What’s the difference between a golf ball and your tired old car that needs a few thousand dollars in repairs? You can still drive a golf ball 200 yards! Today on MoneyWise, Rob West answers the question of how to know when it’s time to pay for repairs or replace your car. 
If you’ve tried to buy a used car recently, you probably noticed the high prices. Why are they high? Demand for cars has risen while the supply of new cars has fallen. People who might normally buy new cars aren’t able to find them, which leads them to buying dependable used cars. This increased demand in used cars has caused prices to rise. Rob mentioned some of the reasons the new car supply has fallen:
<ul><li>There is a computer chip shortage, due to a fire at a factory in Japan. This caused a worldwide shortage of chips used to regulate modern vehicle engines and transmissions. No new chips mean no new cars. </li><li>Auto manufacturing plants are having a difficult time keeping their workforce up due to the COVID-19 pandemic. This further decreases production. </li><li>Secondary manufactures are dealing with the same issues, creating a shortage of the thousands of parts needed to assemble cars. Some automakers have ceased operations temporarily. </li></ul>Vehicle wholesaler Manheim, which also monitors and scores used car values, said they’re the highest they’ve ever been. The upward trend in used car values has started to level out just a bit, but prices are still way above last year’s numbers. 
Cars.com says used-car prices are still going up, but the rate
of climb in prices has started to taper off in recent months. Their used car median listing price in August was $24,000, up almost 35% from last year. 
So does all of this mean you should wait until used vehicle prices get back to what we remember as “normal?” That depends on how much life is left in the vehicle you’re trying to replace.
Experts who’ve been monitoring the chip shortage and other supply chain problems … say it will take time for new car inventories to increase. That means used car prices won’t drop anytime soon.
So in this inflated market, how do you know if it’s worth it to repair your current vehicle? Consumer expert Clark Howard recently tackled that question. He suggests: 
<ul><li>If the repairs cost less than half of the car’s value, go ahead and have the work done.</li><li>If the repairs cost between half and the full value of the car, have the work done only if that means you’ll get another year out of the vehicle. </li></ul>Bottom line, if you can afford to wait until prices decline you’ll more than likely come out ahead. 
Next, Rob answers a few listener questions including the following:
<ul><li>I received a $14,000 settlement due to an injury. Do I tithe on the whole amount or on the amount after expenses?</li>
</ul><ul><li>I have around $170,000 in debt including a mortgage, auto loan and credit card. We have enough to pay off these debts with around $65,000 left over. Should we pay them off all at once with our savings or take them on one at a time? </li>
</ul><ul><li>Do savings accounts have a Payable on Death feature allowing me to designate a beneficiary for that account so that it avoids probate?</li>
</ul><ul><li>I’m getting married soon, what is a good place to start as a married couple to be good stewards of God’s money? </li>
</ul>Remember, you can call in to ask your questions 24/7 at (800) 525-7000 or email them to <a href="mailto:Questions@MoneyWise.org">Questions@MoneyWise.org</a>. Also, visit our website at <a href="http://www.moneywise.org/">M</a><a href="http://www.moneywise.org/">oney</a><a href="http://www.moneywise.org/">W</a><a href="http://www.moneywise.org/">ise.org</a> where you can listen to past programs, connect with a MoneyWise Coach, and even download free, helpful resources like the free MoneyWise app. Like and follow us on Facebook at MoneyWise Media for the very latest discussion! And remember that it’s your prayerful and financial support that keeps MoneyWise on the air. Help us continue this outreach by clicking the Donate tab on our website or in our app.

FaithFi

Faith & Finance is a daily radio ministry hosted by Rob West. The program offers a practical, biblical and good-natured approach to managing your time, talents and resources.

Faith & Finance with Rob West

What’s the difference between a golf ball and your tired old car that needs a few thousand dollars in repairs? You can drive a golf ball 200 yards. Host Rob ﻿West discusses when it’s time to pay for repairs or get another car, and how to buy a used car.

The Used Car Buying Crunch

FaithFi | Oct 20, 2021

Show Notes

Where Faith Meets Finance

You May Also Like