Regardless if you have a used vehicle or have never owned a car in your life, the time might come when you’ll ask yourself whether you should buy a new car. This question, although simple in nature, isn’t nearly as easy to give an answer to. The equation is hard to make and the issue of cost-effectiveness of this purchase is made complex by a number of subjective and non-quantifiable factors. For instance, while the cost of taking a cab or Uber can be compared to the cost of driving a car the same distance, what about being able to consume alcoholic beverages or leave whenever you feel like it. Therefore, here are some things you can consider when deciding whether and when to buy a new car.
1. A simple equation
The first thing you need to consider is the objective cost. Even if it’s not a determining or self-sufficient factor, it’s still an answer that you need to have. Fortunately, you’re not the first to come up with this idea, which is why there’s a platform to determine if it’s cheaper for you to use Uber (or a similar service) than to own a car. Keep in mind that other than the price of the vehicle and the loan term, this calculator also uses fuel efficiency as a factor.
2. Can you really afford it?
The next question may sound a bit uncomfortable, yet, it’s incredibly important that you get an answer to it in due time. Namely, if you’re down on payments for your current car, you shouldn’t even think about buying a new vehicle. This may sound intuitive and logical but you would be surprised to see just how many people owe more money on their current car than the car is worth. This is also why the terms of the loan are more important than you realize. Still, this also depends on a model that you intend to buy. For instance, you have no way of knowing whether a Mazda CX5 resale value fits your budget unless you find a way to check it.
3. Work on your credit rating
The next thing you need to understand is the fact that you’ll need a loan in order to get a new car, which is why you need to start thinking about your credit rating as soon as possible. If there are any problems with your credit score, at the moment, you still might have enough time to fix this. Needless to say, this will help you get more favorable loan terms and avoid the nightmare scenario we’ve briefly mentioned in the previous section.
4. Consider a trade in
If you already own a vehicle, you need to look at it not only as an asset but an asset that you’ll use in order to purchase your next vehicle. Regardless if you aim to sell the car and use the money for a purchase or offer the car dealership in question a trade in. Keep in mind, nonetheless that in order to get the best value out of this trade, you should negotiate separately for both vehicles. Also, you need to understand that this is a barter-based industry, so never agree to the initial offer.
5. Seasonal opportunities
Another thing to watch out for are seasonal opportunities. For instance, the end of the model year, the end of the calendar year and the end of the car’s design cycle are, overall, good dates to make your purchase. Overall data may suggest that December is the perfect time to make a purchase due to all the amazing year-end sales events. Even the events that aren’t necessarily related to the purchase of a new car may give you a slight edge, due to the fact that special limited-time offers on other items may leave your budget in a much better position.
As for the subjective reasons for owning a car, they’re far too numerous to be listed. People with kids need this as a reliable mean of transportation, people who commute to work may plan to carpool, while there are those who simply love being behind the wheel. Just keep in mind, nonetheless, that the above-listed factors are not something that you can safely ignore. Instead, you need to look at these things from different perspectives.