When a Repair Costs More Than the Vehicle Is Worth
Educational decision guide. U.S.-focused; costs vary by state/region and personal circumstances.
People often compare repairs to resale value and stop there. But “value” isn’t the same as utility. Replacing a vehicle has taxes, fees, and unknown-history risk—so a big repair can still be rational.
Better comparison: repair cost vs the all-in cost to replace the vehicle (purchase + taxes/fees + insurance change + risk).
Value vs utility
If the vehicle reliably gets you to work and meets your needs, its utility can exceed its resale price.
Break-even months method
Divide the repair cost by the number of months you expect to keep the vehicle after repair. Compare that monthly cost to replacement.
When replacement is the smarter move
- Safety issues you can’t afford to fix
- Frequent unpredictable breakdowns
- Structural rust / severe corrosion
FAQ
Should I always walk away if repair exceeds resale value?
No. Consider utility and the all-in replacement cost.
What’s a common mistake?
Ignoring taxes/fees and the risk of buying another used vehicle with unknown issues.