Deciding to buy a new car is a difficult process. You must analyze your financial situation, lifestyle and the new car market to determine what works best for you. If you're considering keeping an old car, you also must determine whether you should hold off on your purchase until the deals are better or until your financial situation improves. There's no easy solution, but proper research and an accurate appraisal of your finances can help you make a wise decision.
Finances
Perhaps the most influential factor when deciding whether to buy a new car is your personal financial situation. If you can't afford a new car, then you shouldn't buy one. But if you do have enough money to buy a car, research carefully to learn which auto manufacturers are offering the best deals, such as low interest financing, factory-to-dealer incentives and zero-down promotions. Many online resources exist to help you in your search for data about particular models and manufacturers, including Cars.com, Edmunds.com and KBB.com.
Old Car
If your old car still drives well or requires repairs within your budget, it might be better to hold off buying a new car. But if your old car has high mileage or needs extensive repairs, it might be best to buy a new car. Visit a mechanic to get an exact estimate of how much repairs are going to cost and use that data to help you determine whether it is wise to buy a new car.
Lifestyle Changes
Buy a new car if your old car doesn't match your needs anymore. If you've had children, for example, your old car might not have enough room for a large family. Or if you have a new job that requires a long commute, it might be best to buy a new car that can handle long distance traveling.
Fuel Efficiency
If fuel costs are too much for you, it might be wise to buy a new, fuel-efficient car. Older cars might not meet the same fuel-burning standards as newer, more advanced cars. While you're looking for new cars, note how many miles they get per gallon and consider buying a hybrid vehicle, which will use much less fuel than cars with traditional gasoline engines.
Considerations
If you need a loan to purchase a new car, you must factor into the cost of the car the amount you will pay in interest over time. Research the prices of cars you're interested in purchasing and the amount of money you'll get for trading in your old car. Use that data to determine how much you need to borrow, then use an online loan calculator to determine how much interest you'll pay for different loan term lengths and for different minimum payment schedules.
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