It doesn’t occur to many people that purchasing a car can actually be an investment that saves them more money in the long run. Many of us always assume that the more obvious answer is to keep using public transportation to save some cash. However, there are cases when having our own car might be the wiser financial option.
If you have never had your own car before, here are some clear signs you need to buy your first one.
Your finances are in order
Many of us always have a poverty mindset, always thinking that we are one purchase away from losing everything again. If you come from poverty as a child, this is a trauma response that you need to unlearn, especially if you’ve already reached a point of financial stability.
Here are some clear-cut signs that your financial life is in order:
- You no longer live paycheck to paycheck. If you no longer have difficulty paying your bills and providing for yourself, then now is the time to take out that home or car loan, especially if you find that you can finally pay for it every month without feeling like you have to downgrade your current lifestyle.
- Your debt is manageable, or better yet, you are free from it. Anyone who has an excessive amount of debt will have a hard time taking on more loans and other financial obligations. If you have finally paid your dues and your debt is at a manageable level, then you might be positioned to finally buy your first car.
- You have a decent credit score. Having a decent, if not good, credit score can not only help guarantee that you will be able to finance a car—it also entails that you might be given a lower interest rate compared to others.
You’ve done the necessary research
When it comes to investing a big amount of money, no research is too much. Here are some things you need to know before deciding on what car to buy, let alone finally deciding to get one in the first place:
- The budget you are willing to and capable of allotting for a monthly car payment.
- How much you’re willing to put down for an initial payment, and how much interest rates can cost you every month.
Doing the necessary research means doing your own feasibility study to see if your current financial situation allows for the purchase of a new car. The research will also help you pin down if you can buy brand new or if you need to settle for a secondhand for now and the make and model you can afford.
Your health is suffering from using public transportation
If you use public transportation regularly and already finding yourself getting sick due to factors such as:
- Being exposed to too much pollution
- The stress of being stuck in traffic while riding a bus or other public utility vehicle
- Not getting enough sleep because you have to wake up earlier to catch the bus
Then maybe having your own car isn’t too much of a financial burden. Getting sick will cause you to spend anyway if you don’t have health insurance, so a car might be able to keep you healthier while you commute to and from work. We can’t deny that taking public transportation can be draining to us physically, since more often than not, we also have to walk long distances. So if you feel like having your own car will help you feel more physically comfortable, don’t deprive yourself of it.
You’re ready to negotiate
If you can see yourself being able to find the best possible price for the car you want, and if you think you have a keen understanding of the financing terms that are most favorable to you as a buyer, then you might be ready to make the big purchase.
You need to be ready to arrive at the dealership with a clear estimate of the prices of the vehicle you want to purchase and any pre-approved loan terms that were provided to you. Remember: While a longer loan period may give you lower monthly payments, it might cause you to pay much more due to interest.
Buying your first car is a big decision that requires so much thought and consideration. Make sure to consult with people in your life you trust who you know have an excellent financial life, do your own research, and weigh the pros and cons. Good luck!