I have an old appliance (a drier) that needs a small repair and reached its average lifespan (10 years). It has no rest value.
It has always been maintained very well and it's from a very reputable brand. I performed an inspection and I expect the repairs to be very infrequent, or anyway quite cheap. It's a simple device.
A new one would cost me much more money but would also require less energy to run.
The two questions, basically the same, are: how do I decide if it's time to replace it, given the repair costs, or how do I decide when to replace it, even if working properly?
We can assume the following values to be known:
- repair costs (it could be zero in the case of the replacement of a working, but inefficient, device)
- price of the new device
- a known economical savings per week due to the known energy savings per cycle and cycles per week
- the expected lifespan of the new and old appliances (different from each other of course)
Intuitively, if my appliance works, the money that I save by keeping it pushes the break-even some years in the future, justifying keeping the old one. Small repairs may not pull it back much.
However, if I replace it immediately, after that time I will already be saving money, not happening if I keep the old one.