Posts Tagged ‘depreciation’

Should I Repair or Rebuy?

April 19, 2011

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?