Saving for a New Car

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This topic contains 4 replies, has 3 voices, and was last updated by Profile photo of Stacey Daprile - Ambassador Stacey Daprile – Ambassador 4 months, 2 weeks ago.

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  • #2567 Reply

    My dad always told me that when it comes to money, pay cash for items that depreciate and use credit to purchase items that appreciate. This way you make your money work for you. Well, I am going to be in the market for a car at some point. Right now my 2008 has 160,000 miles on it. My faithful four-wheeler has accompanied me on many road trips, safely carried my children to their events, and it reliably gets me to and from work every day. I am still quite happy with my car and have no desire to go and buy a new car just because I want new and shiny. Especially since my car is paid for. I simply love that I do not have a car payment!

    Looking down the road though, I know that my trusty auto will not last forever. It is time (maybe past time) to seriously start saving for a new car. Going back to my dad’s advice, it makes no financial sense to purchase an item on credit that depreciates the minute you sign the dotted line and drive it off the lot. With that in mind, I have set up a savings plan for the inevitable, and I am keeping my eye on the used car market. After all, you don’t need to give up fancy and shiny just because it’s not straight from the manufacture. I do like new-to-me and shiny! When the time comes, I want to be ready to pay cash for the perfect car for me.

    When it comes to purchasing a car – how should we determine what is the right amount to budget? Is there a formula that will help guide me?

    #2572 Reply

    I grew up in the automobile business (daughter of a wholesaler), and married a man who fell in love with the business and became an auto buyer. I’ve learned that a $9,000 car gets you to the same place at the same time as a $90,000 car. When I shop for cars, whether it be new or certified used is to look at the warranty.

    BTW: I am 67 years old and I have never in my life had a car loan. I’ve always paid cash for my cars. I just tuck away a certain amount each month and figure in the trade value and shop that way.

    #2582 Reply

    Zipporah, it’s great to get validation from an expert! For years I always bought new, and then we started buying used for the kids. Once I saw what great deals there were and how much money we saved on their cars – I have done a 180.

    #2587 Reply

    We learned a hard lesson recently. We bought a used car for under $4000 for our children. We thought we got a great deal. Instead, we bought a headache. We spent twice that in the first 18 months fixing major issues that were not uncovered in the inspection. My warning is it pays to spend a little more and absolutely check that warranty!

    #2591 Reply

    Suzanne, good advise! With six kids we have purchased 5 used cars now (one got totaled in an accident. Thank goodness -everyone was fine.) But all of them, even the one that was totaled (a Honda Civic), have been exceptional cars. Sturdy and reliable. My son’s truck has over 200,000 miles now, and still going strong. Knock on wood! My daughter’s Subaru went from California to Vermont, then onto Colorado where she now lives. Counting my blessings that we have lucked out.

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