Rick's Free Auto Repair Advice

Rebuild transmission or replace car?

Rebuild transmission or replace car — How to decide?

Transmission repair is costly; $2,500 to $4,000 depending on the year, make, and model.  It may make sense to invest that kind of money in your current vehicle if the rest of the vehicle is in good shape. But how do you decide? Here are some things to consider.

Do you have the cash on hand to pay for a transmission repair?

This may seem like a stupid question, because if you have $3,000 – $4,000 sitting in your bank, making this decision is probably a no-brainier. But even if you have the money, you first have to ask whether if makes sense to put that money into your current vehicle versus putting that same money toward the purchase of a new car. Or if the rest of the vehicle isn’t in great shape, are you simply postponing the inevitable?

transmission rebuild kit

Transmission rebuild kit

The reason this question is so important is because, even after you pay for the transmission repair, you’ll still have auto-related expenses like: tires, brake jobs, worn shocks and struts, wheel bearings, cooling system component repairs, and computer and electrical issues. How will you pay for those if you deplete your savings on this transmission repair?

If you have to borrow the money for transmission repair (or put it on a credit card)

Can you afford the payments AND still have enough money to pay for normal maintenance and any future repairs? Because failing to ask this question is what gets most people get into trouble.

You may feel you have no choice but to borrow or charge the repair because you can’t afford a new vehicle. But if you don’t check out the items I list below and another major component fails how will you pay for those repairs on top of your loan/credit card payments?

How to make a more thoughtful decision about investing in a transmission repair

Avoid making an emotional decision

No matter how much you like this vehicle, the decision whether to fix your transmission should be based on solid financial principles, not your emotions.

Step 1: Check out engine condition before spending money on a transmission repair

Knowing that your engine runs well and is in good condition can help you justify spending the money on a transmission rebuild. In other words, you shouldn’t invest $3,000 – $4,000 on a transmission repair in a vehicle with a high mileage worn out engine.

A shop can check out engine condition with a dynamic compression test, check for oil leaks and determine overall condition in less than an hour’s shop time.

Step 2: Check out the frame, suspension brake and fuel lines, shocks and struts

Rust is a killer. I’ve seen people invest in a transmission rebuild only to discover that they need major repairs on their suspension. Worn/rusted control arms, lateral links, worn struts and shocks can cost thousands to fix. Sometimes, truck frame rails are so badly rusted that the truck is simply not repairable at any cost.

Step 3: Is the body in good shape?

Body condition affects market value, sometimes even more than its mechanical condition. If you repair the transmission thinking that you’ll sell the vehicle afterwards, you’d better consider how the body condition will affect your ability to sell or trade this vehicle for a newer model.

Accident damage, deep dent and scrapes dramatically reduce the vehicle’s value. Whether you intend to immediately sell the vehicle after the transmission repair, or down the road, poor body condition will drag down the value so much that you might not ever recover the cost of the transmission rebuild.

How much will a comparable replacement vehicle cost if you ditch this vehicle and buy another one?

I’m writing this in 2021 when used car prices are at an all time high. In this market, count on spending around $10,000 on a used car to get something half-way decent.

Don’t have $10,000?

Fix the transmission in your vehicle and sell it for more than it would normally be worth, OR fix it and keep driving it.

What about when market conditions return to normal?

In a normal used car market it rarely makes sense to invest $3,000 to $4,000 in a transmission repair. In most cases, it usually makes more sense to cut your losses and buy a different car, especially if the transmission failure is likely to re-occur due to poor design (Nissan CVT transmissions). The only exceptions to that advice are:

The vehicle is in great shape with low miles and you owe far more than the cost of the transmission repair.

It’s a common transmission failure and the industry has come up with fixes to prevent repeat failures.

©, 2021 Rick Muscoplat



Posted on by Rick Muscoplat


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