September 24, 2022

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Dave Says 07-01-22

Pricey Dave,

We have now a 2008 Honda Accord that wants a brand new timing chain. Our mechanic says the restore will value about $2,200. The automobile is price about $4,500. Is it time to get one other automobile, or ought to we now have it repaired?

Susan

Pricey Susan,

That sounds somewhat excessive for a timing chain repair to me. Perhaps I’m mistaken about that, however let’s take a look at the mathematics of your state of affairs.

You say the worth of the automobile is $4,500 if mounted and operating correctly. Let’s say for the sake of argument the worth of the automobile if you happen to promote it as-is—mainly salvage—is $1,500. If you happen to take the worth of the automobile as-is, plus the restore, and the quantity you provide you with is greater than the worth of the automobile after it’s mounted, you don’t restore the automobile.

So, if this automobile is definitely price $1,500, the concept of fixing it is vitally questionable. If you may get $1,500 for this factor as-is, I’d promote it and put the $2,200 I’d’ve thrown into fixing that outdated factor towards a greater automobile.

You’re speaking a couple of huge restore on an outdated automobile, Susan. If the restore worth you bought is true, and it was from an trustworthy mechanic—not some padded, overblown quote from a vendor—I believe it’s time for that outdated beater to go!

* Dave Ramsey is a seven-time #1 nationwide best-selling creator, private finance skilled, and host of The Ramsey Present, heard by greater than 18 million listeners every week. He has appeared on Good Morning America, CBS This Morning, Right this moment Present, Fox Information, CNN, Fox Enterprise, and lots of extra. Since 1992, Dave has helped individuals regain management of their cash, construct wealth and improve their lives. He additionally serves as CEO for Ramsey Options.

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