Welcome to Radical Personal Finance, a show dedicated to providing you with the knowledge, skills, insight, and encouragement you need to live a rich and meaningful life now, while building a plan for financial freedom in 10 years or less.

Today in the show we're going to talk about the scenario of

your having a broken car. Should you fix it, meaning it's going to cost a lot of money,

should you fix it or should you sell it and replace it?

And this is a scenario that hopefully I hope you don't face, but it's a really difficult one to face.

And it comes in from a listener who was asking me for advice.

And the question was this, Joshua, I have a 2007 Ford Explorer

with a blown transmission.

It'll cost about $2,500 to $3,000 to replace the transmission. It'll cost about $2,500 to $3,000 to replace the transmission.

It's worth about $5,000 or a little bit less if everything works.

So the question is, should I sell it in its broken state or should I try to fix it?

So I asked how much it was worth if you sold in its broken state and the estimate was about a thousand dollars.

And so this particular listener was leaning very strongly in the direction of getting rid of it.

I was frustrated with the fact that their transmission was broken

and just seemed like the best solution to them to just simply get rid of it.

So in that situation, how do you analyze this? What do you sit down and think about?

Well, first you deal with reality and so you recognize a few things.

You have a car and the transmission has failed.

So you can't change that fact.

You also can't change the money that is going to cost.

If the car is working, it's worth about $5,000 to you.

With the car not working, it's worth, according to this estimate,

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