Help! Repairs cost more than the car is worth!!

cheapman1cheapman1 Member Posts: 6
edited March 2014 in Mazda
My wife and I have a 1997 Mazda 626 with about 80,000 miles on it. It started having transmission problems, so we took it to a national chain for inspection.

The $50 inspection revealed nothing, so they had to seek our approval to open it up. They estimated the cost of repair to be around $2,000 if there was significant damage, around $1,000 if the damage was minor, and a flat $550 fee just for opening it up. We decided to go ahead with the inspection, hoping that it would come back with only minor damage.

Well, it turns out the car had major damage and now their estimate is around $3000!! This is about the same as the car is worth at trade in.

We're seriously considering eating the $550 and taking the car to a dealer as a trade-in. But we're not sure if this is the right thing to do, as we'd end up spending more cash out-of-pocket for a new vehicle, and we're trying to save for a house.

We're looking for people's opinions here. Our questions are:

1. Would a dealer even be willing to take this car, assuming it leaked transmission fluid and has severe transmission damage?
2. If so, would we get anywhere near the blue-book value for it?
3. Would we be smarter just to fix the transmission and hope the car can last another 5 years or so without another major repair?

Thank you very much for your opinions and wisdom. Your insight is appreciated, as we're torn and don't know what we should do!


  • jasmith52jasmith52 Member Posts: 462
    If your car is only worth $3k then don't spend another $3k on repairs. Unless of course the car has some sentimental value. The car has negitive value to a dealer as a broken trade-in. Consider paying a little more and buying a better (newer) car.

    Stay away from the national transmission shops. Their prices are double what an independent shop charges. (Guess who ends up paying for all of that national shop advertising).

    Consider a junk yard (ie. used transmission) from a wrecked or engine-challenged car. Some of the independent transmission shops can help you here

    Consider playing the car donation game. You donate the worthless car to any charity and then take the retail Blue-book tax deduction.
  • zueslewiszueslewis Member Posts: 2,353
    have a regular mechanic you trust (ask your friends/coworkers), talk to them about the deal, get a decent used tranny from a salvage yard, and have the private shop guy install it. You're out about $1,000 dollars more, parts and labor, give or take a few.

    Much less than $3,000 and the car is worthless when it's broke.
  • dbgindydbgindy Member Posts: 351
    On a charitable contribution of a vehicle you can only take what the car is worth at the time of donation. If the car is worth $3000 at trade in in good working order it's probably only worth a couple of hundred (if that) in it's present condition.
  • zueslewiszueslewis Member Posts: 2,353
    to keep the charitable organization out of trouble.
  • cheapman1cheapman1 Member Posts: 6
    Does that mean that the dealer would find the transmission problem, and not accept the car at the "below average" blue-book condition value?

    We were assuming they would, since they have their own mechanics, and could sell the car for around $6500 once it was fixed. We've chosen not to consider reselling to anyone but a dealer, since we don't want to be responsible for sticking someone with a lemon.

    If the national transmission chain is telling us it's a $3000 fix, I'm thinking the dealer's own mechanics might be able to fix it for something like $1000, which means that at a trade in value of $3000 they'd be looking at a net gain of about $2000 on the car.

    However, I'm certainly no expert in the used-car industry, so I have no idea if my assumptions are correct.

    We're not inclined to donate the car to charity, since we think with a new or repaired transmission the car should have a few good years left. According to Consumer Reports, the 626's have been pretty reliable overall, and this is the first major problem we've had with it. For these reasons, we're really only debating between fixing it, or trading it in and replacing it with a newer (used) vehicle.

    Thanks again.
  • zueslewiszueslewis Member Posts: 2,353
    take a presently-broken car, no matter what - you're asking them to assume that's the only thing wrong with it - what if they estimate $2000 and it turns out they need some weird part that costs and extra $1000?

    It ain't happening, sorry. Dealers take enough chances on a daily basis to know better than to sign on for a guaranteed loser deal.

    Also, even if you car was running great, it would be wholesaled because of the year and miles. In 99% of cases, you can't write a warranty on a 80K-plus vehicle and most lenders won't finance anything over 5-6 years old.
  • rroyce10rroyce10 Member Posts: 9,332
    ... >> have a regular mechanic you trust (ask your friends/coworkers), talk to them about the deal, get a decent used tranny from a salvage yard, and have the private shop guy install it. You're out about $1,000 dollars more, parts and labor, give or take a few. <<..

                     Bingo .!

                Tranny shops are NOTORIOUS for the hit and run jobs .. $3 grand ..? sure, if it's 99 Jag XJ8, not a 626 ...l.o.l..

  • zueslewiszueslewis Member Posts: 2,353
    the transmission in an all-wheel drive Dodge Caravan for $1700, parts and labor - you can rebuild it for $1200.

    $3K is hogwash.
  • jasmith52jasmith52 Member Posts: 462
    Dbgindy et al:

    I know that you are SUPPOSED to only deduct the actual value of what a car is worth. However, cars worth less than $5000 do not need to be appraised so nobody will challenge you on it's value. So if you have a broken car (that is worthless) and a retail value of say $3000. Then you could donate it and take say $3000 off of your income and pay maybe $1000 less in state and federal taxes (assuming a net tax bracket of 33 %).

    I am not advocating this approach, I just know of several individuals who have used this very popular tax-based approach.

    This popular approach is no more immoral than selling a broken car to the unsuspecting.
  • prophet2prophet2 Member Posts: 372
    Friends of mine donated their Mazda MPV to the Kidney Foundation and deducted $4999. I don't know what this was based on (retail KBB?), but the advisory given to them by NKF indicated the need for an appraisal if $5K or more was claimed.
  • 5speeder5speeder Member Posts: 97
    "This popular approach is no more immoral than selling a broken car to the unsuspecting"

    Yes, they are both immoral but the former is always ILLEGAL, wheras the latter may not always be illegal.

    prophet2-The NKF was quoting the IRS code to your friends. Probably nothing wrong with declaring the value at $4999 to avoid the hassle of getting an appraisal as long as the market value was at least that much. But I wonder why they couldn't just do a used car price check from Edmunds, print out the page, and keep that for their documentation in case of an audit?
  • jlawrence01jlawrence01 Member Posts: 1,757
    >>I know that you are SUPPOSED to only deduct the actual value of what a car is worth. However, cars worth less than $5000 do not need to be appraised so nobody will challenge you on it's value.<<

    As a CPA licensed in Ohio and Illinois, you are DEAD wrong. In each of the past two years, I have received bulletins from the Cincinnati and Chicago offices that donation of used cars was "an area of potential abuse" that would require additional scrutiny from the IRS. Thanslated into plain English, if you contribute a car and declare it on your Schedule A and the related charitable contribution forms, you are MORE likely to be audited.

    What you are advocating is fraudulent, period. Sure, you MIGHT be able to get away from it, but then again, matbe not. Personally, I would prefer NOT to be audited.

    I advise my clients not to contribute their beaters to charity. I tell them that it is more advantageous to sell the car for below book and pocket the cash or give the cash to charity.
  • jasmith52jasmith52 Member Posts: 462
    I was not advocating the donation method. I was just explaining this widely used strategy.

    By the way, remember when Clinton's taxes were released. He had "donated" his USED underwear and deducted $2 a pair for his used tighty-whiteys.
  • jlawrence01jlawrence01 Member Posts: 1,757
    Only $2 ???

    I am sure that the plaintiff bar would be willing to spend a whole lot more (g).
  • rroyce10rroyce10 Member Posts: 9,332
    .... >> if you contribute a car and declare it on your Schedule A and the related charitable contribution forms, you are MORE likely to be audited. << ..

             Just like those big flashing lights on the side of the road, it pulls the IRS's attention, it's in their top 10 "wanna come and see ya" list .. tread carefully and carry a big CPA ...

                          Terry :-)
  • KCRamKCRam Mt. Arlington NJMember Posts: 3,516
    That $3000 sounds like parts and labor to search out and repair indivisual components what they think are bad. The other posts are right, just pull it out and swap in a working trans for MUCH less.

    Smart Shopper and FWI Message Boards
  • prophet2prophet2 Member Posts: 372
    Actual market value for most Mazdas tend to be less than guide books like KBB and NADA. Older MPVs have had brake and transmission issues as evidenced by vehicle recalls. I couldn't see anyone paying $4999 for one that age, regardless of KBB.

    Red flag territory? You betcha!
  • dbgindydbgindy Member Posts: 351
    jlawrence is exactly correct. Trust me it's not worth it.:-)
  • 18fan18fan Member Posts: 129
    Several years ago, I donated a broken, worthless used car to the local volunteer fire dept. They actually cut it up.... with saws, jaws of life, etc. Used it to train firefighters how to extracate people from cars in wrecks.
  • sue5727sue5727 Member Posts: 1
    I also have a 1997 Mazda 626 whose transmission is on the outs. I have no second gear. I have found the same situation as you are. The value is less than what it costs to repair it. I have found that it is an expensive car to drive because of the maintenance costs- brakes- 4 times ( I have 103,000 miles) and I need struts- 4 at a cost of over $700. Transmission at $2,200. Ouch! I have a sneaky suspicion that there are some major problems with that year and model's transmission. The guy at the dealership told me that the day I brought it in for a transmission check there were 2 other same make year and model Mazdas in for the same problem. I've checked Mazda's website for recalls but nothing. They don't post technical bulletins so I have no idea how bad a problem this is nationwide with the 1997 626's. I will probable end up giving it to charity.
  • dsattlerdsattler Member Posts: 135
    The NHSTA posts them, as does, as I recall.
  • jratcliffejratcliffe Member Posts: 233
    NHTSA, not NHSTA - don't want someone misgoogling.
  • dsattlerdsattler Member Posts: 135
    ...sorry. Damn Internet: spelling counts. When I become king...
  • jratcliffejratcliffe Member Posts: 233
    Not that I have anything against the New Hampshire School Transportation Association or anything. :)
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaMember Posts: 64,482
    Sounds like this "national chain" has pumped up the price on this repair. Unfortunately, I wish you had come to us first before laying out the inspection fee, because that is the trap right there. If you think about it, what can you possibly say to a shop when you've already "invested" $500 and they ask you "what do you want to do?"

    With a bad transmission, this car is practically worthless. I have no problem with the donation route as long as you have a good printout of your car's retail value. Even IF you deduct the price of a used transmission installed (about $1,500), and thereby being perfectly honest, you will still show a KBB value near $5,000.

    That is correct, you must have an appraisal if you declare over $5,000, so try to stay under that.

    Depending on your tax bracket, you might end up with $1,500 in your pocket for a donation approach, which is probably more than you'll get trying to sell the car as is.

    Speaking of used transmissions, have you explored that route as a cost-saving compromise?
  • hjahja Member Posts: 8
    My 1998 Mazda 626 loses power when the A/C is on and the driver changes into Park. When the car is in Drive or any other gear, there are no problems with the A/C. As soon as I switch to park with the A/C on, the RPM's go way down (the car almost dies) and barely stays on. Any suggestions?
  • thelthel Member Posts: 767
    I'd suggest posting this in the Maintainence and Repair board or on of the 626 boards. I think you missed the point of this thread...
  • koolkatkoolkat Member Posts: 2
    I bought 98 626 1.5 yr ago for 6.5K at 50K miles in pristine condn 1 owner.
    Thought it was good deal. Has been giving AT check
    engine light occasionally. TOok to Natl AT chain,
    came up with 1.8K min 2.6K (with Torq convt) estimate. Have it in today in a indep AT shop for 1.8K rebuild. Wish I had read this post and gone the put in used AT route. This car sucks and is
    not a good buy even w/ lower price. Especially since I have had Toyotas that ran 160 and 130K w/o any transmission problems.
    So donation route or repl with used is way to go. Also in Nor CA I dont see any ads for cars with prices as low as what is in TMV or KBB midpoint.
    (see Priv parties seem to ask
    for more than TMV and are getting it in this area.
    SO u can use slightly higher valuation of u document current listings in newspapers or online
  • tweety3tweety3 Member Posts: 9
    This might possibly be the wosrt scenerio that you have heard.....
    Our credit is not good... Around the 500 mark. We had a BK back in 2001 and since have struggled so much its been nearly impossible to raise it much. My car just died and it will cost around $4000 to fix it. Here's the real kicker... We still owe $5000 on this car! So fixing it is out of the question, even if we did have the money. (Which we don't!) So here is what I have to walk on a dealership with:
    *Bad Credit
    *No $$ for down paayment
    *Exhisting vehicle for possible trade-in not running
    * Still owe $5000 on this car
    *Can't afford a payment more than what we pay now, which is $250.

    **So basically its like, "We need you to pay off our exhisting loan, take this car that needs fixing, and give us a new car, all while keeping our payments around the same. ($250)

    Is there any hope at all for us? I have read other questions on this forum. Some others are in better shape than us, and have been told there's not much hope....

    Would a dealership possibly discuss a lease with us? Should we give up now?

    Any advise would be appreciated. Thanks for your time.... I know this is probably the worst anybodys ever heard....
  • grbeckgrbeck Member Posts: 2,358
    Can you get another opinion on how much it will cost to fix your current car? Did the $4,000 figure come from a trusted mechanic? Make sure you aren't getting gouged.
  • nornenorne Member Posts: 136

    you can always get a Kia Rio and keep the payment at $250/mo. Heck Kia approves anyone if they have a beating heart.
  • stickguystickguy Member Posts: 46,976
    I agree that we need more details about what the 4K consists of. Sometimes there are options (a used engine/tranny vs. a new one, etc.). It's also important to consider what the car is worth (or should be worth) post-repair. If it will be worth at least 4K, you are better off fixing it, especially if you can get it done cheaper.

    maybe you can get some help from the local Votech auto shop? try a different mechanic?

    2020 Acura RDX tech SH-AWD , 2022 Ford Maverick Lariat Ecoboost FWD.

  • Kirstie_HKirstie_H EdmundsAdministrator Posts: 11,126
    But if you can't come up with the $4K, it doesn't matter HOW much better off you'd be fixing it - it's not an option. If poor credit is an issue, the last thing tweety3 wants to do is to put an additional $4K on a credit card. That's a poor long-term solution. Getting a new loan and making on-time payments could improve the credit score rather than do further damage.


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  • stickguystickguy Member Posts: 46,976
    gonna finance something somehow. If the car is scrap w/o the repairs, you are still paying on the 5K note, plus whatever you are paying for the new car.

    the best hope is a cheaper fix for the old car. Otherwise, you are looking at payments stretching way out on a cheap car, if you have to hide most of the 5K negative, plus whatever you buy.

    Maybe a cheap used car, but then you have repair worries again.

    2020 Acura RDX tech SH-AWD , 2022 Ford Maverick Lariat Ecoboost FWD.

  • tweety3tweety3 Member Posts: 9
    Thank-you for all your responses.... I forgot to mention that we live about 20 minutes out of town in the foothills. Our home is basically on a mountain, with a mile long bumpy dirt road all the way back. This car (95 oldsmobile cutlass) was not made for driving up and down this road everyday... Thus making another reason why what we really need is a car with better susp. I hope I don't sound really dumb, but what is a kia? Might it be good for my situation? (the road) Also, where would I begin? Just show up at a dealership? I must say that this is my fear... Explaining our situation to someone at the dealership and being laughed at or told they could do it but our payments would be triple..

    p.s. as for the repairs on our car, it is a very trusted mech. and friend who gave us the bad news. He is shopping around for some used parts but ultimately, even he agrees that its probably not worth it... And the car would fetch $4000 at absolute best.... More than likely around $2500-$3500. Although a dealership probably wouldn't even offer a $500 credit since its currently not running.... (well it is, but not enough to be driving it anywhere far as it would burn up..)
  • Kirstie_HKirstie_H EdmundsAdministrator Posts: 11,126
    A Kia is a brand of automobile. Many people on these forums who own them really like them.

    And if you decide to explore the possibility of getting a different vehicle, no salesperson worth his salt is going to LAUGH at you. A reputable salesperson would prefer to actually sell you a vehicle, and laughing at you won't help. Most salespeople will work hard to find a good way to put you into another vehicle, if it can be done. If you decide to go look at Kias, we can point you to areas of this website where other members are recommending good dealerships, hopefully some in your area.


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  • tweety3tweety3 Member Posts: 9
    Hi Kirstie,
    I knew it was an auto, but what kind? Is it a car or is it that small jeep looking thing that I am thinking of.... I'll do a search...

    I would LOVE to get some info on a good dealership in the Fresno/Clovis area... If you could point me where to get this info I would greatly appreciate it....
  • lemkolemko Philadelphia, PAMember Posts: 15,261
    Don't buy a Kia! Those cars values drop precipitously as soon as you drive them off the lot and their reliability is spotty. You will find yourself buried in the car loan. They will roll the negative equity of your Olds into the new loan which is pretty much the entire $5K since the car isn't running. If something happens the the Kia, (likely) you will be in much worse shape.

    For now, I'd check out places like auto auctions and see what kind of car you can purchase outright. Forget being in the "book of the month club." Do this until you can either raise the funds to repair your Olds or your overall finacial situation improves.

    What is it that happened to your car that it needs $4K in repairs? I would go to another mechanic for a second opinion. Avoid dealers for they are the most costly. Avoid places like Pep Boys for they are often third-string mechanics who flunked out of Vo-Tech. A reputable independent mechanic is the best choice.
  • morehpmorehp Member Posts: 30
    I would second lemko's opinion on the Kia. It sounds like you might be better off in a second hand truck or small SUV of some sort, given your driving conditions.

    Before going down that road, I would have another look at the Cutlass. It's hard to think of what single problem could cost $4K to fix on a 10 year old midsize domestic. Correct me if I'm wrong but I would think even a new engine or trans should be less than that.
  • Kirstie_HKirstie_H EdmundsAdministrator Posts: 11,126
    OK, maybe I'm incorrect about the Kia - BUT, if you're looking at keeping it for many years to come, resale value doesn't matter much, if any.

    There are tons of Kia automobiles in different styles, so you'll want to click on the "new cars" tab at the top of the page to find a list of all Kia vehicles if that's what interests you.

    If you don't decide to repair your Cutlass, then talk to EVERYBODY - call dealerships, talk to your bank or credit union - be honest about your situation, and see what options are available. The best advice we can give you is that, whatever you purchase, purchase with the intent to keep it til it's paid off. That's the only way you'll avoid a situation like this again, and it will improve your credit score.

    Once you work with a bank/credit union/dealership to figure out what you can afford, we can help you better to decide what vehicle is right for you.

    If you look at the search tools at the left, you see a "browse by message board" feature. If you select the Prices Paid board, you'll get a list of topics in which people are reporting their good & bad experiences with different dealerships, listed by make/model.

    I did a quick search on the keyword "Fresno," and found only a few references - mostly for Mazda dealerships.

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  • isellhondasisellhondas Issaquah WashingtonMember Posts: 20,338
    It's pretty amazing what it can cost to repair a car with todays labor rates and the price of parts. I show my age sometimes when I think a job should cost around 300.00 and it's 1200.00.

    The poster is in a tough spot with no clear solution I'm afraid.
  • tweety3tweety3 Member Posts: 9
    As for the repairs on our car.... My hubby could explain better, but basically its the entire engine... plus the brakes. By the time you add labor to all that, we land between $3500-$4000. Oh and we did get a second opinion which was pretty much the same....

    Even though I totally see what some of you are saying about the Kia, we are stuck between a rock and a hard place at the moment, so unfortunatly, the here and now is what matters most. Later re-sale is definately a concern, but if a car with not the greatest re-sale ends up being our only option, we will take it....

    So if I call a dealership, do I just ask for the financing department?

    Again, thanks for all the responses. Its helping alot! I am so thankful for the internet!
  • danf1danf1 Member Posts: 897
    First the good news, this isn't the worst I've ever heard. Now the rest...
    If your credit score is as low as you think, then your interest rate will be high. So you have to figure that you'll pay about $25 per thousand that you borrow. In order to get a $250 payment, you need to borrow $10,000. Your car may be worth a few hundred dollars, so you'll be burying 4800, so now you need a car that you can buy for 5200 after tax and plates, not impossible but you also need to finance twice its value. That is where it will get sticky for you.
    Look for a 2004 domestic car with a large rebate and you may be able to get approved, but you won't have a $250 payment. If you do go this route, do yourself a favor and buy the gap insurance.
  • steine13steine13 Member Posts: 2,789
    ... but our new friend doesn't sound like he's got much to lose. So first up, why not stop paying on the '95? Let them repo it and wreck your credit some more; at 500 you'll hardly notice the difference.
    $5k on a '95??? Can you spell "predatory lending"?

    Next, tweety needs to scrounge together some cash. Home equity line of credit, maybe? Lots of cars to be had in the $5k range; Chevy Prizm being the all-star here.
    No 4x4 "jeep-looking" thing for you, too expensive.
    Or do it right and declare BK. It doesn't sound like you have a way to crawl out of this hole.

    Question for the professionals: A friend from work, smart guy but -zero- life skills, owes an undisclosed amount of $$ on a '99 Ranger. The truck has a stuck rear drum brake and hasn't moved in 11 months, he's behind on the payments and is considering "surrendering" the car. They will screw up his credit, naturally, but once they take the car, does he still owe the difference between payoff and whatever the auction will bring? Or can he "walk away" from it with wrecked credit?

    I get to feeling queasy just thinking about it. The guy makes decent money, has low expenses, but doesn't have money for food by the 25th...

  • tweety3tweety3 Member Posts: 9
    Just to be clear... what happened on this car loan is.... After a year in our new home that we built on some property we purchased.... our well went dry. Left with no running water for months, we finally had to drill a new well which ended up costing $13,000. Since we were very low on options, we ended up rolling that into our car loan. (Its with a credit union.) The credit Union allowed us to refinance that loan and roll in the well costs.... So this car would be paid off if it weren't for that.... Sounds crazy, I know but any other place that we tried to finance 13,000 , the payments were too high. The CU stretched out our loan a bit and our car payments only went up $100.

    Are you serious about letting them repo our car? Wouldn't that have a huge impact on our score? I think that would have to be an absolute last resort. But who knows.... Thanks for the input.
  • danf1danf1 Member Posts: 897
    You do walk away with wrecked credit, and you still owe the difference for the repo. Voluntary or not, it won't help the situation any.
  • steine13steine13 Member Posts: 2,789
    I guess that shouldn't surprise me... so better to keep paying.
    In tweety's case, the car is gone, but the well is still there... so that's not as bad as it sounds. And the CU helped out, so they should not be stiffed. But $4k of repairs on a 10-year-old Olds? No way. The car has to go, and the insurance, registration costs etc. with it.

    Tweety, since you guys own your house, why not get a home equity line of credit? Even the "up-to-100%" loans have semi-decent rates. First & foremost, you guys need $$ to stop the bleeding. They say you can't borrow your way out of debt, but don't forget Steiner's Law of Credit: It's expensive to be poor. You have to get some maneuvering room first to avoid justifying bad decisions [new Kia, for instance :-)] by previous bad decisions.

    Good luck!
  • tweety3tweety3 Member Posts: 9
    Well I am currently looking into a Home Equity loan.... Even though our credit is shot, like I said, we have about $70,000.00 of equity in our home. Do you think we would be able to be approved? (even though I know the rates wouldn't be ideal...)

    Thanks for all the help....
  • steine13steine13 Member Posts: 2,789
    "Well I am currently looking into a Home Equity loan.... Even though our credit is shot, like I said, we have about $70,000.00 of equity in our home."

    You have HOW MUCH equity??? Didja make any mortgage payments lately??? How bad can your credit be with that kind of equity in your house??? Why are you messing around with a car loan on a 10-year-old sled?

    I think you need to have a sit-down at your credit union; they appear to have some faith in you, and it looks like you got something to work with here. This should be no problem at all. Pay off the Olds, ditch it, get an '01 Prizm with 40k miles for $5-6, and start paying off your debt.

    Good luck,
  • tweety3tweety3 Member Posts: 9
    How bad? Real bad.... 509.

    We refinanced last year and even though we had alot of equity, we had a real hard time finding a lender willing to help us.... We went through about 6 or 7. I thought Geez, even if we totally flaked they would make money off us.... Alas, we were turned down over and over....

    I'll look into that Prizm....

    Hope you all have a nice holiday!
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