9 Signs Buying a New Car Will Actually Save You Money
Knowing when to say goodbye to your old car is never easy. After all, you’ve made memories together, taken long trips, spent a good portion of your life driving it.
But at some point, dealing with the hassle of your old ride breaking down or paying for expensive repairs will outweigh your indecision of making a change.
Here are some tell-tale signs that trading in for a new car is your best investment.
Repairs Are Getting Costly
If your current car is in the shop every other week and the repair bills are piling up, it might be more cost-effective to invest in a new car with a warranty.
This typically covers the cost of certain repairs and maintenance during the warranty period, helping you save money if unexpected issues come up. It’s a better option compared to buying an older vehicle that might require frequent and expensive repairs.
You’re Spending a Fortune on Gas
If you’ve noticed a significant decline in fuel efficiency and find yourself spending more on gas than you used to, a newer, more fuel-efficient car might be a better choice.
You’ll especially feel the difference to your wallet if you have a long daily commute or take a lot of road trips.
Your Old Car Has a Lot of Miles
Extremely high mileage can be a clear sign that your car is approaching the end of its life. If your current model has over 200,000 miles and is showing signs of wear and tear, it might be time to consider opting for a new car.
You’re Into Technology
Most modern cars offer technology like Bluetooth connectivity, navigation systems with wider screens than your phone or infotainment features.
If you value these conveniences, then upgrading to a newer model is a no-brainer.
You Feel Unsafe on the Road
Feeling worried about the safety of your current car is never a good sign — like if it lacks airbags, stability control or good crash test ratings. You’ll breathe a lot easier replacing it with a safer ride.
Many of today’s high-tech cars are designed to proactively prevent accidents by alerting you to any potential dangers and sometimes responding to threats quickly.
For example, newer cars often come with advanced safety features like lane-keeping assist, adaptive cruise control, and automatic emergency braking.
Your Life Is Changing
If you’re growing your family, taking on a longer commute or got a recent new job — all of these scenarios warrant you opting for a newer model.
Lifestyle changes often come with new responsibilities and commitments and a newer car is less likely to break down or require major repairs, giving you peace of mind and some reliability during a transitional time.
For example, having a larger family means you’ll need more seating and cargo space. If you have a longer commute, a smaller, more fuel-efficient car would make a better fit.
Depreciation
Some cars lose value rapidly, and if your current vehicle’s resale value has significantly declined, you might want to trade it in while it’s still worth something.
That said, you should also consider when buying your next car, that these depreciate significantly over the first few years of ownership, so it’s important to weigh their market value when investing.
If you’re thinking of doing a trade-in, doing a little research online can tell you what your car is worth in ballpark terms. Autotrader is a good resource that can let you see what people in your area are asking for your car model.
Consider Total Cost of Ownership
A big mistake when shopping for a new car is only keeping in mind the purchase price. The total cost of ownership can paint a whole other picture: looking at overall insurance cost, maintenance, fuel, and depreciation will all help you determine if a new car is in your best interest.
One easy way to figure out how much owning a car costs is to use a car cost calculator.
You Can Afford To Buy New
When deciding to make the change, make sure you have the financial means to buy a new car, whether through savings, financing or leasing — without putting yourself in a difficult financial situation.
Experts recommend spending less than 10% of your monthly take-home pay on your car payment. So, say that your take-home pay is $3,000 a month, don’t spend more than $300 on your car payment.
“There is no point in test driving a car if it turns out you can’t afford it,” said Tom McParland, who runs the vehicle-buying service Automatch Consulting and writes about consumer issues and the automotive industry for Jalopnik.
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