Repair or replace a recurring question in tough times

When should you repair and when should you replace?

With the economic downturn keeping people in their homes longer and money ever tighter, it is a choice being considered by more homeowners these days.

For example, with winter coming, and concerns about energy costs mounting, many cash-strapped homeowners are trying to figure out how to reduce the $1,900 per year that the Department of Energy says the typical family spends on utilities.

A new furnace or energy-efficient windows, although both very obvious ways to lower heating costs, may not be in the budget.

In the meantime, caulking around windows and doors doesn’t cost that much and can significantly reduce the flow of cold air into the house. Opening the curtains, shades, or blinds on a sunny winter’s day can add warmth to a room.

The Home Builders Institute of the National Association of Home Builders suggests a few other inexpensive ways, including applying weather stripping around windows and doors, changing the filter in the furnace, using draft dodgers inside exterior doors, and installing programmable thermostats to control when the furnace goes on and off.

After surveying thousands of its readers on the matter, Consumer Reports maintains that if your appliance is eight or more years old, usually it makes sense to buy a new one.

If you have a favorite high-end, older appliance, you may want to repair it. Consider replacing a newer model if it has been repair-prone. But skip any repair that costs more than half the price of a new product, the magazine staff recommends.

The magazine found that its readers sometimes began the repair process but stopped in midstream in frustration. That, too, can be a costly process, because a repair shop will still charge you even if you change your mind and decide to buy a new whatever.

AARP has millions of older members on fixed incomes. It recommends considering the “50 percent rule,” which financial experts have long advocated as a gauge when determining the cost-effectiveness of replacement versus repair.

Those experts say that if a repair was estimated to cost 50 percent or less than the amount you paid for the item, it was usually better to have it repaired.

AARP, however, suggests that the 50 percent rule should be based on replacement value, not original purchase price, since many consumer items have dropped in price over the years.

Always check each and every product you own for a warranty. Conventional wisdom maintains that a product usually starts causing problems the day after the warranty expires, but just in case something is covered, you should know it in advance.

Regular maintenance extends the life of just about anything. When dust and dirt clog furnace filters, the air flow is constricted and the furnace must work harder. A furnace that does not work efficiently will cost you more in energy, and its parts are more likely to wear out quickly.