Is your family struggling to get by on your current income? My wife and I know all too well the difficulty that can arise when living in an expensive region of the country while making little money. It forces you to adapt. You may be looking to save money in any way possible. When you are looking to replace your car, you may want to get the cheapest car that you can find – but is it worth it? I have found that quality trumps inexpensive nine times out of ten. There will always be an exception to this rule, but I always make sure to prioritize getting the biggest bang for my buck (as the popular phrase goes).
What are Your Priorities When Buying a Car?
When you are looking to buy a car, I would bet that there are two or three common features that come into play. The first and perhaps most important is the price of the car. Everyone, unless they are millionaires, looks at the price. It’s just common sense – everyone has a household budget and is forced to live within this regulation.
The second feature that people are now considering is the fuel efficiency or MPG. Everyone wants to save money on the already high gas prices, and you can’t blame anyone for wanting to get a more fuel efficient car. It not only saves money, but the environment as well (which leads to less environmentally-caused illnesses).
The other popular feature that is considered is passenger capacity or even cargo space. Most Americans tend to go with larger cars even though they only use the utility feature of cars once or twice a year.
What Should be the Most Important Features When Getting a New Car?
While I agree that MPG and price should still be considered, there are a couple more important aspects that need to be considered. First and foremost, is the rate of depreciation. Depreciation is one of the hidden costs of car ownership, but it still affects your finances. Essentially, the rate of depreciation (some cars depreciate faster) affects how much you will be able to sell your car for. This means that if you get a cheaper car for $10,000 and are able to sell it for $4,000 after 3 years, it’s not as good of a deal as one that you paid $14,000 and were able to sell for $9,000 after the same 3 years. The first car cost you $6,000 to own the car for the same three years as opposed to $5,000. Not only is the cheaper car more likely to break down, but you also paid more for a car that most likely had less features. This is why it is important to take depreciation into consideration. Another great example of why quality trumps inexpensive most of the time.
Last, but certainly not least, you need to consider the practicality of the car you are wanting to buy. Are you wanting to buy the car because it looks nice or because it is practical. Many people buy cars on the image of the car instead of it’s practicality. This often leads people to buy new cars even though it is a common fact that you lose 15-20% of the car’s value after you drive off the dealership. This is also the motivation behind getting large SUV’s as opposed to station wagons that offer just as much cargo space with a higher MPG. The fact is that practicality is more important than image or appeal.
Finding the best car means that you go beyond the simplistic analysis of price and MPG. It forces you to evaluate long-term results and see the car more as an investment. If you look at buying a car in this way, I guarantee that you will save more money and will have less headache.