Do You Really Need a Car? Before you start, however, it’s a good idea to ask yourself whether you really need a car. If you already have a car and just think it’s time to get a new (or newer) one, be sure that the purchase really makes sense before proceeding. Is there anything else you could do with the money that would provide you with more value? If you’re borrowing in order to pay for the car (as most car buyers do), do you really want to go into debt (or further into debt) in order to get a better vehicle? A Car is NOT an Investment Once you’ve decided to get a car, be sure that you understand that the car is NOT an investment. There are exceptions to this rule, such as some antique and collectible cars which can appreciate in value (although rarely as fast as stock investments). But for virtually all other cars, their value depreciates with every mile you put on them. So look at the car as an expense rather than an investment. How Much Can You Afford to Spend Before deciding how much you want to spend on the car, first determine how much you can afford to spend. This calculation will depend on your overall financial condition, which you can determine by putting together a budget . Also factor in the estimated value of a trade-in, if you have one. When calculating the cost of the car, include not just the purchase price, but all of the associated and ongoing costs: property taxes, insurance, repairs, gas, oil changes, parking meters, tolls, registration, and other miscellaneous expenses.
Posted on: Fri, 23 Aug 2013 10:05:34 +0000
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