Ask Chuck: New Car Before Baby?
My husband and I drive older, paid-for cars. His is 11 years old and mine is 9. Neither give us any issues. People are telling us we need to buy a new car before the arrival of our first baby at the end of the year. We’re not convinced. What do you think?
Time to Upgrade?
Dear Time to Upgrade,
When it comes to cars, just like playing cards, you gotta know when to hold’em, know when to fold’em, know when to walk away and know when to run!
Know When to Run
Never buy a new car based on emotional reasons! It feels good to imagine ourselves in a brand new car. Most people love the smell of a new car; I know I do! We certainly are drawn to the latest safety features to protect our children. And the new models have loads of technology like a built in GPS, back up cameras, blind spot monitors and those glorious heated leather seats. What’s not to like about all of that?
But just because you are having a baby doesn’t mean it is time to get a new car. That is an emotionally-based decision and I say, run from that advice!
Know When to Walk Away
Buying and owning a new car is exciting and can be a good decision if your income allows you to purchase it without debt. But for most people, when the new car smell wears off and you’re left with payments, it’s a different story.
There are lots of benefits to a quality, well maintained, reliable used car. Let me share some stories and some reasons why I think you should walk away from any car that does not fit your budget.
Thirty-seven years ago, I bought a brand new Volvo just before the arrival of our first child. We bought it because it was rated the safest car on the road at the time (even though it did not have a single airbag). It was a great car that we drove for years, but it had issues with the air conditioner and brakes. We spent a lot of money keeping it maintained. Looking back, a used one would have served us just fine and been far easier on our budget. I should have just walked away from the lot the day I was convinced I had to have a brand new car for “safety reasons.”
Know When to Hold’em
Since that time, I’ve become a fan of owning used cars. My wife and I drive Toyotas: a 2006 Sienna and a 2007 4-Runner. All of my sons drive pre-owned cars; one still owns a Tacoma from the 80s! We chose to drive used cars because it is the best financial and spiritual decision for us.
Ann, my wife, recently confessed that when invited to a luncheon at a local high-end country club, she parked as far from the entrance as possible because of her cracked windshield and dirty exterior. She was embarrassed by the fact that her car did not appear as new or impressive as the other luxury models in the parking lot. Recognizing her pride, she realized it was a wake-up call to give thanks for a minivan that has served us faithfully for 13 years! In fact, it has never had to have a major repair in over 190,000 miles of service. We remain confident that we can drive it across the country without concern of a mechanical failure.
Count the Real Cost
Luke 14:28 “For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it.
Buying new is expensive. The average new-car payment as of late last year was $523 per month with an average price tag of $31,455. Not only that, it will lose about 20% of its value the second you drive it off the lot. Most people cannot afford that kind of depreciation.
Payments for a used car are lower, but average $378 per month, which is still high for many households who are in debt and have no savings. The best option of all is to drive a car that you have paid cash for.
The world will give you lots of reasons to buy a new car. But, remember, a car is simply a way to get from point A to point B; it is not a fashion statement or a boost to your ego. An older, reliable car can be an excellent financial decision. And, it can keep you humble.
The average age of cars and trucks in America recently hit a record 11.8 years. Many hold onto their cars longer because of the length of financing. Montana claims the oldest average at 16.6 years and Vermont, the youngest at 9.9.
Benefits of Driving an Older, Reliable Car
- No car payment
- No interest charges
- Cheaper insurance
- Cheaper taxes
- No worries about scratches or stains
- Usually not a target for thieves
- Fully depreciated
- Keeps you humble
- Ability to save for newer model
One of the best ways to get the most out of an existing car is to establish an auto maintenance fund in your budget. Monthly contributions will increase your ability to cover necessary repairs or routine maintenance.
Routine maintenance prevents costly repairs and adds years to the life of your vehicle. If you’re the handy type consider doing some of the work yourself. Check out these 6 tips.
Know When to Fold’em
If your older vehicle is unreliable and has had serious mechanical issues more than a time or two in its recent past, it may be time to get rid of it and start over. It is dangerous to get stranded in today’s world. It is also expensive and time consuming to have a vehicle in and out of the shop for repairs frequently. So do your homework. Analyze what you are paying in total costs: buying, maintaining and repairing what you have. Compare that to the cost of buying, maintaining and repairing an upgrade with fewer miles. If you have cash to buy a reliable used car, you will likely be much better off getting a better vehicle.
And, if you start a new car account while you’re driving your old ones, you can make monthly payments towards a future car. It will save you thousands of dollars in interest over time and earn interest while you’re saving.
I Say Hold’em!
The cheapest car to drive is usually the one you already own. Granted, if one is a gas hog you could consider a more efficient model. But, as long as yours are safe and reliable for a baby, as you seem to indicate, it’s time to hold’em. Drive them till they are worn out, save money and get ready for the day when it is time to make a change. By the way, the only thing you need to buy for certain is a quality car seat!
Originally published on the Christian Post, July 12, 2019