Cars: Repair or Replace?

(This follows on from the previous post)

All this got me thinking about the economics of new vs major repair.

(Context: this discussion is not for people who buy new and trade in after three years, or who do a lot of longer-distance driving and so need a comfortable car with a bit of power under the bonnet. This discussion is about second-hand cars and owners who don't drive tens of thousands of miles a year.)

The purchase price of a car is the first of many payments we are signing up for. We are also taking on a stream of future servicing and maintenance payments, including a stream of "average" repairs over the life of the vehicle, caused by "average stuff happening". Those future payments are what we should be expecting because we are using a piece of heavy equipment some of whose parts run at 5,000 rpm and more, and are jolted by that pot-hole we just drove over, as well as left out in the cold, wet, heat and dry.

So when the car comes up for that timing belt replacement (around 7 years or 70,000km), it's not time to wonder if you should trade it in. It's part of the cost of the car that, well, nobody was over-keen to mention. The odd shock-absorber and front suspension bracket should also be taken in one's stride.

However, if in addition to the usual niggles, the dealer starts quoting thousands to repair gearboxes or other core components, that is the time to consider replacing it. Cars having mid-life crises can be expensive.

At this point I need to make clear that the “cost of repairs” is not what the Main Dealer Service Report says, but what The Guys In Your Local Garage That You Trust say. Which is usually about half what the Main Dealer says. So we get that clear. Main Dealers have, um, conflicting incentives.

Okay. Now for the theory.

The numbers we need to make the decision concern the costs of the repairs that will be needed in the future, for both the current vehicle, and our replacement of choice. That is the great unknown. Sure, a mechanic can look it over and warn you about visible rust on the body panels, and chassis, and the condition of the suspension and exhaust. They can't look into the gearbox, engine case and other such places where the real nasty surprises can be.

That doesn't mean we can't invent other criteria based on numbers we do know, and many people have done, but it does mean those criteria don't address the essential issue: the (unknown) future costs of both vehicles.

However, there is a way round this, which is to use averages to deal with all those might-be's and could-happen's that so many people rightly mention in the car forums when discussing this question.

Let's assume the car has been used "normally". Any other vehicle of the same same age, model and mileage also used "normally" will be in roughly the same condition, with roughly the same expected future expenses. Anything you are trying to dodge spending money on, any one else will surely have dodged as well. There no savings in buying a like-for-like replacement, unless it costs less than the repairs. Which is unlikely.

We have two decisions (note: not cars) available now: repair the current vehicle, or buy a replacement. Our "average" replacement will be running well after our "average current car" has reached the end of its life. So if we decide to repair, we will need to buy another car when the current one finally expires. Assume it is a comparable model to the one we would have bought if we had replaced it, the cost of replacing it later will be greater than or equal to the cost of replacing it now - because inflation.

Now repeat that with the replacement car when it gets its first painful repair bill. The same argument means we replace it, short of its possible full life-span. If it was bought new-ish second-hand (as opposed to middle-aged second hand), we may get ten years out of it. So over the course of our driving lives (say fifty years) we will be buying five cars on average.

If we repair-and-replace, we are effectively adding the cost of the repair onto the purchase price of the current vehicle, and buying a replacement after a longer period of time. Let's say the repair(s) cost £R and the purchase price is £P, and ignore inflation for the moment. Let's say that with repairs, we get an extra five years out the car. Then we will buy four cars over the fifty years (and still have some time left over) at a cost of £4*(P+R).

That compares with 5*P for the "replace" option. The two are equal if 4*(P+R) = 5P, or 4R = P. So if the average "exceptional" repairs cost less than a quarter of the purchase price of the replacement, it's better to repair-and-replace, rather than simply-replace. This proportion will vary with the life we get out of the cars, but isn't too far from what happens now. I'll leave writing the general formula and including inflation to the reader.

The more expensive the purchase price of the car, the more expensive the repairs need to be before replacing it. This does make sense: the repairs are deferring the high cost of a replacement of the same standard.

The shorter the life of the car, the more cars we are buying, and the lower the acceptable repair costs become.

This one-quarter rule is for all the future exceptional repairs to the car, not just the first one. There is no way of avoiding a prediction about the future behaviour of the car. While we may know the cost of the exceptional repairs now we do not know if there will be any more next year. Neither does the mechanic, unless the rust is staring both of you in the face. Those are our dice to roll.

Finally, we have been using averages. With averages come standard deviations, which will mean the costs may vary noticeably between two people running the same cars on this plan.

Servicing / Repairing The Car

I took the Fiat for a service recently. I used to go to a local dealership in Hounslow, which this time seemed reluctant to answer the phone, so I drove by and found it deserted (the Internet was quite sure it was still open). I found out later that Fiat pulled the franchise. So off to an enormous place on an industrial estate off the Great West Road I went. When it was over, they muttered something about oil leaks and a rusty exhaust bracket. There was a list of work that needed doing, one of which was the timing belt, and some of the others were "stuff happens" fixes. Then there was £350 under "oil leak". That was for the investigation, not the repair. The repair would probably cost a lot, said the counter staff, not worth doing, assuming that I appreciated as well as they did the age (10 y/o) and near-zero trade-in value of the car.

I went looking for a second opinion at the local garage that does my MoT. The local mechanic found the leak within two minutes of putting the car on the lift, and his indicative price had way less overhead in it.(*)

For the kind of supermini / hatchback I drive, a low-ish mileage four year-old costs around £10,000, and should have ten years in it. I'm not one for driving massive mileages. My decision amount using the one-quarter rule (**) is £2,500 for the remaining life of my current car. That's for exceptional repairs, not stuff on the service schedule or consumables like brake pads and tyres.

I went through the list of things on the service sheet, picked the important ones, and asked the local garage to do them. The bill is going to be around £1,000, which is way cheaper than a replacement, and leaves some over for the next few years.

I got this car cheap (and it turned out to be cheap for a reason) and have put about £1,000 into it for exceptional repairs so far. The total is still way less than a "good" one would have been, so if these repairs simply carry on the programme of bringing it back up to standard(!), I'm fine.



(*) Main dealers charge more partly because they have way more overheads than your local garage. Those overheads include the nice people at Service Reception, and reassuring paperwork. Not everyone feels confident talking to mechanics first-hand while standing in a workshop. So they pay for the comfort of dealing with Service Reception staff.

(**) See next post

Diary

I've just finished another batch of egregious backdating.

I've been distracted by my shoulder and right arm.

If I sit at a table and eat, let alone try to write, pins and needles shoot along my arm down to the thumb and forefinger.

If I put my head too far forward / backward / to the right, also pins and needles, and discomfort.

If I play the guitar, the elbow end of my right tricep feels really... odd.

Sitting down on a chair leads to discomfort. I fidgeted a lot during a couple of concerts recently. Trains and tubes can lead to more discomfort.

If I lie on my left side to sleep, pins and needles shoot along my arm, and for a while.

If I lie on my right side, that's uncomfortable, with tingles.

I've been sleeping on my back for the last six weeks.

Which means when I wake up, that's it. I'm stiff and ache-y. Pulling the duvet up and curling up for an extra hour is not possible.

I've been having walks at 06:00. In this weather.

I have been taking action.

I've had three sessions with my osteo, and a massage from someone who knows how. Each one has lead to an improvement.

There are two problems.

One is a probable trapped or inflamed nerve in my neck. That was from trying to flip a heavy mattress, something, I've done many times before without a problem.

The other is muscular tightness from adapting to the electric guitar.

Neither was helped by having a back that has been described as "like a turtle".

For a while I could not sort out which symptoms were coming from which cause.

I can now.

A wrist brace above my elbow helps with the guitar playing. I suspect I will adapt to that.

The most I can do is have massages to keep my back from tightening up. My osteo likes the idea of pulley-rows and face-pulls as well. I can do that.

I'm now waiting for the nerve in my neck to sort itself out.

Everyone says that it will remit, but it will take time.

Madison

Another one from the Qobuz suggestions, from a songwriter with the unlikely title of Drugdealer. I love its 70's vibe (through 2020's production), clean tones and all-round songiness.

Let's Sing, Let's Dance

I think I started subscribing to Qibuz in 2021. I would look at its featured new releases and try one or two. I'm not usually one for Korean girl rap DJ's, but Park Hye-jin's first album tickled my funny bone. This is the first track.



Stream it on your preferred service.

Views From Maryon Park

 Well, the same view, but cropped.

The top one is like one of those Victorian landscapes with a title such as "View from a hill in south London". The middle one is "my zoom lens wasn't long enough to get those darn trees out of the frame". The bottom one is "How much would it really cost the Council to trim a few trees once a year so everyone could enjoy a panoramic view of London"?

Land of The Grey and Pink: Nine Feet Underground

Of course I first heard this in music history class. I did not first hear it on a portable LP player at university. Good heavens no. It's a long insrumental piece, one of a kind in the band's work. I don't go much for the twee Canterbury Sound songs, but this is a knock-out.



The Canterbury Sound band you may have heard of is the Soft Machine. These guys all knew each other and played together on occasion. It shows.