Last post on Jul 05, 2007 at 7:33 AM
You are in the Smart Shopper-Archives
What is this discussion about?
#1 of 102 Help! Repairs cost more than the car is worth!!
Sep 24, 2003 (1:40 pm)
My wife and I have a 1997 Mazda 626 with about 80,000 miles on it. It started having transmission problems, so we took it to a national chain for inspection.
The $50 inspection revealed nothing, so they had to seek our approval to open it up. They estimated the cost of repair to be around $2,000 if there was significant damage, around $1,000 if the damage was minor, and a flat $550 fee just for opening it up. We decided to go ahead with the inspection, hoping that it would come back with only minor damage.
Well, it turns out the car had major damage and now their estimate is around $3000!! This is about the same as the car is worth at trade in.
We're seriously considering eating the $550 and taking the car to a dealer as a trade-in. But we're not sure if this is the right thing to do, as we'd end up spending more cash out-of-pocket for a new vehicle, and we're trying to save for a house.
We're looking for people's opinions here. Our questions are:
1. Would a dealer even be willing to take this car, assuming it leaked transmission fluid and has severe transmission damage?
2. If so, would we get anywhere near the blue-book value for it?
3. Would we be smarter just to fix the transmission and hope the car can last another 5 years or so without another major repair?
Thank you very much for your opinions and wisdom. Your insight is appreciated, as we're torn and don't know what we should do!
#2 of 102 Here's my two cents on your situation:
Sep 24, 2003 (4:43 pm)
If your car is only worth $3k then don't spend another $3k on repairs. Unless of course the car has some sentimental value. The car has negitive value to a dealer as a broken trade-in. Consider paying a little more and buying a better (newer) car.
Stay away from the national transmission shops. Their prices are double what an independent shop charges. (Guess who ends up paying for all of that national shop advertising).
Consider a junk yard (ie. used transmission) from a wrecked or engine-challenged car. Some of the independent transmission shops can help you here
Consider playing the car donation game. You donate the worthless car to any charity and then take the retail Blue-book tax deduction.
#3 of 102 Great points -
Sep 24, 2003 (4:46 pm)
have a regular mechanic you trust (ask your friends/coworkers), talk to them about the deal, get a decent used tranny from a salvage yard, and have the private shop guy install it. You're out about $1,000 dollars more, parts and labor, give or take a few.
Much less than $3,000 and the car is worthless when it's broke.
Sep 24, 2003 (4:49 pm)
On a charitable contribution of a vehicle you can only take what the car is worth at the time of donation. If the car is worth $3000 at trade in in good working order it's probably only worth a couple of hundred (if that) in it's present condition.
#5 of 102 Yes, and they do get appraised
Sep 24, 2003 (4:52 pm)
to keep the charitable organization out of trouble.
#6 of 102 Hmm... so does that mean...?
Sep 24, 2003 (8:57 pm)
Does that mean that the dealer would find the transmission problem, and not accept the car at the "below average" blue-book condition value?
We were assuming they would, since they have their own mechanics, and could sell the car for around $6500 once it was fixed. We've chosen not to consider reselling to anyone but a dealer, since we don't want to be responsible for sticking someone with a lemon.
If the national transmission chain is telling us it's a $3000 fix, I'm thinking the dealer's own mechanics might be able to fix it for something like $1000, which means that at a trade in value of $3000 they'd be looking at a net gain of about $2000 on the car.
However, I'm certainly no expert in the used-car industry, so I have no idea if my assumptions are correct.
We're not inclined to donate the car to charity, since we think with a new or repaired transmission the car should have a few good years left. According to Consumer Reports, the 626's have been pretty reliable overall, and this is the first major problem we've had with it. For these reasons, we're really only debating between fixing it, or trading it in and replacing it with a newer (used) vehicle.
#7 of 102 Dealers WILL NOT
Sep 25, 2003 (4:24 am)
take a presently-broken car, no matter what - you're asking them to assume that's the only thing wrong with it - what if they estimate $2000 and it turns out they need some weird part that costs and extra $1000?
It ain't happening, sorry. Dealers take enough chances on a daily basis to know better than to sign on for a guaranteed loser deal.
Also, even if you car was running great, it would be wholesaled because of the year and miles. In 99% of cases, you can't write a warranty on a 80K-plus vehicle and most lenders won't finance anything over 5-6 years old.
Sep 25, 2003 (4:32 am)
... >> have a regular mechanic you trust (ask your friends/coworkers), talk to them about the deal, get a decent used tranny from a salvage yard, and have the private shop guy install it. You're out about $1,000 dollars more, parts and labor, give or take a few. <<..
Tranny shops are NOTORIOUS for the hit and run jobs .. $3 grand ..? sure, if it's 99 Jag XJ8, not a 626 ...l.o.l..
#9 of 102 That's just it - you can replace
Sep 25, 2003 (4:44 am)
the transmission in an all-wheel drive Dodge Caravan for $1700, parts and labor - you can rebuild it for $1200.
$3K is hogwash.
#10 of 102 Car Donation Gaming:
Sep 25, 2003 (7:59 am)
Dbgindy et al:
I know that you are SUPPOSED to only deduct the actual value of what a car is worth. However, cars worth less than $5000 do not need to be appraised so nobody will challenge you on it's value. So if you have a broken car (that is worthless) and a retail value of say $3000. Then you could donate it and take say $3000 off of your income and pay maybe $1000 less in state and federal taxes (assuming a net tax bracket of 33 %).
I am not advocating this approach, I just know of several individuals who have used this very popular tax-based approach.
This popular approach is no more immoral than selling a broken car to the unsuspecting.