providers' website. Consider the Product Disclosure Statement (PDS) and Target Market Determination (TMD), before making a purchase decision. Contact the product issuer directly for a copy of the PDS and TMD. Use Canstar’s car insurance comparison selector to view a wider range of policies.
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