Is it finally time to buy a new car?

Until very recently, my father and I drove the same car – same make, model and year (though his was gray and mine is black). That was entirely coincidental, though it always was interesting to hear how his car was deteriorating in much the same way as mine (right down to the cracked radiator that caused both our cars to need the transmission replaced). Also, his car was cleaner. And didn’t smell like dog.

Our shared automotive experience came to an end last week. After much thought and debate, my father decided to trade in his old gray car for something newer, more attractive and more reliable. His plan, he told me, had been to wait until the end of the summer, but he didn’t feel particularly safe anymore. He knew the car was going to betray him sooner than later and, like a good horror movie, the anticipation of the big letdown was killing him.

Meanwhile, at almost precisely the same time my father was signing the paperwork on his new car, I was sitting in the waiting room at the mechanic’s, bracing myself for the worst. My car has failed me more times than I feel I can admit and still be a credible source of financial advice. But I keep holding on to it, because I’ve got a vision of saving money and buying myself a new car – next year. And then I end up at the mechanic’s again and next year turns into next next year because I just put a big chunk of my savings into fixing the lousy old car.

This last time was no different. I’ve got a limited understanding of automotive repair, so the only thing I remember the mechanic telling me was that “there’s brake fluid everywhere” which I’ve come to understand is mechanic-speak for “I’m going to need your next paycheck, please.” I won’t admit how much I spent to fix my car (a gentleman never tells), but it did make me ask myself, “Is it time to abandon the plan?”

It’s great to have a plan and follow through on that, but sometimes, in certain situations, there are too many variables surrounding the plan in order to be as firm as you’d like. Sometimes you have to adapt to constant changes. So if you find yourself in that no man’s land of a great plan that keeps getting kicked around by reality, here are a few important questions to help you determine if it’s finally time to buy a new car.

Is this the best season to buy a new car?

If you live in climates that feature four seasons, then you know that your car can take a lot of damage in the winter. As a result, you may feel especially inclined to get away from your old car as soon as the snow melts, but just keep in mind that the end of the year is generally considered to be the best time to buy a new car, as dealers are bringing in next year’s models and need to clear inventory off their lots to make room.

How much is your current car worth?

Part of the hang-up you might have over buying a new car is that you don’t have much (if any) savings and thus, nothing to bring to the table. But don’t forget – you’ve got your car to trade in and there may be more value there than you’d think. More often than not, you’re going to get much more back on a trade-in with a dealer than you would if you sold the car yourself. Check out the estimated value of your car at Kelley Blue Book and keep that amount in mind.

How much is it going to cost to keep your car on the road this year?

Seeing as you’ve probably helped him put braces on his kids and convert his basement into a rec room, your mechanic should be more than happy to give you an estimate on all the work – optional and required – that your car is going to need in the coming months. If your car is older, this means more than just routine tune ups and oil changes. We’re talking about the costly replacements that start showing up between 60,000 and 100,000 miles.

Now take that estimate and consider how much you’ve spent in the last two years on unanticipated breakdowns and repairs. Because those will continue to happen. Probably more frequently.

Value vs. cost

So now you consider the information at hand. How much is your car worth to a car dealership and how much is it going to cost you to simply stay on the road until you’ve reached your goal? How much are you saving towards your next car every month? Are you still paying the loan on your current car?

And remember, whatever your car is worth, it’s almost guaranteed that it will be worth less in a year’s time (or a week’s time, for that matter). Meanwhile, the price for upkeep is going to increase.

If you’re looking at the figure and it’s basically a wash at this point, ask yourself the most important question: “Do you feel safe in your car?” It’s clichéd to say, but you really can’t put a price tag on peace of mind. And let’s be honest – cars are dangerous enough as it is. If you’ve come to the place where you no longer trust your car to get you from one place to another that might be all you need to know.

Resources, resources, resources

If you have decided that it’s time to move on to a new automobile, be sure to check out all of MMI’s awesome financial calculators to help you answer questions like:

• What vehicle can I afford? 
• Which is better: a new or used vehicle? 
• Which vehicle loan is better? 
• How much will be vehicle payments be? 

Good luck!