Is your car on its last legs? Are you thinking about looking for a different car for your family? I know that all of those exciting new car ads are tempting and I know that you work hard and you deserve to be in a fancy new car, however, slow down and take a breath and think about this for a minute. Do you really need a new car? Do you really want to spend the money that it is going to cost for a new car? Can your current vehicle be fixed? If not, why aren’t you looking at the used car market?
Here’s the thing, I’m not against car loans. I’m a big fan of budgeting and scrimping and saving, but I also think that a person deserves the peace of mind to drive a car that they don’t have to worry about. I think this is especially true if you drive children around with you. I don’t, however, think that buying a brand new car is the answer. Here are 4 reasons you should never buy a new car:
- The Cost is Higher. This is an obvious one, but new cars cost more than used cars. Definitely keep this in mind when car shopping. Look at my recent experience, for example, I bought a 2016 Toyota Camry last year (2017) and a friend bought the same model car the year before (2016). That friend paid $14,000 MORE than I did for the car. Yes, I will be glad to wait to buy if it means I save 5 figures.
- Depreciation. Brand new cars depreciate quickly, which means it won’t be long and you will be upside down on your loan and that is not a place that anyone wants to be.
- You’ll pay more interest. Okay, this is another obvious one, but since you are financing more money, that means you will be paying more in interest. More money? Who wants to do that?!
- Higher insurance rates. New cars cost more to insure, which is yet another cost. These new car fees really add up, don’t they?
The list really does go on and on and there are quite a few reasons why you shouldn’t buy a new car. Can you think of any reasons you should?