Deciding Whether You Should Buy a Car
First of all, you should be aware that probably you're facing the second most important purchasing decision in your life, after a house. We are not talking about tonight's dinner or new pants, as you need to spend $15,000 or often more. Buying a wrong car can be costly and put unnecessary burden on your financial situation if it turns out that your car has high maintenance cost and a gas guzzler. So, you should think twice before deciding.
Do not let impulsiveness reign when you choose a car. You should be honest with yourself by assessing your current situation. People can live without cars, but if you live in a remote area without public transport and the time spent in public transport is too long, then there is a good reason to buy a car.
Another good way to tell whether you need a car is to calculate the amount of annual transport cost and compare it with the annual car loan payment. If your public transportation cost is equal or more than the car loan payment, then you should buy a car. Delaying the purchase of a car can be a good option, especially if you have alternatives like sharing a car with your parents or your friends.
A car can give you much freedom and ability to do more things. But so do the money you save. Think of what you can do with the extra money, for example, for paying your mortgage or invest it on precious metals.
Even if you have the cheapest car in the market, you should consider the cost of insurance, fuel, repairs, tolls, parking and maintenance which can cause you to spend a lot more than what you spend on public transport. So think twice. For example, putting new tires on your car can cost you $1000. Often, when you have a car you should be prepared to spend money on unexpected expenses.
