If the repair costs what the car is worth, it is not a repair

Usually not, the people here say — and before you decide, they want the diagnosis checked, because theirs were wrong more than once. Three separate conversations say the rule: when a major repair approaches or exceeds the car’s market value, paying it is financially irrational, and the car should be sold as it stands, scrapped, or used as a deposit on a replacement. One exchange across two conversations, one account to two, argues the edge: the one says fix it if the car is otherwise reliable, because a new loan and payment cost more than a repair; the two say a bill that size is the car telling you its life is over. The accounts’ decider is whether the rest of the car is sound and whether you could carry a payment at all. The corrections are the useful part. One conversation was told an engine was destroyed by a broken belt; one correction backed by three accounts says that model of that era likely has a timing chain, not a belt, and a third says the fault turned out to be the serpentine belt — a bent valve aside, the engine did not need replacing. One account says the quoted price was dealer pricing when a used engine from a breaker’s yard costs far less; one exchange, two accounts to one, argues whether the quote was padded or simply what parts and labour cost now, and another, two to four, whether an engine of that family is worth replacing at all — the four say a used engine can make it worthwhile, the two say the model’s known faults make it money in a hole. One correction says a hundred and eighty thousand kilometres is not a worn-out car by today’s standards. One caution rated high says the diagnosis is everything: a head gasket and a full engine are wildly different bills. Single accounts add: a dealership charges far more than an independent shop and is not more competent; get more than one quote — one account says they were quoted higher and treated dismissively as a woman, and the answer for anyone is several quotes; regular maintenance is what prevents this bill, which is a lesson for the next car; and if the car is your second home in a hard year, one exchange, three accounts to two, says sentiment is a reason to fix it cheaply, not a reason to pour money in. If you sell, one account says part it out or sell it as-is for a deposit on the next one, and one exchange, one each way, weighs a private sale of a non-runner against a car-buying service.

Everything, because you may owe more than the car is worth, and the people here have been under that water. Four separate conversations say the way out of car debt for good is to pay cash next time or pay this loan off fast, because interest on a thing that loses value every month is the trap; two conversations say the practical move when the loan is bad is to refinance at a lower rate, usually through a credit union — the page on this site about credit unions is the door. Single accounts fill in the mechanics: a car depreciates the day you drive it off, so a long loan leaves you under water — owing more than it is worth — for most of the term; if you sell while under water you need cash to cover the gap, and one account took a personal loan for the difference so the sale could go through; check the contract for financed add-ons — an extended warranty, gap cover, gap cover — that can be cancelled to cut the balance; and pay down principal to build equity before you refinance, because one caution says lenders usually want positive equity before they refinance. Two cautions rated high say gap insurance matters exactly here: if the car is totalled while you are under water, you owe the remaining balance and need a new car, and gap cover pays the difference. One account says the monthly figure is not the payment but the payment plus fuel plus insurance, which is the number to compare against your income. Three contraindications carry the limits: no deposit as big as the car; no co-signing a refinance; and do not sell the car back to the dealer immediately, because one caution rated high says you will get far less than you financed. And the line from public guidance above: handing the car back does not hand back the debt.

In the US that depends on your state, and the people here agree on the ethics and divide on the law. Five separate conversations say rates in the mid-twenties to mid-thirties per cent on a car loan are predatory — one conversation’s example was a very old, very high-mileage car financed at thirty-four per cent, at a price a caution says was far above its value — and that a loan like that should be avoided or exited. Two conversations say rates like that are usurious in some jurisdictions, and two say some states cap rates or bar loans of this shape, which may give the borrower a remedy; which states, and what the cap is where you live, is a gap the accounts named, and your state attorney general’s consumer office is where the answer is. One exchange, two accounts to two, argues whether the example was illegal usury or merely a bad and legal deal, and another, three accounts to four, argues whether the dealer or the buyer was responsible — this page carries that as an argument and ranks nobody. Two corrections keep the arithmetic honest: the cash price of a financed car includes the deposit, not just the amount financed; and a zero-per-cent deal is rarer than it looks — two accounts say even strong credit usually gets a small rate, and one account suspects the interest was priced into the car. One correction works a rate back from the payment and term and finds it higher than the borrower was told, which is why the whole-loan sum on the payday page applies to cars too. One exchange, two accounts to one, argues whether thirteen per cent on a new reliable car is ‘criminal’ or a decent outcome for weak credit — the one says decent, given what used-car lots charge. Single accounts explain the market you may be in: buy-here-pay-here lots profit from the deposit and the repossession; for people without transit and with poor credit these loans are sometimes the only offer; used-car prices were inflated at the time and one caution says the example still sat far outside the norm. One account says the buyer also failed to check the car’s value first — which is the one thing this page can hand you before the next signature.

The people here argue this at length and the deciders are worth more than the verdict. Three separate conversations say that once the payment no longer fits, or the car has become a hole for money, a private sale or handing it back beats bleeding on — with the public-guidance line above about what a surrender leaves you owing. Two conversations say sell now and take the loss, because the payment was too high for the need in the first place. The argument in full, from one conversation: four accounts to three, on a large vehicle at zero per cent that the owner could pay but could not save alongside — the four say keep it, because at zero per cent paying it down costs nothing extra and selling realises the depreciation as a loss; the three say a payment you can make but cannot save alongside is unaffordable in all but name, and one correction agrees that a long term at zero per cent is not a ‘horrible’ loan because the term adds no cost. Three more exchanges — one account to two, each time — run the same axis on other cars, and the accounts’ deciders vary: how far under water you are, how stable your income is, and whether you can take a short-term hit to fix a long-term drain. One caution rated high says selling now can lock in a loss when the market value sits well below what was paid, and another that selling requires cash you may not have for the gap. One exchange, two accounts to two, argues whether a bad car loan is a catastrophe or a common mistake with a clear fix; the fix side says refinance, cancel the add-ons, pay down principal. Single accounts on the keep side: cut other spending hard; take side work the vehicle enables; prove you can save the full amount for months before the next big purchase; and one says a payment that takes a fifth or more of take-home pay for a depreciating thing is the problem, whatever the rate. One caution rated high says a car that dies before the loan ends leaves you paying for nothing — which is the repair-versus-value sum from the first question, applied to the future.

Rarely, and the people here asked the legal questions more than they answered them. One exchange, one account each way, has one saying you cannot return a new car because no state requires it, and the other saying check your state’s law for any window before you ask the dealer; this page checked the general position: the US Federal Trade Commission says there is no federal cooling-off right for a vehicle purchase — the contract binds when signed unless the dealer or your state offers a return policy. Two conversations say that where a state caps rates or bars loans of this kind, the contract may be voidable or the borrower may have a remedy; what the specific law is where you live, what recourse a borrower has, and how to negotiate a lower rate or a payoff with the lender are gaps these conversations name and never fill — a legal-aid office or your state attorney general’s consumer line is where this page hands you. What the accounts could do without a lawyer: refinance elsewhere when the equity allows; cancel financed add-ons; sell with the gap covered; and, as a last resort, surrender — knowing from public guidance that the debt and the credit damage stay. The one route this page will not carry is the one an account raised and dismissed in the same breath: damaging the car for the insurance is fraud. For the loan that was predatory from the start, the page on this site about high-interest lending carries the whole-loan sum and the alternatives; for the payment you can carry but resent, the people here who kept a zero-per-cent car and paid it down have their case in the fourth question.