Planning to replace your car? Here’s a list of factors that you should consider

People often plan to replace their cars for various reasons. Some may do it to upgrade to a newer model, others just want something that can fulfil their requirements. If you are planning to replace your car, then we suggest that you should consider all the pros and cons to make an informed decision.

The reasons to replace a car

You can replace your car for any reason that may deem fit to you. It may be the case that your car has got damaged, or the engine has started malfunctioning. Maybe you cannot afford the insurance coverage. Maybe your family members are growing and you need a bigger car. Or maybe you have some extra cash and want the latest car with all the gadgets and safety features. All these are valid reasons to replace your car.

It may be the case that you might not have taken all the calculations into account. A new car can be very expensive as compared to the total repair cost of the car that you own. It’s important that you consider all the factors before you decide when to replace car.

Calculate the cost of a new car

If you want to replace your car with a brand new one, you must first calculate the cost of that new car. Can you afford it after you have sold your car? This is the math you have to do. This calculation will help you know if you can afford a new car or not.

Consider a scenario here:

Exactly one year after you had bought your car it might have depreciated by 22%. Most people sell off their cars after 5-6 years. If you have got the car on a loan and the loan is paid off, you can sell off the car and use that money to buy a brand new car.

The cost of a new car after buying it

Calculate the cost of maintenance of your old car compared to the cost of a new car. Would it be higher? Yes, the new car has a warranty, but you must ensure top-notch maintenance of the car throughout the warranty period. Otherwise, the warranty will become void.

The question is: What is the cost of maintaining a new car? Will it be more than the maintenance of your old car? If so, then you may run out of your budget, and you may not afford it.

Remember, you have to take your new car to a service station on fixed dates, for free-of-cost inspection. But there are other costs related to internal cabin maintenance and other parts of the car you will have to pay for – like regular oil changes, brake parts and seat belts, etc.

However, if you have all your bases covered, then you must buy a new car.

Again, it’s all to do with calculations what is your annual income

Experts say that you should only replace your car with a new one that would be equal to about 20% to 23% of your annual budget. If you can’t afford a new car, just do with your old car. And if the maintenance cost of your old car requires you to spend a major chunk of your earnings, consider leasing a car or opting for a new used car.

Hidden costs for new cars

If you replace your car with a new one, you might have to pay higher insurance premiums. The registration fee might be higher too. But a used car could be less expensive to buy. The sales tax might be high and the vehicle license cost might be higher. You must also take into account how fuel efficient will the car be? Maybe your car might need repairs often, but a new car might out do those costs with the amount of gasoline it consumes monthly.

How long can you keep your car?

A well-maintained car can last over 200,000 miles. You can keep your car for around 12 years.

Things you can do for your car

You can keep your car. If it is costing you a lot in maintenance, then you must opt for a professional mechanic. Find out how much is the cost for maintenance so you know you are not getting ripped off. Try changing the oil yourself. Maintain your car regularly, so as to avoid frequent or unexpected break-downs.

Get into the do-it-yourself mind set

You can fix a punctured tire yourself. You must learn how to replace brake pads. Just follow the instructions in the car’s manual and maintain the car yourself as much as you can. Invest some money into getting the right tools and instruments for proper car maintenance.

Conclusion

Remember that buying a new car will cost you a hefty amount. If you have the budget and have made all the calculations on how much a new car will cost you upfront – and later on – for at least 3 years, you will know when to replace your car