Are Sky-High Auto Prices Changing the Math on Fixing Old Cars?

As vehicle costs hit record highs, the math is changing for car owners who are deciding between repairing an old vehicle and shopping for something new.

It's an age-old question for car owners: How long do you keep fixing up a car that's getting older — and at what point is it simply no longer worth it?

That point may be shifting for some drivers as the cost to replace a car, even with a used model, continues to rise. A multi-thousand-dollar repair that once seemed unthinkable may now make more sense.

"The average new car payment is [now] a little over $700," says David Bennett, AAA’s senior systems repair manager. "Let's say your current vehicle needs $2,100 of repairs — maybe it's a 15 year old vehicle — well, that's three car payments, and then you got a car that's still in good shape."

That said, weighing the pros and cons of resuscitating an old car is complex and personal. Here's more about what's changing in the car marketplace, and how those trends might affect a repair-or-replace decision on your old car.

Average prices and car ages are up

Affording a car isn't what it was. New car prices have increased by 30% since before the pandemic, to an average of just under $50,000. Average used car prices are up 28% to almost $28,000, according to CoPilot CEO Pat Ryan. (Indeed, it's now a stretch to find any safe and functional "pre-enjoyed" car that's priced in the four-figure price range.) Car loan rates are currently around 6.7% for new cars and 11.9% for used cars, according to Experian. That's up, too, from 4.3% and 8.6%, respectively, in 2022.

Together, these factors have resulted in that average new-car payment of $700 or so — it was actually $756 in the second quarter of 2025, according to Edmunds. Even a used vehicle will set you back by an average payment of $559 a month.

Car repairs, too, are getting more expensive, with the average repair bill rising by 26% between 2022 and 2024, according to J.D.Power. Yet drivers seem more willing to pay them when the cost to replace a vehicle is so high.

That's partially why the average car on the road today is older than it used to be. According to S&P Global, the typical age of a passenger car in service today is 14.5 years. That figure has increased by more than two years since 2020.

Drivers have been holding onto their vehicles longer ever since average costs in the new and used car markets soared starting in 2021 amid pandemic-era shortages.

What most people can afford to buy now, Ryan says, "is either a far lesser new car, or more likely, a materially older user car."

The challenges of an older vehicle

Driving an older car means more than foregoing the new and better infotainment systems and safety features of a a later-model vehicle. Continuing to own an old car, Ryan says, means "you're buying more repairs… and you're either almost out of warranty or fully out of warranty."

Worse, the first big repair you face on your old car may not be its last. "One of the rules of thumb that sounds superstitious, but it's not necessarily wrong: When stuff starts breaking on your car, people often find that more things start breaking," Ryan adds. "Things don't get better."

When a used car gets up to a higher mileage, the owner has to consider how much money they want to put into a vehicle that may not be worth all that much anymore — and may be getting past the point of being "reliable."

Deciding to repair or replace today

The numbers in the current car marketplace — vehicle prices, repair costs, loan rates — have evolved, and none in a good way. But less has changed about the best ways to decide whether to keep and repair an old car, or to replace it.

If you're facing an immediate repair, compare its estimated cost (preferably from more than one garage) to what the car would cost to replace. You should not spend anywhere near the vehicle's replacement cost on an individual repair. But, because repair rates are up, you may face spending more for the fix than you expected, or might previously have considered.

If that's the case, evaluate two further considerations. The first is how much you can afford to spend to still have wheels on the road. If you can handle paying the repair bill, but not the ongoing payments on a replacement car, that reality might all but drive your decision, so to speak.

If you could afford to buy a new car, though, consider the second key factor: the likelihood the car may need further, and expensive, repairs. Major unexpected problems like a transmission failure are unlikely, but if they're required the cost can run to the mid-four-figures.

Predicting future repairs is an inexact science. Still, if you have a trusted mechanic, ask them for their opinion. You can also look up your car’s make and model online to see what kinds of problems are common with your car’s siblings. In addition, you can use tools like RepairPal’s Reliability Rating.

One final caveat. As the AAA's Bennett points out, even considering a repair to an old vehicle should only apply if the car in question is still safe to drive. Obviously, financial health should never taken precedence over physical safety for you and your loved ones.

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