Are you torn on whether to keep your current car or replace it for a new or used one? There are a lot of factors that go into your choice of what car to drive. You need a car that fits your needs in terms of size, features, and efficiency, but also a vehicle that fits your budget. Costs for repairs, fuel, and insurance are also key components of car ownership.
It’s worthwhile to consider replacing your car if you can upgrade your driving situation and get a good deal. Follow our step-by-step guide below to determine if you should keep or replace your car.
How to decide if you should buy a new car or not
Step 1: Calculate your current costs. The first step is to evaluate the costs of your current vehicle.
Be sure to include insurance, fuel, and repair expenditures. Get a monthly estimate of all of your expenses so that you can compare your current vehicle to the cost of replacing it.
Step 2: Calculate the cost of a new car. Whether you would plan on purchasing a new car or a used car, it is important to calculate all of the potential costs.
Aside from the purchase price, you should also factor in insurance and registration costs for a new vehicle. In addition, if you are purchasing a used vehicle, you will need to get an inspection and you might need to pay for unexpected repairs.
Do your research on vehicles that you could be interested in. Read reviews for new and used vehicles so that you can assess pros and cons.
Step 3: Consider your budget. The next step is to simply consider your budget to see if you can afford to replace your current car. Estimate your upcoming expenses alongside your income and be realistic about your options.
If you are thinking about purchasing a new car, then you should take a look at the monthly payment and the time it would take to pay off the vehicle.
Step 4: Find out the market value of your current car. It’s helpful to know how much your vehicle is worth when you are trying to decide to keep or replace it. If you car is worth more, then you will have more options and might be able to profit on selling it.
A good resource for those looking to figure out the value of their current car is Kelley Blue Book online. You can access their website here, and then click on Car Values in the tab at the top of the page.
Once you have taken all of the above steps into consideration, then you can evaluate your unique needs and options. If a new car is within your budget and necessary for your circumstances, then it might be time to upgrade. If you budget is too tight right now and it would be more cost effective to keep your current car, then you should probably wait a little while before trying to switch. You can always start saving money on the side to allow for a newer car when your budget has expanded.