The day you make that last payment on your car loan is triumphant. You’re free! The longer you drive a vehicle you’ve purchased, the more value you’re getting from that investment. It’s only natural to want to stretch it out for as long as possible before taking on another auto loan. However, stretching it out too far can actually wreak worse financial havoc.
This raises the question: How do you know when it’s time to buy a car?
Let’s take a closer look.
Warning Sign #1: Your Car Is Becoming Less Reliable
You want to feel secure when you set out on a drive — whether you’re heading to work, picking your friend up from the airport or starting a cross-country road trip. In other words, you want to be confident your car will make it.
Reliability is a huge component of peace of mind.
According to Business Insider, issues that may indicate a new car is on the horizon include:
- Grinding or rattling noises
- Steering/alignment issues
- Deteriorating fuel economy
- Major repairs (radiator, etc.)
- Pieces loosening/falling off
So, if your car is starting to experience symptoms such as those — especially any that jeopardize your safety and self-assurance on the road — purchasing a newer model may be worthwhile.
Warning Sign #2: Repair Costs Are Rising
At some point, you’ll need to crunch the numbers against what you’re spending on repairs vs. what you’d be spending on a car loan.
Here’s an example: Say you determine it would cost you $5,000 annually to buy a car. If you brought your car in three times for a cumulative cost of about $2,000, you may decide to keep your current vehicle for another year. If you had to take your car in for minor and major repairs throughout the year totaling about $4,500, it may make more sense to invest in a new vehicle — as these costs are only more likely to rise year over year.
Warning Sign #3: Transportation Needs Have Changed
Life circumstances beyond finances alone may push us to take the leap and acquire a new vehicle.
For example, a couple who finds out they’re expecting a third child may decide it’s time to upgrade to a van or an SUV rather than a sedan to accommodate car seats. Someone who gets a new job with a longer commute may need a more fuel-efficient vehicle. A driver who just moved to a city may want to downgrade their large vehicle to a smaller one that’s easier for parallel parking.
Warning Sign #4: Features Are Outdated
Every model year seems to bring a slew of new tech, safety and efficiency features. The fact of the matter is you may simply want to upgrade from your older model to take advantage of these offerings.
According to Consumer Reports, drivers can benefit from driving a car with safety features like backup cameras, forward-collision warning and curtain airbags. Drivers may also enjoy connectivity features found in newer models like Bluetooth and built-in navigation.
Knowing when it’s time to buy a car will help you balance getting the most life out of your current model with keeping repair costs low, experiencing high reliability and getting the features you need to thrive.