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What's best: Repair an old car or buy new?

Tara Baukus MelloQuestionDear Driving for Dollars,
Our treasured family car, a 2003 Honda with 125,000 miles, needs a new transmission. We own the car and have had great luck with it thus far. Our current financial situation is not favorable and we are trying to avoid a car payment. Should we spend the $2,500 to $3,200 to fix the Honda or do something else?
-- Andy

AnswerDear Andy,
It's almost always a better financial decision to repair your current used car than it is to replace it with another car, even a used one. While the mileage on your Honda is considered high, there's no reason your used car can't last you several more years without major repairs as long as it's properly maintained. Since your Honda has not had any major problems up to now and because you are struggling financially, I'd suggest you get your used car repaired.

Before you get your used car repaired, you may want to get quotes from a few different shops -- Honda dealers and reputable independent mechanics that have expertise with Hondas -- so you can compare costs. If you do opt to get a rebuilt transmission versus a new one, look into purchasing a factory rebuilt transmission, which should save you some money. It is most likely a better choice than having a local mechanic perform the rebuild on your current transmission.

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If you have a car question, e-mail it to us at Driving for Dollars. Read more Driving for Dollars columns and Bankrate auto stories.
 

Bankrate's content, including the guidance of its advice-and-expert columns and this Web site, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this Web site is governed by Bankrate's Terms of Use.

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