Car companies want you to buy their products on impulse. They would, generally, prefer that the step of thinking is removed from the consumer’s process. This is evident in the commercials you see around the holidays in which a spouse is surprised when he or she notices a gift wrapped in a large red bow sitting in the driveway or in one maker’s “sign, then drive” promotion, prompting customers to believe that the car-buying process is better when it takes thirty seconds.
Buying a car is a significant financial decision, and it can affect your financial stability for years. The process should not be taken lightly. It’s important to start at the beginning by asking yourself a series of questions.
What are my needs versus my wants?
We haven’t reached the point of discussion whether to get the convertible or the sedan. First, we have to determine whether we need to buy a car in the first place. There are many other options to consider.
Are other forms of transportation available? Although I was living in the suburbs, I took a bus and a train to my job a few years ago, and could use public transportation to get wherever I needed to go. Bicycles are less expensive to own than cars, and walking is yet another choice.- Is carpooling an option? While usually viewed as inconvenient, the thousands of dollars you could save makes carpooling attractive.
- Can my spouse and I share a car rather than buying a second? You may be able to coordinate schedules so one can drop the other off and pick the other up at work.
- Will a program like ZipCar suit my needs? If you don’t need to drive constantly, you may be able to sign up for a car sharing service. You can reserve a car for only the hours you need one.
- Can I get more out of my current car? Modern cars can easily last beyond 200,000 miles if properly maintained. Put off a purchase as long as possible, and don’t succumb to the desire to trade in for the latest model every few years.
If you can determine you don’t need a car, you may want to stop here. The process is complete for you. On the other hand, if you do have the money available, you may be willing to pay for convenience. You don’t need a car, but you want one, and that will cost you. So carefully consider saving as much as you can on the purchase.
Should I buy a new car or a “pre-owned” (used) car?
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Best of Consumerism Commentary, September 2009
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Best of Consumerism Commentary, September 2009
We also had a number of excellent guests on the Consumerism Commentary Podcast in September. We discussed budgeting with the creators of You Need a Budget and PocketSmith, learned how to survive on a teacher’s salary, discovered the details about Mint.com’s acquisition by Intuit including one surprise that was not mentioned in the media earlier, and discussed negotiating and bargaining with presidential adviser Herb Cohen.
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