Knowing whether to repair or replace a water heater depends on a few key factors. If your water heater is less than 10 years old and the issue is minor, such as a faulty thermostat or heating element, a repair is often the best option. However, if the unit is over 10-15 years old, leaks are present, or it no longer provides enough hot water, it may be time for a replacement. Assess the cost of repairs versus the cost of a new unit, and consider energy efficiency as newer models can save you money in the long run.