Are You Car Shopping?

Are you shopping for a new car?

Many people sleepwalk into mortgages, car payments, and consumer debt. They don’t think through the long-term ramifications. Buying a new car may be best in certain situations, but learning to discern between wants and needs is important for financial health. Even if you can afford to replace a car, it doesn’t mean you need to.

It’s easy to forget to thank God when a car lasts a long time. We’re often simply more concerned with how it looks or how we’re perceived by others. If you’re tempted to buy a new car, just ask yourself a few questions. “Why do you want to buy right now?” “What will you have to give up to own it?” But don’t stop there…

Do you have a 3 to 6-month emergency fund that will cover your expenses? Are you giving regularly? What’s your ratio of debt to income? If driving a new car raises your debt load, consider whether that is more important than driving your current car and saving to pay cash at the right time.

We need to analyze our priorities and take a serious look at personal debt in general. When possible, driving dependable, older model vehicles is a way to avoid paying interest on value-depreciating new ones. A recent article at BankRate.com found that Americans pay $575 a month in hidden ownership costs. That’s nearly $7,000 a year that could go towards paying off debt, building an emergency fund, savings accounts, or investment opportunities. Remember, “The borrower is servant to the lender.” (Proverbs 22:7)

Now, if you sleepwalked into debt, check out our budget coaching program. It can put you on the road to financial freedom. Go to crown.org and click “Get Help Now.” You can start today at crown.org.