Ron Peterson <r...@s...core.com> wrote:

>On Jul 6, 9:36 am, Douglas Johnson <p...@c...com> wrote:
>> Mark Bole <m...@p...net> wrote:
>> >Let's not go to extremes.  Unless you are on financial life support, buy
>> >a newer used car when the annual cost of repairs to the old car exceeds
>> >50% or more of the car's resale value.  And don't forget to drop
>> >collision insurance well before that time.
>>
>> Let me suggest that the resale value of the car is relevant only if you are
>> going to resell it.  If you are going to keep driving it, then the issue is the
>> cost of repairs vs. the net cost of buying another car.
>
>If your car is totaled, the insurance will only pay approximately the
>resale value. Collision insurance is reduced for older cars, so it
>makes sense to keep it.

Sorry, I should have snipped a little more. I was suggesting the resale value
of the car is irrelevant as to whether you should repair it or not. That
decision should be based on the cost of repairing vs. the net cost of buying
another car. Yes, likelihood of further repairs, reliability, and safety play
into the decision as well. But those are often used as rationalizations for
wanting a new toy.

But since you bring it up, I tend to drop collision on a car when I can afford
to write it off. Don't forget. If the car is totaled, the insurance company
will only pay the blue book (retail, usually), less the deductible. For an
older car, that might be only a few hundred dollars.

-- Doug

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