Do You Need A New Car?

Are you ready to buy a new car? Or will the old one hold out a little longer? Here are some points to consider.

As your ten-year-old sedan puffs its way up the driveway for the night, the question comes hammering at your brain again:

"Should I buy a new car?"

Your current vehicle has nearly 160,000 miles, and should have an engine overhaul as well as several maintenance tasks performed. Still, paying up front for these costs is better than a monthly payment for the next four years, right?

Not necessarily. If you're weighing this question from a variety of angles, here are some things to keep in mind:

1. How often do you drive your car? If you use the vehicle for occasional errands or as a second vehicle for backup to a later model, you may be able to get away with holding on to your clunker. If it has been mostly reliable for the past several years, and you can keep it running steadily with the investment of a few hundred dollars, you may want to hold onto it for another year or two, especially if you expect household finances to loosen up to the point where you can more easily afford a monthly payment for a new car. Better yet, start putting away that monthly payment now, so when you do buy a car, you'll be able to use a nice chunk of change as a down payment.

2. What kind of shape are the parts in? If you've replaced the engine already and it still has problems, or you keep losing power and aren't sure of the reason why, it may be time to unload this vehicle, especially if you depend on the car to transport children, the elderly, or anyone on a semi-regular basis. Replacing original parts with used ones may keep the car running a little longer, but it also may allow it to wear out more quickly. Give your car a thorough inspection, or have one done professionally, to find out if the parts are likely to hold out much longer.

3. Have you kept up with the maintenance? Getting the oil changed every 5,000 miles or so, along with greasing the doors and filling fluid levels can keep your car running more effectively for a longer amount of time. But if you have not kept up with maintenance and have knowingly allowed some parts to wear out as you use them, the car may not hold up much longer. It may be time to trade it in, especially if you have kept up with maintenance, which may fetch a better trade-in price.

4. What does the body look like? Is it rusting away? Are the floorboards falling through? Do seat springs pinch passengers? Is the exhaust pipe rusted out? Are the tires bald? Rather than being concerned about the car's appearance for aesthetic reasons, you want to keep the car's body in good shape for safety purposes. Besides, car body parts that don't function well may cause the car to break down in a situation where you will lose all trade-in value.

5. Will your finances handle a monthly car payment? If you buy a new car, can you pay cash for it? Can you afford a down payment? Will the monthly payment, along with car insurance rate adjustments, impact your monthly budget? You don't want to buy a car only to have it repossessed in a few months. Work out a realistic budget on paper to see if you really can afford a new car. If you're thinking about getting a used car, be sure you don't trade your car for someone else's headache.

Whether you're in a position to comfortably buy a new car requires thoughtful analysis. Before jumping into a major decision, inspect your current car and look at the dollar figures. Then make your decision, knowing you gave it your best shot.

© High Speed Ventures 2011