Purchasing your next vehicle: Principles to consider that will Save You Money

If you’ve been following my blog, you may remember this post from a month ago: A Minivan instead of a SUV? Well, we have an update! Here’s my FB status from yesterday:

There’s no cheaper vehicle than the one that you own. While this is true, eventually it’s time to walk away and say good-bye. The Jeep (15 yrs old) has served us well. We are now proud (and unashamed!) owners of a minivan. Yes, we only have one child but you can’t find a better value for your money (when comparing to SUV’s). Looking forward to picking up our new-to-us vehicle on Monday!

As we say good-bye to trusty rusty, I’ve been reflecting on some principles re: owning and purchasing a vehicle that are wise to consider. Here are some of those:

  1. keep driving your vehicle after you’ve finished your monthly payments. the cheapest vehicle really is the one that you own. even if you put $1,000/yr into your vehicle in repairs, you are still farther ahead than if you had car payments. many people trade in their vehicles before they are paid off or as soon as they are paid off and lose out on the financial freedom that zero car payments provide.
  2. when you no longer have car payments, put the money you are saving now into savings. you will need another vehicle at some point. instead of increasing your living expenses, set aside that money for your next vehicle and you may never have a car payment again! Amazing, right? It is!
  3. unless there’s unusual circumstances (ex: you work for a car company and get a significant discount), don’t buy a brand new vehicle. the greatest depreciation for your vehicle is within that first year. we bought a 2014 dodge caravan. it’s only been on the road for 15 months. we paid anywhere between $14,000-$20,000 less than what the original owner bought it for new. Crazy.

I hate spending money on a vehicle. They are a horrible investment. But given where we live (no bus system), we need a vehicle to work, shop, etc. We hope that our new purchase will last us 15 yrs. Who knows, maybe our daughter will learn to drive on this minivan. Now that’s a crazy thought!

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