Buy a New home but Drive an Old Car

Not many people go into raptures at the prospect of acquiring a decade-old car from a used car dealer. On the other hand one would only contemplate buying oneself a brand new car if not a fancy one. rnBefore heading to the showroom for new car shopping ask yourself: rnDo I really need a new car nowrnWhy would I need a new car nowrn You may answer in affirmative to the first question quickly, but would pause for a moment when you get to the second. The truth is, most of us do not need newer cars all the time. One may want it, but one does not need it. One needs to honestly assess one's need for a new car. If the car does not have an excess of 200,000 miles, chances are the present car is still roadworthy.rnHow long should you wait before buying a new car?rnYou could put off buying a new car for at least one year, if not more. If you already have two cars, check if you could do without one of them. Owning only one car may be an orthodox lifestyle, but consider how much money it involves leaving an extra car idle in the parking lot all day. rnGet creative with transportation alternatives. Concentrate on having a nice dwelling while driving an old car. The gist of this advice is that homes almost always appreciate, that is their value increases. While newer houses are a good investment, newer cars are not. rnNew cars depreciate very fast. It is like a lot of money going into a bottomless pit and never returning. On an average, new cars lose more than 20 percent of their value the first year and 15 percent, the second. After two years, a $20,000 new car is worth only $13,000 with seven thousand dollars of value lost. If you had taken finance for this car, you will probably be paying more than your car is worth. Americans seem to spending more on cars and transportation because there has been a steep rise in two- career families and many other people want newer and fancier cars.rnAn average family during its lifetime, puts more money into automobiles than it does with its home. A car buying decision is extremely important for a family as a new car will lose value rapidly as depreciation. On the other hand, a cheaper used car will save you lots of money. rnOnce you have decided on what kind of car you are going to buy, how you are going to pay for it also needs to be answered. Always make it a point to pay in cash for a car. Do not borrow and pay interest to buy something whose value depreciates fast. Save to pay in cash for a car. Your not yielding to the temptation of buying a car on finance lets your savings grow and you can actually buy a dependable older car without borrowing. Actually you are allowing yourself a payment by saving the interest charges, with which you can buy another car rnThe major catch in buying with finance is you will tend to be less particular about the cost. But when you pay in cash, you would tend be cautious about where the money is going. It's easy to spend on a car when you borrow. Remember that cars are expensive and they quickly lose value and we must be careful about how we are going to pay for them.