To Repair or to Replace?

The past day has been a rollercoaster of emotions. We found out Friday that one of our cars faces very costly repairs— costly enough that the service manager told us, "Decide how much you love the car." 😨

Stripped of emotional questions like, "Do you love this car?" the choice of whether to repair or replace it is an economic decision.

Several people have told us the old car is worth less than the cost of the necessary repairs, so it's not worth fixing. I'll point out that the market value of the old car is not the right comparison. The proper comparison is the cost of the alternative. What's the cost of owning a new car relative to the cost of repairing the old car, and relative to the satisfaction that each provides us?

Written as an equation, it's:



Now, since I've called it economics and I've even written a formula you might think that makes the decision objective and hence easy. Actually it's neither easy nor objective. Two of the values in the formula above are satisfaction— an inherently subjective measure. And a third value, the cost to repair, involves estimation of significant unknowns. It's not just how much this repair would cost, which ranges from a low of around $3,000 to over $6,000, but also the cost of whatever additional repairs an ageing car would require over the course of, say, 2 years or whatever time horizon we consider. It's not straightforward; not even close.

We Already Did This 2 Years Ago 😠

Adding to our frustration is that we literally made this decision— a decision to replace the car or spend significant money to repair it— two years ago. With the same car!

In 2019 we were facing significant repair bills and thought we'd like to buy a new car instead. After a series of poor dealership experiences reconfirming that car sales people mostly suck we finally test drove a few cars that we liked okay but decided we actually liked our car better.

Over lunch that day we penciled out the costs of repair vs. the costs of new car ownership. By new car costs I mean the depreciation on a new car and the opportunity cost of the money tied up in it, not the purchase cost. If we were comparing the price of repairs to the price of a whole new car, repairs would win pretty much every time! The costs turned out roughly equal. Thus, since we knew we liked our car better than the new ones, we decided in favor of keeping— and paying to fix— the old one.

Paying to fix wasn't cheap, BTW. We estimated $8,000 to tackle a variety of deferred maintenance. I thought that was a reasonably generous estimate.... Then the actual cost of all the repairs came to nearly $11,000!

The experience of a burgeoning repair bill last time colors how I look at the situation this time. I really don't want to have to buy a new car right now... but I know that objectively it's probably the cheaper thing to do. 😣

Car Shopping

Saturday morning Hawk and I set out to go car shopping. Late last week we learned our 2008 BMW convertible needs expensive repairs. it's old so it's probably cheaper in the long run to replace it than repair it.

Normally car shopping is something I'd approach with gusto. I enjoy reading about cars, looking up options, visiting lots, and test driving vehicles. This time, though, I barely wanted to go. I was still miffed about the sudden imperative to spend many thousands of dollars I hadn't intended to spend right now.

Hawk wanted to get it over with, though. She drove us out to a dealership in Fremont, where there's a 2018 model similar to ours. I sat in the passenger seat, dejected the whole ride. But once we got on the lot and started checking out the new car, something good happened.



The new car fit. First, it fit size-wise. Many other cars we looked at are materially larger than ours. We don't want a bigger car. Ours is the right size for us. Sure, we'd take a few extra inches of length if it appeared in the right places, like making the trunk a bit more spacious, but not 10 inches overall. Or 12. Or 20. Just walking around the car we felt a sense of familiarity. That continued as we sat inside. Everything was right at hand and where we're used to finding it.

Next, speaking of sitting inside, the seats were comfortable for Hawk. That was a huge because when we test drove a 2019 model similar to this in 2019, she couldn't adjust the seats to get comfortable. Something about this 2018 model (we're looking 3-year-old lease returns in the certified pre-owned program) gives it seats that offer greater adjustment.

Finally, the car's not annoying to drive. When we test-drove a pair of 2019s two years ago I disliked the lag between pressing the throttle and getting acceleration, and the excessive number of informational icons on the dashboard that lit it up like a Christmas tree. This car had a bit of throttle lag, but not too much, and it had a not-garishly-distracting dashboard. Also, though many controls are integrated into the multiple menu levels of the computer display on the center console, a) commonly used controls like audio volume and temperature and fan settings have dedicated knobs and buttons, and b) Hawk quickly found that the center screen computer menu/navigation system can easily be switched completely off.

Update: continued in Car Shopping part 2 (Salespeople Still Mostly Suck).

Car Shopping part 2 (Salespeople Still Mostly Suck)

We spent a good part of the day Saturday car shopping. It was unexpected. We'd had loose plans to go hiking this weekend and maybe have friends over, but then the mechanic dropped a bombshell on us Friday afternoon that our car was basically kaput. We changed up our plans in a hurry.

I already wrote about our visit to one BMW dealership. It was exciting that a 230 convertible, basically the next generation of the 1-series we own, was very comfortable. That lifted my spirits, giving me more willingness to do more car shopping— both for more BMWs and other makes.

Ignored at Audi

We visited an Audi dealership next. It was just a few blocks away from the BMW dealership at Fremont's Auto Mall. I've been curious about the Audi A5/S5 convertibles for some time. They're bigger than the BMW 2-series, lining up against BMW 4-series. That makes them bigger than what we think we want but we still wanted to check them out for their nicely designed interiors and to see what their driving is like.

We were half successful in that regard at the Audi dealership. We got to sit in an A5 and see how nice it was but not drive one. No salesperson approached us at all. The staff barely even looked our way when we entered the showroom; nobody came to talk to us as we were checking out a floor model; and nobody even seemed to notice when we left 10 minutes later.

This reminded me of what I wrote last time we went car shopping: Car Salespeople Mostly Suck.

BMW Wasn't Much Better

BTW the service wasn't worlds better at the BMW we'd left. We'd walked the length of the showroom without being approached. At the far end we saw a trio of staff idling at a sales desk and called out to greet them. One salesperson stepped forward to help us. He had pretty much no training or experience in how to help us, though. He couldn't answer any questions without reading a document, and each time he needed to look up a document it took several minutes. At least he got us the keys (which also took a few minutes) and let us test drive the car in peace.

After the test drive we asked him a simple question: What's your price for this car? He took 5 minutes to come back with an answer. We asked him another question. I forget what it was but we gave up waiting after another 5+ minutes and walked toward the door. I purposefully stopped to look at a display next to the exit so he could see us leaving and rush over to meet us. I let him write his name and number on some of the paperwork he gave us. He may be a poor salesguy, but we're buying the car, not him.

BMW #2 - Nope, It's Not Going to be Easy

I left Fremont optimistic about the prospect of buying a newer BMW. My mild frustration with the unskilled salesperson paled in comparison to my excitement from finding that the BMW 230 fit well and drove well. When we tried a 2019 model two years ago it didn't. Alas, our experience at the San Jose BMW dealership showed us that what happened in 2019 wasn't a fluke. The model we looked at there had different seats from the one in Fremont, and they were not comfortable for Hawk.

This is a case where having unskilled salespeople is a big minus. None could tell us why the seats were different. I mean, it's almost certainly due to an options package. The optional seats are fine, the base ones aren't, or vice-versa. A competent salesperson would know which car has which, and what the difference is, even for a 3 year old model. But nobody there is that competent.

What that means for us is that we can't buy remotely. We can't say, "Oh, now that we know we like this model, let's call/email around and find one at the best price." We must physically test every individual vehicle we consider. What a drag.