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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.

  • How much more energy efficient will the new dryer be? (Mine is gas, so saving electricity is pretty low on my priority list...) You need to determine how much electricity costs, how much you'll save with a new dryer per run, and how often you run it per week. (Now that our kids have moved out, it gets used a lot less than before...) – RonJohn Nov 23 '17 at 9:05
  • How much is known, and it translates into the known weekly savings in the bill,as I wrote in the question. The specific value is not relevant for the question, that is specifically generic. If you really want to know, the savings of 2 kWh/cycle would put the break-even 5 years in the future, half of the lifespan of a new device which, with a heat pump, would not last as long as the simpler, condenser model I have. – FarO Nov 23 '17 at 9:13
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    If it's truly a "small repair", then it's a no-brainer, especially if DIY. – RonJohn Nov 23 '17 at 9:25
  • @RonJohn The question is generic and also applies to the case where an appliance is perfectly working, but terribly expensive to run, therefore justifying the replacement. The repair costs may in this case be zero. – FarO Nov 23 '17 at 9:37
  • are you asking for a mathematical formula? – RonJohn Nov 23 '17 at 10:44
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This is slightly opinion based.

On simple math;

  • R = Repair/Routine Maintenance costs year on year
  • E = Notional loss due Economical Savings on a year
  • I = Benefit [Interest or returns] on cost price of new device

If R+E-I is a large positive number, the cost is high and the sooner you replace the better. If the it is large negative number; wait for appliance to break down. If it is small positive or negative number it doesn't matter much.

Other Factors:

  1. Risk: Old appliance can break down unpredictably. The time to repair or replace maybe large. This may create hardship. For example a heating system going down in winter and it takes few weeks to repair / replace. Or some items may suddenly leak gases that can be toxic, or blow up etc. In such cases it makes sense to replace the items past life span. To an extent look at examples of replacing car tiers, they may work well; but if worn out they can bust immediately or in few years. But if they bust when you are on freeway; the consequence can be dangerous.
  2. Lifestyle: Newer devices may offer better convenience and may make more emotional sense to buy new.
  • So in my case it would be R = 0 since it's running well and the current repair is more like a maintenance I do myself for free; E = 2.5 runs a week, 0.4 Euro difference in energy costs = 52 Euro; I = 450 Euro for a new device and 3% interest = 13.5 Euro -> R+E-I = 38.5 Euro per year. Is this large or not? it's not clear the reference for "large". – FarO Nov 24 '17 at 8:58
  • Is the current value of the old device not taken into account? if someone applies this formula to a device that is for example 1 year old, the result may be biased. – FarO Nov 24 '17 at 9:00
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    @FarO Large is contextual. 38.5 in absolute terms is not big. The new device is 450; i.e. 12-13 times; so you would break even after that many years ... not a substantial savings ... save the new device is EUR 120 and savings of 40 EUR makes sense. Or if the yearly savings is in range of 300 or 500 EUR's ... it's slightly different. Again there is no pure math in such cases. – Dheer Nov 24 '17 at 9:03
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    @FarO Yes current resale value need to be considered and subtracted from cost price of new device. i.e. incremental cost for new device. – Dheer Nov 24 '17 at 9:04
  • I think you should include the last two comments in the answer, they are important to understand it. Then I could accept it as official answer. – FarO Nov 24 '17 at 9:56

protected by Dheer Oct 22 '18 at 17:23

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