Illustration of a car on a lift being repaired
Illustration: Matthew Hollister

Because of the limited availability and increased cost of new and used cars right now, many people are facing a choice between paying a premium to replace their current car and spending—sometimes a lot—to keep it running. This can feel like a difficult decision, but some car repairs that used to be considered too expensive to make financial sense are now worth the investment.

More on Car Care & Maintenance

While shelling out for major repairs on an older car—such as replacing the engine or transmission in a gasoline-powered car or the battery pack in an electric vehicle or a hybrid—may set off alarm bells for many consumers, your car is worth a lot more now than it would be normally. That means investing in keeping it running is probably money well spent, as long as the car has been well-maintained. The following advice will help you spend wisely on repairs.

Do the Math

The challenge: Prices for major repairs, such as trans­mission replacements, vary widely from vehicle to vehicle, so deciding which are worthwhile will depend on your situation.

The solution: You can use CR’s car value estimator and repair estimate tool to help you decide if a major repair makes sense and whether you’re getting a fair price for the work. “It’s almost never a good idea to pay for repairs that cost more than your vehicle is worth,” says John Ibbotson, CR’s chief mechanic. For instance, if your 2007 Toyota Corolla with 150,000 miles is worth just under $7,000 and needs a head gasket replace­ment costing between $1,300 and $1,600, the repair makes sense. A $7,000 engine replace­ment, on the other hand, would be ill-advised.

Review the Warranty

The challenge: Repair shops may offer you new parts, less expensive remanufactured parts (used but restored to original specifica­tions), or even cheaper used parts that have not been restored. “Every part has a different warranty,” Ibbotson says. “Sometimes factory parts have a better one, and other times reman­u­fac­tured parts can be a little better. It all depends on the car’s make and model, and where you’re having it repaired.” Which part should you choose?

The solution: Review the terms of coverage to compare how long the warranty lasts, how many miles it covers, and whether it covers labor costs if the part fails. Ibbotson says used parts can be an economical way to keep a lower-value car running but adds that they often don’t come with robust warranty protections.

Keep a Fix-It Fund

The challenge: Major repairs can be costly, especially for cars no longer under warranty. There’s always the possibility with an older car that a repair costing hundreds, if not thousands, of dollars could pop up. But less than 40 percent of Americans have enough money saved to pay for a $1,000 emergency, according to a survey conducted by the consumer financial services company Bankrate. Some automotive repair chains offer financing on the work they do, but the interest rates they charge can approach 30 percent.

The solution: Create an emergency fund of at least a couple thousand dollars, so you’re prepared to pay for unanticipated repairs. If you’re lucky and don’t end up needing it, you can always use the money as a down payment on your next vehicle.

Editor’s Note: This article also appeared in the March 2022 issue of Consumer Reports magazine.