Car Payment vs Keep-and-Fix Calculator

For the “keep” option, it builds a year-by-year sum: each year’s repairs start with your current annual repair cost and increase by the expected escalation rate. Then it adds those yearly repair totals across your chosen number of years. For the “replace” option, it adds the upfront cost to the total financed payments for the horizon: monthly payment × 12 × years (so if the monthly payment is 0, only the upfront cost is counted). Finally, it computes the cost difference as (keep total − replace total).

Your escalation rate is usually the biggest swing factor: if repairs are likely to rise quickly, “keep” becomes less favorable sooner. The calculator also assumes the replacement stays for the full horizon and that repair spending, while often lumpy, is evenly spread by year. To stay focused, it excludes items like insurance changes, fuel, registration/taxes, financing interest beyond the monthly payment, resale value, and downtime—so treat the result as a financial baseline, not a full life-cycle budget.

If your monthly replacement payment is 0, the tool will still compute replace total as just the upfront cost plus no ongoing payments. If your current annual repair cost is 0, “keep” will stay at $0 over the horizon (unless you enter a non-zero escalation). If costs land very close, the calculator labels it “roughly equal” and you’ll want to decide based on non-financial factors like reliability, safety, and how annoying downtime would be—because the finance math won’t clearly dominate.

Use realistic repair escalation: overly optimistic estimates can delay the break-even and make “keep” look better than it likely will be. Also remember that the recommendation is strictly financial—if you’re replacing due to safety or repeated inability to drive, you may want to replace even when repair totals are slightly lower. Finally, don’t forget to choose a horizon that matches your decision timeline; a short horizon can favor keeping, while a longer horizon can make replacement payments win once repair escalation compounds.