By Claire Nash
November 17th, 2019
BURLINGTON, ON
Getting around without a car is not everyone’s cup of tea. While public transport might be a viable way to get from place to place, many of us do not have the time – or patience – to use it. Which is why we still buy cars, despite there being more ways than ever to commute without owning one yourself.
You should always go into the decision having considered all the facts.
However, buying a car is an activity fraught with potholes. There are so many ways you can get caught up paying off a car that wasn’t really what you needed in the first place. You should always go into the decision having considered all the facts.
Here are three important things to consider before buying a new car.
1. Do you need a bank loan?
Whether you are going to buy a first-hand or second-hand car, you could make use of a bank loan. This might be to your benefit even if you could technically buy it direct. Money in the bank now is possibly worth more than the extra you end up spending on payments in the long run. Make a checklist before applying for a car loan to come to a more informed decision. It’s great to not have to think about paying your car off, but what you do with the money in the bank can make a big difference to your financial status.
2. Do you need to drive?
Having your own car might seem cheaper than using Uber or Lyft on a day-to-day basis. But there is something else you need to take into account, which you should consider even if you already own a car. Time is money, and we spend a lot of time in transit. Think about how much one hour of your time is worth. With that in mind, how much money does your daily transit cost?
If you are not driving, you can make better use of your transit time. Unless you have issues with motion sickness, you can pull out your laptop and get work done. Alternatively, you can work on a passion project that you otherwise would never have time for. Is this time worth more than you’d be paying on a ride-sharing app?
With this approach, you can even consider buying a cheap car and hiring a driver part-time. Not everyone can afford this, even if they buy a used car, but those who can should consider it.
3. How much will maintenance cost?
A mistake many people make when buying a car is not taking maintenance costs into account. It’s not because we’re unaware of them, but because we put off thinking about them. However, maintenance massively impacts how much the car really costs. A cheap second-hand car could end up costing you more than a new car, because you have to constantly repair problems. And some imported new cars will cost you big in the long run because parts need to be brought in from elsewhere.
Maintenance costs are impossible to accurately calculate in advance, but try and get a general idea of the state the car is in and how much the parts cost. This can also help you come to a decision of whether it might not be cheaper to use Uber to get everywhere.
