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Thursday, April 25, 2024    		 
Household Math™: Car Purchase vs. Car Repair
by Scott Bilker
Scott Bilker
Scott Bilker is the author of the best-selling books, Talk Your Way Out of Credit Card Debt, Credit Card and Debt Management, and How to be more Credit Card and Debt Smart. He's also the founder of DebtSmart.com. More about and DebtSmart can be found in the online media kit.
 
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Test your knowledge by trying to solve these DebtSmart, Household Math™ problems! After you complete the problem you’ll get the solution and explanation.
 
1. Janice pulled into her parking space at the local grocery store, got her cart, and did the usual shopping run. After she finished shopping, she packed the car with perishables, hopped in the driver's seat, started the car and put it in reverse. Nothing happened! She had to have the car towed to her local mechanic who then told her that the problem could be an adjustment or the transmission. It was the transmission.

The cost to repair it is $1,200.00. Janice estimates that if she repairs her current car, she can drive it at least another 25,000 miles before the engine gives out. Because of this, she's considering buying another used car, but she wants to be able to count on that car for 50,000 miles before requiring a major repair or it just dying.

After doing some research, she finds only one car that she feels will meet the 50,000-mile requirement. The total price for that car is $3,000. All other costs being equal, should she buy the used car or repair the transmission?
Purchase car
Fix transmission
I don't know!



 

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