Repair or Replace?
Rules of thumb can guide your decision to pitch it or patch it
En español | My Grandpa Clyde was one of the great handymen of all time. He could repair just about anything.
See also: Uses for plastic bottles.
Before Clyde bought something, the first thing he'd ask was whether he could get parts and supplies to repair it himself when it broke. If the answer was "no," he wouldn't buy it. If the answer was, "You don't need to worry about it, Mr. Yeager. This will never break," Gramps would thank the salesman politely and walk away, rather than accuse him of being a bald-faced liar.
Unfortunately, times have changed since Grandpa Clyde's day. We now live in a world where it costs more to repair most items than to replace them. Sometimes, it still pays to repair rather than replace..
Consider the following tips:
The 50 Percent Rule: Financial pundits often talk about the "50 percent rule" when deciding whether or not it's more cost effective to repair an item rather than replace it. The conventional wisdom was that if a repair was estimated to cost 50 percent or less than the amount you paid for the item, it was usually better to have it repaired. This is still a good guide to keep in mind, although many consumer products (e.g. electronics, furniture, appliances, even clothing) have continually dropped in price (in inflation adjusted dollars) in recent generations. So now, to be more accurate, the 50 percent rule should be based on replacement value, not original purchase price. For major items like automobiles, calculate the estimated current market value or resale value. Regardless, it's simply one rule of thumb among many other considerations.
Appreciating Appreciation: Before you decide to replace something instead of have it repaired, carefully consider whether the item you're thinking about trashing might appreciate in value over time. In the case of a well-made piece of furniture that is likely to become an antique, the choice to repair it is probably obvious. But it may not always be so apparent. I wanted so badly to pitch those clunky old stereo speakers my dad passed along to me when I was a teen,and buy some trendy new (cheap) ones at Kmart. But Dad wouldn't let me. Now those JBL speakers are classics and worth nearly as much as my 401(k) (sadly, in that sense).
Around the House: Well-made, older appliances may be worth the cost of repair (if you can still find parts and someone to do the work). You also need to factor in that most older appliances use considerably more energy than newer models (see www.energystar.gov). In the end it’s often more cost effective to replace them when they need repair. On the other hand, replacing older windows in your home (if they’re still in serviceable condition) with more energy efficient ones may not be a smart investment becaue it may take several years in most instances to recoup the significant upfront investment. What about the roof over your head? Investing in maintenance and even fairly major roof repairs to prolong the life of a roof -- provided that it's in generally sound condition -- is often more cost effective, particularly for larger roof surfaces.
Rags or Riches: When it comes to clothing, the priority should be on taking proper care of it rather than investing in repairing it. Because most non-designer clothing is relatively inexpensive, it’s usually cheaper to buy something new once garments become threadbare. Even if you put on a few pounds, tailoring garments usually only makes financial sense with higher-end apparel items, unless you’re a seamstress yourself.
Is It Plugged In? A friend of mine who owns an electronic repair business once told me that nearly half of all the items people bring into his shop are simply suffering from a faulty electrical cord, plug, or other connection problem. Other routine fixes he encounters include cleaning out an air filter or replacing a worn out belt. If that’s the case, then repairing it will save you major currency (get it?). But, if it’s something more major and requires special parts, even my friend admits that most new electronics are so inexpensive that it’s probably not worth the fix.
Jeff Yeager is the author of The Ultimate Cheapskate's Road Map to True Riches and The Cheapskate Next Door. His website is www.UltimateCheapskate.com and you can friend him on Facebook at JeffYeagerUltimateCheapskate or follow him on Twitter.