Is the pressure on you to buy a new car? Maybe you’re sick of walking around everywhere. Or maybe you already have a car but it’s reaching the end of its life. Whatever the reason, you’re in a position where you’re thinking about getting a new vehicle.
Image Credit: Dan Moyle
But vehicles can be pretty expensive, right? If you’re struggling to come up with the money to get a new one, then I wouldn’t be surprised. The average price of a new car in the United States, as of May 2015, is a whopping $33,560. This is a figure that has been steadily rising in recent years and shows no signs of slowing down. Like pretty much any consumer good these days, the prices are rising at a higher rate than our wages are. You may see cars as ubiquitous, but the average modern American can’t actually afford to get one.
Even if you have a car currently and decide to sell it, you still may not end up raising the money to get a new one. As soon as a car leaves the lot, it decreases in value, and fast. (That’s called depreciation – cars are an asset that don’t get better with age!) So how do we deal with this? Well, the best thing to do at this point is to weigh up all of your options.
Do you really need one?
Let’s assume you don’t have a car. Why have you decided that you need one? Have you recently turned of age and have just passed all your tests? Just because you’ve got that shiny new license in your hand, it doesn’t mean you need to run out and get yourself a car just yet.
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Getting trained to drive as soon as possible works in your favour. The younger you are, the easier it is to pick up a skill. And having the license ready is a great advantage to have. But getting a car right away may not be such a smart move. Consider your options. Do you need the car to get to work or to buy home supplies? You should only get a car if it’s absolutely necessary. If you live in New York City, then you should definitely be questioning your decision. It’s easier to get around NYC without one, so do you really need it? Don’t just get a car for the sake of getting a car.
Work on your current one
So let’s say that you already have a car. Why is it time to get rid of it and buy a new one? You should only be doing this if your needs meet the criteria above and if your old car is beyond repair. That, or repairing it would cost more than actually getting a new car. And don’t believe what that car dealer is telling you – it’ very unlikely that this is the case!
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Have your car inspected by an independent mechanic. Not the one on the car sales lot – an independent one. Get a quote for whatever repairs you need. With the estimated cost in your hands, you can make a more informed decision. And don’t jump to the conclusion that a particular issue can’t be fixed! Sometimes, people who don’t like the handling of their vehicle think that all they can do is buy a new one. But even minor changes like a tyre replacement can improve the handling of your vehicle. You must exhaust all your repair options before deciding to get a new car. (Pun intended, although I didn’t know I was making a pun until after I’d written ‘exhaust’.)
Consider getting a loan
Okay, so you’ve exhausted all the above options. You need a car. You can’t get by without one. If you have one already, it’s basically a lemon. If you’re still not quite there financially, you could consider taking out a loan in order to get a new car.
As long as you’ve got a good credit score and a bit of money to pay for fees, getting a loan for a new car should be pretty easy. If you don’t think you’ve built up a credit history yet, do so now. You can do this by getting a credit card and using it to make small purchases over the next few months. That it, using credit only on things you can afford to pay in cash. That way, you can pay off the credit as soon as possible. This gives you a good credit history and could well be enough to get you started. Learn about loans for a car here.
Are you sure you’re looking at the cheapest option?
Here’s a story that is more familiar than you might think. Someone decides they want a car. They’re shopping around for a bit and catch a glance at something really flash, like the Ford GT 2017. Then they see the ~$400,000 price tag and throw their arms into the air in despair, giving up on their dreams of ever affording a car. (Or, intoxicated by the new car sell, they buy the car anyway and get into financial trouble. The other option is better, trust me.)
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While your story may not be quite as extreme as that, it is possible that you’re aiming a little too high. I don’t want to be a dream killer here, but are you sure you’re looking at the most affordable option? Consider what you actually need the car for. Do you need the horsepower of that $100k model? Do you need the sporty body of that $350k one? Do you need the gorgeous engine purr of that $70k model? What I’m saying here is this: don’t be ashamed to look at cheaper or used cars. Be pragmatic. People often overspend on vehicles. Don’t fall into that category.
Rent a car
If you’re really desperate, you could consider renting a car. Of course, this is only a short-term solution. In the long-term, it’s going to cost you way too much. It’s really only a suitable solution if you need one for the short-term, or if you only need one intermittently. If you are in those categories, though, renting a car might really be the best option for you altogether.