Perhaps your vehicle is getting tired, in need of some maintenance, or just plain worn out. If the body is in good shape, it may be worth putting some repair money into keeping it on the road, but putting a lot of money in an old vehicle can also be foolish. It may be time to look for something new, or at the very least newer.
Buying a vehicle can be intimidating, especially if you haven’t done it before. Buying used is one option and there are many good used vehicles on the market. Buying used saves you the cost of initial depreciation, which is typically highest in the first couple of years of a new vehicle. Buying used also has disadvantages. With private sales, you may save some money on initial purchase price but you never know what you are getting, and there are no warranties or guaranties. It is buyer beware and I always recommend if you are not experienced with vehicle evaluation, it is better to buy from a reputable dealer who will do a vehicle inspection, repair items as needed and provide at least a limited warranty.
Another disadvantage of buying used is financing. You need the money up front, or borrow from a bank (even if it goes through the dealer financing) and the interest rates are much higher than what you can get on new vehicles. Also most banks won’t finance a vehicle that is older than seven years.
Buying new can be a great experience. You can find exactly what you need and what you can afford. Financing is lower, and with the end of the model year approaching you can find some real deals on new vehicles and their financing. Some even offer zero down-payment options and zero per cent or very low interest rates.
Before you go shopping though, you need to have a serious discussion with yourself. What do you really need? If you have four children, your choices are much more limited than if you are just a single person. Will you be expecting an addition to your family in the future or will there be grandchildren you wish to transport? Fitting three child car seats into some vehicles can be a real challenge, even for some of the larger sedans.
Next, consider what you can truly afford. That model with all the luxury features is nice but the price is higher too. Safety features are important and worth paying for. That killer entertainment system isn’t the reason to purchase an automobile. Many drivers prefer the visibility from the driver’s seat of a pickup truck or a SUV but they typically consume more fuel than a sedan. How much of your budget do you set aside for fuel?
Also consider the total cost of ownership. Some vehicles require much more maintenance or the regularly scheduled maintenance costs are higher. You can ask at the dealership what typical scheduled maintenance costs and add that into your budget calculations.
Finally, what will be the value of the vehicle when you decide to part with it? Well cared for vehicles retain more resale value, but some models are also more popular. Small SUVs and compact hatchbacks are currently in higher demand and these popular vehicles will typically have a higher resale value in the next few years. Some manufacturers are renowned for reliability and that also impacts resale value. It may be worth spending a few hundred dollars more when purchasing a new vehicle if it provides a higher resale vale later. It’s all about the total cost of ownership.
Every new vehicle you test drive is going to feel much better than your old vehicle, so don’t be swayed by the first one you drive. Take your time, and drive them all. Try some rough and smooth roads, railroad crossings and around curves. Don’t forget to try both stop and go traffic and highway routes. A vehicle is a major purchase so don’t feel pressured or sign any agreements until you have made your choice. It is your money and that puts you in the driver’s seat — literally and figuratively. I can’t emphasize enough that you should never be pressured into making a purchase. Tell the salesperson you wish to test other vehicles before making a decision — and do it.