Overall, though the car is actually still pretty nice. However, I always tend to look at things financially.
Look at things financially.
The current value of your car is not the factor you should be considering, nor is it "current value (resale value) vs cost of repairs." When owners balk at spending, (as an example), $2,000 on repairs for a car that has a resale value of $1,900, because they "don't want to put more into the car than it's worth," they are often justifying spending more (per mile) and in TCO on a different (newer) car. That's fine, but then finances are only one part of their factors- and not the most important part.
Resale value is only one part in your Total Cost of Ownership- a known and expected part of the most costly factor: depreciation. Depreciation is the single biggest factor of TCO, and will raise the cost of any method you use to express TCO (total cost, annual cost, cost per mile).
(My TCO Factors are pasted at the bottom. These are my version, not based on inferior models most commonly seen online, and not nearly as thorough as a professional version. I am not a professional, and YMMV).
Repairs and maintenance are also a known and expected factor of TCO (regardless of how they are expressed), and (for the vast majority of owners) almost never exceed depreciation, and rarely exceed fuel costs, when expressed as a cost per mile. There are obviously rare cases where either (a) a car is driven so little that normal maint and repair does fall on par or exceed fuel costs, or (b) a car is driven an average number of miles but the owner has had either catastrophic repairs not covered under warranty, or spends significant amounts of money to upgrade and modify their car, raising maint & repair on par with fuel costs, depending on the number of miles driven.
Despite the last 2 oddities, depreciation is the costliest factor in TCO, and owners contemplating cost of repairs vs cost of a replacement vehicle would best do the math for a solid financial analysis. There are certainly situations where replacing a car does provide a lower TCO, given the right circumstances. The vast majority of times, repairs provide a lower TCO.
Replacing a car in needed of costly repairs might provide a lower TCO if:
(1) The "repair car" is replaced by a vehicle with low initial cost, where depreciation will be mitigated as a factor, and the car will provide mileage without significant repair or fuel costs (in comparison to the repair car). The specifics of this need to be worked out by each individual. (2) The costs to the "repair car" will not lead to any significant accumulation of miles (which lowers the TCO expressed per mile, etc). In other words, the owner repairs the car, but either does not drive it, or is unable to drive it due to further catastrophic repair costs. Notice I did not say that the cost of repairs fails to mitigate the cost of depreciation by raising the value of the car- the cost of depreciation is so high, that it generally doesn't matter (for TCO purposes) if repairs raise the value of the car; What natters is how many more miles the cost of those repairs will get you (thus lowering TCO and TCO expressed as a per mile cost).
So, if you replace your Passat with a used Honda Civic, where the cost to buy is low and eventual resale value is average (reducing the factor of depreciation costs), and you see FE similar to your Passat (reducing the factor of fuel costs), and you see minimal maint and repair costs and experience no unusual costs such as accidents (reducing the factor of maint and repair costs), then you may see TCO on par or better than spending the money to fix the Passat. This depends on several other issues: (1) Each individual would have to run the numbers on their particular situation to establish their TCO and TCO expressed as a cost per mile, and do so comparing both cars, and (2) As JM said, the future's uncertain and the end is always near. Which means that your TCO analysis doesn't tell you that the Honda needs sig engine work after 2,000 miles, or the new trans in the Passat blows up. You simply can't account for these.
Let's say your initial costs for the Passat were around $25,000, and the market value of the Passat is $2,000. The factor of depreciation, as expressed as a per mile cost, over 160,000 miles, is just over .14 cents per mile. This is not your TCO, nor your TCO expressed as a per mile cost, but just one factor expressed as a per mile cost. Let's say you spend $3,000 for labor and parts for a new transmission (any type), regardless of what your TCO actually is (all TCO factors considered), you will be raising your TCO, expressed as a per mile cost, by .019 cents (less than 2 cents) per mile,
for only the current mileage. If you go another 160,000 miles on the new transmission (preferably a stick), you will be raising your TCO, expressed as a per mile cost, by .0094 (less than one cent) per mile.
As an aside, if the same (new) transmission gets you another 160,000 miles, and you then sell the car for $0, your depreciation, as expressed as a per mile cost, will be just over .07 cents per mile. Yes, you cut your cost per mile in half.
In order to get the best (lowest) TCO out of the Passat, you need to maximize miles while doing what you can to earn the best FE, and maintaining the vehicle in a such a way as to minimize repair costs. Depreciation can only be mitigated by lowering the items connected to initial cost to purchase and maintaining the car in such a way to maximize market value at time of resale. Cost of fuel goes up with mileage, but can be mitigated through driving style and FE choices and habits (tires, proper maint). Cost of maint and repairs also go up with mileage, but can be mitigated through DIY, guru maint, and proper upkeep. Other factors in TCO are relatively similar regardless of the Passat or its replacement (but not if the Passat is replaced by a new, more costly car). If these costs are mitigated, higher mileage will yield a lower TCO as expressed by cost per mile, regardless of TCO expressed as a total.
Now, that being said, we all know that there are numerous other considerations outside of TCO that owners consider. I will not attempt to address these, other than to say that some of them might also be included in a full financial analysis. For example, if you lose work time (income) during a period where the Passat is unavailable, we would have to include that cost into our calculations as a new factor in TCO, etc.
Let's face it, TCO analysis is not what people do in these situations. Rather, they see a "big" repair bill, forget TCO and cost per mile, and buy a new Passat, thus raising their TCO for both cars, and eliminating any chance they had of earning an outstanding TCO from the first Passat.
My TCO factors:
TCO factors include:
(1) Depreciation (initial cost minus current TMV, including financing).
(2) Fuel Cost (fuel only, additives are included in “Maint Items”).
(3) Maintenance Items (tools, oils, filters, consumable fluids, bulbs, belts, fuel additives, battery, shocks, struts, suspension items, tires, windshield, dent removal, glow plugs, fuses, sensors, clamps, sprays, various cleaners, waxes, paints, wiper refills, etcetera).
(4) Labor (Fees paid for labor connected to maintenance, installation of parts, diagnostics, shop fees).
(5) State Fees (Vehicle tags, registration, title, inspection, emission fees. Includes initial state sales tax).
(6) Insurance
Not included: Highway or bridge tolls, parking garage fees, and items purchased for fun.
Check my math, I type quickly.