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Transmission Replacement Cost: Is It Worth It?

Faulty transmissions are among the costliest of mechanical failures. Here’s when it’s time to walk away.

Grinding Your Gears

Vehicle breakdown
Vehicle breakdown

The older our cars get, the more likely they are to experience major equipment malfunctions. This is even more true if you’re not keeping up on routine maintenance. Among the clangs, whirs, and rattles that can signal an issue, the clunk of a bad transmission can be a death knell for your car. Depending on the value of a vehicle, it may not even make financial sense to get a transmission fixed or replaced.

Some of those lucky drivers will still be under warranty when they experience transmission trouble but given most transmission don’t tend to encounter issues until they’re beyond 100,000 miles, our discussion will mostly cover older cars. The older the car, the more depreciation has sapped its value. And the less a vehicle is worth, the more likely a major repair job can total it out. We’ll get to that calculus and how it effects our decision to repair or scrap the vehicle later on. First, we have to consider what issues a transmission might encounter and their remedies.

Common Fail Points

Automatic transmission
Automatic transmission

A vehicle’s transmission transfers power from the engine to the wheels while adjusting the ratio of rotation to the driveshaft through a series of gears. There are three primary types of transmission: manual, automatic, and continuously-variable. (You can read more on transmissions here.)

There are a number of common ways in which a transmission can start running into trouble. Low fluid can lead to major problems. Transmission fluid not only lubricates but also acts as hydraulic fluid and should be replaced approximately every 30,000 to 60,000 miles. It’s not just poor maintenance, a leak can also be the cause of low fluid. A clogged fluid filter can also result in problems. Poor lubrication leads to excess wear on parts which in turn can lead to mechanical failure.

Adding transmission fluid
Adding transmission fluid

Signs of transmission problems include clunking, jerking into or slipping out of gear, hesitating to change between gears, whirring, grinding, or buzzing sounds, and even a burning smell. Complete failure can mean a loss of connection between the engine and driveshaft, resulting in a loss of power going to the wheels.

Considering the Options

Person working on a transmission
Person working on a transmission

To figure out whether it’s worth it to replace a faulty transmission, we’ll have to consider our options and do some calculations.

We have four basic options. First is getting a salvaged or used transmission, which would be the cheapest option at somewhere between $500 and $1,500 depending on the make and model in question. Next is having the transmission rebuilt. This is the middle option in terms of expense, at between $1,000 and perhaps $3,000 or more. Third, you can have a new one installed. This is often the most expensive option and can typically range from $2,000 to $5,000 (though some transmissions can cost considerably more than that). And then there’s the labor at between $500 on the low end to $1,500 on the higher end. The fourth option is to sell or junk the vehicle. Expect buyers to take the need for a new transmission into account when they make any offers.

While buying a used transmission may seem the wisest course if you want to save money, that’s not always the case. It’s important to recognize that a used transmission is just that, used, and may encounter similar problems to the one you’re replacing before too long. Rebuilding a transmission can be a reasonable option but is still rather expensive and requires that you find a knowledgeable specialist. Buying a new transmission is by far the most expensive option but ensures that new transmission problems should be far in the future.

Doing the Math

Person doing calculations
Person doing calculations

So how do you decide whether it’s worth it to replace a transmission at all? It helps to look at the problem like an insurance company. A vehicle is considered a total loss or “totaled” when the cost of repairs exceeds that of the actual cash value (ACV) of the vehicle. However, in many states a vehicle is considered totaled if repair costs exceed just 70 percent of its ACV (this can range from 70 or up to 100 percent depending on the state). In other states, a “total loss formula” is used that compares the combined cost of repair and the salvage value of the vehicle to the ACV.

To illustrate, let’s apply this to a hypothetical vehicle, say a 2010 Subaru Outback with a faulty CVT. In today’s market, the trade-in value on our Outback is around $4,500. Our cheapest option is to buy a used CVT which comes at around $1,700-$2,000. Add labor costs of say $1,000 and were looking at close to $3,000 or roughly 75 percent of the Outback’s value. If we factor, as in the total loss formula, a salvage price of $800, and we have an Outback that might have seen its last camping trip.

Mechanic checking over a vehicle
Mechanic checking over a vehicle

To summarize, getting a working and reliable transmission in place of a failing or failed one is going to cost between $2,500 and $7,500. If that number is 70 percent or more of your vehicle’s actual cash value, it’s probably mechanically totaled. As in all cases, make sure to get a full diagnostic done to identify if that clunk you’re hearing is indeed the transmission going out. It’s also a good idea to get multiple quotes before going ahead with any major repairs. And, if it needs repeating, remember to get your regular maintenance done to keep the transmission gremlins at bay.

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Chris Kaiser

With two decades of writing experience and five years of creating advertising materials for car dealerships across the U.S., Chris Kaiser explores and documents the car world’s latest innovations, unique subcultures, and era-defining classics. Armed with a Master's Degree in English from the University of South Dakota, Chris left an academic career to return to writing full-time. He is passionate about covering all aspects of the continuing evolution of personal transportation, but he specializes in automotive history, industry news, and car buying advice.

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