This is Optimal Finance Daily. Your aging car, repair or replace. Part 2 by Philip Taylor of ptmoney.com.

When you need to buy a newer car. If renting isn't a viable option and fixing your car doesn't seem worth the expense, then you'll want to buy a newer car.

Here's where you need to be careful. You need to keep the cost of a new car reasonable,

or you'll lose any benefit you get from dumping the old car. Car prices range wildly,

but you'll probably spend at least several thousand for a decent used vehicle.

Once you decide to go with a newer car to replace your

old beat-up one, think carefully about what you can spend. Understand the car loan debt trap.

When you roll the balance due on your old car loan into a new one, you're in a risky cycle.

Sometimes it's inevitable, like if your car is totaled

through no fault of your own and doesn't give you enough money back for a new car. A car's an asset,

but unlike a home, which tends to increase in value, a car loses value the minute you drive it off

the lot. This is the reason some people find themselves upside down on a car loan. They may need to

sell a car before they've owned it long enough to utilize its value. Then you owe more than the car's

worth. Some of us get mired in car debt because, well, cars are expensive and you just don't

always have the money to buy a car outright. Plus, automakers are adept at

marketing the image of a stylish and expensive car. Lenders also offer really long loan periods on vehicles,

sometimes up to seven or eight years. Being in debt for that long makes it rather unlikely that

you'll even drive the car as long

as the loan period.

While some people keep their cars for a decade or more, others may get bored with a car

after three or four years.

The quicker you rush to trade in a vehicle for a newer model, the more money you lose.

...