When Is It Wiser to Replace a Car Engine or Buy a New Car?

Choosing whether to replace an engine in your car or buy a new one is a decision that depends on several variables. Here's a detailed guide to help you make an informed choice.

Engine Replacement Options

When considering engine replacement, you have several options:

A new engine A rebuilt engine A used engine

Personally, I tend to go with a rebuilt engine, as they often provide a cost-effective solution while still offering decent performance and longevity.

Cost Comparison: Replacing vs. Buying a New Car

If your question is whether it's more advisable to replace an engine in a car or buy a new one, the answer depends on the condition of your current vehicle and your personal preferences.

For a newly rebuilt engine for a Toyota, the estimated cost might range from $3,500 to $5,000, with an additional $1,500 to $2,500 for professional installation. A new Toyota might set you back by around $30,000 or more.

The decision ultimately comes down to your vehicle's condition and your willingness to keep driving it. If the car is in good shape and you want to continue using it, a rebuilt engine might be the more economical choice. However, if the car needs extensive repairs or is too old, it might be more practical to buy a new one.

Real-Life Example: Engine Swap Fiasco

My son faced a similar situation with his Volvo S60. Due to an engine blowout, he opted for an engine swap, only to find that the cost of reprogramming the vehicle's chip was exorbitant. As a result, the overall expense of the swap was prohibitively high, and he ended up selling the car for less than the cost of the replacement engine. This experience highlighted the importance of selecting a reputable mechanic who can accurately assess the need for an engine swap.

Considerations for Various Vehicle Models

Replacing an engine is more feasible for certain vehicle models:

A 1970 Jeep Wagoneer can have its engine removed in a couple of hours in a backyard setting during February. A 2016 Volvo, on the other hand, might be more complex and expensive, making it more practical to purchase a newer model.

The complexity and ease of replacing an engine can vary significantly between vehicle models, so it's important to consider the specific make and model before making a decision.

Inflation and Car Value Over Time

To help you decide between replacing an engine and buying a new car, let's look at some numbers. Using inflation as a benchmark, here's a breakdown:

In Canada, the value of money is halved every 7 to 10 years due to inflation. For a car that costs $40,000 today, it will be worth $80,000 in 2031 and $160,000 by 2038.

If you keep your car for 20 years and buy a used one that's half the cost of a new one, it might be more economical to repair and maintain the current car instead of buying a new one. Dealers typically provide used cars for around 50% of a new car's price for 3 to 4 years, and around 10% to 12% of the new car's price for 5 to 8 years. After that, they may only offer them at minimal prices.

Consider the additional costs of maintaining and repairing your car. If the car does not burn oil and remains in good condition overall, it might be a more cost-effective option to replace parts like brakes, shocks, and steering rather than buying a new car.

Conclusion

Whether to replace an engine or buy a new car is a complex decision. It's crucial to weigh the cost of repairs, the condition of your current vehicle, and your personal preferences. Inflation and the rising cost of new cars make the decision even more significant. By carefully analyzing these factors, you can make an informed choice that best suits your needs and budget.