Is it Time to Buy a New Car?

Is it Time to Buy a New Car?

How do you know if it’s time to get a new car? I have heard this question from countless customers. The truth is that there isn’t a good answer for those people. The reasons for replacing a car can vary enough that every person has to make that decision for themselves. But the reason most people are asking us is because they feel like they are having to repair their car a lot and it may be time for a new one. For these people I do have a way to assess your current car and make a decision if you should move on to a new ride.

What I tell my customers is to take all your maintenance costs (including anything you pay for a loan) over the last year, add them up and divide them by 12. This will give you an average on what you are paying for your current car per month.

Then I tell the customers to go look at and price some cars that they like. My goal is to show the customer two things. The first is that their current car doesn’t cost that much to maintain as they thought and second that new cars cost much more than most people remember.

I have found that people begin to fall out of love with their cars because they get tired of the repair bills and it’s frustrating that the car breaks down on them. The shock of a large repair bill can be very vivid. If you have had two $600 repairs over the course of a year it is easy to think your car is falling apart. But the times your car works fine are not as vivid and you don’t think about the months that nothing goes wrong. By averaging out the repairs over a year you get a better sense of how much is costs you. If you have two $600 repairs over a year it means that your maintenance cost is $100 a month. I have watched people completely rethink how they view their car after averaging out the maintenance cost. It can make the annoyance of the car breaking down a little more bearable if you know that you aren’t spending a lot on the car.

It’s also important for someone in this situation to see whats out there. New cars are really impressive. The new features that are common on most cars these days may make it worth considering an upgrade. Cars have never been more fuel efficient or safe than they are now. There are new fully electric cars coming out and most manufactures are getting into the hybrid game. The problem is that they can be expensive. According to Nerdwallet the average cost for a monthly car payment was $523 in 2018. When someone is forced to look at the difference in monthly costs they tend to re-evaluate a new car purchase. But for those people that have maintenance cost that get even close to the cost of a new car it make complete sense to upgrade.

There are some people that fall out of love with their cars and no amount of cost calculation will re-ignite any joy for that car.

For those people I would suggest getting a new car, but for everyone else it’s worth averaging out the monthly costs and evaluating if a new car is right for them.

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