Before buying your first car, these are the 5 questions you need to ask yourself-
1. Can I afford the monthly installment?
The first question you need to ask yourself is whether you can afford your car’s monthly payment or not. You need to make a decision taking other factors into consideration, such as your rent, household expenses, utilities, and any other outstanding loans or EMIs. Only purchase a car whose monthly installments you can afford, or instead, calculate and create a budget for a new car and only then explore your options in-line with your budget. Also, take factors such as job stability and future contingencies into consideration before buying a car.
2. Can I afford maintenance?
While buying a car, do not consider expenses only in the form of the car loan EMIs. Maintenance costs are also a significant factor that would require you to make allowances for before buying a car. The cost of maintenance increases as the price of a vehicle increases, so do some research and ensure that you’re aware of the maintenance costs of a vehicle before purchasing the same. A vehicle should only be purchased if you can only afford both, the monthly payments as well as maintenance costs.
3. Are you paying for features that aren’t really necessary?
Cars come in different variants and some cars have more extravagant features than others, some that may not be really necessary. Are features like seat warmers, foot massagers, and fancy navigation systems must-haves? Or can you make do without them?
You would also have to make similar considerations in the case of the size of a vehicle. If you’re living all by yourself, is it worth buying an SUV or a seven-seater? It would obviously be smarter to buy a hatchback or a sedan in that case, which would imply that the cost of the vehicle would be cheaper and that the maintenance costs would be lesser too.
4. Is it worth buying a new car or a used one?
Cars have high depreciation rates, and the second you drive the car out of the showroom, the vehicle would’ve already lost close to 10% of its value. Keeping this in mind, do your homework and figure out if buying a second-hand car would have more value than buying a new one. Find a certified car dealer and evaluate your options. If this dealer is trustworthy, you should consider buying a second-hand car to save a lot of money.
5. Should I own a car or is leasing one better?
Leasing a car has its own set of advantages, and one of the pros of leasing is that you can offload a car as soon as it shows signs of wear and tear. You’re not at the receiving end of a car’s depreciating value and high maintenance costs. However, leasing has its own set of cons too, so analyze your options and make a decision wisely.