Our love affair with our cars and trucks and SUVs has endured over the last 100+ years and today we have more vehicle choices, styles and brands available to us that ever before. So how do we insure we're buying our vehicles wisely and most cost effectively.
Well, first off, cars and trucks are generally a terrible financial investment. There, we said it (and that was really tough for us - we're big time sports car lovers here at FinancialChecklist.com. They tend to lose value (depreciation) rapidly and along with the related costs of insurance, gas and maintenance, they can bury us as drivers quickly if we aren't wise in how we buy and purchase them.
So how do we stack the odds in our favor? Well, a few thoughts to make you a smarter vehicle buyer and owner:
When buying a car, truck or SUV:
1. Never buy new. New vehicles lose almost 40% of their value in their first 3 years of ownership and almost 60% of their value within 5 years of their being new. With today's average new vehicle costing around $30,000, losing 40 or 60 percent of that value rapidly is to lose some serious money quickly. Therefore, never buy a new car. It's a losing proposition any way your slice it, especially with the truth behind reason 2, which is:
3. Along with always considering a vehicle's depreciation, consider also it's fuel economy, features, mechanical and cosmetic condition, auto history, maintenance history and driving comfort. You'll never regret buying a more fuel efficient vehicle that meets your other needs, as you'll save real money every mile you own and drive it. Learning the history of the car you're considering purchasing is a great investment and running an auto history report is well worth its cost. Also, have your car inspected by an independent mechanic prior to purchasing the vehicle. Let them see if there's been any prior damage and what maintenance items have been performed (or not performed) and alert you to what maintenance you may have coming up soon. An auto history report typically costs around $35 and a mechanic's inspection is about $100 or so. Both are well worth the cost when you are ready to buy!
1. Drive a little more like your grandparents. While your vehicle choice has a lot to do with your fuel economy, you too have a lot to do with how fuel efficient your driving style can be. You don't have to be a hypermiler to save here, but driving wisely, not speeding, lowering your luggage weight and keeping your vehicle maintained will all help you save significant money as your operate your vehicle.
2. Keep a solid log of your vehicle maintenance history under your ownership. Record how often you had the oil changed, when you had the brakes serviced, when the timing belt and water pump were changed, etc. This log will inspire your maintenance actions and a well tuned car yields lower operating costs across every mile.
3. Use your vehicle minimally. Every less mile you drive saves you 100% of that mile's cost in maintenance and fuel costs. Cutting out unnecessary trips will save you big money, especially with today's high fuel costs.
4. A loved vehicle will love you back. If you are determined to take great care of your vehicle, then more than likely it will reward you with many, many miles of great service and few problems or unexpected repairs. Many people treat their vehicles as just transportation appliances, but don't let that be you. Mix in some pride and regular cleaning, care & attention to maintenance and you'll be pleasantly surprised by how well your car will thank you with long and solid service to you.
Finally, when you buy your vehicles, always buy with cash! "What," you say, "How is that possible?" Going into debt to buy a depreciating asset is a double looser. You pay more in finance charges while your vehicle's value drops in value again and again over time. Instead, save and buy only a vehicle you can pay for in cash. If you are willing to walk through the Financial Checklist Plan, then buying this way won't be a problem. You'll learn how to save and eliminate debt so that you can buy your next vehicle with cash and own it outright right from the start. Trust us, buying a car with cash will buy that car cheaper and give you a sense of accomplishment and delight that no financing arrangement can provide.
Drive on and Drive well...and Wisely!