There are many respects that come with adult life. Things like paying bills on time, cooking and cleaning for yourself, and being truly in charge of your own bedtime (that will take a while to perfect). But nothing compares to the freedom that comes with owning your first car. Not only do you no longer have to rely on friends or family for lifts, or use public transport to get around, it also means that you can travel anywhere you want at any time. Fancy a day trip to the beach? Done. Want to visit an old friend who lives over a hundred miles away and in the middle of nowhere? Done. You now have the freedom to make these decisions without having to make a plan days in advance and give up the best part of a day to get there. While this freedom is invigorating and uplifting, it comes with a price. The price of buying and running a car. Buying your first car is a big step to make, and if you don’t have a close friend or relative who knows about cars to help you, it can be quite daunting. Below are a few questions to consider to help you narrow down your options.
New or used?
Depending on your financial situation, this might be decided for you. However, even if you have a decent amount of savings for a deposit and can afford the monthly payments for a new car, it doesn’t necessarily mean that this would be the best option for you. Most new cars lose 10% of their value as soon as they are driven off the forecourt, and on average after three years of ownership, a car is only worth around 40% of its original price. This means that no matter which way you cut it, your expensive purchase will be worth a lot less than you paid for it within only a few short years. Cars that are over five years old represent the best value for money when it comes to balancing new technology and safety with future depreciation and value.
Loan or save?
This is entirely up to you. However, if you have no savings at all, you may be waiting a long time to be able to afford something that will last more than a couple of months. Many dealers offer finance deals on their used cars at very competitive interest rates. And if you decide to buy privately, there are a huge variety of options to finance your new purchase, even if you have a small personal loans bad credit rating. Just be sure that you can afford the repayments for the duration of the loan to ensure your credit rating is improving – not depleting.
Have money set aside for emergencies
Any car, new or old, can throw up some unexpected problems, so it’s always a good idea to have some money set aside just in case. At the very least you will have to budget in for regular servicing and consumable parts like tyres and brake pads, not to mention some money for all that fuel you’ll be using on those long road trips.
Hopefully, this has helped to get you excited about the prospect of buying your first car. It’s a big responsibility to take on, but it’s all part of the fun of being an adult.
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