Buying a car is a decision that divides just about everyone. For environmental reasons as well as practical and financial ones, some of us put off buying a new car until our existing one is no longer considered roadworthy. By contrast, some of us are so willing to spend big on a shiny toy as a form of retail therapy.
For most of us, the sensible middle-ground between these two extremes. But exactly what determines whether we need a new car or not? Here, we’ll take a look.
How much would it cost to replace?
First, we have a question of cold numbers. Changing your car will, in most cases, leave you worse off in the short-term. But to find out how much, you’ll need to consider a few figures. How much are you paying for your existing vehicle each month? Factor in the cost of repairs, fuel, and insurance. Then compare this to the monthly outgoings you’d have if you decided to upgrade.
Don’t forget depreciation
One factor that few of us are likely to consider is that of depreciation. The newer the vehicle, the more quickly its value will decrease. A brand-new car will lose a considerable chunk of its value the moment you drive it off the forecourt. As such, going for something that’s been used, even if it’s in near-mint condition, could save you a considerable amount.
How much can you spare?
Once you’ve worked out the difference between your current spending and your potential future spending, it’s time to think about your overall budget and how much you can afford to spend in the long term. It’s difficult to put a figure on exactly how much you need to spend on a car. Something arbitrary like 10, 15 or 20% of your annual income will not apply to everyone. Consider how much utility you get from driving from place to place. If you’re travelling constantly in your car for work, it makes sense to invest in one that’s comfortable and cheap to run.
Your practical skills might also impact your choice of vehicle. If you’re comfortable opening up the bonnet to fix the occasional niggling fault, then you might get away with opting for a more high-maintenance vehicle. If you aren’t, then investing in something sturdier might be wise.
What about renting?
If you don’t want to put money up-front, then personal leasing might be a great option. Offered by companies like ZenAuto, you’ll pay a fixed amount every month and have the running of the car dealt with on your behalf. Go down this route, and you’ll be able to change your car as often as you like without any of the hassle that comes from buying and selling.