If you’ve been driving the same car for a while, you might be wondering if it’s time to get something new.
Or maybe you’ve got your eye on that new electric Mustang and can see yourself tearing up the town in one of those.
Not sure, though, if you really need a new car or if you just want one because everyone else has one. Should you get rid of that old car now, or should you wait a little while longer? Let us help you answer those questions.
5 Tips For Deciding If You Need A New Car
A shiny new car in your driveway, giving off that new car smell and making your neighbours and coworkers green with envy, is a hard aphrodisiac to resist.
But trust me, once you have to start making payments on that new ride, the excitement will wear off and you may even feel some regret.
The truth about buying a new car is that it should be based on what you need, not what you want. And it shouldn’t be about keeping up with neighbours, friends, coworkers, or family members.
You really only need to ask yourself one question: Is there something wrong with your current car, and will you get anything out of getting a new one?
1. How will it affect your monthly budget?
The easiest way to stop wanting a new car is often to think about money. Unless you pay for the car in full when you buy it, you will have to make car payments.
You might already be paying for a car. If so, will the payment for the new car add to what you already pay each month?
Your car insurance is also likely to go up when you buy a new car. Before you sign the papers for a new ride, you should definitely get a quote for that.
Do you live in a state, like Nevada, that taxes cars like property when you register (and renew) your car each year? If so, the price may be much higher than your current car.
Do you need to protect your credit score so you can get a mortgage, for example? A hard pull on your credit report happens when you apply for an auto loan. This can lower your credit score.
Your ratio of debt to available credit goes down because of the new debt, which can hurt your score.
When you get an auto loan, you’ll be “upside down” right away because the car’s value starts going down as soon as you drive it off the lot. This might not seem like a big deal right now, but if you run into trouble in the future, it will be hard to sell the car.
Did you know that the value of a brand-new car drops by 46% in the first three years?
2. Does the new vehicle offer more or better safety features?
If buying a new car will give you more or better safety features, then it is a good idea (assuming that you can afford it).
We all drive around in big metal death traps, and we don’t know how good our neighbours are behind the wheel, so why not stack the deck in our favour?
This makes sense if your current car has front airbags for the driver and front-seat passenger but no side-impact door airbags.
Most of the time, it’s best to drive the safest car you can comfortably afford.
3. Do You Need More Tech Features?
If you drive an older car, you might be interested in some of the newer tech features.
For example, if you want to be able to use your phone in the car without having to hold it, Bluetooth can help. Or, you want to play your Spotify playlist on the car stereo from your phone.
You might also be interested in things like the GPS built into the dashboard of most new cars these days.
Even simple upgrades like heated steering wheels, which used to only be available on high-end cars, are now available on new cars.
4. Are repair bills on your current car high?
If your current car is giving you trouble and you have to pay a lot to fix it, it probably makes sense to buy a new one.
Even if you end up having to pay for a car, you may find that you end up spending about the same amount each month on average.
So, let’s do some math to see what makes sense.
5. Does it no longer fit your lifestyle?
Let’s say you’ve been driving a coupe for the last three years and are thinking about getting a new one.
Has your life changed in a way that makes the coupe no longer the best car for you?
Among the things that could have changed are:
You have new kids or are going to have some
Your job or hobbies require more storage space (drum player)
You moved from a hot climate to a cold one, so you no longer need the convertible.
You changed jobs or hobbies and no longer need as much space as your current vehicle has.
Your older kids are no longer living with you, and now your car is too big.
These are just a few ways that a change in your life can mean you need a new car.
Getting a new car is a big choice that you should think about carefully before making.
These tips should help you decide if you need a new car right now or not. And remember that because new cars lose value so quickly, it’s better financially to buy a slightly used one.