It is not easy to decide whether you should trade in your old car for a new one because there are various factors to consider. Even though you think it is a wise decision, it may not be because of the sluggish economy, and there is still uncertainty about it.
Living cost is rapidly soaring, and you cannot be sure about your job because many people are still facing unexpected layoffs. This is the pandemic time, so you need to be very careful about money.
There are various things to bear in mind, like upcoming financial needs, repair cost, your car’s age, and the like. Further, if you are paying for it in cash outright or you are going to finance it. What is your credit score?
Do you think you will be able to get a deal at affordable interest rates? If you apply for car finance for bad credit in Ireland, you will likely end up with an expensive deal. Here is how you can decide whether or not you should replace your old car.
Do mathematical calculations
You will have to do mathematical calculations whether it can save you some money or not. Check how much you are paying for repair work every month and compare it with the monthly instalments you will likely pay if you buy a new car.
Consider the mileage and age of the car, too, to make the proper comparison. If you have paid off your current auto loan, you will be able to get that value off the purchase price of a new car. Do not forget to consider the insurance value because it can make a lot of difference.
How much you can afford to pay off
It also depends on your budget. It is easier to buy a car if revenues exceed expenses. If you have seen that your budget is tight, you will have to cut back on your expenses to have some more cash for your car purchase. It is still not that easy.
Financial experts suggest that you should not spend more than 20% of your net pay on your car. Your first priority should be able to meet all of your expenses. If you find that you cannot keep up with repayments without compromising your everyday needs, you should hold on to your old car.
If you are looking to buy a secondhand car, make sure you have checked the mileage and repair cost you will likely bear down the line. The overall cost much not be the same as a brand new car, but various indirect costs can quickly add up and increase your burden.
Mileage and how long you can drive it
Mileage is an essential factor to consider. Because you are looking to buy a new car, it does not mean that you will get high mileage. It may have a more unsatisfactory performance than your current car. It is usually suggested to buy a fuel-efficient car, but they can be quite expensive.
You also need to see whether you need a car for a long commute. If you need it to go to and from work, you probably do not need to trade it in. However, if you are to cover long distances, you will need to buy a new car.
At the time of making a decision, ask yourself if you enjoy your current car. If you look after your car, you can increase the mileage undoubtedly.
Ask yourself if you enjoy driving it or you feel disgusted? If you still love your car and enjoy riding it and do not have to cover long distances, you should stick to your old car.
Find out other ways to save money
If you have decided to keep your old car, there are still many ways to whittle down maintenance cost. For instance, if you get to a mechanic to get the oil changed, you should try to do it independently.
If you cannot do it yourself, you should choose another mechanic that charges a more affordable price. Keep checking your repair bills. If you find that the repair bill is increasing every month, it indicates that your car has seen better days, and now you should upgrade to a better model.
Sometimes do-it-yourself techniques cannot prevent you from saving money because you face a new problem every other day. In this situation, you have no option other than to buy a new car.
Since you can take the value of your current car off the new car’s purchase price, you will want to get good cash out of it. You will have to research the market.
Professional factors can also affect your decision
If you are in a sales department, you may have to go to the field in your car. Even if you do not have to go further afield, the condition of your car makes an impression. Your job may require you to maintain a certain level of professionalism. Therefore, having a car in good condition also matters. In this situation, you cannot decide to keep your old car. However, you will have to set aside money for a down payment. The larger the deposit, the lower the car debt will be. It will help you pay lower interest.
Whether or not you will replace your old car depends on various factors. You will have to consider your monetary needs, mileage, the purpose of using your car, affordability, and the like. A rule of thumb says that you should do your homework correctly to make the right decision.
If you are to finance your car, make sure you choose a lender that lends money at affordable interest rates. Ensure that you have a good credit rating and have built a large down payment for your car. This is because it will reduce your debt size, and as a result, you do not have too much money in interest.