At What Point Do You Replace Your Bike?

I was talking to my buddy today about his bike. He had told me that he was experiencing some mechanical problems and considered parting out his bike. As I dug deeper, he was able to describe the problem. Basically his freewheel isn’t grabbing anymore. During the conversation he talked about buying one of my old road bikes from me. I reassured him that it wouldn’t cost more than $30 to fix the problem on his bike and recommend he go that route. But somehow I think he has it in his mind to buy a new/different bike instead.

Personally I would only replace bike if:

1. It was stolen.
2. If the frame cracked.

Otherwise, I’d fix things as they broke. What about you, when is your breaking point having to buy a new bike?