Retiring Your Existing Car

Your existing car is paid off, but it is becoming more costly to maintain. How do you know when the time is right to buy a new car? Living by the "no car payment" mantra can be good for your pocketbook, but there comes a point when repairs to your trusty Toyota begin costing more than a car loan or lease payment. These days, you can buy or lease a reliable new car for as little as $200 a month—sometimes less.

Contact your mechanic and ask for a summary of repair costs for the trailing 12-month period on your existing car. If it totals more than you would have paid for a new car loan or lease payment, you may want to consider new wheels. You're finances will gain predictability, and you won't have the added stress of wondering where and when you'll break down next.