Deciding Whether to Buy a New Car or Keep Your Old One

Lately, my family and I have been contemplating if we are going to buy a new car or not. Well, our family car is already 16 years old. We've been trying to find out if a new car would benefit us and basically, if we can afford one. We came to a conclusion. We weighed the pros and cons and we decided to keep our old car. Here are the things that we considered.

The price of a brand new car can be too much especially if you're just a regular guy or leading a simple life. It may take you a while before you can save up and buy the car at its full price. There's an option to have a car loan but the problem here is that the monthly amortization could really hit you hard. You can pay in small amounts for a set period of time but if you compute for the total price you paid, it will be staggering.

Now for an old car, you may consider the annual repair costs. For our car, we estimate it at around 30,000 pesos or roughly $690 a year. We've had our car for 16 years and this is the rough estimate of repairs and maintenance we do every year. This may be different from car to car though depending on its use. Now, the brand new car which is a simple sedan that we're aiming to buy costs 750,000 pesos which is around $17,240. So that's 25 years worth of repair. We cannot afford to pay in full. Another thing that you should consider is how often you use your car. The less often you use it then it's less likely it will succumb to wear and tear.

Is your old car still worthy to be driven? If you find yourself fixing something different every week or even every month, then it's probably time to buy a new one. The same goes if your mileage is going down the drain. You'll most likely save fuel on a brand new and more fuel efficient car in the long run.

Here's another thing that we consider in our family. We are planning to go abroad in the next 1 to 3 years and it would be inconvenient to buy a new car then sell it when we are about to leave. We'll just have to stick to our old car. The maintenance cost is way too low compared to the money we'll spend on buying that new car. And of course, we'll have to bring down the selling price of the car since we used it. We will definitely lose a few hundred or thousand bucks.

Well, it really depends on your situation. Would it be feasible to buy a new car instead of maintaining your old car? Can you afford to buy one? If you're going for a loan, won't the monthly payments affect other aspects of your daily expenses such as food or rent? You'd most likely find yourself setting aside a huge chunk of your salary every payday to cover the monthly payments. But if you can really buy one without compromising other necessities, then go ahead with the new car.