The purchase of a new vehicle for your young family can be more nerve-wracking than buying a home or selecting the right college for your children. With so many options to choose from, picking your next car is overwhelming, which may lead to a regrettable choice in the end. Like any other big decision, the purchase of an automobile should be done with clear head and a good deal of information collected ahead of time. Here are a few items to consider.
Thinking of expanding your family at some point in the future? If so, choose the minivan rather than the five-seat sedan when making your vehicle choice. Going smaller to save money can be detrimental to your finances if, for example, the next child to be born turns out to be twins. Conversely, don’t go too big if you and your spouse have decided to keep your family small. Purchasing an SUV or something larger for your family of four can also damage your annual budget.
Consider how your new vehicle will be utilized. Is it for quick trips around town to perform errands or for a job an hour or more away? If staying in town, mileage may not matter as much due to lower usage. If commuting, higher mileage is a necessity to save money not only on the trip but the inevitable traffic jams you encounter.
I once purchased a new vehicle that was totaled nine months later because the frame was so soft it ended up being bent when I was sideswiped on a cold, icy day. Because I didn’t get the full amount of what I invested, I ended up purchasing an older car with higher mileage. Don’t let this happen to you; check places like Consumer Reports to see what the safety ratings are on the vehicles you are looking to buy. The amount you pay to repair damage to both the car and your family can be much greater than what you initially paid if the vehicle isn’t as safe as you first thought.
Hopefully, you have saved enough to pay cash for your new vehicle. However, if financing the vehicle is necessary, don’t sign anything until you receive a final estimate on how much your monthly payments will be. Best bet – walk away if the loan is greater than four percent of your monthly net pay. Look into paying as much cash as possible for your vehicle to lower the monthly payments.
An increase in your insurance premium is almost a certainty when it comes to purchasing a new vehicle; however, a number of factors can help avoid a huge jump in price. For example, the car’s safety record can help keep the premium from jumping too high. Items like a built-in alarm system and extra air bags can also keep the increase low. If using this car to commute to work more than 20 miles round-trip, think about letting your spouse use it for smaller, non-related trips to avoid large hike.