Dear Dave - My old car has been having lots of problems lately.
Do you have any advice on how to decide when it's best to just fix
an old car or get a newer one instead?
Fix it or sell it?
My old car has been having lots of problems lately. Do you have
any advice on how to decide when it's best to just fix an old car
or get a newer one instead?
This is a good question! Mathematically, the first thing to look
at is the car's worth if you don't make repairs. Should you spend
$1,000 to increase the value of the vehicle $500? Dumb question,
right? At that point, you sell the car as-is and put the $1,000 it
would take to fix it toward something newer.
On the other hand, let's say you've got a little hooptie worth
$1,000 but by putting $500 into it, you can have it up and running
again. Suddenly it's worth $2,500. That's money well-spent, because
what you've done has significantly increased the value.
The other side is that at some point, the hassle factor of an
old car can turn it into a money pit. If you can't get anywhere
because the car's always busted, then you need to find something
else for the sake of safety and reliability. If this happens,
though, you should still pay cash for a better car. Even if you're
not taking a step up in price or fanciness, it's still better than
taking on a car payment. I'd walk or ride a bike everywhere before
I did that!
You lacked clarity
About 17 months ago, my wife and I allowed a lady who had lost
her home to a fire to move into an empty house we own and had
thought about selling. During that time she's made no effort to pay
rent. My wife wants to write it all off and just give her the house
and title, but I think she owes us something for putting a roof
over her head. What do you think?
Honestly, I think you handled this situation poorly from the
very beginning. From what you're telling me, you put her there
originally on a charity basis, and now you want to change the deal.
You didn't say anything about giving her a house, but you didn't
set up a rental agreement either. And now you're acting like she
owes you 17 months of back rent. I don't think so. I think that's
Now, you have some decisions to make. Were you providing free
housing to someone who was struggling, or were you providing a free
house to someone who was struggling? I understand this lady has
experienced a terrible tragedy, but even with that, I'm not hearing
lots of evidence that she's moving toward gaining control and
getting her life back together. You may be giving a drunk a drink,
if after 17 months of this situation she's not back on her feet
again and out on her own.
If it were me, I'd sit down with her and have a gentle talk. Let
her know the last 17 months were a gift, but you want to see her
making her way and winning at life again. Set a reasonable time
limit, whether it's six months or even a year, and tell her you'll
be selling the house at that point. This is fair to her and to you
guys as well.
Dave Ramsey is America's trusted voice on money and
business. He's authored four New York Times best-selling books:
Financial Peace, More Than Enough, The Total Money Makeover and
EntreLeadership. The Dave Ramsey Show is heard by more than 5
million listeners each week on more than 500 radio stations. Follow
Dave on Twitter at @DaveRamsey and on the web at
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