Should I Repair or Rebuy?

I bought a top of the line front loading washer two years ago. It was on sale for $500.00. What a deal – the regular price was $899.00. Things were humming along nicely, laundry was getting done – until one morning I heard loud noises from the basement and ran down the steps to find the washer hopping across the floor. The load was out of balance, which is very bad for any type of washer, but most especially bad for a front loader.

The vibration was really severe and it resulted in some pretty serious damage to the drum – it came disconnected from the body of the washer, so it sort of hung there.

I called the repair guys. Since this is a foreign made washer (sorry all you “buy American” people – it was a good deal and the people I bought it from are Americans – also, the company that services it is American, so I guess I can rationalize it that way. . .). Worst case scenario was replace the drum for $387.00.

Got me thinking – what is my top line cut-off? How much before I say “I may as well just buy a new washer?”

So, I needed to know some things. Like, what is the yearly rate of depreciation for a washer?  How many years is a washer likely to last? Should I use the price I actually paid or the original price of $899.00 in figuring out the depreciation?

I, of course, went to Google and found this Depreciation Guide:

depreciation_cp-1-2

Apparently my washer has a useful lifetime of 8 years and depreciates by 12.5% per year. So, after two years what is it worth?

I’m just a little lazy today and would like you to figure this out for me. Should I buy new or repair?

By the way, the actual repair cost was a mere $167.00. Does this change your answer?

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One Response to “Should I Repair or Rebuy?”

  1. Steve Cohen Says:

    Dr. Daunis:
    You really can’t use the $899 retail price for your machine since you didn’t actually pay that amount. So, for all practical purposes the machine has a real market value of $500 since I’m assuming that so-called “deal” is available to anyone. If you use the $500 purchase price then the depreciated value after two years at 12.5% should be about $383. In this case paying $387 to repair it wouldn’t have made sense if you could buy a new one for another $500 (first check your warranty before doing so). Paying the actual $167 though might have. At least you’d have about 6 more years before it depreciated to the repair amount, assuming no more repair costs during that time. If you do use the original $899 retail value to determine whether you should pay to repair it, you probably should even at the $387 amount although again why would you do that if you buy another one on sales for $500. Hope this answers your question.

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