Are you looking at buying a new car? Both the new and ups car markets are kinda nuts right now.
Manufacturing holdups over the pandemic have made it hard to get new cars in a decent time frame. Because new cars are so hard to get, the magic of supply and demand has caused used car prices to soar over the last few years.
In reality, if you can hold out on buying a new (or used) car right now, it is probably best to wait. But if you actually need to get a new car right now, it is essential to weigh your needs versus wants.
Our friend Jena is currently in the market for a new car. Her’s is on its last leg and she doesn’t trust it to get her to work every day.
We were all talking the other day and she was saying how cool the new Lexus something-something SUV looks. It’s got tons of room, fancy screens, and a powerful engine!
“That’s awesome,” we said, “but do you really need all that?”
She is a single lady with no kids. She lives a good 40 minutes away from her job. And she is still paying off some old debts.
Everyone has the right to get whatever car they want, so long they can afford it. But if money is a problem, like in Jena’s situation, it is important to really look at what you actually NEED in a vehicle. (Check out my article on How Much Car You Can Actually Afford)
Buying a New Car: Check for Gas Mileage
When we were looking for a new car for Mr. Bean 5 years ago, he was excited to look at cool fast cars that could go 0-60 in so many seconds.
But at the time, he was driving 30-45 minutes, each way, to work 5 days a week then another 30 minutes back and forth to Jiu-jitsu, 2-3 days a week over a hilly freeway.
In his old car, he was having to fill up on gas at least once a week, sometimes twice. We had to find a car that would get better gas mileage.
With this in mind, we put a strict gas image requirement on our new car search. 30+ miles a gallon.
For people who have long commutes, good gas mileage should be a high priority, especially with today’s gas prices on the rise.
Buying a New Car: How Much Space Do You Actually Need?
Most of Mr. Bean’s travel time was driven by himself. 90% of his driving was just him and a backpack. There was no reason to look at big SUVs or vans with tons of storage.
This knowledge allowed us to narrow down our search and look for the features he really wanted: Bluetooth phone connection, manual transmission, and great gas mileage.
10 years ago, we were looking to buy a new van for me because we had just had a new baby and car seats just would not fit comfortably in my tiny Ford Focus.
I knew I wanted sliding doors (kids love to slam car doors into other cars). I also needed enough room for 2 car seats.
Living in Hawaii, small streets and tight parking abound. I would rather give up the extra storage space and movie screens of larger vans for the ability to fit into compact parking spaces and still comfortably grab a stroller and 2 kids.
Inside space was important, but so was minimal external space for me. So we found a Mazda 5, literally called a Mini-Mini Van. I have loved it for 10+ years and can never get rid of it because they discontinued it in America a few years after I got it. 🙁
Sometimes, You Really Do Need a Bigger Vehicle
For some people, a larger vehicle might actually be important.
Maybe you have 6 kids, like my cousin. The extended passenger van is a requirement.
Or you could have a construction company and need to carry huge batches of lumber or concrete loads.
Sometimes, a large van or truck is necessary, but make sure you’re not paying for more car than you really need.
It hurts my Personal Finance heart when I see a single person buy a huge SUV or pickup truck just to drive themselves back and forth, 40+ miles a day to an office job. If money is tight, that huge vehicle is just flushing those hard-earned dollars down the drain.
Buying a New Car: What Features Do You Really Need?
Heated seats, built-in GPS, and Individual Screens for each of the back seats are wonderful, but do you really need them?
Those fancy extras can add thousands of dollars to the price of a new car. If you’re struggling to pay your student loans or pay for after-school childcare, that money can probably be put to better use.
When you are first thinking about purchasing a new car, make a list of the features you really need. Keep this list with you when you go car shopping to prevent the car salesperson from upselling you on all sorts of expensive upgrades.
- GPS- Pretty sure we call have smartphones with a Maps app nowadays. (Save on cell service with Tello, we switched and pay only $14/mo)
- Built-In TV Screens- A TV in the car can be great for keeping kids calm on long trips, but most of the time, it is actually cheaper to have it installed aftermarket. Or just have the kids bring their own tablets that they carry everywhere anyway.
- 4 Wheel Drive- depending on where you live, this can be totally unnecessary. Car Sales teams promote the extra safety feature but unless you live somewhere that gets a lot of snow and ice, this is just a nice to have. Just buy quality tires and save on the excess cost and maintenance.
Buying a New Car: Compare Maintenance Costs of Different Brands
When looking for a new car, make sure you consider the maintenance costs of the brand of car you are getting.
- Fancy imported cars can cost thousands of extra dollars to maintain. Parts are harder to get or it may be harder to find a specialized mechanic.
- Cheaper cars may be less expensive upfront, but if they are constantly breaking down, your maintenance costs over the years may negate the initial savings.
- Check to see if the same company produces different brands. Lexus is owned by Toyota. Lexus cars are usually considered to be more high-end and expensive than Toyotas, but many of the parts are the same!
Don’t get caught up in brand names when car shopping. Do your research and find out how to get the best quality car for the long run.
How Long Do You Plan To Own Your New Car?
When I first moved to Hawaii after college, I just needed a small car to get me to and from work. I got a little Ford Focus that was only a year old and easily within our budget. But we were planning to get married and have kids in the near future. We knew we wouldn’t own it for more than 5 years. So fancy features and a lot of space were not a big deal,
Kids came into the picture and we knew the van we purchased would be in the family for a long time. We saved up, shopped around, and bought it brand new to ensure it would last for as long as possible.
For Mr. Bean, we ended up getting a zippy little Honda Fit that was less than a year old. It gets great gas mileage, which is still awesome even though we cut his commute in half! (Why We Love Our Small Home)
He can fit everything he needs, including the occasional kids, and he got his hands-free Bluetooth and manual transmission.
Hondas are known to last forever! So we plan to keep it and let the kids drive it when the time comes. Then we can decide if we want to get his 0-60 fun car for Early Retirement. (What is Financial Independence)
We purchased both cars with cash and/or paid off low-interest loans in under 3 years. Because of this, we have continued to save for our future cars in our Expected Expenses accounts for the last 10+ years.
Wrap-Up
If you’re looking to get a new car in the near future, and want to make sure to get the best bang for your buck, make sure to really look at your options.
Don’t just rush out and buy the biggest and fanciest car you can make payments on. Really consider what your needs are.
Find a car that’s just right for you. Pay it off fast, and enjoy it for years to come.
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