Keeping vs. Selling: Weighing Your Car Options & the Value of an Extended Car Warranty

Deciding whether to keep or sell your car is a big financial decision that goes beyond just preference. The costs of car ownership, maintenance, depreciation, and repairs all play a role in whether it makes sense to hold onto your vehicle or trade it in for something newer.

But before you rush to sell, there’s one financial factor that can make keeping your car more cost-effective—an extended car warranty. If you’re facing expensive repairs, but your car is otherwise reliable, an extended warranty can help offset repair costs and maximize your investment.

This guide breaks down the pros and cons of keeping vs. selling a car, the costs of car ownership, the used car market, and why an extended car warranty makes financial sense for many vehicle owners.

The Pros & Cons of Keeping Your Car

✅ Pros of Keeping Your Car

Avoiding New Car Payments

New cars come with hefty price tags, often requiring monthly payments for 60-72 months (or longer). Keeping your car allows you to avoid this financial burden.

Lower Depreciation Costs

A new car loses 10-20% of its value in the first year and up to 60% within five years. A well-maintained used car depreciates much slower, saving you money in the long run.

Lower Insurance & Registration Fees

Older cars typically cost less to insure and have lower annual registration fees, especially compared to a new vehicle.

Reliability & Familiarity

If your car is well-maintained, you already know its history and potential issues. A used car purchase, even from a dealer, can come with unknown risks.

Extended Car Warranties Help Offset Repair Costs

If repair costs are a concern, a vehicle service contract (extended warranty) can provide financial protection by covering major repairs like engine, transmission, electrical, and A/C issues.

❌ Cons of Keeping Your Car

Increasing Maintenance & Repair Costs

As cars age, they require more frequent repairs and maintenance. Common repair costs:

Transmission Replacement: $3,000 - $7,000

Engine Repair: $4,000 - $10,000

A/C Repair: $500 - $2,000

Electrical System Fixes: $500 - $1,500

Fuel Efficiency Declines Over Time

Older cars are less fuel-efficient, potentially costing hundreds more per year in gas compared to newer models with improved MPG ratings.

Lack of New Features

Newer cars come with advanced safety features, better infotainment, and improved fuel economy, which may make an upgrade more tempting.

The Pros & Cons of Selling/Trading Your Car

✅ Pros of Selling or Trading In

Get a Newer, More Reliable Vehicle

Trading up means getting a newer, more dependable car with modern safety and tech features.

Potentially Higher Resale Value

The used car market fluctuates, but in times of high demand, you may get more money for your trade-in.

Lower Repair & Maintenance Costs

Newer vehicles often come with factory warranties, covering repairs for 3-5 years, reducing unexpected expenses.

Better Fuel Efficiency

Upgrading to a hybrid or electric vehicle can dramatically cut fuel costs.

❌ Cons of Selling or Trading In

New Car Payments Can Be Costly

The average new car payment is $725 per month and used car loans average $500 per month.

Depreciation Hits Immediately

A new car loses value the moment you drive it off the lot—up to 30% in the first two years.

Higher Insurance Costs

New cars typically require higher insurance coverage, increasing annual costs.

Why an Extended Car Warranty Makes Financial Sense

If you’re on the fence about keeping your car due to repair concerns, an extended car warranty (also known as a vehicle service contract) could be the smartest financial move.

🔹 What Does an Extended Car Warranty Cover?

An extended warranty can cover major mechanical and electrical repairs, including:

• Engine & Transmission (Most expensive to fix)
• Steering & Suspension Systems
• A/C, Heating & Cooling Systems
• Fuel System, Brakes, & Electrical Components

🔹 How Much Does an Extended Car Warranty Cost?

Prices vary based on vehicle age, mileage, and coverage level, but here’s a general cost range:

• Basic Powertrain Coverage: $1,500 - $2,500
• Comprehensive Coverage: $2,000 - $4,000
• Luxury or High-Mileage Vehicle Plans: $3,500+

For many, this cost is far less than one major repair bill.

When Should You Consider Keeping Your Car?

Keeping your car might be the best choice if:

✅ You have no car payment

✅ The car is still reliable

✅ You can reduce repair risks with an extended car warranty

✅ Your insurance and registration costs are affordable

When Should You Consider Selling Your Car?

Selling your car makes sense if:

❌ It has frequent costly repairs

❌ It gets poor gas mileage

❌ You can get a high trade-in value

❌ Your repair costs exceed its current market value

Final Verdict: Keep or Sell?

If your car is in good shape and paid off, it may be worth keeping—especially with an extended car warranty to cover repairs. However, if repair costs outweigh your car’s value, it might be time to sell or trade it in.

Before deciding, get a quote for an extended warranty from Noble Quote and see how much you can save on future repairs.

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