I'm 27, make $55K and drive a 15-year-old car with 65K miles on it — should I just run it into the ground or risk busting my budget with a trade up?

For Jake, who has $6,000 in savings and $1,200 in monthly expenses, it's a tough decision. A new, even inexpensive car means monthly payments that add to his budget and could delay his savings goals.

While he most often drives during his 20-minute commute to work, he occasionally takes the vehicle on long road trips to visit his out-of-town girlfriend. He's concerned its reliability just won't last in the long run, and is afraid what might happen if the car gives out far from home.

There's real — but limited — value

Jake’s car is dated, but not without value. According to Kelley Blue Book, a 2010 Honda Accord's estimated trade-in value is about $2,500. Of course, this amount may vary based on vehicle condition.

Trading in might net Jake some cash, which he could put toward a down payment, but if he bought a new car he’d have to add hundreds of dollars to his monthly budget to account for the new loan. Over the years, that adds up fast, especially for someone focusing on building financial stability.

Leasing can be tempting because monthly payments are often lower than financing a new car, and he'd get to drive a newer vehicle with, hopefully, little repair risk. But leases come with strings, like strict mileage limits, wear-and-tear charges and higher insurance costs. You also don’t own a vehicle after a lease expires, unless you buy it out.

Given Jake’s modest income, and the fact he needs a functional car either way, he may want to hold onto his Accord to keep his budget low and prioritize saving for now.

Why running it into the ground might be the smart move

Oftentimes, it’s less expensive to fix a car than to buy a new one. According to Ramsey Solutions, if repair costs exceed the car’s value, it may be time to replace it. If not, it's often prudent to keep it. Since Jake’s car is fully paid off and hasn't required any major repairs yet, he's in a strong position.

Given the age of Jake’s car, depreciation is now minimal — he’s absorbed it already — yet his Accord still offers dependable, no-debt driving. Trading it in now could cost more in future payments than he’ll ever get back in value. Unless it’s starting to rack up costly repairs, the sensible path may simply be staying the course: saving more today and preparing for a strategically timed upgrade tomorrow.

For now, Jake should consider running his car into the ground, so long as he maintains it well, saves his money and watches out for increasing repair costs. And when the time is right, he can have more choices on his next vehicle purchase. Perhaps he could aim for a low-mileage, reliable used vehicle he can pay cash for or finance minimally, or secure a large down payment for a newer model and keep loan costs down.