August 04, 2010

Cost Analysis of Junking Your Car

At what point should you give up on your car?

Tradition states that it's when the cost of the repair is more than the cost of the car. But, that's an incomplete analysis. Because that's simply treating the vehicle as a parked asset and not a means for transportation.

If the car is worth $500 and the repair costs $600, it still makes sense to make the repair if I get more than $600 out of the car in the future. And while there is some risk involved in that not knowing the future, the economic choice is to choose the repair.

But, I feel like I'm still missing some factors? What else do I need to think about? Let's solve this today so tomorrow I can talk about leasing, which I've always wanted to figure out how to make sense of.

In other news, my wife's company, Sweet Table Chicago, designed a dessert table for recent Stanley Cup Winner and Chicago Blackhawk defenseman, Brent Sopel. The party was ridiculous. And the table was her best yet. Check out the pics.