Your budget is the most important thing when it comes to buying a car, and that doesn’t just mean a purchase price. Running costs including insurance, repairs and servicing are all regular outgoings that you’ll need to take into consideration before buying a car. So work out a budget and stick to it.
When you’ve worked out your budget you can decide what type of car you need. For example, do you only want to drive to your local shops, or do you need a larger car? Once you know what type of car you need the next question is do you buy new or second hand? Both have their own set of pros and cons:
Nothing quite beats that ‘new car’ smell, but there is a price to pay for purchasing newer models.
- Financing your purchase – not many people can afford to buy a new car outright, which means that they’ll need to take out one of many car finance options. However, you won’t be able to sell or modify it until you’ve made the last repayment and bought the car outright. You could find yourself stuck with a car you don’t want and 95% of people who take out finance run into trouble with the interest.
- Fuel efficiency – newer models have their fuel efficiency and carbon gas emissions rated and with fuel prices skyrocketing having this information can make a real difference to your bank balance.
- Peace of mind – one of the best things about buying a new car is the warranty and knowing that your car will be repaired if something goes wrong. Buying a used car may save you money, but you could spend more than you saved by having to repair it soon after purchase.
Believe it or not you can get car air fresheners that give your vehicle that new car smell, so if that’s your only reason for wanting a new model, think again.
- Bag yourself a bargain – many people that buy new cars sell them once they’ve run out of warranty, so you’ll find many used cars that are only 3 -5 years old. If they have low mileage and are mechanically sound you could be looking at your ideal first car.
- Equity – unlike houses cars continue to lose their value no matter how well that market is doing. Used cars will have already absorbed their initial depreciation, up to 75% in the first 2-4 years of its life, making them easier to sell on without finding yourself in negative equity.
Don’t buy the first car you see, and when you go to see a car make sure you take someone with you who knows at least basic car mechanics. Be sure to take it for a test drive and don’t back down when it comes to sticking to your budget.