On car mileage and knowing when to buy a new car

Your car has been good to you, but at some point, the repair bills start telling a different story. Here's how to know when it's time to move on, and how a car loan can make the next chapter easier.

Buying a car is no joke. It takes a serious amount of thought, decision-making, and saving before taking the plunge and signing the paperwork. And because cars are such a huge investment, many are likely to stick with their cars until the engines literally conk out and fail on them (or perhaps even long after that).

But no matter how good of an investment your car is or how emotionally invested you are in your car, there will come a time when you have to replace it.

How do you know when to replace your car?

Generally speaking, any car that has driven more than 120,000 kms is considered to be a high-mileage car, especially if your car is an older model. Newer models can get away with going up to as high as 150,000 kms and still run without a hitch.

But mileage isn’t the only factor you should look into when considering a new car.

Reliability

If your car is breaking down a lot even before it hits the 100,000-km mark, it’s time to start crunching some numbers.

If it only died on you once, this may be a fluke or factory fault, so you can probably ignore it. But if it happens more than once, then you should note down all the costs. Figure out how much you’ll spend on repairs to get it back to its normal and reliable condition.

Even if you can afford to have it fixed every time it breaks down, if the cost adds up to the value of a new car, then it makes more sense to invest in one instead. Chances are, repairing your old car may bring up more issues as the years go by. It may also be worth exploring second-hand car financing in the Philippines as a more budget-friendly alternative.

Maintenance fees

Even if a car isn’t breaking down, older cars still need to be examined regularly to make sure they run smoothly.

If your one-time maintenance cost is more than half the current value of your car, it’s probably time to say goodbye. For instance, if your mechanic quotes you PHP 100,000 to get your car repaired and your car’s current value is around PHP 300,000, then it’s probably worth it to keep your car. But if your car is only worth PHP 190,000, then you’re better off letting it go.

Remember, you’re not only thinking about the money you’re shelling out at the moment, but also how long your car is likely to keep running. If your car is guaranteed to keep running after the repairs and you’ll likely get an ROI, then you can probably keep it for another year. But if your car is unlikely to last another three months, then the PHP 100,000 doesn’t seem worth it.

Buying a new car

Buying a new car doesn’t have to eat away your life savings. You can replace your old car and drive a new one with the help of a car loan.

Why get a car loan?

A Metrobank Car Loan helps you get the car of your dreams with Metrobank’s Car Loan Online Application facility (MCOLA), you can find and compare different cars to find the one that best fits your lifestyle and even choose from three cars of your choice.

With a Metrobank Car Loan, you can purchase a brand-new car, so you won’t have to deal with worrisome repairs and high maintenance costs. Metrobank lets you loan a minimum of PHP 350,000 and up to 80% of the car’s net selling price while giving you competitive rates and flexible payment terms of up to 60 months.

Don't just look at monthly payments. Check the car loan annual percentage rate (APR). This figure covers the total cost of borrowing, including interest and fees, and is the most accurate way to compare loan offers side by side.

How to get a bank car loan?

Knowing how to apply for a car loan is simpler than most people think. Metrobank has made it easy. All you need to do is scan and upload your documents to the Metrobank loan application facility (MCOLA) and wait for the confirmation email. Reviewing car loan approval requirements before you start can help speed up the process significantly.

For employed individuals:

• Completely filled out and signed Metrobank Car Loan Application form
• One valid government-issued ID (preferably passport)
• Certificate of Employment (COE) with compensation, position or job title, and date employed or tenure
• Latest income tax return (ITR) or BIR Form 2316
• Three (3) months pay slips/ latest six (6) months bank statements
• Marriage contract, if applicable

For Overseas Filipino Workers:

• Completely filled out and signed Metrobank Car Loan Application form
• Passport
• Certificate of Employment (COE) with compensation, job title, tenure, employer’s email (original if land-based OFW) or latest POEA contract and Certificate of Sea Service with work history and tenure (if sea-based OFW)
• Proof of monthly remittance for the last six (6) months
• Three (3) months payslips/ payroll bank statements
• Marriage contract, if applicable

In Business:

• Completely filled out and signed Metrobank Car Loan Application form
• One valid government-issued ID (preferably passport)
• If Single Proprietorship, DTI Certificate of Registration or Business Permit
• If Corporation, SEC Registration with Articles of Incorporation and By-Laws (or Articles of Partnership)
• Two (2) years latest Income Tax Return (ITR)
• Two (2) years Audited Financial Statements Latest six (6) months bank statements
• Marriage contract, if applicable

Corporation or Partnership:

• Completely filled out and signed Metrobank Car Loan Application form
• If Partnership, Articles of Partnership with names of Partners
• If Corporation, updated General Information Sheet (GIS)
• Two (2) years latest Income Tax Return (ITR)
• Two (2) years Audited Financial Statements
• Latest six (6) months bank statements

When to say goodbye to your old car

Every car has a lifespan and knowing when yours has run its course is just as important as knowing how to care for it. Once repair costs start outweighing your car's value, holding on does more financial harm than good.