As a mechanic I got asked all the time, when do you buy a new car? This is a tough question to answer. There are very few reasons that you need to buy a new car. However, there are many reasons why you’d want a new car. To answer the question truthfully, the answer will always be “it depends”. The question is really what does it depend on? What are good reasons to go buy a new to you car over keeping the one you already have?
Buy a Newer Car When you can pay cash.
The best way to buy a car is with cash. If you’ve ever listened to Dave Ramsey you know that you should never buy a car you can’t pay cash for. Now I know if everyone, only paid cash for cars there would be almost no new cars are on the road.
Cars have gotten way too expensive for most people to pay cash. However, if you are going to buy a used car consider saving money and pay cash. This way you don’t end up owing more money on a car than it’s worth. This is especially important when you end up with a 5-6 year car loan.
A lot of things can happen in 72 months. Including blown motors, bad transmissions and other things that make your car not worth fixing. When this sort of thing happens, you end up fixing a car you shouldn’t be putting money into.
Buy New When The payments are Cheaper Than Repairs.
Although you should pay cash for your car. There are cars that are always in the shop. This becomes costly after awhile. If you are paying $500-$600 dollars a month in repairs on a car for months on end. It’s time to buy a new car.
This doesn’t mean one $1000 to $2000 bill. That’s normal many times you’ll get one big repair bill and nothing for a long time. When you’re car breaks something new every few weeks and it’s costing you on average over $500 to $600 a month just to keep it on the road. That’s the real-time to consider buying a newer car.
Before you start looking for a newer car. You need to consider if your car is worth anything? Can you get any trade-in value for it? Do you have money for taxes and licensing? Many times when you take these things into consideration the repair bills are still cheaper than making payments on a car.
Don’t forget your car insurance rates. If you have a cheap beater that only has minimum coverage, the rise in insurance can make it cost-prohibitive to buy a newer car. When you add an extra $100-$200 a month in insurance. You may still be better off fixing your car, compared to making car payments.
When your car is on its last legs.
If you are driving a car with 200,000 miles on it, you may want to start looking for a newer car. At minimum start saving to pay cash for a newer car. Most cars these days have no problems going 150,000 to 200,000 miles. However, past that, you start running into the nickel and dime repairs.
These are the things that you debate on fixing every time something breaks. Like your rear window motor. You don’t really need the rear windows to work you don’t use them. So you just make sure it’s rolled up and don’t fix it. The problem is things like this add up.
Next thing you know, you’re the only one who can jiggle the key just right to start the car, which starts only on the third try. All your tires have a different name on them. You can’t remember that last time you changed your oil. You just add a quart every 800 miles. It’s the same as changing it every 3000, right? This is when your car is on its last legs. You do need to buy a newer car. Hopefully, you saved all the money you didn’t spend on repairs and can afford a newer car.
Just to upgrade.
There is nothing wrong with wanting to upgrade cars. In fact with the technology in cars changing all the time, it doesn’t take long to have an outdated car. If you no longer like your car, get a newer one. Assuming you can afford to pay cash for it.
That 10-year-old luxury car doesn’t have half the luxury items, a new low-end car does. This is the main reason people buy newer cars. They just want to upgrade. It’s nice driving a newer car with power everything and all the strange safety features. If you want to upgrade your car there is nothing wrong with it. Don’t feel you need to keep a car running forever.
Many times that money you spend on a newer car is worth the security you gain. Knowing you won’t have unexpected break downs is worth saving for. However, be smart about it. Buy what you can afford and get a good price. Shiny and newer is not always better if you regret taking that loan out every day.
Your vehicle needs have changed.
When you’re young a 2 door sports car, or a small economy car is really all you need. As you get older, get married, have kids, you end up needing a bigger vehicle.
Not everyone wants a mini-van or giant SUV. People with large families do need something that seats there whole family comfortably. As your life changes so does your car requirements. When your needs for a vehicle change buy a bigger car, or truck you can afford.
Conclusion
There are lots of reasons people buy a newer car. To answer the question when do you buy a newer car? When you can afford it. Although you can switch that around and ask yourself can you afford to keep your car? Either way, cars cost money and if you don’t have any then there is the problem.
My best suggestion to anyone debating on a keeping their car or buying a newer one is to run the numbers and do what costs you the least. Unless you are wealthy then heck do whatever you want. Heck if you have money and want to throw some money my way that would be cool. For the rest of us working stiffs, a car is not worth being in debt for. Enjoy your car, maintain your car, and it will treat you right until you can afford a new one. Then you get to start all over.